Working Capital Management Essay Example for Free

Working Capital Management Essay 1.1 Background of the Study Finance is a business term which deals with the study of fund management. If finance is to be accepted as weapon which enables an organization to pay its bills promptly it is necessarily linked with the flow of fund. The management may accept or reject a business provision on the basic of financial viabilities .It guides investment where opportunity is the greatest producing relatively uniform yard stick for judging most of a firms operations and projects and is continually concerned with achieving and adequate rate of return on investment as this is necessary for survival and the attracting of new capital. The function of finance involves three major decisions which the firm must make the investment decision, financing decision and dividend decision. An optimum combination of the three will maximize the value of the firm. In other word entire activities relating the finance are done with the help of financial management. So in this area of management there are two main functions firstly to assemble the funds necessary to initiate a new business economically and secondly to provide the basis of continue new operation. â€Å"Financial management may be defined as the part of management which is concerned mainly with raising funds in the most economic and suitable manner, using, these funds as profitable as possible, planning future operation, and controlling current performance and future developments through financial accounting cost accounting, budgeting, statistics, and other means. It guides investment where opportunity is the greatest producing relatively uniform yard stick for judging most of a firms operations and projects and is continually concerned with achieving an adequate rate of return on investment as this is necessary for survival and  the attracting of new capital(kulkarni, 1986: 76) We know that firms aim at maximizing the wealth of shareholders. In its effort to maximize shareholders wealth, the firm should earn sufficient return from the operations. Earning a sound amount of profit requires successful business activities. The firm has to invest enough funds in current assets for the success of business activity. Current assets are needed because sales do not convert into cash immediately. Investment in current assets should be just adequate or not more not less, to the needs of the business firm. It should be realized that the working capital needs of the firm may be fluctuating with changing business activity. This may cause excess or shortage of working capital frequently. The management should be too prompt to begin an action and current imbalance. Thus, the firm should have knowledge of the sources of working capital funds as well as investment avenues where idle funds may be temporarily invested. Thus the study of working capital is of prime importance to internal and external analysts because of its close relationship with the current day to day operations of a business enterprise. Management of working capital in a business enterprise is very important mainly for few reasons. Firstly, an enterprise, must determine the adequacy of investment in current assets, otherwise, it would seriously erode their liquidity base. Secondly, they must select the type of current asset suitable for investment so as to raise operational efficiency. Thirdly they are required to ascertain the turnover of current assets that greatly determine the profitability of the enterprise. Lastly they must find out the appropriate source of funds to finance current assets. It is therefore a recognized fact that any mistake made in management of working capital can lead to adverse affects in business and can reduce the liquidity turnover and profitability of the firms. Working capital management is an important decision making area of financial management of an enterprises. It requires understanding for how to raise and allocated financial resources how to relate Short-term investments, financial decisions to the overall objectives of the firm and how to relate  short-terms financial decisions to certain long term financial decision to certain long term financial decisions .(Upadhyay,1985:40) Working capital management involves the relationship between a firms Short-term assets and its short term liabilities. The goal of working capital management is to ensure that a firm is able to continue its operations and that is has sufficient ability to satisfy both maturing short-term debt up coming operational expenses. The management of working capital involves managing inventories, account receivable, account payable, cash etc. There are two concept of working capital gross concept and net concept. Gross working capital simply called as working capital, refers to the firms investment in current asserts. Current assets are the assets which can be converted into cash within an accounting year and include cash, short-term securities, debits, bills receivables and stock. Net working capital refers to the difference between current assets and current liabilities current liabilities are those claims of outsiders which are expected to return for payment within an accounting year and include creditors, bills payable and outstanding expenses. Net working capital can be positive or negative. A positive net working capital will arise when current assets exceed current liabilities. A negative net working capital occurs when current liabilities are in excess of current assets. (Pandey; 1995: 665) Working capital management is a process of short-term decision making regarding the current assets and liabilities affecting the long term operation of an organization. It is a process of planning and controlling the level and mix of current assets of the firm as well as financing these assets. It includes decision regarding cash and marketable securities, receivables, inventories and current liabilities with an objective of maximizing the overall in due of the firm. In general, the concept of working capital is synonymous with the fund available for meeting day -to- day requirements of a company. But according to a group of authorities working capital refers to the amount of investment  in total current assets only. It means they are supporting the gross concept of working capital. Thus the gross concept of working capital denotes short-term asset only, it does not include short-term liabilities. However, a business can not exist only with the current assets, it needs current liabilities too. Actually, the amount of working capital heaving depends upon the amount of current liabilities. In this sense working capital means the excess of current assets over current liabilities. Meaning of Banks Banks are very important financial intermediaries in financial market. â€Å"Financial intermediaries not only savers but also they create new financial products. They gain economics of scale in analysis of credit worthiness of potential borrowers in processing and collecting lone and minimize cost of information and make easy flow of transactions.(Peter, 1999: 4) Banks are the principal source of credit to house hold, individuals and family business all forms and local units of government Furth more, they are the source of financial information, planning and controlling. â€Å"Banking institution is inevitable for resource mobilization and all-round development of the country. It is resource for economic development; it maintains economic confidence of various segments and extends credit to people. (Ronald, 1993: p 87). Bank deal with money by accepting various type of deposits disbursing loans and investing in productive sectors and rendering other financial services as the primary function. Banks are channels between saving surplus and saving deficit people and thus they are the bridge of utilize scatter fund to productive sectors. Hence, they represent a vital role in the transmission of government economic policies (especially monitory policies) to the economy. When bank credit is expensive, the investment slows down and unemployment rises. Bank deposit represents the most significant component of the money supply used by the public, commercial banks play an important role for economic development of the country as they provide capital for the development of industry trade and business by investing the saving collected as deposits from public. They render various services to their customers facilitating their economic and  social life. About Bank of Katmandu Ltd. Bank of Kathmandu Ltd. (BOK LTD.) is a culmination of a comprehensive vision of the promoters to take the Nepalese economy to a newer realign in the global market. Each promoters of Bank of Kathmandu has successfully demonstrated leadership skill, business acumen and entrepreneurial wants his/her respective field. Bank of Kathmandu came into operation in March 1995, under the commercial bank act 2031 with the following predominant objectives. Identify business prospects not at catered by then existing commercial banks and offer new banking products and services. Introduce modern banking technology facilitating bank and business operations and transactions. Bank of Kathmandu activities globe around deposit mobilizations, Advancement of various credits, International banking including trade financing, inward and outward remittance and funds and portfolio management. The bank has introduced many facilities to the customer. Deposits of unfavorable conditions, the bank has been able to make a substantial marketing of products, expansion of areas and diversification of service using latest technology, which will ultimately, helps it to grow further. Bank of Kathmandu is committed to providing products and service of the highest standards to its customer by understanding their requirements best suiting the market needs. Bank of Kathmandu has been providing any where banking facilities, from which customer can deposit and withdraw from any of nineteen branches including head office. Bank has lunched customer oriented service such as hire purchase, educational loan, housing loan, vehicle loan, festivity loan, foreign employment loan scheme etc. bank of Kathmandu. It’s launched the mobile banking service through SMS. With the aim of providing banking services at the customer fingertips. Bok is starting internet Banking and alert service. BOK is starting internal banking and alert service very soon. Capital Structure of Bank of Kathmandu Independent and Self-Governing board, involving a pool of endowed and farsighted directors, each directors of the board has been recognized and well-acclaimed for his/her contribution in the development and growth of Bank of Kathmandu. Young, seasoned and talented bankers, each with year of banking experience and proven competency, Constitute the management team of bank of Kathmandu. In the present economic scenario the bank has to complete with other existing and new commercial bank of Nepal. It is already established itself as an innovative bank that introduces new modern technology in the banking industry. In short, BOK has made significant contribution to support the countries economic system and development effort. 1.2 Focus of the Study Financial institutions assist in the economic development of the country. The concept of financial institution in Nepal was introduced when the first commercial bank, the Nepal Bank Limited, was established in 1994 B.S as a semi-government organization. In the fiscal year 2039/040, new banking policy was introduced for the establishment of new banks by the joint investment of foreign nations. The establishment of joint venture banks gave a new horizon to the financial sector of the country. Commercial banks are the heart of the financial system, which plays significant role by collecting scattered surplus fund and delaying these funds in the productive sectors as an investment. They hold the deposits of many persons, government establishment and business units. They make fund available through their lending and investing activities to borrowers, individuals, business firms and government establishments. Bank is a business organization where monetary transaction occurs. It creates funds from its client, saving and lends the same to needy person or business companies’ in term of loans, advances and investment. So, proper financial decision making is more important in banking transaction for its efficiency and profitability. Most of the financial decisions of a bank are concerned with current assets and current liabilities. The working capital management of a bank is different from that of other  business enterprises. A bank plays a significant role to fulfill the requirement of working capital of any other type of business enterprises. It also needs efficient management. Investment in working capital of other business enterprises is a part of current assets of banks working capital and we can consider deposits and short term borrowing as a part of current liabilities. So this study is a reference regarding the working capital management. 1.3 Statement of the Problem Working capital management has been regarded as one of the conditioning factor in the decision making issue. The management of working capital is synonymous to the management of short- term liquidity. Working capital is regarded as the life blood and nerve of a business concern and is essential to accommodate the smooth operations of working capital is harmful to an enterprise to achieve its primary objectives, therefore maintaining optimal level of working capital is the cruse of the problem as it is strongly related to the trade off between risk and return. How ever it is difficult to point out as to how much working capital needed by a particular business organization. An organization which is not willing to take more financial risks can go for more short term liquidity. The more of short term liquidity means more of current assets and less of current liabilities. The less current liabilities implies less short term financing heading to the lower returns resulting from the use of more high cost long term financing , so it is very essential to analysis and find out problems and its solution to make efficient use for funds for minimizing the risk of loss to attain profit objective. Inadequate investments in working capital threaten the solvency of enterprise as well as effect its growth. On the other hand, excessive investments in working capital yield nothing. Therefore working capital should be determined in such a way that total cost of liquidity and cost of non liquidity is minimum. Hence the goal of working capital management is to manage the firm’s current assets and current liabilities in such a way that it should maintain satisfactory level. Working capital management of banks is more difficult than that of manufacturing and non manufacturing business organization. Commercial banks are great monetary institutions which are playing important role to general welfare of the economy. The responsibility of commercial banks is more than any other financial institutions. They must be ready to pay on demand without warning or notice, a good share of their viabilities. Banks collect funds from different types of deposits for providing loan and advances to different sector. To get higher return, banks must try to increase funds from deposits as well as their investment. The first motive of banking business is to borrow public saving and lend to needy people. But commercial banks always face the problem for utilizing more deposit as investment fully and productively. The gap between collection of deposits and disbursement of loan increase the cash balance on bank, which require paying its large amount of liability of banks. Some specific problems felt in this study are as follows:- 1. What are the major factors effecting the management of WC in BOK? 2. Which of the current assets are more problematic on BOK? 3. How have the firms been raising the required funds? Is the funds properly and productively utilized or not? 4. What are the components of WC which affect the operating income of BOK? 5. How have the bank been utilizing their debt capital. 1.4 Objective of the Study Research objectives are the guidelines to conducting the research at a right way. The major objective of the study is to evaluate the working capital position of bank of Kathmandu limited. The other objectives of this study are to throw light on the importance of the proper management of working capital and to make suggestion about how to manage working capital of bank of Kathmandu limited from the long rage view point. The specific objectives of the study are as follows: 1. To indicate liquidity position in current assets of bank of Kathmandu limited over the year. 2. To point out the position of current liabilities and assets of bank of Kathmandu limited over the year. 3. To analyze the need to control investment in working capital in bank of Kathmandu limited. 4. To make suggestion about removing any obstacle in making decision regarding management of working capital and to point out  alternating solution for maximizing the profit . 1.5 Significance of the Study Working capital is the size of investment in each type of current assets, each of the current assets should be managed efficiently an effectively. It is because decision regarding working capital affects not only the profit ability of the firm in the short term but also its very survival in the long run. The management of working capital should not be neglected by enterprises otherwise they will seriously erode their financial viability. As the commercial bank in Nepal are exacting greater and greater influence in the economy of the country and effective and efficient management of their current assets is needed to better the profitability of the firm. The need of the study like this arises from the real nature of the banking business and also forms the impact that it has economy of the country because the business of banks is to accept deposits and advanced loans, and the label of deposits and loans depends upon the working capital policy the study of this type will be most importance for the bankers, the economists and the public at large. It provides the literature to the researcher who wants to carry on further researcher who wants to carry on further research in this field. Therefore, it has been felt very necessary to evaluate the position of working capital management and to focus on the importance of the capital management in bank of Kathmandu limited. 1.6 Limitations of the Study None of the study can go beyond the boundary of some limitations and this study is also not an exception. The scope of the present study has been limited in terms of period of study as well as sources and nature of data. The following are the major limitations of the study. 1. This study is considered only bank of Kathmandu limited and based on secondary data. 2. This study focused on working capital management of bank of Kathmandu limited only. Thus the findings of the study may not be applicable for other bank so the study cannot judge other financial aspects of the bank. 3. Only main financial tools and statistical tools are employed for analyzing the working capital management. 4. The study only covers the period of five  fiscal years from 2059/060 to 2063/ 064. 5. This study is basically done as the requirement for the partial fulfillment of masters of Business studies (MBS) of Tribhuvan university (T.U.) 1.7 Organization of the Study The study has been divided into five chapters. They are as follows:- 1. Introduction The first chapter deals with introduction, background of the study, limitations of the study and organization of the study. There fore, this chapter is for brief introduction of the topic and it highlights the fundamental objectives. 2. Review of literature The second chapter deals with the review of related literatures and available studies Written and prepared by different experts and researcher in the field of working capital. 3. Research Methodology The third chapter presents the research methodology used in the study. It deals with research design, population and sample. Nature and sources of data date processing procedure, tools and techniques of analysis. 4. Presentation and Analysis of Data The fourth chapter is the main part of this research that deals with the presentation analysis and interpretation of data. Different types of tools and technique have been used to analyze the available data in order to achieve the set objectives. 5. Summery, Conclusion and Recommendations The fifth chapter presents the summary and conclusion of the study based on the analysis of data and also provides recommendation for the improvement of working capital management of bank of Kathmandu limited. CHAPTER- 2 Review of Literature This chapter is concerned with the review of relevant literatures available in the books, journals articles research reports, newspapers, magazines, policy documents which are published or unpublished. Every study is very much based in past knowledge study and experiences. The past knowledge or the previous studies should not be ignored as it provides foundation to the present study various thesis works have done indifferent aspects of working capital of different organization are also review for the purpose of justifying the study . 2.1Conceptual Framework The management of the funds of business can be described as financial management. Financial management is mainly concerned with two aspects. Firstly, fixed assets and fixed liabilities, which are concerned with current uses and sources of funds. Both of these types of funds play a vital role in business finance. Business firms need various types of assets in order to carry out its operation. Some assets are required to meet the needs of regular production and same other are required specially to meet day to day expenses and short term obligations. The assets such as cash, marketable, securities, account receivables and inventories which are know as current assets are required to maintain at a certain level depending upon the volume of production and sales. The cash and marketable securities are respectively considered as purely liquid and near liquid assets where as the account receivable and inventories are not. However they can be liquidated as and when necessary within a period of less than one year. The capital invested on these assets is known as working capital. In short working capital is the sources of financing current assets and it includes shorts as well as long term financing. Firms need cash to pay for all their day to day activities. They have to pay wages, pay for raw materials, pay bills and so on. The money available to them to do this is known as the firm’s working capital. The main sources of working capital are the current assets as these are short term assets that  the firm can use to generate cash. However the firm also has current liabilities and so these have to be taken account of when working out how much working capital a firm has its disposal. Working Capital is there fore:- Thus working capital is the same as net current assets, and is an important part of the top half of the firm’s balance sheet. It is vital to a business to have sufficient working capital to meet its entire requirement. Many businesses have gone under not because they were unprofitable but because they suffered from shortages of working capital. By the definition of various experts of working capital management we conclude that all institution whether private or public financial institution manufacturing or non manufacturing that need just adequate working capital to compete with competitive market . It is because over or under adequacy of working capital is dangerous from the firms objective points of view over investment on working capital effects the firms profitability just as idle investment. on the other hand under investment on working capital effects the liquidity position of the firm and causes to financial hindrance and failure of the company . It is therefore a recognized fact that any mistake made in management of working capital can cause to adverse effects in business and reduces the liquidity turn over and profitability and increases the cost of financing of the organization. â€Å"The objective of managing working capital is to aid in the value maximization of the firm by minimizing the cost of working capital. The level of working capital also differs by the types and nature of business. The cost of maintaining the working capital depends on the sources of finance used. The short-term sources generally cost less than the long term sources but they are riskier. (Pradhan, 1992: 148) 2.2 Concept of Working Capital There are two schools of thoughts or concepts regarding the meaning of working capital. According to one school of thought, working capital is meant for the currents only. It is concerned nothing with the liabilities  side. According to other school of thought working capital is the excess of current assets over current liabilities. The former concept which can be termed as gross concept, is important to newly established companies where liabilities have not been acquired immediately , but the lattes one which can be term as net concept is important for both newly established and operating concerns where some amount of current liabilities has been maintained for payment of different creditors, income taxes, bill payable, secured and unsecured loan etc. The term current assets refers to those assets which in the ordinary course of business can be or will be turn into cash within one year without undergoing or diminishing in value and without disrupting the operations of the firm such as cash, Marketable securities, accounts receivables and inventory etc. current liabilities are those liabilities which are intended at their inception to be paid in the ordinary course of business such as accounts payable, bank overdraft and outstanding expenses etc . Mainly there are two concepts of working capital gross concept and net concept. Gross Concept In a simple term gross concept of W/C means investment in current assets in other words, gross working capital is the total amount of available for financing of current assets .However it does not show the real financial position of a business firm. According to this concept the working capital may be classified as capital invested in the various types of current assets such as cash, inventories, receivables etc. This classification important from financial managers point of view as it lays emphasis on the various areas of functional responsibility but it totally ignores the time which is very important in the formulation of procurement polices. From the view of I m pandey gross working capital refers to the firms investment in current assets. C/A are the assets which can be converted into cash within an accounting year and include cash short term securities debtors bills receivables and stock. Net Concept Gross concept of W/C is the narrow concept which is only concerned with the  study about total investment of current assets .In the other hands, net concept of W/C is a broad concept which focuses to long term view of working capital. under the concept of net W/C it studies current assets and current liabilities as differently. Todays market is heterogeneous every changed in environment and other factors bring changes of demand needs and wants of customers at the same time so every business firms have to be made their W/C policies to fit the new environment thus, Net W/C concept should be studied to know the portion of current liabilities. How much current liabilities should be managed to how much current assets? Net W/C is an accounting concept, which represents the excess of current assets over its current liabilities. current assets consists of cash, bank balance, stock, debtors, bills receivables etc and current liabilities consists bills payable, creditors, outstanding expense s etc. Excess of current assets over current liabilities, thus, it indicates the liquidity position of an enterprises. From the view point of I .M pandey, the term net working capital refers to â€Å"the difference between current assets and current liabilities. Current liabilities are those claims outsiders which are expected to nature for payment within an accounting year and include creditors, bills payable and outstanding expenses. Net working capital can be negative or positive. A positive Net W/C will be arise when capital occurs when current liabilities are in excess of current assets† (Pandey;1995;p730 ) 2.3 Classification of Working Capital Working capital can be classified into two types:- 1. Permanent or fixed working capital 2. Temporary or variable or fluctuating working capital A firm’s permanent working capital is the amount of current assets required to meet long term minimum needs. Temporary working capital on the other hand is the investment in current assets that varies with seasonal requirements. figure in below illustrates the firms changing needs for working capital over time while highlighting both the permanent and temporary nature of those needs. Permanent working capital is similar to the firm’s fixed assets in two important respects. First, the amount invested in both of these asset groups  is long term. Therefore supplies of capital to the firm need to realize that the funding needs for permanent current assets is long term despite the seeming contradiction that the assets being financed are called â€Å"Current†. Second, for a growing firm, the level of permanent working capital needed will increase over time in the same way that a firms fixed assets will need to increase over time. However, permanent working capital is different from fixed assets in one very important respects- it is constantly changing permanent working capital does not consists of particular current assets staying permanently in place , but is a permanent level of investment in current assets, whose individual items are constantly turning over. Like permanent working capital, temporary working capital also consists of current assets in a constantly changing form. However since the need for this portion of the firms total current assets is seasonal, we may want to consider financing this level of current assets from a source which can it self be seasonal or temporary in nature. (Van Horn; 1996: 205) Thus the permanent working capital refers to that level of current assets which is required on a continuous basis over the entire year and the temporary working capital represents that portion of working capital which is required over permanent working capital. 2.4 Objectives of Working Capital A bank undertakes many transactions daily. Sometimes, customers deposits large quantity and sometimes withdraw from their deposits in high quantity. Investment fund of banks is covered by deposit collections of different types of account holder. A bank should have to pay the money to depositors when they want to withdraw. For daily operation of office and to meet the administrative expenses, a bank should have certain level of working capital. Working capital is required to run the business smoothly and efficiently in the context of the set objective. It is no doubt that no company can achieve its goal without proper use of working capital. Therefore it can compare as lifeblood to the organization. The main objectives of arranging capital are as follows: 1. To pay to depositors 2. To maintain cash reserve ratio (CRR) statutory liquidity Ratio (SLR) 3. To satisfy the customers by granting loans promptly and increase the attraction of business etc. 4. To meet the administrative expenses, perform the task as per objectives of business and run the business smoothly. 5. To fulfill the present need of business as well as get ready for risk and economic fluctuation in future. 2.5 Need of Working Capital Working capital is maintained at bank by current saving fixed deposit collection. Specially to grant loan and to pay cheque, creditors and account holders demand the liquidity. Generally banks need liquidity for maintaining following goals. 1. Transaction Motive 2. Security Motive 3. Speculative Motive Figure 2.2 Need of working capital 2.6 Determinants of Working Capital The total requirement of working capital is determined by a wide variety of factors. The influence of these factors is different in different business organizations. Perhaps none of them can neglect the management of adequate w/c. Therefore, an analysis of the relevant factors should be made in order to determine the total investment in w/c. The description of the factors which generally influence the w/c requirement of the firm is given below 1) Nature and Size of Business The working capital requirement of a firm is basically related to Nature and size of the business organization. If the size of the business is small, then it requires less working capital but if the business organization is bigger, it requires more working capital. Financial and training institution have needed very high amount of w/c. Public utilities have a very limited need of w/c and have to invest abundantly in fixed assets. Their working capital requirements are nominal. 2) Production Policy We just noted that a strategy of constant production may be maintained in order to resolve the working capital problems arising due to seasonal changes in the demand for the firm’s product. A steady production policy will cause inventories to accumulate during the off season periods and the firm will be exposed to greater inventory costs and risks. Thus, if cost and risks of maintaining a constant production schedules in accordance with changing demand. Those firms, whose productive capacities can be utilized for manufacturing varied products can have the advantaged of diversified activities and solve their working capital problems. (Pandey; 1995: 675) 3) Operating Efficiency Operating efficiency of the firm means the optimums utilization of resources at minimum cost .The firm cannot effectively contribute to its working capital when the operating efficiency is low. Working capital turnover is improved with a better operation and financial efficiency of a firm, efficiency of operation accelerates the face of cash cycle and improves the working capital turnover . It releases the pressure on working capital by improving profitability and improving the internal generation of fund. 4) Manufacturing Cycle Manufacturing cycle starts with the purchase and use of raw material and completes with the production of finished goods. Longer the manufacturing cycle larger will be the firms working capital requirements. An extended manufacturing time span means large tie-up funds in stocks. Thus if there are alternative way of manufacturing cycle should be chosen, once a manufacturing process has been selected , it should be ensured that manufacturing cycle is completed with in the specified period . This need proper planning and coordination at all levels of activity non manufacturing firm financial and service oriented enterprises do not have manufacturing cycle .(Pandey ; 1995: 674) 5) Profit Margin The net profit is source of working capital to the extent that has been earned in cash. The earning capacity of the different firm can not be equal.  In the words of I.M .Pandey some firms enjoy a dominant position due to quality product or good marketing management or monopoly power in the market and earn a high profit margin. Higher profit margin contributes to more working capital. The level of working capital is determined not only by the profit margin , but also by the way of appropriation for taxations, dividends, reserves and depreciation only after providing for these items internal funds can be set a side for working capital . As the provisions for these items are higher the amount of working capital will be lesser. 6) Level of Taxes The level of taxes is one of the important elements, which is also influences working capital requirement of a firm. The amount of taxes to be paid in advances is determined by the prevailing tax regulations. But the firms profit is not constant or cant be predetermined. Tax liability in a sense of short- term liquidity is payable in cash. Therefore the provision for tax amount is one of the important aspects of working capital planning. If tax liability decrease, it needs to decrease the working capital and vice -versa. Besides the above factors there are many other factors also which may have a greater role in determining the size and composition of working capital for example firms attitude to take risk, credit policy, firms policies toward the financial management in the inflationary period, co-ordination among production, distribution, developed transport and communication system etc could also play an important role in determinants effects both temporary and permanent working capital.

A Case Study On Warlordism In Africa History Essay

A Case Study On Warlordism In Africa History Essay Warlordism has appeared in many states and cultures in history. Currently there are two countries, in which warlords play an important role these are Afghanistan and Somalia. In my paper I will try to describe this form of ruling in a case of Somalia what have warlords brought to common people, how have they affected their lives and possibly how may their future look like. Warlordism is known as the prevailing form of political organization in the south-central regions after the fall of Siad Barres regime in the early 1990s. Warlords, the leaders of Somali newly emerged political factions, begun to play an important role mainly after the fall of Siad Barres regime in 1991. These powerful men, who base their support mainly on clan identification, changed the country of Somalia a lot when they were pursuing their own ambitions. The main goal of my work is therefore finding the answers to these questions what caused warlordism to rise in Somalia, what happened during their rule in the 1990s and what impacts have had warlordism on this country. For better lucidity, I divided my seminar work into four major chapters. The first chapter is rather theoretical it explains the meaning and origin of the word à ¢Ã¢â€š ¬Ã… ¾warlord and it tries to offer some exact definition of à ¢Ã¢â€š ¬Ã… ¾warlordism. The following part of my paper seeks an explanation of why has warlordism become such a significant phenomen of Somalia, where lie its roots and it also reminds of the role of Siad Barre in Somali history. It describes the rise of warlords and also their gradual fall during the second half of the 1990s. For better understanding, I added two subchapters the first is about clans in Somalia and the second one takes a closer look on how the situation looks like in different Somali regions. The third chapter examines the impacts of warlordism on common life of Somalis, what was their contribution to Somalis after the year 1991. Again, two subchapter were added. The first subchapter explains, where warlords gain there resources for maintaing warfare and keeping their rule; it also offers somewhat interesting conclusions of researchers from the World Bank about Somali economy and Somalis themselves. The second subchapter tells about rather sad remains of Barres regime about militarization of society. The last chapter takes a brief look on the way how have warlordism and civil war changed the role of a women in Somali society. It shows that in spite of their inferior situation, they still carry on some important function in common life of Somalis. 1 A definition of warlordism Warlord is a person who controls a specific area of his country with military forces that are loyal to him and not to a central government. He uses his power beyond his legitimacy, often thinking that war is the only way of ruling. By doing this, he differs from a feudal, who has also military power, however he still stays loayl to a central governmant (or leader). This word (warlord) comes from the German word à ¢Ã¢â€š ¬Ã… ¾Kriegsherr, that has similar meaning. Even Germans use nowadays the English term instead of their own.  [1]   Warlordism is therefore a form of ruling by warlords and can be described above all in so called failed states. Generally, in these states there is either no central government or authority, or this government has lost its control over the country. According to Anderson, most of the failed states share these three characteristic features: à ¢Ã¢â€š ¬Ã… ¾Firstly, the central government has effectively lost control and authority over the territory. Secondly, internal violent conflict is or has recently been rampant. Thirdly, the level of human suffering is appalling. Extreme poverty and hunger are widespread and growing. Atrocities are being committed. Human rights grossly violated and otherwise curable diseases turn into epidemics.  [2]  . The Fund for Peace creates every year so-called Failed States Index, which mixes social, economic and political indicators. For the year 2009, 38 countries most of them from Africa were classified as à ¢Ã¢â€š ¬Ã… ¾alert. The highest index level was assigned to Somalia (114,7)  [3]  . In a specific case of Somalia, we can therefore speak not only about a failed state, but many scientists and journalists describe it as a collapsed one. It means lack of state institutions and state coercive powers who cannot offer public services anymore.  [4]   If we would like to be more precise at the description and origin of warlordism, there can be found four major characteristics: 1) Rule over a small part of country is overtaken by trained and armed man, who make use of instability of a central authority 2) These men seek their own self-interest, not a public favour 3) Legitimacy of warlords comes from their personal charisma and the devotion of followers 4) Because of their self-interest, country is divided into small political and economical sections, free trade is disrupted, therefore economy is slowing and foreign investors do not wish their capital to be part of this territory.  [5]   Examples of this system can be found in many countries. It appeared and appears in Afghanistan, Iraq, Burma, Chechnya, Colombia, Democratic Republic of Congo, Sri Lanka, Sudan and Pakistan. In this paper, I will describe the current situation in Somalia. 2 The origin and progress of warlordism in Somalia The beginnings of warlordism in Somalia can be observed after a coup detat in 1969, when general Siad Barrà © took control over the country. He rewarded well those were loyal to him, to his clan, but with the help of bribes, gossip and intrigues, he managed to fragment other factions (which were supposed to get weaker) this tactic is described as divide-and-rule. Domestic resources and foreign aid were not used for development, rather for rewarding Barres loyal clans and their military leaders and to punish disloyal ones. This brought a massive instability, causing armed oppositionist clans to rise against Barres regime, first in the northeast region, and then in the northwestern, southern and central regions all except the territory ruled by Barre. Combined with rather disastrous result of the war with Ethiopia, Barre started to lose control and other factions began strengthening their positions. It resulted into civil war, where Siad Barrà © was overthrowned and anarchy again r eigned this country. Cause of the Somali civil war is not only clan system, but the roots lie in wrong distribution of resources and power, long-lasting corruption, exploation, despotic regime and wrong development. All these elements mixed together caused what we saw in the first half of the 90s in Somalia. The loss of war with Ogaden gave a birth to new political factions. People from the Majerteen sub-clan of the Darod established the Somali Salvation Democratic Front (SSDF), operating in central Somalia, while the Isaaq clan took control over the north, under the name of Somali National Movement (SNM). The last important faction, emerged during the reign of Siad Barre, was the United Somali Congress, consisting of the biggest clan of the Hawiye, and occupied central-south Somalia. At the time of Barres fall, there was about 15 political factions in Somalia. A year later, major centres were occupied by the four strongest warlords. While Mogadishu was divided into two parts between Aidid and Ali Mahdi, Mohamed Said Hersi controlled Bardaro and the port of Kismaayo was under the rule of Ahmed Omar Jess. All four fought strongly among themselves, bloody fights occured especially between the two leaders of Mogadishu.  [6]   Therefore we can say that former clans emerged now as political factions with warlords in their lead and these factions often crossed clan lines. What was also broken and missing, was the Xeer law.  [7]  Regrettably after the collapse of regime, warlords were not able to unify, to maintain central government with warlords in its lead. They could have governed the whole country, but they were unable to make an agreement, so all that remained was shattered country with relatively small territories, controlled by military leader. Militias were not struggling for taking place in government; the war simply degenerated in anarchy and banditry. The only exceptions rised in the north, forming Somaliland and Puntland. Fights among the leaders for remaining resources and for strategic points (harbours, airports, major cities etc.) brought great havoc to this country and because farmers were not able to work on their fields due to persisting warfare, hunger spread quickly among inhabitants. The result of their warfare was also spread of armaments, the nearly complete destruction of the capital of Mogadishu, plundering of almost all public goods and state properties, fleeing of almost one million of Somalis abroad and separation of at first Somaliland, and than Puntland in the north. The civil war destroyed almost all state institutions, the social and economic infrastructure and broke all food supplies, both from internal and external sources. Boundaries of traditional clan territories have quite changed since the start of civil war. Weaker clans have been driven out of their homeland, while stronger ones took their positions. The raids were targeted at profitable areas (rich agriculture lands, ports, cities etc.) and locals often fled because of violence that is brought by attacking warlords. It is also an example of Puntland, from which many people have fled through Yemen to Australia, America or Scandinavia.  [8]   The main interest of rising warlords was prolonging of statelessness, as their crimes agains locals errupted massive stolen property, unresolved property disputes and occupied territory.  [9]  It were not only warlords, who had an interest on prolonging of civil war and anarchy. Also some businessmen voted strongly against a rebuilding of government, as a new administrative could easily see through their business and cut their gains from illegal trade to minimum Since 1995, conflicts have changed a lot in Somalia. From a large-scale warfare betwen clans that plagued the whole country to only local conflicts between sub-clans began to emerge. These conflicts had much less duration and were also not so bloody, as only few people were involved.    The are several reasons for this change clan elders gained much more authority, also warlords have finally secured their regions and also have less resources to buy means of war weapons and ammunition. The biggest incentive gave however Somalis themselves people became finally fed-up with their tyranny, especially businessmen, who refused to pay any fees and taxes just for passing through warlord operated territories. Therefore they hired Islamists militias, who represented a formidable threat to warlords. Islamic radicals quickly restricted warlords rule. The real power had only those warlords controlling strategic places (like ports, cities, airports) or those in high positions (memebers of the government etc.) Meanwhile, businessmen formed their own private security forces to guard their property    since the new government was unable to do that; these private forces are ranked among the most powerful in Mogadishu. Although crimes of warlords are deceasing in progress, white collars are beginning to represent a new threat to Somali stability, since their increasing counterfeiting of currency, which strongly undermines Somali economy.  [10]   2.1 Clannism in Somalia Clans are basic units of society in Somalia throughout its history. Yet their role has somewhat changed in   last years, especially after the accesion to power by Siad Barre. First I would like to characterize a Somali clan.   Clan identity is not fixed here, and is subject to change. Warlord maipulates people to gain their loaylty to achieve his goals, (where they are political, territorial, economic or military). However, it does not mean that the members of clans change their membership constantly every day. It happens only when see that someone else can offer them better conditions. A few points can be observed about the changes of clans and clan identities in Somalia: a) traditionally, clans served more like mediators, their purpose was to bring peace and stability to the country, also shifting of clan identities was not so often. This was changed during the rule of Siad Barre, when clan leaders manipulate other followers to acquire their goals, and this shifting of clan identities became a primary source of conflicts (not clans themselves. b) in the beginnings of Somali civil war, conflicts occured especially between major clans. In progress, conflicts became more and more localized, even between the leaders of the same clan (fights between subclans andeven between sub-subclans), like it happened for example in Somaliland eventhough they gained some independence, new clashes emerged inside ruling Isaaqs clan. As I mentioned, the primary source of conflicts are shifting clan identities. But it it also true that clans are main and probably the only way how to bring peace to Somalia, as they it was in past Somalia. Legitimacy of clan elders and of traditional customary law (xeer) could be the sources of cooperation and reconciliation. à ¢Ã¢â€š ¬Ã… ¾A clan is Somalia is a double-edged sword it closely links Somalis and tears them apart  [11]  . 2.2 Divided country The following lines describe the differences between the main Somalia region. From 1991, many formal, self-declared adiminstrations have arisen. We can distinguish between these four types transregional, regional, district and municipal. Examples of transregional and regional entities can be found obviously in Somaliland and Puntland. The problems is that although they provide some basic functions, they do not posses the marks of an internationally recognized sovereign state like issuing of passports and so on. But not only these two have tried to gain some autonomy the Rahanweyn Resistance Armys administration of Bay and Bakool regions in 1998-2002 and the Benadir Regional Authority in 1996  [12]  . These territories are often formed on clan homelands or former colonies, like Puntland, which is situated on the territory of the Harti clans, or Somaliland, the place of the former Brittish colony. Warlords could therefore build a new state by adding existing blocks together. There is however another clash between centralists and federalists. Centralists fear that a divided state will become much weaker and will offer an opportunity to neighbouring countries to slowly appropriate separeted territories, while federalists are mainly those, who dont have any representatives in government and fear that the TFG could take too much from them. There is a strong regional diversity in Somalia from the relatively peaceful and secure provinces in the north to the war-torn territories in the south. Rich lands of southern region, ports and acces to sea are the sources of conflict that still prevails in this part of Somali country.    The Lower Shabelle region doesnt seem to form some regional authority, as clashes between various factions and warlords over rich agriculture and marine resources still continue. On the other hand, the Middle Shabelle region proves to be relatively stable in recent years thanks to new formed administration. Other clashes continued to torment the Lower Jubba region, especially those around the port of Kismaayo. The winner of factions wars was the clan Juba Valley Authority, which holds a relatively strong position over this territory. Neighboring Middle Juba and Gedo regions also lack some strong authorities; the Gedo region must in addition face attacks form Ethiopian soldiers, who are trying to pacify local Islamic groups. The   regions of Mudug,   Galgaduud and Hiraan in the northwest of Mogadishu officialy claim some authority, but de facto have none. They provide no basic functions, have no authority or legitimacy to govern. Security is   provided by traditional leader and Islamic courts, to some extent. In opposite to the southern and the central regions, the north-east and west terriotries have succeeded in forming stable and secure provinces without significant violent   conflicts. Even administrative organs and state institution appear here, providing some basic functions. Somaliland, occupying the north-west part, formed on bounderies of the former British   colony in 1991. Despite two minor civil conflicts in 1992 and 1994, it has created its onw bicameral parliament, judiciary, police force and municipal structures, also elections are regularly held. Somaliland was followed   by Puntland in the north-east eight years later. Similar to Somaliland, Puntland also faced internal conflicts from 2001-2003 concerning constitutional crisis, but those two were solved peacefully. Like in Somaliland, peace and security has attracted some foreign investment and NGOs, however in a smaller quantity compared to its western neigbour.  [13]   3 The impacts of warlords rule In a case of Somalia, we can say that the absence of state authority or defined state borders is not an essential problem for this country. Most African states gained their independence almost overnight, which brought many problems. Examples may be ethnic conflicts as a result of arbitrary boundaries, weak institutional system full of corruption and bureaucracy, weak links between state and civil society or monocrop economy too dependent on exports  [14]  . Also most African people have had bad experience with both colonists and post-colonial leaders, who have often cruelly exploited them and used state institutions and state power only for their personal profit. No wonder why many Africans rather do not believe à ¢Ã¢â€š ¬Ã… ¾modern systems of free market and liberal democracy. For a long time, they had their own system of organization that worked well. If we describe anarchy as a system without a central government, than in Somalia lasted anarchy all the time, before colonists arrived (the difference between anarchy past and present is that in pre-colonial era, round  ½ of population was not dying or being in danger of dying because of hunger, as it happened in 1992  [15]  ). Families, clans, tribes and villages had their own rules and traditions, with which their could prosper relatively good. They also had their own leader. Would it be so bad, if that leader became a warlord? Somali experience answers us the question yes, it would. As much as order within clans or tribes is well-kept, people still need basic functions of state to be organised. They need to have their rights protected, their basic needs to be satisfied. Property rights, security, infrastructure, electricity, schools, health-care or (for common people not so important) some political represantion; these things have to exist in case a state wants to be succesfull and prosperous these days. If warlords took care of this, it would have been no problem. However, warlords in Somalia have not been able to secure these things, they have cared rather about their personal gains while exploiting this already poor country and fighting for remaining resources, than about people needs. Thats why we can say that warlordism have affected the country of Somalia quite negatively, it has spreaded fear and hate among civilians and was profitable only for those who were loyal and close to the warlords. Warfar e brought among civilians was terrible. The Lower Jubba region was affected by far the worst. To maintain the patronize system and to acquire more weapons, warlords needed money. They gained financial resources by selling livestock and agricultural products of locals, later even that of foreign food aid. Rural inhabitants were terrorized almost instantly after Barre was overthrown. à ¢Ã¢â€š ¬Ã… ¾Destruction was systematic, wells, ponds, grain stores, seeds and livestock consumed, carried off, killed or destroyed.  [16]   Because of many refugees, who were forced to flee the country and settle in abroad, we can say that warlords are responsible for Somali diaspora, which have affected many Somali lives till nowadays. Somalia is highly dependent on remittance and for many people it is the only way how to survive (remittances make up about 825 mil. USD in 2004, which is about 60 % of GNP  [17]  ). Warlords have also prevented people from reaching basic state functions healthcare, education, infrastructure and so on. Especially education, which is important everywhere and everytime, was signifacantly missing, as new young people can help their country, at least by describing and understanding what is happening there, so the foreigners could better comprehend what is going on. Furthermore, not only that warlordism doesnt help locals, it also keeps off foreign countries from helping. Risky environment full of chaos will probably not attract foreign investors. Foreign aid is stolen by the warlords, and those delivering it are kidnapped or attacked.  [18]  Under these circumstances, only few countries are willing to help such countries, whether with humanitarian, development or military aid. Especially in case of Somalia, after the debacle of the US and the UN forces in 1993, the Western states consider twice before they send some troops to these regions. To summ up, no matter how bad experience have Somalis with autocrative regimes, a creation of some state authority still looks better that status-quo. Stronger government (without warlords in its lead) with control over the country seems to be at least some solution to current problems. Furthermore, except of breaking internal security, warlordism also threatens neighbouring countries. Collapsed Somalia, without a well-guarded border, is ideal for smugglers, illegal trade of weapons and drugs. In addition, unstable environment will surely attract those who need to be hidden radicals, extremists, terrorists. Somalia is a great example, as after reclaiming the power by Islamic Union Courts in 2006, some highly-sought terrorists from al-Qaida appered in these territories. Which attracted a major enemy of terrorists, the government of the United States, and the US Army began consequently airstriking suspicous villages in the south region, where terrorists were hiding. However, the US did not well in this case, as they supported enemies of UIC warlords, who on the contrary used these resources to gain more power, so they could continue with exploiting Somali inhabitants. Not a good idea from the US, I would say. 3.1 Economic consequences of warlordism To maintain dissorder and to keep their power, warlords need money. The main sources of their income are money they receive from foreign sponsors, from taxes and charges levied on trade routes, ports, airports or in big cities or even on some sections of road, or, there have been attempts to use counterfeit Somali currency, which was printed abroad. Another problem of Somalia is qat (khat), a flowering plant with cathinone alkaloid, which is a stimulant causing excitement, loss of appetite and euphoria. The WHO considers this plant as a drug of abuse  [19]  . Since Islam forbids Somalis drinking alcohol, they chew this plant to have at least some feelings of intoxication. Similar to the Czech people, who meet in pubs and drink beer, Somalis meet in a place called à ¢Ã¢â€š ¬Ã… ¾mefrish, where they chew en mass  [20]  . Not only that workers are of course less effective while being drugged; what is more important is the fact that the distribution of khat is nearly entirely con trolled by warlords, who gain huge profits from the drug trade and they use these revenues to acquire more weapons and other means of warfare and therefore more power. Conflicts between warlords also caused massive economic problems. Except of human casaulties number of people who were killed by war and disease, who were never born or who emigrated is estimated about 2 millions, there is also a great poverty, by which is affected about 43 percent of population Moreover, Somalia finds itself at the bottom of the most African (and worlds) economic rankings. Also its external debt has increased a lot from the beginning of civil (2 billion USD) to nowadays (about 3,2 billion USD)  [21]  . Nevertheless, trade was not so affected by warfare and private sector adapted very quickly on the lack of state institutions. When Saudis placed a ban on livestock (mainly sheep and goats), they simply direct their trade elsewhere. This example shows us another characteristic feature of Somalis their resiliance. As I said, many Somali economic indicators lie even behind the worlds poorest countries. Yet we should mention that these data do not vary so much from those of pre-civil war this shows us high resilience of Somali people, who could adapt to very difficult conditions. Moreover, state collapse brought to Somalia what even structural adjustment programmes could not privatization and liberalization of economy and of all public services water, electricity or security; especially telecommuncation system have developed quite well so far.  [22]  It shows us, that Somalia was not unified politically, economic integration of Somali regions went on well through free flow of goods, services and informations. Economy is able to develop itself, although foreign aid is either missing (after the debacle of UN forces in 1993-1994) or being looted by warlords. Trade has to face some difficulties here though, as important markets placed in major cities have become too dangerous and risky for trading as a result of warfare. So traders need to operate on different trade routes. Also some states, especially from Arabian peninsula, refuse to do business with Somalis, as there are no veterinary controls. Menkhaus  [23]  appoints however, that the demand of Somali merchants for new roads a trading routes, so they could trade more easily and safely, is one of the primary causes of incurred peace processes and peace talks.   Furthermore, it is an argument for weakening position of warlordism. Without warlord rule, traders have better opporunities. If country is secured, if merchants can do their business without a fear of being kidnapped or robbed, if veterinary regulations are instituted, than trade is flourishing and commonweal is incresing. A conclusion of the World Bank research says that Somali war has its main roots neither in a warfare between clans nor in the Cold war, but in a policy of Siad Barre, who shifted from command economy to free market and economic liberalization, while still relying on the power of his own clan and fomenting rivalry between other clans. Consequences of these actions were not immediate, however in the future they have proved to have a devastating effect on Somalia. 3.2 Militarization of society A significant feature of Siad Barres regime (and consequently of warlordism) is a culture of militarization, something that have lasted to these days. Barres institutions had but a little legitimacy, law was rather forced by military means. After the coup in 1991, weapons could be found almost in every family, metaphorically spoken. Weapons have been used to settle quarrels between people and have even been traded on open markets. To make conditions even worse, several observes spotted that some Somali warlords are supported from the neigbouring countries, who dont seek a peaceful solution, but their own goals and interests. Main actors are Djibouti, Eritrea, Ethiopia and Yemen, who deliver their weapon-cargos though ports in Boosaaso, Marha and Kismaayo  [24]  . This was a serious problem for warlords, as they slowly started to lose control over their followers, as well as clan elders has lost much of their authority. Law was a one big uknown. Since any accountability could be s een and impunity became common in Somalia, situation got worse very quickly. (warlords were oppressing locals, using them as a forced labour or driven them out). Without any state authority, a real power lied in the hands of those who were armed militiamen, their leaders and young men, who sought in war their own profit (these men were often rather children, as some observes estimate that about 200  000 (5 %) of Somali children had been involved in militia activities).  [25]   Weapons that warlords demand and with which they fight are usually following low-cost assault rifles, pistols, hand grenades, rocket propelled grenades, mortars, heavy and medium machine guns and anti-aircraft cannons deployed in a ground-attack role. However, warlords commonly do not interfere directly with weapon traders, they rather authorize someone else to acquire merchandise for them. Luckily, in the past several years, clashes between clan-leaders and locals are not so frequent, but still most people keep their weapons, because they fear for their property and for their lives. This applies especially for south-central Somalia, the region without any form of effective and strong government. On the other hand, Somaliland and Puntland have made a signficant progress in demobilization, as their leaders know that without

Lincoln the Tyrant Essays -- Essays Papers

Lincoln the Tyrant There is no doubt that Abraham Lincoln is widely regarded as one of the great American presidents. The general public, when asked about Lincoln, will often tell the tale of a great man. Holding their head high, they will embark on the journey of a benevolent leader, praising the man who envisioned a new America: a great country of racial equality, and the pillar of human liberty. There are some, however, who have quite the opposite view. In his work, The Real Lincoln, economic historian Thomas J. DiLorenzo tells quite the different tale. Daring to criticize this beloved president, DiLorenzo defends his antithetical statements with several key points: Lincoln was more similar to a dictator than an American President. Arguing that the War Between the States was wholly unconstitutional, DiLorenzo corrects the popular misconception that Lincoln’s war was one of abolition. War was not necessary to end slavery, but it was necessary to fulfill Lincoln’s true agenda – to destroy the most significant check on the powers of the central government: the right of secession.1 During the civil war, Lincoln blatantly disregarded the U.S. Constitution and adapted his own form of government. His first step was to suspend the writ of habeas corpus. With such rights thrown away, Lincoln arbitrarily imprisoned those who publicly disagreed with his principles. American citizens accused of crimes have a constitutional right to a speedy public trial by an impartial jury, to be informed of the nature and cause of the accusation, to be confronted with witnesses against them, to bring witnesses in their favor, and to have the assistance of legal counsel. On April 27, 1861, Lincoln decided that such constitutional... ...rica’s great Tyrant. Footnotes 1. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 9. 2. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 135. 3. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 145. 4. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 141. 5. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 150. 6. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 35. 7. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 11. 8. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 48. 9. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 275. 10. Thomas J. DiLorenzo, The Real Lincoln (New York: Three Rivers Press, 2002) 269.

Michael Manns The Insider - History Redefined :: Movie Film Essays

Michael Mann's The Insider - History Redefined [1] Growing up, I had always been a gullible child. If someone had told me the sky was falling, I would inevitably look up. As my naivety led me to be the butt of many jokes, I grew less and less trusting. I learned that if something looks too good to be true, then it probably is. I learned not to buy products from infomercials. I even had to sadly face the reality that the WWF wrestling matches I so faithfully watched each weekend were fake. My eyes had been forced open and made to look at the light. But when I looked back down at the world around me, my vision was blurred. I had become cynical. [2] In retrospect, this change was a somewhat positive one. I began questioning everything, taking nothing for granted. I watched movies and television shows with a look of disgust, knowing that the unlikely scenarios portrayed on the screen could never happen in real life. When the Reel American History project came my way, I knew it was the perfect playground for my inquisitive mind and distrustful nature. I thought about how I would be a detective, uncovering the real facts about what happened. Nothing would get by me! I imagined myself picking apart the film, scene by scene, and raking the filmmaker over the coals for daring to manipulate history. [3] After choosing to study The Insider, I sat down to watch it. For close to three hours I was riveted by the drama unfolding on the screen. I was completely swept up in the story. As the last scene faded away, I sat silently with my emotions: sadness for Jeffrey Wigand's losses, an utter hatred for the entire tobacco industry (at that point, synonymous with "evil" in my mind), and a deep sense of admiration for my new hero, Lowell Bergman. But then a new frame came up on the screen and interrupted my thoughts. I squinted to see what the small print said: "Subsequent to the events dramatized here, the tobacco industry in 1998 settled the lawsuits filed against it by Mississippi and 49 other states for $246 billion.

The Pearl :: essays research papers

Kino’s lack of material items did not keep him from happiness. That is until he thought it was possible to acquire a greater amount of wealth and increase his happiness through the pearl. In turn, this resulted in the downfall of Kino and his family.   Ã‚  Ã‚  Ã‚  Ã‚  Kino’s life before the pearl brought him satisfaction and contentment. He was a loving husband and father. â€Å"Juana is driven, although instinctively as a woman to heal the family, nevertheless in reality to act for the man to protect the family.† (Karsten 6) He raised and took care of them. Kino loved Coyotito; His son was his pride and joy. He brought together Kino and Juana and made them a family. There is also Juan Tomà  s, Kino’s brother, who supported Kino throughout his life. â€Å"We do know that we are cheated from birth to the overcharge on our coffins. But we survive. You have defied not the pearl buyers, but the whole structure, the whole way of life, and I am afraid for you.† (Steinbeck 70) Kino had few possessions. He had his home, a brush hut, which provided protection and shelter. In addition, a canoe, this is a family heirloom. It was passed down from grandfather to father to son. â€Å"Kino and Juana came slowly down to the beach and to Kino’s canoe, which was the one thing of value he owned in the world.† (Steinbeck 19) â€Å"It was once property and source of food, for a man with a boat can guarantee a woman that she will eat something.† (Steinbeck 19) Kino also had the song of the family. The song brings a feeling of unity â€Å"... the Song of the Family is identified along with other unnamed songs, the heritage of Kino’s people, in the calm beginning of the story... (Karsten 2) Many changes and alterations were brought about by the pearl. Kino immediately began to make a list of things that he wanted to buy with the pearl’s wealth. He has an opportunity for social mobility and acts upon it. Among the many things on his list were an official marriage, new clothes, a rifle, and education for his son. Instantaneously, Kino’s desires became cloudy. â€Å"There was no certainty in seeing, no proof that what you saw was there or was not there.† (Astro 29) Kino then started doubting his dreams and the pearl became misty and cloudy. Kino’s community thought of him differently because of his sudden acquired wealth.

Cell Phones – Boon or Bane

Is a knife useful instrument or a perilous weapon? It depends on how it is used. Same implies with the case of technology. The greatest invention are those which affect the mass of people; and of those greatest invention is cell phones . It would be very ungrateful on our parts not to recognise how imperative are they to us. Cell phones have revolutionised the human existence . This is possible only because they are getting cheaper and cheaper day by day. Discounted cell phones accessories have made it even easier to keep the phone intact and give it a longer life. Undoubtedly , if cell phones are in right hands ,then they are a marvel ! Firstly they are proved to be a gratuity on the account of uniting not only the country but the entire planet as a â€Å"global village†. No matter how far we are sitting we can gossip anytime anywhere! In fact it’s bliss to the parents as well as children . Parents can every time monitor their children and children are also safe. If anyone is in any kind of danger s/he can call for help immediately . It arrests mishaps. The delight of watching favourite tv shows, songs, etc is unmatched; as now cell phones are embedded with all high tech features. Also discounted cell phone accessories have added cherry on the top. Accessories such as wireless Bluetooth handset (can be used to talk without even locating the cell phone ) , cases and pouches (keeping the phone intact and out of harm's way ) , charger ,adapter battery covers ,screen protectors are so easily available that they help people to uphold their cell phone with an ease. There are always two sides of a coin . The Time creation aspect of technology has posed a peril which we keep ignoring . The cell phones have progressed rapidly at the rate of knots. Also at the same time they have provide us with a cushion to challenge more task than what we would have attempted if cell phones would have gone on a French leave! This invites element of multitasking. This deprives a person of enjoying his own hard earned money! Also when a person is multitasking rather than completing a single task he merely juggles between a huge number of tasks. This causes burden and hence results in Stress . Stress is a bane to the modern era. Due to our ill capacities of not understanding the correct usuage of resource, our life has turned into a Frankenstein’s movie! Also cell phones have made terrorist attacks in the world very easy. This has become a global matter of concern . Not going far beyond and viewing things aerially and focusing solely on our lives children are growing in precocious manner ,which is again a big matter of concern for parents . Also discounted cell phone accessories have made it easier for children to buy them and keep them unnoticed! They burn their time to ashes by playing games on it, listening songs etc. Instead of going out and playing, they stick to their easy chairs or couches and play games on their phones , which turns their reflexes into slow responses! We have heard of batteries blasting when they were put to charging. This is again on the account of using discounted cell phone accessories . The retailers replace the original piece with duplicate ones, to which customers are totally unaware of. Over utilisation of any resource is harmful . Now mobile phones have interweaved into our lives so much ,that some have started considering it as an inevitable part of their lives. They are addicted to it like a drug addict is addicted to drugs and some have gone even worse! This has consequently given rise to new phobias! Such as Nomophobia (the fear of being out of cell phone) ,Phantom ring (imagining call phone to be ringing when it is actually not) , Human antenna (holding phone high up in the air so that it can catch signal! )and so on. Not only this usage ,of cell phones driving have contributed 10% to the road accidents. We should always remember , that there lives a wise man between the valley of two mountains. Plain and pleasure are a result of modern technology . Usage of cell phones as a boon or a bane ; the answer lies in our hands!

American Transcendentalism: the Life of Spiritual Individuality Essay

In the Second Great Awakening different spurs of religious movements were influenced around the country in the late 18th century. During the religious movement one of the major reforms was Unitarism. In the Unitarian Church the main focus is on God, and the impact God has on the unity of the world . Although many joined this reform, there were others that went against it. They disagreed with the contracted meaning of Christian when referring to God. They favored the name â€Å"theist,† that showed â€Å"universal designation of the divinity. † These people were called Transcendentalist. Transcendentalism was an idealistic and literary movement that promotes a simple lifestyle and a â€Å"semi-religious nature. † The Transcendental Club was founded in 1836 in Boston, Massachusetts. The founder and most popular of them all was a writer and bard, Ralph Waldo Emerson. Others that were involved were a feminist reformer and writer, Margaret Fuller, a minister, Theodore Parker, naturalist and novelist, Henry David Thoreau, James Freeman Clarke and many other members. People became very confused with the beliefs of the transcendentalism. Transcendentalism contained â€Å"a combination of intellectual, aesthetic, and spiritual attributes. † James Freemen Clarke stated that â€Å"we are called like-minded because no two of us think alike. † There was no definite dogma for this belief but there were still values generally held. In An Essay on Transcendentalism, by Charles Mayo Ellis he explained that transcendentalism sustained one’s idea from God, motivation or the pious world. The inner conscience was where all ideas and reason began. Transcendentalists had a very different lifestyle. They were not very successful with all their ideas, but they promoted ideological and social change though their research and the great mind their God gave them. Emerson also rejected the Unitarism community and was seen to be the founder of the Transcendentalists. He believed Unitarism to be â€Å"a cold intellectualism that seemed to destroy the validity of man’s conscience,† meaning stopping a man from thinking. He created a group with his friends that did an extensive research on a philosophy that had a more universal just. A philosophy they revealed was a German transcendentalist by Immanuel Kant in the 18th century. Emerson’s lectures were mostly about the history of the world and what history actually is. America was influence also by the books, Aids of Reflection by Thomas Carlyle and Samuel Coleridge. Al the reform grew by the writings by Bhagavad-Gita of Hinduism, Saying of Confucius, and French authors. Ralph Waldo Emerson created the First Series in 1841 an Essay on History and begins with one of his poems: There is no great and no small To the Soul that maketh all: And where it cometh, all things are; And it cometh everywhere, I am owner of the sphere Of the sevens and the solar year, Of Caesar’s hand, and Plato’s brain, Of Lord Christ’s heart, and Shakspeare’s strain. At the end of the poem Emerson’s references to Caesar, Plato, Lord Christ, and Shakespeare, who are still known as great men, would have influenced Americans to keep listening, reading, and understanding his views. Emerson believed in self-reliance. Transcendentalism is focused on the right to reason through one’s conscience and spiritual world. Emerson states in his essay that one who has â€Å"the right of reason is made a freeman of the whole estate. † He described his thought by using the experiences of Plato. Americans would be able to realize if a great man like Plato acted upon Emerson’s statement, and they also were to repeat it, they may become great like him. Emerson continued to explain that one is determines their history and â€Å"this human mind wrote history†¦ if the whole of history is in one man, it is all to be explained from individual experience. † If one is an individual their decisions impact where they will end up in life, but also one individual can change the world. Emerson uses the example that â€Å"everyone revolution was first a thought in one man’s mind and when the same thought occurs to another, it is the key to that era†¦every reform was once a private opinion, and when it shall be a private opinion again, it will solve the problem of the age. † Solving the problem of the age was the task of Emerson and other transcendentalists and other social reformers. Throughout the whole essay the individual that Emerson was referring to can be anyone. He did not judge by the color and size, but people were seen as equals. This idea gave hope to the minorities of America who were looked down upon. Emerson gave them up and believed that they will motivate themselves to be the individual that wise men opt to be. Henry David Thoreau had his own vies on transcendentalism. He believed in â€Å"individual conscience† and if one disagreed with a law proposed by the government they should refuse to obey the laws. He did not believe in violence and always resorted in peace. In the Resistance to Civil Government written 1849 by Thoreau, he explained how the American government was corrupted. He said, â€Å"That government is best which governs not at all,† throughout his proposal he continued to state a good government was expedient. An expedient government is one that focuses on the practical rather than the moral reasons. The American government was all tradition and it did not promote a free country. Thoreau wanted a better government. Transcendentalists had strong faith in the conscience. Thoreau asked the question, â€Å"Can there not be a government in which the majorities do not virtually decide right and wrong, but conscience? † One should use their conscience to understand right from wrong and not by what tradition may explain. Thoreau also explained how the corrupted government has controlled the people. In the military they were known as the â€Å"standing army† and the mean had no free will of judgment. Thoreau’s idea of civil disobedience was practiced by a solider who did not want to fight in an unjust war. The government expected to obey their â€Å"unjust laws† There were two different types of injustice described. Thoreau understood which situations to let go and which to act upon: If the injustice is part of the necessary friction of the machine of government, let it go, let it go: perchance it will wear smooth–certainly the machine will wear out. If the injustice has a spring, or a pulley, or a rope, or a crank, exclusively for itself, then perhaps you may consider whether the remedy will not be worse than the evil; but if it is of such a nature that it requires you to be the agent of injustice to another, and then I say, break the law. Thoreau did not believe in slavery or the war in Mexico and these events started the civil disobedience. When person does not follow the rules of the government then they are put in jail. Jail is the right place for both a thief and a â€Å"just man†. The whole America government was based on majority rules; the government was based on injustice. â€Å"All voting is a sort of gaming, like checkers, or backgammon†¦ playing with right and wrong, with moral questions; and betting naturally accompanies it†¦cast your whole vote, not a strip of paper merely, but your whole influence. † The minorities were rejected and overlooked. Minorities were powerless, and they should result into civil disobedience. Thoreau explains the attitude of his state by giving a scenario. What will the state of Massachusetts would do with the man; they will rather keep all in prison and give up war and slavery. Civil disobedience is a rebellion known as a â€Å"peaceable revolution. † The reason that many did not want to practice civil disobedience was because of fear. They were afraid of the consequence to their kin and assets. Thoreau experienced the consequences of civil disobedience. He did not pay his tax for six years and he was put in jail. He believed that living in jail was better than obeying an unjust law. This rebellion in jail was a type of propaganda that influenced people to take to stand for what they believed in and used their conscience. Men that use their conscience are just men. Thoreau’s dream was to live in a stat in which justice was served to all and everyone is treated with respect. Transcendentalism was a very widespread religion that understood one’s individuality and self-reliance. Throughout America, people were more and more influenced by the Second Great Awakening. Ideological and social change was promoted mostly through writing. Both Emerson and Thoreau were able to express themselves that was to motivation a reader to change their lifestyle. Also the Transcendental Club was not strict and did not have an imposed guideline. Transcendentalism focused on the unity of others and the minorities are recognized. In the long-run Transcendentalism was not as successful as it was seen to be, but during the late 18th century and early 19th century this reform had a big impact on the lives of the American people. 1. Campbell, Donna M. â€Å"American Transcendentalism. † http://www. wsu. edu/~campbelld/amlit/amtrans. htm. 21 May 2007. Literary Movements. 19 Apr. 2009 . 2. Danzer, Gerald A. , et al. â€Å"Religion Sparks Reform. † Afterword. The Americans. 1985. By Danzer, et al.. Ed. John S. Bowes. Evanston: McDougal Littell, 2003. 240-245. 3. Emerson, Ralph Waldo. â€Å"Emerson’s Journal, June 24, 1863. † http://www. transcendentalists. com/emerson_on_thoreau. htm. 19 Apr. 2009. Jone Johnson Lewis. 19 Apr. 2009 . 4. Emerson, Ralph Waldo. â€Å"History from Essays: First Series (1841). † http://www. emersoncentral. com/history. htm. 19 Apr. 2009. Jone Johnson Lewis. 19 Apr. 2009 . 5. Harding, Walter. â€Å"Transcendentalism. † http://www. themystica. com/mystica/articles/t/transcendentalism. html. 14 Apr. 2009. MYSTICA. 19 Apr. 2009 . 6. Thoreau, Henry David. â€Å"1849, Resistance to Civil Government. † http://www. transcendentalists. com/1thorea. html. 19 Apr. 2009. Jone Johnson Lewis. 19 Apr. 2009 .