The New Barons

It seems as if almost daily the malign consequences of the New Public Management (NPM) that has informed public sector reform in many countries for the last 30 years are being exposed. In the UK, one recent high profile example is the Francis report into the failings of the Mid-Staffordshire NHS Foundation Trust which can be read as an indictment of the kind of ‘tick box’ procedural managerialism inaugurated by NPM. But NPM, with its proceduralism, audits and managerial controls has increasingly morphed into something else, a more post-bureaucratic understanding of public management. Here, the emphasis is less on procedures and audits and more on freeing inspirational leaders to innovate and enact ‘radical change’.

Of course these things are linked. NPM always had several meanings, including the relentless praise of ‘enterprise’ in public services. Post-bureaucracy is a similarly flexible term, and the two fit together in all sorts of ways, as this article by Leslie Budd of the Open University explains. Still, the post-bureaucratic accent of contemporary public management has a certain distinctiveness in part as a reaction to what was, ironically, the explosion of ‘red tape’ associated with the supposedly anti-bureaucratic NPM.

I talk at length about post-bureaucracy  in the book, especially in chapter 4, and a recent case has called to mind one of the points made there. I suggest (p. 86) that the embrace of post-bureaucracy carries with it huge risks because, freed of all those irritating rules and procedures it is just as likely that managers will act with recklessness and little or nothing will curtail them. In fact, I might have gone further, and pointed out that corruption and fraud, as well as recklessness, are made more likely in such situations, as Cambridge economist Ha-Joon Chang argues.

The case that reminded me of this was that of the head teacher of an ‘academy school’ in the UK who has resigned following multiple accusations of financial impropriety, including allegations about the way she employed family members. The allegations are particularly interesting if we consider how Weberian bureaucracy is in part to do with the avoidance of nepotism, of corruption and, indeed, the links between the two.  This was a head teacher who had been lionized by successive politicians as the epitome of what the new style public servants should be: dynamic, innovative leaders.

Now the allegations are just that – there have been no criminal proceedings – but they fit into a wider sense of a managerial or leadership cadre in both the private and public sectors which is out of control, treating their organizations as their own individual fiefdoms rather than things for which they have a duty of stewardship. I have myself seen such behaviour, for it is as prevalent in universities as anywhere else.

The danger is that such episodes are seen as a series of individual scandals or, if put together, a sign of some inevitable decline in moral standards and the probity of public life feeding what is beginning to be seen as a crisis of trust in leadership. But they are neither: they are systemically linked by a particular approach, or set of approaches, to the management of organizations. It is in part, at least in origin, a consequence of the new capitalism I discuss in the book, of the neo-liberal revolution that has literally or metaphorically marketised so many areas of economic and social life. But it is more complex than that, and is more linked to the ideas about ‘neo-mercantilism’ I talked about in my post of January 9 2013. For what we have is a new managerial class which has little to do with the ‘market’ in any recognizable sense and is closer to a kind of baronial oligarchy in which there is little organizational constraint on how its members may act. In these circumstances, the only constraints become the extra-organizational ones of the law, at which point they become publically known scandals. But their origin is not some mysterious, and still less inevitable, decline in moral virtue. It lies in the dismantling of organizational controls under the chimerical doctrine of post-bureaucratisation.

Our new insecurity

Last week I was interviewed for a new ten-part BBC Radio 4 series about the changing nature of office life (I don’t have a link for this, but the first part will be broadcast on 22nd July at 13.45 GMT+1). One of the questions I was asked was about the famous 1950s book The Organization Man by W.H. Whyte. It was a book which spawned a phrase – ‘organization man’ – and which was a kind of nostalgic lament for a time before corporate hierarchies, a lament for individualism.

But, as I said in the interview, from a present day perspective 1950s organization man is something about which we might now feel nostalgic. The basic deal of the post-war settlement was one of security. In exchange for a perhaps rather stultifying work life, organization man was offered lifetime employment in a company rooted in his community and which provided a pension and a place in the world. It was the workplace equivalent of a Norman Rockwell painting.

The consequences of lost security were born home on me this week by two things, one personal, the other impersonal. Personally, I talked to a friend in Denmark who had lost his management job and feared for what would happen to him and his family now. Yes, that is in Denmark, one of the homelands of the social democratic settlement – but he was scared. Impersonally, I saw the report from the UK Institute of Fiscal Studies which showed how real living standards in the UK have fallen dramatically in the last five years, since the financial crisis.

What is going on in Europe is an extraordinary experiment of a sort that has never occurred before, and work organizations are at its heart. The historic compromise between capital, labour and the state is being eviscerated. The most obvious effects of that are on the unskilled working class, the disabled and the unemployable, with their benefits being drastically cut. But what is now emerging is that what were hitherto the secure middle class are also seeing huge reductions in their economic position and their security. Moreover, the previous expectation that their children would be better off than them is being confounded.

This is the inevitable consequence of globalized neo-liberalism, which ultimately levels down wages and conditions of employment to the lowest possible level. Although in Europe  its electoral support was predicated upon the votes of the middle-class, its agenda was always about the interests of a tiny handful of individuals and corporations. There’s nothing new about societies being run for and by small elites, of course. But this is the first time in human history where a settled middle-class, underpinned by a welfare state, is being so drastically damaged (except, perhaps, for the 1920s German inflation – and we know where that led – and, anyway, there was no comparable welfare state). There's an excellent article on this. These are people who vote, who pay taxes, who support mainstream political parties, and who have an expectation that ‘the system’ will take care of them.

The consequences are tragic for individuals, but very interesting for political commentators. Europe in the 20th Century responded to Communism by differentiating the potentially revolutionary working class from the incorporated middle-class. The working class now have nowhere to go, and certainly nowhere revolutionary. The middle-class are being disincorporated – first by corporations, now by the State. The fallout from this will determine how we in Europe live in the coming decades.

It won't be pretty.