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Big vs small government? You’re asking the wrong question

big business, big government, democracy, Good Democracy, on a high, Peter Levine, small business, small government No Responses »

Jan 292013

I’ve been wondering, as is my wont, on issues I can do nothing about.

The big play at the moment seems to be between the proponents of big versus small government. I tweeted a link this afternoon to a piece on A Better People. The piece describes how some of the functions of tax collection might be replaced with the process of crowdfunding:

With the rise of the internet, however, another approach to funding government is becoming more viable – crowdfunding.

Crowdfunding involves asking people to provide funds for worthwhile projects on a micro-scale, many individuals each donating a small amount.

This isn’t a totally new approach. Rich philanthropists have donated millions for worthwhile causes, communities have come together to fund (and build) small public works and individuals have adopted park benches and potholes for many years.

However the internet has lifted crowdfunding to a new level, with the potential to cost-effectively raise millions of dollars through tiny individual donations in a managed way.

The only response to my tweet at the time of writing was (I think) to indicate this would be the way forward in order to cut big government. I fail, however, to see how this conclusion was arrived at. Let me explain.

In our modern civilisation, government is always big. In reality, there is no getting away from this big government. Sometimes, this government is located in that part of society where politicians are voted for and we regularly (though not as frequently as we might prefer) get to throw them out. This kind of big government may attempt – as I feel is right – to mediate between the needs of the voters, the economic engine of business and other interested parties out there. It may, however, on the other desultory hand, and as I believe is happening right now, give in to the demands of moneyed citizens and allow them a permanently exaggerated influence over the resulting democracy.

There is, of course, quite a different big government. This is the kind of big government which results from the kind of response (I think) the tweet I mention above was making. Here, the proponents of such government make out it is actually small government. They aim to ensure politicians we vote for have as few resources as possible to dish out and share (or not) amongst the commoners. What such proponents fail to realise is that big government – just like energy (a matter which is never created, never destroyed, only ever converted) – will always find a place to install itself. In this case, then, those moneyed citizens I mention above gain not just a permanently exaggerated influence over this now sad body we call democracy but – in truth – a de facto control over everything.

This is how big government slides into a different landscape: it becomes the exclusive tool of the rich and wealthy instead of a bulwark against the abuses all of us at some time or other might be inclined to contemplate. From the hateful big public government feared by the small governmenters – that beast which cannot always be properly controlled – it becomes the fearful big private government despised by the state-enamoured socialists and social democrats.

The only conclusion I can come to as a result is that big government is a given; is inevitable; and needs to be accepted.

In a complex society such as the one we now inhabit, the question is not big versus small government.

The question is what type of big government.

Which leads me on to consider the confusing issue of democracy. If we believe in it, we should implement it above and beyond the immediate requirements of efficacy. And if we believe in it thus, big government should serve – above all – the democratic instincts which allow a populace to express its voice on a regular basis.

If, however, we feel at all that time is short – that decisions taken speedily are more useful than decisions taken ultra-democratically – the kind of big government we should really be contemplating is quite a different beast. Here, it should be populated by pyramidal hierarchies where few people are in charge. The principle being that a bad decision taken quickly is better than any decision at all – whether good or bad – which finds itself being taken over a wearisome period of time.

And if we believe in a democracy of greater complexity, a “good democracy” to use Peter Levine’s terminology, where the needs of citizen empowerment are matched against the efficiency of the process, where indeed the definition of efficiency contemplates the degree to which ordinary citizens are afforded the opportunity to take part, the kind of big government we should aim to create will combine aspects of both the big public government we are accustomed to complain about as well as the big private government we are generally led to believe benign.

Or which we are, in fact, mostly oblivious of.

Big versus small government? I think it’s clear what I feel on the subject. The real question now, I suppose, is whether those who prefer to posit the argument around the aforementioned axis do so out of ignorance or do so with an unfortunate – and quite ill-natured – intentionality.

A question for another day perhaps?

What say you?

Can anything big behave as if it were small?

ACTA, Big Agreement, Big Capitalism, Big Society, Big State, FreeTheInternet, Internet, on a high, open web, PIPA, small business, small government, SOPA, sorted, Splinternet, web, websites No Responses »

Feb 112012

As I logged onto Twitter an hour ago, a long line of tweets came my way in which I had been included in the early hours of this morning. Brian started the ball rolling by linking to a post of mine on the subject of what I tentatively called the “Big Agreement” – where a new contract would be drawn up between interested parties on what to do about both the “Big State” and “Big Capitalism”, neither of which were appearing to be especially relevant to a 21st century society with evermore devolving instincts.

The final tweet in the line of tweets in question was this one from Frances Coppola:

@brianfmoylan @eiohel @legalaware Big Society, Big State, Big Corporates, Big Capitalism….big is the problem

Now whilst I am inclined instinctively to agree, I do wonder if the problem is size or – on the other hand – behaviours. After all, we do have a perfect paradigm of vastness in 21st century life which actually behaves like very small: here, I refer, of course, to the Internet and its various bits and bobs. In essence – with its billions of pages of data and interactivity, its millions of connected servers and its ability to find and remember what’s relevant and apposite – it both acts like a human brain on a very discrete scale as well as performing the tasks of a globalised entity.

Very big then – or very small?

I’m inclined to believe it is both.

I’m not sure, therefore, that Frances is right to assume big can never act small for all our benefits. In reality, the very fact that so much of modern lawyerly energy is being expended on trying to shoehorn the current web and Internet into the traditional business models of content industries across the world is a clear indication that the aforementioned elements of virtual communication are currently big enough to attract the attention of these corporate behemoths – but too small in some aspect or another for them to be able to fully trust the selfsame Internet’s ways of seeing and doing.

So it is that I might argue we need to examine how the web and the Internet manage to carry off this wonderful sleight of hand with such apparent aplomb.

For the experience such behaviours provide us with is surely applicable to other areas of human endeavour.

And, if only we were able to stand back and analyse with intelligence, we might take advantage greatly of such clear examples of overwhelming achievement – as we continue to strive to create more responsive public and private sectors.

Backing finance or backing monopolistic waste?

bad business, banking, big business, Britain, consumer banking, financial crisis, investment banking, Labour Uncut, small business, unclassifiable No Responses »

Feb 082012

Labour Uncut has a sad piece today on the subject of why Labour needs to back the financial services sector. Sad because it’s clearly an example of a wasted opportunity.

The author of the article, a successful entrepreneur, argues a number of things which – as a very humble ex-worker in a bank at the eye of the 2008 storm – I really must take serious issue with. He does fairly say, for example, that:

[...] it’s not just British bankers who are busy corrupting their national standards of decency and fairness either. The Spanish bankers are also at it, with Santander and BBVA dishing out eye-watering bonuses that will have many City types wondering what exactly their overseas brethren did to end up with both the weather and the cash.

Without mentioning that the new right-wing Spanish government has placed a €600,000 cap on the executive salaries – never mind bonuses – of those who work at Spanish banks which have received public funds over the past few years.

He then goes on to point out that (the bold is mine):

It’s hard not to recoil when looking at the sheer magnitude of some bonuses and then the gap between top and bottom.

But here’s the problem. Words are powerful, especially on a subject as emotive as this. Attacking injustice is fine, but “bankers” has become a term of abuse that is applied without distinction and as a result ends up tarring everyone working in financial services.

And here I agree unreservedly. I remember what it was like when a staid, boring and underpaid profession as my own – my remuneration was always less than the average national wage, even when for example I had responsibilities as complex as checking documentation for signs of potential money-laundering – became the kind of profession one simply didn’t admit to in polite company. From being the glue which kept society together to a pariah on the face of the planet is not an easy series of steps to take.

However, it is when the author of the article under discussion goes on to say the following that I really take issue (again the bold is mine):

The UK is an acknowledged world leader in financial services. Just as in the past the UK was a leader in making cars, ships and textiles. Hundreds of banks and financial institutions from all over the world flock to Britain because it was and currently remains the best place to do business.

But there’s nothing that pre-ordains this will always be so.

If a future Labour government goes to war with finance in pursuit of a mythical rebalancing of the economy, the cost will be felt in the dole queues and in Britain’s international competitiveness.

As if these costs weren’t already being felt precisely because of the recent products, processes and behaviours of a financial services sector which – even now – tends to believe self-regulation would be the answer?

I have, in my job at the bank, witnessed the kind of waste that goes on in all large corporations. From unhappy experiences in IT-system commissioning to dreadfully overpriced display units designed to improve internal communication; from a specialised computer mouse costing an arm and a leg, with the aim of protecting an arm and a wrist from the pain of repetitive-strain injury, to a plush hotel room in a city far away from home for a perfectly honest charity event everyone was too embarrassed at the time to properly publicise; from 50 percent bonuses for middle managers, whose job it was to implement opaque salary policies and end-of-year distribution curves designed to make objectives impossible to achieve, to unnecessary overtime payments for projects poorly managed and husbanded … these are surely not the signs of an industry which currently deserves our support.

Neither fair in remuneration nor measured in its ability to manage change constructively, the real customers of the banking industry happen not to be the personal ones like you and me … nor the sole traders … nor the small- and medium-sized businesses … but, rather, far more importantly, the managers at the top of the tree.

All the admirably good and hard work of the call-centre staff, the branch personnel and the sales people who suffer every day of the week means nothing in the face of the fact that these behemoths are evermore structured to make money for their leaders.

I agree with the initial thesis that we shouldn’t be bashing an entire industry simply because the people at the top are behaving without a single fibre of moral propriety. And the solution to the problem can, perhaps, quite unconsciously, be found in this final quote (once again, the bold is mine):

Actions have consequences and the Labour leadership would do well to pause before endorsing policies that will scythe into one of this country’s truly world class industries. As with Britain’s past industries, it doesn’t take long to lose the edge and fall back.

The Labour party needs to take a deep breath and consider the hundreds of thousands of people whose jobs are at stake in finance. We need to remember that financial services have a key role to play in the future growth of all our industries. And most of all, we need to develop balanced and strategic policies for the financial sector, not simply hop onto the banker-bashing bandwagon.

“As with Britain’s past industries, it doesn’t take long to lose the edge and fall back.” That’s a quote and a half – and should make us think far more profoundly. What is it about British industry and its hierarchical structures which makes it so prone to the vagaries of elements beyond businesspeople’s direct control?

Cogitate on the answer to that one – and you may discover the way forward for our wider society.

A blame culture, ours? It starts from the top. Leadership is, after all, as I saw commented the other day, much more a question of providing the right kind of facilitating work environment than micromanaging people’s creativity out of existence.

Sustainable 21st century business surely requires people at the top to centralise far less their responsibilities on themselves. This does mean, of course, that they will become less indispensable – and, therefore, cheaper to employ. But until this is done, British business will continue to be at the mercy far more of government legislation and external factors than its own long-term and internal securities and structures. Only when both power and earnings are transferred to the people who actually add daily value to a company will company culture and differentiation from the rest of the marketplace become more positively entrenched – and the impact politicians can have on the future health of a sector become, equally, far less significant.

Labour’s attitude to British finance shouldn’t be the key to improving the ability of the sector to perform, whatever the framework. That key, instead, lies within the sector itself. And if the market were truly free – as, indeed, I believe it should be – the sector itself would already realise this.

Whilst a monopoly of top executives continues to run the financial services sector in the UK, we will get a stream of complaints from these top-heavy and highly uncompetitive companies unhappy with the legislative and regulatory constraints of the British economy.

It’s high time they realised they need to sort out their problems by sorting out the way they manage their businesses.

You don’t need to pay someone million-pound bonuses to know how to cut the livelihoods of tens of thousands of workers. For that kind of money we need far more imagination.

So up your game lads and lasses. And transfer that power!
____________________

Update to this post: some background reading from the Guardian newspaper has just come my way – an interview with Stephen Hester from the Royal Bank of Scotland on the subject of the furore surrounding his recent bonus award. It also provides an alternative viewpoint to some of the issues I raise above. Well worth your time.

How the Coalition is deliberately engineering a competitive deficit in British business

a con, bad business, big business, Britain, Coalition capitalism, competition, competitive deficit, small business No Responses »

Jan 272012

Prologue

I will try and limit myself to simply quoting two contrasting situations tonight, though this may prove rather difficult – if not entirely impossible. [Editor's observation: in hindsight it was!]

Act I – Banking on it!

The first involves the Royal Bank of Scotland. Quote number one here from our dearly beloved Guardian:

Royal Bank of Scotland stoked a political row on Thursday night after it announced it had awarded its chief executive, Stephen Hester, a bonus worth almost £1m.

The payment was derided as “utterly unacceptable” by one Liberal Democrat peer, while a Foreign Office minister calculated that Hester’s package meant he was paid in three days what a soldier in Afghanistan, “risking his life”, earned in a whole year.

What’s more:

The bailed-out bank attempted to justify the bonus – which is being paid in shares that Hester will be able to gain access to in 2014 – by saying it needed to reward the chief executive for the progress he had made in reducing the size of RBS.

Since he joined in November 2008, the bank has cut 33,000 jobs.

So Hester needs to have his already lavish salary almost doubled – in this case it is the state, as 80 percent shareholder, which has voluntarily chosen to act thus (for no prior contractual agreement imposed by a previous regime was operating in this particular instance) – in order to reward him for the magnificent skills and prescience required which allowed him to discover how to save pots of shareholder money by prejudicing the lives and times of what we must conclude are 33,000 unskilled and short-sighted workers.

So let’s just weigh that one up as we move onto quote number two, from the same newspaper:

The Royal Bank of Scotland has spent more than $4m (£2.5m) of British taxpayers’ money on lobbyists in Washington since it was bailed out by the government, documents disclose.

Both in-house and commercial lobbyists have been paid to influence American senators and congressmen reforming US finance law since the bank’s collapse and government bail-out in October 2008.

The money has been handed over despite calls from ministers for RBS and other banks that have received taxpayers’ handouts to refrain from hiring public affairs firms.

So is there anything I can add to this which you are not already thinking?

One rule for the rich – and quite another for the poor?

Act II – In the black!

It looks like the government might be trying to work out a way to limit the black economy in the UK to a maximum of £1000 in cash payments. I’m not sure how many cash payments this might eliminate in reality – but let’s put that thought to one side for the moment. Anyhow, today I read from tris over at Munguin’s Republic the following pair of golfing metaphors (ie par for the whole damn bloody dispiriting public-private sector course):

HMCR chief Dave Hartnett (you remember him, don’t you?), says that it is the public’s duty not to pay tradesmen cash in hand, otherwise said tradesmen may be tempted (look away if you are of a sensitive disposition) to ‘evade paying their fair share of tax.’ (Shock, horror.)

And, if you do not act as tax collectors (unpaid), and they do “forget” to declare all their earnings, this might result in even deeper government cuts to public services. (More shock and horror!!)

However, according to tris the very same Mr Hartnett has also been responsible for a number of other matters over the past couple of years about which the Telegraph actually had this to say way back in December; matters which, in reality, cast a teensy bit of doubt on his intellectual cogency. These matters are somewhat distanced from the alleged behaviours of your neighbourhood builder (who, incidentally, though probably irrelevantly to civil servants like the aforementioned individual, may as a result of government economic policy be currently struggling to make ends meet). To continue in tris’s own words:

Now, would this be the same Dave Hartnett who, having allowed himself to be bought, on over 100 occasions, incredibly expensive meals, arranged multi-billion pound tax avoidance schemes with the Goldman Sachs and Vodafone…who, by strange co-incidence, had picked up the tabs for these “fine dining experiences”?

And did this multi-billion pound drop in tax revenue not in some way result in the government having less money to spend?

Meanwhile, we have a story from False Economy from September 2011 which clearly indicates that the government is actually being extremely coherent indeed (table here):

Disturbingly our research shows that some of the companies lining up to take a slice of the mushrooming multi-billion pound public service sector are among the most unethical in the UK and many remain largely unknown to the public

We’ve found that the biggest companies that are playing an increasingly important role in running our public services have the bottom rating for many of our ethical and environmental criteria, including environmental reporting, supply chain management, human and workers’ rights and political activity.

The government is now selling our public services to companies seemingly without any scrutiny of a company’s ethical or environmental policies. This apparent policy vacuum challenges the coalition’s stated claim that ‘this will be the greenest government that the UK has seen’. This is significant as it threatens to undermine the progress that the previous government had made in terms of its ethical and environmental purchasing policies.

And what’s more:

Another area that gives great cause for concern is the evidence we have uncovered that shows that 13 of the companies we surveyed have subsidiaries in countries that are widely considered to be tax havens, something that is included in our Anti-Social Finance category.

This implies that the companies concerned, including some of biggest names in the outsourcing industry such as BUPA, Capita and Sodexo, are managing their finances in such a way that they may be actively avoiding paying tax here in the UK.

Coherent government, that is, in the sense we have already observed: one set of permissible behaviours for the poorer end of society – and clearly quite another set for the wealthier ones amongst us.

Epilogue

I’m beginning to get the feeling that this government and its civil servants are not only being actively encouraged through close and carefully weaved private connections to set up a two-tier Britain as far as public services are concerned, they’re also being actively encouraged to create a Britain whereby:

everything which private companies need in order to function in the public space is externalised onto a rapidly shrinking state evermore at the exclusive service of private sector interests – that is to say, we as a voting public lose out twice: a) fewer public resources will remain as a whole and b) of the fewer resources that remain, more of them will end up in the pockets of private sector advocates
large industry interests will be massively prioritised at the expense of the small – that is to say, whilst only big companies will be able to afford the technical advice to avoid paying tax, small companies will inevitably end up paying proportionately far more than their big cousins ever will

This is in no way a free-market level playing-field of any kind whatsoever. Traditional economies of scale mean those with a monopolistic stranglehold over whole sectors and industries already have a substantial advantage over their small- and medium-sized competitors. But factor into the mix the reality that most large companies will now interpret the government’s recent agreements on tax liability as providing a green light for such behaviours … well, we can only then conclude that a competitive deficit is being deliberately engineered into the British business environment – a deficit intentionally designed to prejudice the smaller companies on that spectrum of economic activity and favour the much larger.

There must, of course, be a better way. The question, of course, is who may provide the leadership we need on the matter.

I would like it to be someone from the party I belong to.

And I do wonder if, one day, it could ever be the case.

Should our economy be democratic – and is this something Labour and its potential voters can agree on?

big business, capitalism, economic democracy, government, Labour, on a high, professional politicos, small business 3 Responses »

Jan 242012

This introduction to the term “economic democracy” came my way via Tom on Facebook today. I republish it in full below:

Economic democracy is a socioeconomic philosophy that suggests a shift in decision-making power from a small minority of corporate shareholders to a larger majority of public stakeholders. There is no single definition or approach for economic democracy, but most theories and real-world examples challenge the demonstrated tendencies of modern property relations to externalize costs, subordinate the general well-being to private profit, and deny the populace majority a democratic voice in economic policy decisions.[1]

It’s the next bits which I really like, though (the bold is mine):

Classical liberals argue that the power to dispose of the means of production belongs to entrepreneurs and capitalists, and can only be acquired by means of the consumers’ ballot, held daily in the marketplace.[2] “The capitalistic social order”, they claim, therefore, “is an economic democracy in the strictest sense of the word.”[3] Critics of this claim point out that consumers only vote on the value of the product when they make a purchase; they are not voting on who should own the means of production, on who can keep its profits or on the resulting income redistribution. Proponents of economic democracy generally agree, therefore, that modern capitalism tends to hinder or prevent society from earning enough income to purchase its output production. Centralized corporate monopoly of common resources typically forces conditions of artificial scarcity upon the greater majority, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.[4][5]

Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory, and as a variety of reform agendas. In most cases, economic democracy promotes universal access to “common resources” that are typically privatized by corporate capitalism or centralized by state socialism. Assuming full political rights cannot be won without full economic rights,[1] economic democracy is a proposed solution for the problems of economic instability and deficiency of effective demand. As an alternative model, both market and non-market theories of economic democracy have been proposed. As a reform agenda, supporting theories and real-world examples range from decentralization and economic liberalization to democratic cooperatives, fair trade, and the regionalization of food production and currency.

It seems to me that in this concept we might have the seeds of a properly renewed Labour Party – even if some significant proportion of a decade down the line. Rather than focussing on the “how” – the policy-making details so beloved of professional politicos but of so little immediate interest to the wider voting public – surely what at least Labour needs far more urgently is a “what” everyone, voters and supporters, can agree on.

“Responsible capitalism” is certainly a nicely turned phrase for policy wonks – but at least fifty percent tainted by many people’s current experiences. Meanwhile, applauding the ability to learn from one’s enemies obviates the need to admit that choosing one’s friends is a far more significant leap in political activity.

Far better surely, then, than the triangulation of the latter – or, even, the uncertain timbre of the former – is precisely the concept under discussion in this post which Tom has brought to our attention: bringing democracy to economic activity.

But as an overarching and shared meme to capture people’s imaginations. Neither workers’ cooperatives nor mutual business structures; neither stakeholder consultations nor a popular capitalism. No detailed instructions which would allow the enemy to pick away, perhaps quite rightly in the event, at the gorgeous potential of such an idea.

Rather, we should argue that where we really place the source of our deficit in modern societies is not in our voting system; not in our media; not in big or small business behaviours; not, even, in our politics. Instead, it is entirely to do with how imperious that “consumers’ ballot” isn’t: a ballot, right now, which covers only a discrete set of purchasing decisions and ignores almost everything else of importance in the processes that run our economies.

An “everything else” which – to be honest – has clearly failed us of late. Perhaps precisely because economic democracy in Western societies is such a limited, empty and anti-democratic practice.

A "game changer" which rewards banks with more easy profit on a plate?

a con, banks, game changer, George Osborne, small business, SMEs No Responses »

Nov 262011

http://youtu.be/Ob5GsXIKG_k

OK. Let me get this straight. This is the idea:

Chancellor George Osborne will unveil a new government scheme to underwrite at least £10bn of loans to small businesses when he delivers his autumn statement on the economy on Tuesday.

The ~~government mouthpiece~~ BBC goes on to report that:

The plan sees the government underwrite banks’ borrowing, allowing them to borrow more cheaply.

This saving should then be passed on to the firms through lower interest rates.

A Treasury source described the scheme, which is thought to be similar to the Labour government’s credit guarantee scheme of 2008, as a “game changer”.

So. Banks have failed completely to run their affairs correctly and have played a grand part in the economic unhappiness we are all currently suffering from. And as a reward, instead of pumping money directly into small and medium-sized businesses, most of which have struggled admirably to keep afloat in circumstances entirely outside their control, the government – in its astonishing wisdom – has decided to channel yet more easy profit on a plate to the aforementioned and blatantly inefficient financial services sector.

This is a “game changer”? In what way, pray do tell?

Signs that crash like cymbals of our times

a con, bad business, bad capitalism, big business, business, small business No Responses »

Nov 192011

I saw a TV ad this morning for Armani perfume. The product was called “Code”. It was a his-and-hers perfume. Two actors. One stage. Thirty seconds. An ad for our times.

For I imagine the main cost of making and selling a new perfume lies in its marketing. A his-and-hers perfume is a perfect way of cutting such costs by half. Both men and women’s perfumes need men and women in their narratives. Both men and women’s perfumes need thirty seconds to make their pitch. Put them together in the same TV spot – and you must be cutting costs of some sort there.

Surely.

More signs of our times which crash like cymbals. I said this on Wednesday (the bold underlines for the purposes of today’s post the idea which draws my attention):

It does, of course, beg the question: what on earth are Osborne and Cameron up to? In my mind, I think the only sensible reply is to say: “Exactly what they set out to do!”

Increase unemployment – in order to tip the balance of negotiating power in the direction of employers; destroy that part of our monopolistic “free market” which, even now, was giving the bigger companies grief – in order that the only businesspeople left on the killing-field are the big-money sponsors of the Tory Party; shake out all those feelgood policies New Labour had engineered to tie the disparate social elements of this country together – in order to better control the chaos that is left; and – finally – deactivate all chances of making socialism work for the oh so conservative British.

Whilst at the end of October I pointed out (again, the bold being for the purposes of today’s post):

What’s really frightening me about the encroaching crisis we are only now beginning to properly fear is that we’re all sitting lobbing foolish pebbles at each other – from within our corporate and socio-political bunkers – whilst outside a chaos of unimaginable consequences is beginning to make itself clear. And yet no one seems to know how to make the first move to creating a more efficient business and economic environment. Concentrations of money and resource of the kind we are currently witnessing are not only examples of bad morals – they’re examples of bad business. If money only circulates round a few chosen few, the victory is bound to become pretty pyrrhic one of these days.

Which reminds me of a tweet from the always excellent Richard J Hughes which came my way only yesterday:

@shanegreer Beating tax abuse and havens creates level playing field for honest, innovative small businesses & create jobs. Your problem is?

As far as I can see, all the above only goes to indicate those signs of the times I’ve already mentioned. Whilst we talk endlessly about innovation and progress, and how capitalism’s very essence lies in renewal and imagination, the majority of our business infrastructure is really only ever interested in aping and copying what’s already been done.

Our business environment is evermore set up to benefit existing players at the expense of the new.

And, eventually, we are all going to suffer the consequences – whether we currently judge ourselves rich or poor.

How about we unfairly dismiss a few of these Coalition slackers?

a con, big business, business, Coalition, Coalition capitalism, Coalition cuts, David Cameron, George Osborne, small business No Responses »

Oct 262011

I read this over at Craig’s place today and felt a real shudder go down my spine. His first paragraph starts thus but is not the bit that made me shudder:

I am not blogging about the EU summit. It is pointless. It will of course produce a communique to reassure the markets. It makes no difference.

The last paragraph finishes thus (the bold is mine):

That is why I am not blogging about today’s EU meeting or a specific statement of the US Federal Bank Chairman. They are all pissing into the wind that is shortly to be a tornado. I expect before I die I will see a genuine social revolution. I expect that, as always happens, middle class liberals like me will start by being elated by it, and end up being shot by those who seize on the change, to take their turn to use the power of the state to corner resources for themselves.

And now I hope you join me as you tremble. And if you do not tremble, then you are still exactly as were the Jews when in the 1930s they thought it could not get any worse.

For it was then the turn of the Guardian to bring me this piece of news:

In a report seen by the Daily Telegraph and commissioned by Downing Street, the venture capitalist Adrian Beecroft suggests British workers should be banned from claiming unfair dismissal so companies can sack them and find more capable replacements, saying this would boost economic growth. The document has generated a furious response from trade unions.

As it might very well do so.

But even those supposedly on our side only speak of the morality of the issue as an afterthought. Far more important for them is the health of our collapsing economy:

But Norman Lamb, chief adviser and parliamentary private secretary to the deputy prime minister, Nick Clegg, said taking away protection from unfair dismissal would damage the economy because it would increase workers’ fears that they could be arbitrarily sacked.

Lamb, a former employment lawyer, said: “I think it would be madness to throw away all employment protection in the way that’s proposed, and it could be very damaging to consumer confidence.

“What we are talking about here is every single employee in the land being in a position where their employer could arbitrarily terminate their employment – and the impact that could have on consumer confidence, fear of losing your job, would potentially be very damaging.”

Only to lamely remember that:

“I just think it’s also not right to throw away that sort of scheme of protection.”

Almost a year ago I said the following:

It’s not that this Coalition government doesn’t have principles. It does.

It just so happens that its principles are limited to two: sock it to the poor and train them to understand their only salvation is that of wage slave to the wealthy. Problem is that innovation doesn’t work like that. Ideas need space, confidence and trust to flourish. Cameron’s understanding of the future needs of a society which adds value by generating and implementing ideas is so tawdry and basic that all he will achieve is a mass emigration of the clever to places where they will be better understood.

And as I continued by saying:

This government is not only going to show us how bad it is at the welfare state, it’s also going to show us how very bad it is at anticipating the needs of business – all business, that is. Innovation does not come out of slotting bright and intelligent individuals into the round holes that already well-formed organisations are prepared to allow. For true innovation to surface, everything must start from the ground up. There must be that cycle of birth, growth and maturity which joining an existing organisation could never provide.

So it is that in amongst all the unrest of a capitalism going dangerously sour, we have the seeds of total collapse. And our government’s response? Invest in the future? Look to release the imagination of the very best of our nations? Consult and debate ways of ensuring we can all be in this together?

Nope. Our government’s response is to make it easier to dismiss the workers who already fear for their jobs – and have already cut back on their spending.

I tell you what. I jolly well do feel that it’s time to unfairly dismiss some of those government ministers responsible for this chaos.

Before closing up shop tonight, then, let us just run that idea past ourselves one more time. Exhibit A – The Coalition Thesis: a stumbling capitalism is due to inefficient workers who are too confident of keeping their jobs. Exhibit B – The Coalition Solution: a flourishing capitalism will come out of making us feel all awfully insecure so we stop all our spending out of fear.

And, in exchange, the proponents of all this tawdry politicking get a) to hang onto their jobs; b) assure their future employment; c) line the pockets of their pals in big business; and d) prance around on very public stages spouting the kind of disgraceful rubbish which makes me think Craig might – after all – one day turn out to be right.

This Coalition government isn’t only mad – it’s bad; isn’t only rank – it’s inefficient; isn’t only anti-good industrial relations – it’s anti-good business.

And if you don’t believe me yet, you better start soon. Because if you don’t believe me soon – believe me, it’ll won’t be long before it’s far too late.

Convergent evolution or cartels galore?

a con, big business, business, cartels, convergent evolution, small business No Responses »

Oct 152011

Modern big business claims for itself the virtues of the free-market economies. It differentiates itself from old-style centralised government planning by arguing that it lives, heaves and survives in an environment of continuous competition. Whether just large or actually massive, these organisations provide the very best outcomes for their clients and consumers at the very lowest prices.

I believe, in fact, that this was the argument used by the banks in the UK recently when they made their submissions to the independent investigation into banking structures and stability. Essentially, they said, it didn’t matter how big the very biggest companies were: what was far more important was the total number of players – whether big or small – in the marketplace.

What a naive and yet noble belief in the power of the hidden hand.

I was perhaps unfair to businesspeople almost everywhere yesterday when I suggested that cavalier attitudes were prevalent in the private sector. This I did in order to explain why some politicians – especially those closest to big business – behave as they do. I suggested the real problem was not incompetent politicians but, rather, competent businesspeople who did insist on being in the wrong frame.

That is to say, the frame of politics.

Today, however, I read a piece which has come my way via Chris at Stumbling and Mumbling – and whose thesis runs as follows:

However, for most of those I have spoken to over the years, the aggro they have had with government departments is nothing compared to the runaround they have been given by the large private sector monoliths and, more specifically, the banks and utility companies. On Radio 4′s Today programme this morning, government minister David Willetts suggested that cartels are operating in both these sectors. This will come as no surprise to those business owners who have had to deal with them. There may be a variety of suppliers but they all seem to adopt the same industry standards, with systems and processes that can’t (or won’t) adapt to customer needs.

The writer goes on to conclude more widely that:

A couple of years ago, Simon Caulkin noted that, while the Cold War might be over, Soviet-style centralised planning is alive and kicking in the private sector oligopolies. In service organisations, retaining control and reducing complexity means, as far as possible, designing out the customer. As John Seddon says, designing out the customer leads to ‘failure demand’. But, if all your competitors do things in the same way, then why worry? The customers can only go to another supplier which will subject them to the same treatment. Most, therefore, will just grin and bear it. The smaller businesses, without the financial muscle to exert any influence, usually just seethe in silence.

So here we have a supposedly free market, where – everywhere – the customer is actually being designed out of the procedures and processes. Everywhere you go, the helplines don’t help and the systems systematically prioritise the interests of the supplier over the interests of the customer or end-user.

I have seen this myself – and know it is true. I have seen new IT systems being implemented after a takeover – and have seen the defender position being taken in terms of what benefits the real customer in all of this: the shareholder and end-of-year profits.

Meanwhile, the consequent degradation in customer service – as they lose years of online documentation and functionality galore – is sold, in a blitz of orgasmic PR, as a set of huge improvements all round.

Convergent evolution or cartels galore? Either way, the market is no longer free.

Can a public company ever be anything but private?

big business, business, on a high, open source, Rosebud, small business, sorted, Spain, transparency, www.opensource.com No Responses »

Sep 222011

The word “public” is a strange word. When used by Americans about companies, it refers to organisations which are obliged – by law – to hide important details of their functioning from their workers and their customers, whilst far more important constituencies such as shareholders are not duly informed first. In Britain, on the other hand, we use the word to describe schools which are actually private – ie do not belong to the state.

And then, of course, there are “public revelations” – which no one in public life would ever like.

So whilst “public” might – in the first instance – appear to be a word you’d really rather like to be associated with, there is a reasonably long list of negative connotations and contexts in which you can find the word.

The website opensource.com has an interesting article on this very same subject this week:

But for public companies, the benefits of an open approach are often overshadowed by the risks. During my time at Red Hat (a publicly-traded company for much of my tenure), our approach was traditionally to “default to open,” sharing as much information as we could, both inside the company and with the outside world.

Yet, as a public company, there were many financial and legal obstacles that stood in the way of openness. It was challenging to find the right balance between being open with our thinking and information, yet respectful of the legal and financial responsibilities that come with being a public company.

In the company I most recently worked for, there was a definite tendency on both management and union sides of the negotiating table to use these legal and financial responsibilities in order to precisely avoid setting that “default to open”. In an environment – the financial services sector – where heavy top-down governance ruled for almost everyone out there – except, it would seem, in the event, the big guns who from up on high continually helicopter-viewed the landscape – the cloak of convenience which such governance offered both parties was a temptation too fine to resist.

The opensource.com article goes on to offer a couple of solutions which relate more to people setting up new businesses than those who may suffer the burden, in the interests of greater transparency, of re-engineering existing ones.

Well worth a read, then – especially if, as I say, you’re new to business; and with the grand virtue, in an executive summary kind of way, of being brief and to the point.

Meanwhile, a piece I wrote two years ago now reminds me of my own continuing interest in openness. A short quote from it today, to whet your appetite perhaps, in this article I entitled “Openness, not Rosebud, is the key to sustainable organisation”:

We do not disavow the need for organisation. What we request, deserve and battle on behalf of is the kind of organisation that underlies a Spanish shopping experience.

Openness, honesty, fairness and justice – all at the same time, all without unnecessary hierarchy or prioritisation.

If we must be repressive, let us be fairly so

a con, big business, Blackberry Messenger, business, Channel 4, repression, riots, small business, social media, social networks, Theresa May No Responses »

Aug 112011

I’m astonished by this piece of information which came my way via Channel 4′s Twitter feed not a moment ago, reporting on declarations by the British Home Secretary Theresa May:

#May: among the issues we will discuss is whether we should disrupt messaging services when trouble is being planned

My response could hardly have been otherwise:

@channel4news Death knell of Blackberry, this. Do we also do the same for corporate networks where tax evasion is planned?

Obviously, here I assumed – without having double-checked – that the messaging service described did actually refer to the encrypted and difficult-to-trace version which runs on the Blackberry – a business smartphone par excellence which, in a new and unfortunate lease of life, at least according to mainstream media, has been widely used by rioters to organise the recent wave of violence.

Although May might also have been referring more broadly to all manner of communication networks – including, that is, the doughty and ancient SMS texting infrastructures. Whilst there have even been certain tweets today which indicated Cameron’s government was looking to consult the Chinese authorities on how best to filter and intervene communications on social networks.

Anyhow, as I mentioned a day or so ago, it’s heavily ironic that a messaging system designed to assure the integrity of business communications has now been turned against that very same business sector – as well as, of course, a wider society. And where business has an imperious need which requires filling, there will be very few governments in the world capable of convincing it otherwise. So I do wonder how likely it is that, apart from the short-term political advantage mediocre politicians are looking to gain from this, anything long-lasting will be achieved by such declarations.

But, as I point out in the title of this post, if we must be repressive, let us be fairly so.

So what do I mean by that?

Cogitate, if you will, this fact – if, indeed, it is true – which I picked up whilst surfing the Internet this morning:

“Benefit fraud is 0.5% for DLA. 0.8% for IB. Tax evasion is £120 billion [...].”

If the criminal activity recently committed – on both property and the integrity of people’s peace of mind – deserves such a draconian solution as this overt and unabashed interrupting and intervening of communication networks (for who will deny it doesn’t already happen covertly), and in particular when acts of serious public disorder are allegedly “planned”, then let us apply the legislation far more widely (that is to say, far more cogently) than is currently being outlined by parts of our political class. Let us apply it, then, to all kinds of criminal activity where such networks are used to plan illegalities.

As I ask in my tweet: “Do we also do the same for corporate networks where tax evasion is planned?”

And as I can only see myself concluding: “Big and small business beware. With this proposal of May’s, you really might not know what impulses you are letting yourself in for. And you may end up living to seriously seriously seriously regret them.”
____________________

Update to this post: some further reading came my way yesterday evening via a dear acquaintance on Twitter – a short description of what the Americans define as “wire fraud” and how it gets dealt with. Anyone know how this crime is considered in the UK – if, indeed, it is considered at all? For it would be a pity if we began to contemplate its punishment by reserving its sentencing for the underclasses only.

Meanwhile, Peter Oborne writing in the Telegraph this morning summarises most powerfully things so many of us have been feeling and writing over the past few days. Once again, hammer on head-of-nail time.