About The Blog

Debate at the intersection of business, technology and culture in the world of digital money, both commercial and government, a blog born from the Digital Money Forum in London and sponsored by Consult Hyperion

Advertisers

Technorati

  • Add to
Technorati Favorites

License

  • Creative Commons

    Attribution Non-Commercial Share Alike

    This work is licensed under a Creative Commons Attribution - Noncommercial - Share Alike 2.0 UK: England & Wales License.

    Please note that by replying in this Forum you agree to license your comments in the same way. Your comments may be edited and used but will always be attributed.

« Credit, debit, prepaid | Main | If you must use cash »

Negative added value

By davebirch posted Apr 17 2007 at 8:57 AM

[Dave Birch] Cash really is a waste of money.  In the U.S.A., the government has been losing money of every new copper coin, as the costs of producing a one cent coin is about 1.4 cents.  Now, because of the cost of nickel, the five cent coin now costs 5.73 cents.  This makes minting coins an astonishingly bad business: it may well be unique in the amount of value destroyed in the production process.  I wonder if there's a business school course somewhere about managing businesses with negative added value: the final product is actually worth less than it's raw materials.

Technorati Tags: ,

I do remember hearing about this phenomenon before.  It was many years ago when I was teaching an MBA course in IT Management and I can remember some of the (mature) students discussing negative value in the context of the Trabant, the famous East German mass-market car which was so rubbish that building them destroyed the value of the basic raw materials, let alone anything else.  I did a quick google to see if I could find a reference to this and found that negative added value is well-known: in fact, during the 1990s, ALL of the world’s leading automobile manufacturers (with the exception of DaimlerChrysler) earned a negative added value!

You really do learning something new every day.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c4fd753ef00d8341ca6d053ef

Listed below are links to weblogs that reference Negative added value:

Comments

The comments to this entry are closed.