The coronavirus crisis

This blog has been sadly neglected in recent years, as all my blogging time and energy have been taken up with my Brexit Blog. But the current coronavirus crisis prompts me to return to it, because so much of what is happening in this crisis has an organizational dimension, and some of it relates directly to the themes of the book which this blog accompanies. In this post, I’ll discuss some of them, with the focus on what is happening in the UK but no doubt at least some of it has a wider relevance.

Overall, it’s possible to see many of the chickens of contemporary organization coming home to roost. This is most obvious in the National Health Service where spending as a percentage of GDP effectively flatlined between 2011 and 2019, and per capita is well below that of most other highly developed countries (e.g. France, Germany, Japan, Australia). Crucially, this is against the background of a rapidly ageing population and – as has also been laid bare by the coronavirus pandemic – a social care system that was already in crisis and has been for at least half a decade (as discussed on this blog in May 2016).

The issues here go well beyond those of funding, though. They also relate to managerial apprehensions of the ‘efficient’ use of that funding. In the book (p. 142) I use the specific example of the NHS to discuss this, writing that “one way this has been done is to reduce spare capacity in the system. This in turn has the effect that unusual peaks in demand, such as a major incident or a flu epidemic, swamp the system … the question still remains: efficient for whom? Is spare capacity inefficient from the point of a view of a patient caught up in a demand peak?”

This seems almost prophetic now, as the NHS faces a desperate struggle to obtain the machinery and protective equipment needed to deal with coronavirus, whilst old people dying in care homes are not even included in the official coronavirus mortality statistics. Of course, it would be absurd to argue that any health system could permanently maintain all of the spare capacity needed to deal with so unprecedented crisis. But running a system for years without any spare capacity at all was always bound to lead to disaster.

Similarly, we are now seeing the consequences of the endless restructurings and in particular the dynamic of centralization-localization as the supposedly inefficient bureaucracy of the NHS is subjected to almost yearly reforms. It was such an analysis which led to the fragmentation of the NHS into Clinical Commissioning Groups (CCGs), to break down the ‘monolith’ of the NHS. This was happening even as it was being reported that the problem with NHS procurement was lack of centralization, but under the dogma of ‘post-bureaucracy’ this was ignored (discussed on p. 87 of the book). Fast-forward to the coronavirus crisis and what do we fine? That very quietly the government has taken back central control of procurement from the CCGs to deal with it.

Nor is it only in health care that we see the consequences of the ill-judged managerial reforms and budget cuts of the last decade or more. I wrote on this blog in October 2016 about the crisis that was already underway in prisons. No surprise, then, that coronavirus is sweeping through them now, and there are calls for the early release of at least low-risk offenders and prisoners on remand.

Beyond public service issues, the coronavirus crisis has laid bare the inequalities and insecurities associated with the new capitalism and its associated ‘precariat’ (discussed on p. 118-120 of my book). The supposedly self-employed ‘entrepreneurs’ and zero hours workers of Uberfied business models are by the far the most economically vulnerable to the lockdown of the economy. The gap between this precariat and the salariat (like me) who have continued security as they work from home is more obvious than ever. It falls to government, at least partially, to bear the costs of this – in effect bailing out the employers who have for years benefitted from this ‘flexible’ workforce. As with the financial crisis, what we see is a privatization of profits and a socialization of costs and risks.

Meanwhile, hundreds of thousands who had never expected to now turn to the welfare system and find that it is very far from the generous safety net they had imagined, let alone the scroungers’ paradise that the tabloid press had led them to believe (see also p.120 of book). This is not just a matter of a one-off crisis. Rather, it comes against the background of the middle-calls insecurity which has been underway for some time, and is intimately linked to the demise of middle management and the white-collar underclass that has characterized the new capitalist model (p.123 of book; see also this blog post from February 2015).

Intimately linked to precarious employment is the use of foodbanks (blog post from September 2016) and here, too, coronavirus has had an impact. On the one hand, they face mounting demand as people’s incomes dry up. On the other, staffing and donations are both impacted by the illness, and some foodbanks are having to close down just as they are most needed.

No doubt there are many more examples of how coronavirus is exposing underlying issues within the organization of public services, of work, and of society more generally. The key words are ‘exposing’ and ‘underlying’. In this post I have made frequent reference to what I wrote in my book or on this, accompanying, blog. The message is not meant to be a self-congratulatory ‘I told you so’. Rather, it is intended to show how so much of what is happening grows directly out of things we already knew, or which were already happening.

This is absolutely crucial for otherwise they would just be regarded as ‘crisis’ events and, as such, unusual or short-lived. This in turn would support the idea that once the crisis is over we can and should return to ‘business as usual’. To an extent, this is what happened after the financial crisis. Although many expected that it would lead to a wholesale re-evaluation of how – at the most generic level – we organize, that didn’t really happen. Instead, we saw what Colin Crouch aptly dubbed the strange non-death of neo-liberalism.

Perhaps this time things will be different. The neo-liberal or new capitalist model has been much more challenged by the coronavirus in that it has led to the mobilization of state resources in a way not seen since the Second World War. That ought, at least for a while, to put paid to the innumerable paeans to the superiority of the market for any and every political and economic question. It feels, at least at the moment, as if something quite fundamental has ruptured – although one should be wary in assuming that any such rupture will have predictable, let alone positive, effects. And even should they be positive, it is a tragedy that it will have taken the deaths of so many to demonstrate what was, in so many ways, already obvious.

Cyber insecurity

In the new edition of my book I mention (p.25) cyber security as an example of how organizational rules are often flouted, leading to risky behaviour such as inadequate passwords or clicking on links that contain malware.

This is a microcosm of a much wider set of issues which have been brought to the fore this week with the news that Yahoo suffered a cyber-attack which may have compromised the personal data of more than a billion user accounts. This is the latest of a string of high profile cases involving companies including Tesco Bank, mobile phone company TalkTalk, and infidelity dating site Ashley Madison.

Such cases are themselves a microcosm of an even wider set of issues around online frauds and scams. Today, UK consumer groups have criticised inadequate protection against bank transfer frauds where people are conned into making payments they are expecting to make to a legitimate recipient but which are diverted to a scammer.

It is for most of us a daily experience to receive emails that purport to come from banks or other organizations (‘phishing’), or from someone in our email contact list supposedly robbed whilst abroad and in need of our funds(the ‘sad news scam’), as well as the older scam of the message about money to be transferred if the victim first transfers a smaller sum (the ‘Nigeria 419 scam’ and variants). In all cases what is being sought is money, data, or the installation of malware which will allow these to be collected, with ‘ransomware’ being an increasingly common, and nasty, version. There are also numerous scams that are initiated by phone. Common examples include the bogus call from ‘Microsoft’ leading to remote control of your computer and/or demands for money to remove viruses.

It’s easy to think that only the extremely gullible are taken in by any of these things, but some of them are very convincing and the forms they take change, so it is easy to be caught out. Moreover, as new technologies emerge, such as contactless card payments, new possibilities for theft are created. The massively increased use mobile devices also creates new scams, and the immediacy of a mobile (compared with, say, an email on your PC) makes an instant, unconsidered response that much more likely. Plus the emergent ‘internet of things’ makes cyber security even more challenging.

Like any other crime, there are a mixture of personal, corporate and regulatory issues that may offer protection from or redress for cyber-crime. I like to think (but don’t we all?) that I am reasonably savvy about cyber security, partly because I worked on a research project about it recently. But what I find irritating is how we are increasingly pushed into exposing ourselves to the risk. Personally, I have never signed up for internet banking and I never use contactless card payment, but that has become more and more difficult to sustain. Telephone, let alone branch, banking is increasingly difficult, and banks seem amazed when people refuse to bank online. In shops, I have had contactless payments taken without consent. And, beyond that, I’ve recently had a couple of experiences where my bank has contacted me on a withheld number asking for security information in order to progress queries. They were, in fact, genuine calls, but I think it would have been easy for a fraudster to mimic them.

More generally, it’s all but impossible to live off-line to any great extent nowadays, or not without a huge amount of inconvenience. But the practices of organizations capitalise on this. Every single commercial and state organizations you deal with demands personal data – often way beyond what is needed for the transaction in question. The privacy policies of these organizations are far too complex to understand, and refusing to sign up to them renders it effectively impossible to access a huge swathe of services. Then again, I have never (knowingly) signed up to Facebook, Twitter or Linkedin, but I nevertheless get endless emails from each of these, and unsubscribing has no effect. Equally, I always tick the ‘no’ options on communications from internet sites I buy from, but often get communications nonetheless and often find that unsubscribing from these makes no difference.

So although we are bombarded with advice about how to protect ourselves from cybercrime and internet marketing, the reality is that there is relatively little that we, as individuals, can do. And the things we might consider, such as single password sites for multiple accounts, can make us more insecure as they concentrate sensitive data in one place.

Insecurity is endemic to the human condition – existentially, psychologically, socially, economically we are insecure. Today, we have to add a new insecurity, virtual or cyber insecurity, in which we may be bullied, blackmailed, lose at best our money and at worst our identity.

Uber good news

After my last rather gloomy post, today there is some good news. I’ve posted elsewhere about the rise of uberfication and the gig economy, and also about how this links to supposed ‘self-employment’, which is really employment shorn of any protections. (I do not write about this in the current edition of the book, but it will be covered in the fourth edition, which comes out next month).

Today, the company after which the phenomenon was named, taxi app firm Uber, was subject to a significant ruling by a UK employment tribunal. Specifically, Uber was told that it cannot treat its drivers as self-employed, and must pay them the national living wage and holiday pay, and possibly even pensions. The ruling (which is likely to be appealed against by Uber) will, if it stands, have significant implications for other companies operating the same or similar business models. As the lawyer representing the drivers who brought the case (with the support of the GMB union) said:

“This is a ground-breaking decision. It will impact not just on the thousands of Uber drivers working in this country, but on all workers in the so-called gig economy whose employers wrongly classify them as self-employed and deny them the rights to which they are entitled.”

This ruling comes at a significant time, politically. In both the EU Referendum (and for those interested in Brexit, do take a look at my Brexit blog tracing developments) and, even more, the US presidential race, the issue of how changing work practices erode security has been an issue. More widely, this connects with the political consequences of globalization and the hollowing out of middle class employment.

Of course, even on minimum wage and protection terms, employment remains a far cry from the post-war social democratic model of secure employment with a social welfare net. Even so, the ruling suggests that the direction of travel need not inevitably be downwards, and that globalization and technology are not forces of nature but may be corralled by politics and legislation. As I argue throughout my book, what happens in organizations is not pre-ordained but is an outcome of the choices we, collectively, make about how to live.

Work and food

There has been a huge – 20% - rise in the number of workers in the UK on Zero Hours Contracts (ZHCs) in the last year, bringing the total to about 900,000. It’s telling that in the third edition of my book, published in 2012 but mainly written in 2011 I did not mention ZHCs, which at that time were much less common and there were perhaps only 200,000 workers on them in the UK. That is remedied in the fourth edition that will be out later this year, of course, but even that will not take account of this latest surge.

Lauded as offering ‘flexibility’ for individuals, ZHCs are all about flexibility for organizations: there are no guaranteed hours, it is labour on demand. And although in the public mind they are associated with low-skill jobs like cleaning and catering, they are also common in professional occupations such as teaching and airline pilots.

It’s become obligatory to say that ZHCs suit some people, but to foreground that is to de-emphasise that in most cases they do not, and are a source of miserable insecurity (for some experiences see here and here). But recently published research shows that they are also bad from a business point of view, in terms of contributing to the long-term productivity problem of UK business (Rubery, Keizer & Grimshaw, 2016).

The worst kinds of ZHCs – so-called exclusive ZHCs, which prevent workers taking employment with other employers – have been banned in the UK. And, under great political pressure, retailer Sports Direct (where over 90% of staff are on ZHCs) has announced this week that it will give its employees (but not agency staff) a choice between a ZHC and a guaranteed hours contract. But ZHCs are illegal in New Zealand and (with some complexity of definition) in many European countries.

Whilst ZHCs have received a lot of media and political attention, what is perhaps even more significant is the rise in self-employment. This connotes an image of small entrepreneurs and sturdy self-reliance of the sort lauded by free market ideologues. In fact, it is largely to do with companies employing people as independent contractors – often, people who were hitherto employees of the same companies they now contact to – and the rise of the gig, or uber, economy. There are perhaps 5 million people in the UK who are self-employed.

I know from personal experience what the insecurity of self-employment means because my father, after he left the army, was a self-employed driving instructor during my childhood. That encompassed periods when anything from illness to a heavy snowfall to the petrol shortages during the 1973 oil crisis, and in those periods he had no income and no savings and the consequence was that our family had – almost literally - no food. But what I remember more from those times than the lack of food is the pervasive worry that tomorrow there would be no food at all. Nowadays, I’m insulated from such insecurity but when I contribute to the local foodbank it’s because I remember what it means. In the UK currently there are a million people a year who use foodbanks, although this is probably an underestimate. One of the key drivers is reported to be ‘insecure work arrangements’ including ZHCs.

Buyer's remorse

This post in many ways follows on from the previous one and indeed a series of posts recently where I have circled around issues of nostalgia and populism. These issues seem to me to be at the core of current politics, and central to understanding contemporary organizations within that politics.

Yesterday, the Mail columnist Peter Hitchens wrote an extraordinary and I think noteworthy opinion piece. Hitchens, for those who don’t know him, has for many years been a provocative right-wing journalist. Younger brother of the late Christopher Hitchens, he is by no means predictable in his views and although I mainly find them objectionable he can’t be dismissed in the way that one might, say, dismiss those of right-wing controversialists like Richard Littlejohn or Katie Hopkins who also write for the Mail.

In his piece, Hitchens laments having fallen for the free market politics of the Thatcher era, which he now sees as a "con that ruined Britain". In particular he bemoans the consequences of privatization, deindustrialization and globalization remarking, to quote just one sentence:

“How I miss the old names of trusted brands, and the knowledge that these things had been made for generations by my fellow countrymen.”

Similarly, Hitchens remarks on the loss of secure employment and stable communities that accompany this transformation.

Well, it’s rather late in the day for him to be expressing buyer’s remorse. After all, it’s not as if the consequences of the policies he endorsed were not warned of. But I am struck by how close his views now seem to some of those expressed in my own book, for example:

“One of the many organizational consequences of all this [neo-liberalism] is to break the connection between businesses, places and communities” (p. 105)

But after listing a wide array of formerly British brands now sold off or disappeared, I go on to say that this is not a nostalgic, nationalist lament; whereas I think that that is exactly what Hitchens offers. What he seems to hanker for is the world of his 1950s childhood, with the apparent certainties it contained (but which, perhaps, only seem so in the way that childhood at any period does).

What I think is significant about this is the way it derives from a fissure that was always present in Thatcherism between nationalist traditionalism and free market globalism. They are necessarily contradictory because free markets inevitably corrode social traditionalism whilst, of course, globalism inevitably corrodes nationalism. Both Thatcher and Regan managed to hold this contradiction together for a while, but its consequences are now glaringly apparent.

They are apparent in the EU Referendum debate, about which I have already written plenty on this blog, but especially in the current wave of support for Donald Trump in the US. This has been described as a kind of cry of agony of the traditional US working and middle classes, for whom the security of the post-war consensus has been eviscerated. And what is so important to understand is that this comes in large part from the same segment of the population that, like Hitchens, so enthusiastically supported Reagan (and, in the UK, Thatcher) to pursue precisely the policies the consequences of which they now lament.

So what we are now seeing is the long-term consequences of the incoherence of the neo-liberal political narrative (i.e. not simply of neo-liberal economics) and it is almost bound to turn nasty as the nationalist and traditionalist strand of that narrative becomes dominant. Remorseful buyers want their money back but, alas, it has already been spent and so remorse turns to anger, but an anger misdirected at foreigners, immigrants, refugees, the disabled and so on. True it also blames ‘elites’, but in an incoherent and contradictory way, shown not least by taking as its champion a figure such as Trump who so obviously belongs to an elite, by any reckoning.

Of course in both the US and the UK (and elsewhere) there is a left-wing version of this which is more coherent in its analysis and more progressive in its solutions, but likely in both cases to struggle to achieve electoral success (though I may be proved wrong about that). Indeed, in the European context, it is this which makes the EU so important, as a regional, rather than nationalist or globalist, response to a situation which whilst certainly implicated in neo-liberalism also offers some potentials for social democracy. These potentials, which the recently launched Democracy in Europe Movement 2025 (Diem25) seeks to realise, offer some kind of hopeful response to the calamitous unwinding of the neo-liberal experiment.

At all events, Hitchens’ dream of a lost and mythical England is not the right response, any more than is Trump’s sloganizing about making America great again. At best these can lead only to another fit of buyer’s remorse in which their supporters suffer the further disillusionment their inevitable failure would bring. To what extremes would they then turn?

Lost in history

I am not going to write yet again about the EU Referendum today, or at least not directly, but rather about some reflections prompted by an article that appeared in The Guardian today by John Harris which was about the referendum but with a particular take. Harris, who is an invariably interesting journalist by the way, argues that many inclined to vote to leave the EU are reacting to having had huge and rapid social changes “imposed on them”. They should not, therefore, be patronizingly dismissed as “irrational, unhinged and gullible”.

Whether or not this is a valid reason for voting to leave the EU is an open question, and as I say not what I want to discuss here. Rather, it seems to me that the sentiment Harris is reporting is a variant of something I discuss and criticise at length in the book (especially pp. 88-92): the idea of a world in rapid, perhaps unprecedented, change which makes mandatory constant organizational change. It is one of the many ways in which organizations and politics are both connected and harmonic, something which is becoming a regular theme of this blog.

What strikes me most is how unchanging these claims are, and how they are both meaningful and meaningless. Harris is talking about the period since Britain joined the EU, so the forty or so years since 1973. But in 1973, which I can just about remember (I was 8), similar sentiments were expressed, and very vociferously too. The past, it seemed, was not just another country but, in the past, we had been another country. The memories of war, Empire, social cohesion and civility may have been refracted through the lens of nostalgia but they had their counterpart in more objective analyses of relative economic decline, shifting centres of geo-political power and changing social norms.

It was common then to hear adults talking about how ‘the country has gone to the dogs’, that ‘we won the war but we lost the peace’ and, though I can’t recall hearing these exact words, that ‘I just want my country back’. Some of this, as with the present EU debate, was about immigration but, also as with the present EU debate, it was part of a more inchoate sense of unchosen changes. Indeed it’s worth remembering that this kind of sentiment was a big part of what lay*, a few years later, behind electoral support for Margaret Thatcher, including her remarks at the 1979 election campaign about British people feeling ‘swamped’ by immigration. And yet people now are wont to say that immigration ‘used to be ok’, even though their predecessors did not say anything like that at all.

So that sense of unchosen change isn’t new and perhaps this means that it is actually itself rather patronizing to uncritically accept it as an authentic, respectworthy sentiment. If anything it is just an unremarkable truism: 2016 is different to 1973, just as 1976 was different to 1933 in all kinds of ways, most of which were not ‘chosen’ and could not reasonably have been ‘asked’ about. Why would anyone expect otherwise? The issue seems to lie more in a sense that this change is going somewhere frightening or, perhaps most frightening of all, that it is going nowhere. It’s this fearful sense of being lost in history that I want to explore.

Fear of redundancy, fear of being left behind, fear of being judged unequal to the demands of change. That this fear is largely orchestrated through an invocation of hordes of Asians and Slavs – or, in more politically acceptable language, the challenge from the emerging economies of China, India and Eastern Europe; or the anodyne ‘global economic race’ – serves to underscore the perhaps not racist but certainly racialised tang of contemporary stories about Britishness. We may have no clear idea of what the future holds, but we are continually told that failure to change will mean that the future will occur elsewhere, in a faraway country of which we know little. There is therefore an easy translation from the ubiquitous experience of change in the workplace to a fear of foreign competition, and an easy translation from that to fear of foreigners in general and immigration and European integration in particular.

It is indeed quite remarkable that the bullishness about change in the organizational sphere has been so comprehensively unmatched in other areas. The most charitable interpretation of British involvement in the Iraq war is that it was animated by a desire to maintain the ‘special relationship’ and to influence US policy – a desire which was a continuation of British foreign policy since 1945 and which persists to the present day. New Labour’s attitude to the EU, initially relatively conciliatory, later became rather similar to that towards Old Labour: one of hectoring calls for modernization and change in the face of global competition. The Coalition government after 2010 was relatively muted on the EU because of the presence of pro-EU Liberal Democrats but the Conservative administration since 2015 is defined by degrees of hostility to the EU relations. (Interestingly, these two foreign policy areas are in conflict, since the US relation to the UK is refracted through the UK’s membership of the EU, as President Obama is beginning to make clear).

Back on the home front, immigration and asylum policies have also been animated by fear. There is no doubt that New Labour were more relaxed about multi-culturalism than was Thatcherism. And Cameron’s ‘Notting Hill’ conservatism has largely followed them in this, which in part explains the rise of UKIP (which was not just fed by the EU issue but the sense that Cameron is not a ‘real Conservative’ e.g. in terms of gay marriage legislation). Nevertheless, across all recent governments policy in these areas has been draconian and it is noteworthy that the case for tolerance has mainly been made in purely economic terms – the economic need for immigration – so that it is in effect inseparable from the mantra of change as an adjunct to global competitiveness. There is no real suggestion that immigration is related to either our past responsibilities as a colonial power or to our future possibilities as a cosmopolitan society. It’s just an economic presence, bereft of past or future.

It would be unfair to ascribe this culture of fear solely to the polity. It is also the case that any capacity to be positive about the future is limited by the rabidity of a press where it is not just the tabloids which are filled with blood-curdling stories of new causes for alarm. On Europe, immigration, asylum, crime, terrorism, paedophilia as well as health, climate change and, notoriously, house prices the media tell of a world to which a cringing fearfulness is a quite reasonable response. Yet it is not a fear of anything in particular, even if it attaches at moments to something specific. A combination of rolling news and limited attention spans means that each fear is registered, instantaneously forgotten and superseded by a new terror. What endures is not any specific anxiety but a generalised neurotic dread. But whilst fed by the media this climate has been able to flourish at least in part because it fills the vacuum created by the political failure to articulate any compelling future vision of ‘the good life’.

There is clearly a symmetry between the febrile atmosphere engendered by the daily kaleidoscope of media-fuelled panics and the managerialized politics and political managerialism in which ‘the only constant is change’. If we want an image of contemporary Britain it would be of a person running in terror away from an unseen yet omnipresent enemy, but running on a treadmill rather than a road. Standing at the side is a sadistic personal trainer in the form of politician, manager or journalist cajoling and bullying the runner to go faster, to redouble the effort to go nowhere on pain of being engulfed by the invisible demons which lie in wait for those who fail to keep up. The ‘global race’ has no finishing line. It is a journey with no beginning, no end and no purpose or meaning beyond its own self-fulfilling imperative to keep moving at any cost.

This is not, as is conventionally supposed, because we** are too wedded to the past but rather because we have too little sense of ourselves as located within the past-present-future continuum which more truly constitutes history. If, when I was a child, the problem was the weight of the past then for the coming generation it is the weightlessness of the future. When I was growing up, British identity was, unhappily and ultimately unsustainably, that of an old person stuck in the past with memories of a great empire, a heroic war, of glories lost. That is still discernible, but it is now much more akin to someone with Alzheimer’s disease. Anyone who, as I have, has had the misfortune of witnessing this condition will know that what makes it so devastating is not simply that the sufferer recollects so little of the past and is often over-attached to those distant fragments which are flickeringly remembered. It is also that there is no conception of the future, and the present is just a fear-filled moment of transitory but ever recurring change. 

*Surprisingly from a present-day perspective it also in part lay behind the decision to join what was then the EEC in 1973. I can remember my highly Conservative – and conservative – primary school headmistress inventing a song about a ‘beautiful dream’ as part of a celebratory pageant of this event. I played – and I hope this will amuse anyone reading this who knows me – one of the ‘gnomes of Zurich’, then a slang term for Swiss bankers. Whether these gnomes were depicted positively or negatively in the pageant I unfortunately can’t recall.

**By ‘we’ I mean ‘we British’ but similar things may well be true in other countries. I think this is so in France, which I know quite well, and probably in the US and elsewhere. Indeed something like what I have said here seems to apply to US and is expressed by Donald Trump when, as in his now notorious ‘ban all Muslims’ speech he cried plaintively about the need to work out “what the hell is going on?”. Obnoxious as it was, it did express this sense of ‘historical lostness’ that I am trying to explore, and Trump’s popularity is surely a consequence of that sense.

More gloom

In the second edition of the book I made some remarks that turned out to be prescient about what at the time I wrote it was the nascent financial crisis. Since it is rather rare for my – or any other social scientist’s - predictions to come true I rather regretted the fact that in updating for the third edition I had to excise them. I’m now working on the fourth edition but by the time that comes out (at the end of this year) I suspect that I will have been overtaken by events and that by then we will be well into another, probably worse, crisis. So I’m going to get my prediction in now.

Of course I’m not the only person saying this. Last week a leading strategist at Societe Generale said the same thing and the Royal Bank of Scotland advised its clients to sell their equity holdings in anticipation. Stock markets across the world are in sharp decline, and the collapsing prices of oil and basic commodities are precipitating a global deflation. At the heart of all this is the slowdown in China and, in particular, the massive growth in corporate debt there, much of it due to a real estate bubble and the rise of a secondary banking sector.

Meanwhile, personal debt in most countries – from Sweden to Thailand - is also rising to higher levels than at the time of the 2008 crisis. Although in the UK and US it is not yet at the same levels as it was then, it is also rising. Once again in the UK much of this debt is related to a house price bubble and lax bank mortgage lending, but also rising is unsecured debt sometimes used simply to cover basic living costs.

If there is another financial and economic crisis the consequences will be much graver than in 2008 for two reasons. One is that the capacity, both financial and political, of nation states to bail out banks will be much more limited. So much the worse for the banks, it might be said; but it will not just be the banks that suffer. The reason why, post-Lehmann’s, the US and other governments stepped in was not because of an outbreak of Keynesianism but because they saw the political and economic consequences that would follow if the cash machines, literally, ran out of money. This time round there's every chance that that will happen.

Second, the intervening years have seen a growing precariousness of employment, symbolised but not limited to the rise of the zero hours contract, as I have written about elsewhere on this blog. At the same time there has been an erosion of welfare provision. Thus the ability of ordinary people to weather another crisis is much more limited. In many countries – Greece and Spain amongst the most obvious examples – the capacity of families to provide support for unemployed young people and pensioners has already reached breaking point. It is one thing to give such support to tide over short-term problems, quite another to do so on a more or less permanent basis.

For, as the distinguished political economist Andrew Gamble (2014) suggests in an excellent book, crisis is now likely to be permanently embedded within the global economy, in the absence of some major shifts in ideology and public policy. Of that, there seems little chance. Despite some initial impetus for reform after the 2008 crash almost nothing came of it. There was no new settlement and no new deal, and every prospect, therefore, of another crash. It looks to me as if 2016 will be the year we see it. 

Reference

Gamble, A. (2014) Crisis Without End? The Unravelling of Western Prosperity. Basingstoke, UK: Palgrave Macmillan.

Required reading

Over Christmas I have been reading Jonathan Coe’s latest novel, Number 11. Like John Lanchester’s Capital, which I ‘reviewed’ on this blog, it can be read as a ‘state of the nation’ novel (Coe even makes a joke about this) and, via five interlocking sub-stories, it reprises some of the themes of his earlier books, especially What a Carve Up! and The Closed Circle. Overall, I would characterise these themes as being about the unwinding of the post-war welfare state and its accompanying collectivism, and the ongoing consequences of individualization, privatization and – a key one in Number 11 – monetization (in the sense of putting monetary value on things like education which might otherwise be regarded as valuable in themselves).

The title Number 11 carries several resonances: the address of Britain’s finance minister; the number of the circular bus route that a character rides so as to be warm without heating her home; the number of subterranean floors being dug below an uber-rich family’s London home to extend their already commodious residence. For it’s a satire – sometimes almost judderingly heavy-handed, other times almost painfully delicate – that often addresses some of the themes of this blog, especially those of inequality, tax avoidance, the pitfalls of choice, the politics of ‘austerity’ and, even, the perils of twitter.

The section that spoke most profoundly and personally to me is entitled ‘The Crystal Garden’ which tells of the doomed attempt of Roger, an Oxford academic of about my age, to track down a short film he had seen as a child:

“Roger was convinced … that life was better, simpler, easier, in the past … it wasn’t just a hankering for childhood. It was bigger than that. It was to do with what the country was like … in the sixties and seventies …. For Roger it was about welfarism, and having a safety net, and above all … not being weighed down by choice all the time … he loved the idea of trusting people to make decisions on his behalf. Not all of them. Just some. Just enough so that you were free to live other parts of your life the way that you wanted.” (Coe, 2015: 176)

It’s important to understand that this isn’t about nostalgia, or at least not just about nostalgia. It’s about a rupture that animates – in very different ways – the politics of both nationalists and socialists across, at least, Europe. In France, Les Trentes Glorieuses, Jean Fourastié’s term for the 1945-1975 period of economic growth and social security, captures the same sentiment that Coe expresses. This rupture is described in my book in terms of the shift in the 1970s to the new capitalism (pp. 104-120) and so, of course, present in the book I most heavily draw on in that section, Richard Sennett’s (2006) The Culture of the New Capitalism. And it’s no coincidence that at the heart of Roger’s memory was “waiting for his father to come home from work – from the same place he worked for forty years” (Coe, 2015: 176) because stable employment was at the heart of the economic and social security of those years. As I’ve argued elsewhere on this blog, the erosion of that security constitutes the most pressing political issue of the present time in Western societies, in ways well-captured (for all that it is startlingly inattentive to the ‘critical management’ literature that says much the same thing) by Boltanski and Chiapello’s (2007) The New Spirit of Capitalism.

We can understand this in conventional political terms: the social democratic consensus of North and West Europe and, to an extent, the USA in the post-war decades was about the best economic and social arrangement that has so far existed (even if it did not always seem so at the time). But perhaps it is better understood without thinking in terms of economic or political theory. Bill Bryson’s humorous memoir The Life and Times of the Thunderbolt Kid expresses it well as regards the United States; David Lodge’s novel Nice Work captures the beginning of it in the UK, especially as regards academic life. And Coe’s book is the latest example of the powerful way that art and humour can illuminate social science.

In a somewhat related vein, another Christmas read was Douglas Board’s novel MBA. This is not nearly so well-written (but, to be fair, whereas Coe is a well-established professional novelist Board is a coaching and leadership consultant who has turned his hand to fiction) and it’s a fairly clumsy satire, if not farce, of business schools. Still, it does hit what are for me some familiar targets in terms of the corporatization and even corruption of the contemporary business school, including the hubris of high-flying deans (see Parker, 2014 for a real world example). And there are some acute insights along the way about, for example, the enmeshment of business schools and politicians in the marketization of the public sector that also get a look-in in Coe’s book. MBA certainly isn’t a great or even a good novel, but it’s the first that I know of that tackles the business school. I feel sure that this setting is ripe for the attention of a latter-day Malcolm Bradbury or David Lodge campus novel.

Uberfication: an idea from the past

I learned a new and rather ugly word this week: uberfication. It came up in a discussion of new patterns of work and employment and checking on the internet I find that it is a term which has been in use for a year or so now. It derives from the taxi firm Uber which has developed a model for taxi hire in which customers use a mobile phone app to match their journey requirements to the availability of an Uber driver. This has caused protests from taxi drivers all over the world, most recently in Rio de Janeiro just yesterday, because Uber drivers are exempt from the licensing and many of the regulations of established taxi firms and drivers who are thus having their livelihoods threatened.

Uberfication refers to the application of the same, or similar, business model to a range of businesses and activities with many websites referring to the uberfication of everything, examples ranging from dog walking to doctors. Other terms for the same phenomenon are the ‘gig economy’, the ‘on-demand economy’ or the ‘platform economy’ (the point being that a platform such as Uber does not provide services but connects customer demand to a supplier, who provides a service as if engaged to play a gig) or the more cosy-sounding ‘micro-entrepreneurship’.

This business model has three defining features. The most obvious is a technological one, the mobile phone app that enables the connection between demand and supply to be made, including differential pricing according to levels of demand and supply at the moment that the transaction is agreed. The second is that it enables the avoidance of most or all of the regulations that apply to conventional providers of the service. The third is that those providing the service are not employees of any company but are independent contractors or self-employed agents (or, if you prefer, ‘micro-entrepreneurs’).

Although the word is a new to me, the underlying idea is one discussed at several places in my book and on this blog. The ‘flexibilization’ of work has been underway for some time now, leading increasingly to a ‘precariat’ (p.117 of book) whose work is insecure, often characterized by zero-hours contracts and without much or anything in the way of fringe benefits such as pensions, sick pay or maternity/paternity pay. Uberfication is an intensified form of this, since the independent contractors have no employment rights at all: they are not employed, so such rights are irrelevant.

Unsurprisingly uberfication is beginning to find its way onto the political agenda, at least in the United States. For the free market right it is a splendid development, bypassing state regulation and ‘vested interests’ and promoting an Ayn Rand type vision of autonomous self-determining individuals, freely contracting with each other in a pure(ish) market (only pure-ish because there is some evidence that prices are manipulated by controlling supply at times of peak demand). For the left, the concern is that employment rights are eroded, insecurity increased and, for that matter, buying power diminished (in other words, this isn’t an anti-capitalist point, it’s a Keynesian point: if workers don’t have strong and secure earnings then where does demand come from?).

One way of looking at this in organization theory terms is a shift from ‘hierarchy’ to ‘market’. In brief, the idea here (associated with the economist Oliver Williamson but also, in a different way, the business historian Alfred Chandler) is that there are different ways of co-ordinating human activity, which come into play according to specific cost conditions, allied to particular technological conditions. One way is via a market of individual contractors (the invisible hand, as Adam Smith called it), the other is through internal hierarchies within firms (the visible hand, as Chandler dubbed it in his book of that name). Following that account, uberfication substitutes market for hierarchy. However, it should not be forgotten that the way that co-ordination occurs does not just arise ‘naturally’ from cost and technology but depends on the political decisions we make and the legal systems through which we enact those decisions (hence the many legal challenges to Uber, most recently in Canada).

We can see this as a new technologically-mediated moment in the long-term hollowing-out of the social contract that sustained at least Western economies and societies in the post-1945 era which, along with erosions of the welfare state, makes for an increasingly insecure existence as I have written about several times on this blog. But although the technology may be new, the idea, and its consequences, are not: in very many ways it is reminiscent of the ‘putting-out system’ of the early industrial period (and still to be found in many parts of the world today). In this system subcontracting to individuals and families working within their homes was a way of bypassing the restrictions of the medieval guild system.

Of course the idealised image of uberfication is one in which people have complete flexibility of work and complete control of their destinies with no manager telling them what to do. And that may fine for some people, especially when they are young and healthy. But as a general model of employment it means low wages, no security and no protections. Stripped of its technological glitz it means a life rather like that depicted in the long poem written by Thomas Hood in 1843, The Song of the Shirt, which is about the putting-out system in the garment trade. The link to the full text is here, but just to quote the closing stanza:

Stitch! stitch! stitch!
In poverty, hunger, and dirt,
And still with a voice of dolorous pitch,--
Would that its tone could reach the Rich!--
She sang this "Song of the Shirt!

I began my last post with a reference to the saying that history always repeats itself but never in the same way. Here, I will finish with another aphorism, usually attributed (in a number of variants) to the Spanish-American philosopher George Santayana: those who don’t learn from history are doomed to repeat it.

The benefits of work

The way that work is rewarded is central to organizations, and pay is only one part of it. Associated benefits such as pensions, maternity and paternity pay, and sick pay are also highly important. Sick pay in particular makes a huge difference to security and quality of life. I know this very well from personal experience. When I was a child in the 1960s and 1970s my father was self-employed. He had no savings, six children, and a wife whose work – looking after these children – was not paid. If he was ill, as he sometimes was, or if for some other reason there was no work for him, as was often the case, we felt the consequences within a day or two: there was no food to eat.

So I was struck today by a news story that the British government are considering the idea that workers should fund their own sick pay by paying into an individual savings account. There are no details yet – it isn’t a policy announcement – but seems to be based on similar systems in the United States and in Singapore. It has also been explained in a paper by – predictably – the free market think tank, the Adam Smith Institute (ASI). The idea seems to be not so much a savings account per se, but a combination of savings and private insurance policies.

The logic, if one can call it that, seems to be the same as that in the debate about NHS funding, which I discussed in a recent post. It is that state welfare is unaffordable and so must be replaced by private provision. That is nonsense because it still has to be paid for: if I can’t afford to pay the tax or national insurance to fund sick pay, how can I magically afford to pay an insurance premium to a private provider? Actually, as with health, the situation is worse than this. State-run insurance systems pool risk across the entire population, making them cheaper. Private insurance systems don’t just pool risk across a smaller population (the customers of the company) but are also inherently prone to sub-divide those populations. Thus, as we see most obviously with car insurance, companies segment their customers into risk groups and charge differentially accordingly – hence the very high premiums charged to young and old drivers. The commercial logic is obvious: those most likely to claim have to pay a higher premium. Translated to sick pay the logic is equally obvious: those most likely to need it have to pay more to insure against it. And, pretty quickly, they become uninsureable.

Perhaps the logic is that private providers will do the job better than a state system. This standard neo-liberal claim for private provision is, predictably, made in the ASI paper (as an aside, if the ASI ideologues read the writings of Adam Smith they might be less naïve). It founders on the now massive evidence of how in the personal finance sector in particular inefficiencies and rip-offs abound. Consider the massive mis-selling of private pensions, endowment mortgages and personal protection insurance (PPI), which have given rise to billions of pounds of compensation claims and huge heartache along the way, since compensation never really compensates and, often, arrives too late to do so at all as in the case of the Equitable Life pension scandal. Most of this arose from precisely the deregulation of financial services and of state provision of welfare. It doesn’t take a genius to work out that if sick pay goes the same way there will be massive scandals a couple of decades down the track. And, if so, then as with PPI a second wave of scandals around scam sales of compensation services will emerge.

But suppose all that is too pessimistic, and a private market in sick pay insurance accounts did not fall prey to scandals and rip-offs. If so, then at best we would have yet another extension of the paradoxically controlling nature of choice, which I discuss in the book (p.75) drawing on the more extensive, and brilliant, discussion in Barry Schwartz’s (2004) book The Paradox of Choice. For, now, we will have to monitor, evaluate and switch between the providers of sick pay accounts alongside our same (unpaid) work choosing electricity, gas, water, phone, pension providers and so on. The extension of choice as an unquestioned good into every area of life re-constitutes us as perennial choosers. An image of, say, shopping around the market for the nicest or cheapest vegetables, becomes elevated to a cardinal and unique principle. Making the wrong choices means you only have yourself to blame, but the consequences will not just be a less than nice dinner; they will be destitution.

It is tempting to think that those advocating such measures are well-intentioned but naïve, over-attached to the theoretical nostrums of page one of the Economics 101 textbook. It is not so. They know exactly what they are about. As the ASI report that provides the intellectual ballast for this idea bleakly puts it:

“The new system must overturn any idea that society collectively is responsible for the future needs of its members; that future provision is for themselves to determine by their actions now.” (p.13)

Or, as Margaret Thatcher so chillingly put it as long ago as 1981: “Economics are the method: the object is to change the soul”.

 

Working assumptions

This post is inspired by Martin Vogel’s thought-provoking piece, on the excellent Vogel Wakefield counter-consultancy blog, where he discusses the politics of organization. In particular, he points out how little conversation there was during the British election of the changing nature of work, the social purposes of business and similar themes. With economic debate (and not just in Britain) dominated by the single theme of government fiscal deficit and cultural debate by that of immigration, work – so central to most people’s lives – barely got a look in.

True, there were some marginal references. Labour did seek to open up issues of lack of employment security, lack of quality jobs, and zero hours contracts. The Conservatives did talk at times about the number of jobs created in the British economy in recent years. Both parties talked occasionally about apprenticeships. But huge issues about under-employment, about the effect of technological change on white-collar employment, and about productivity (again, see Martin Vogel’s post for more on this) didn’t get mentioned at all. Moreover, nothing much was said on the many issues adjacent to or around work – for example the highly uncertain future of pensions and the exploding need to provide care for the elderly, much of which will be done as unpaid work, especially by women.

Perhaps it is the case that modern politics is incapable or unwilling to talk about such large and long-term issues. Indeed, it is not just in relation to work that big issues are neglected. In particular, no one in British politics seems willing to take a good look at Britain’s role in the world, something which has been ducked since, arguably, 1945. In fact, with the exception of the issue of EU membership, foreign policy of any sort did not figure in the election. And this is not just an issue for Britain. The mechanisms of international governance seem unable to gain any traction at all on a range of pressing problems from Ukraine, through to the dire and increasingly unstable situation right across the Middle East. The central structures of the UN, specifically the permanent membership of the Security Council, again reflect the world in 1945, not 2015.

One factor here – pertaining to work as much as to security – is the way that globalization, whilst largely created by the decisions of nation-states, has now undercut the purchase that nation-states have upon policy, leaving a political vacuum. From this viewpoint, what can national politicians say about, for example, job insecurity, pensions or de-skilling other than to see it in terms of the ineluctable effects of the global free market? The same could be said about things such as corporate tax avoidance which I posted about earlier this year. We just don’t have the political structures to deal with this situation, and very few people talking about how we might create them.

Yet there are some levers which national governments do have, especially around education and training, that might be pulled at least with respect to issues of employability and productivity. One reason why they do not get much discussed is, I suspect, the increasingly dysfunctional effects of media management. Political strategists seek simple, constantly repeated mantras to ‘frame the narrative’ – the fiscal deficit being the obvious example – which are by definition incapable of speaking of or to complex, inter-related problems. Add to this the almost inevitable short-termism of the electoral cycle and it is perhaps unsurprising that long-term problems get shelved for another day – witness the huge difficulties of developing a global approach to environmental sustainability.

Coming back to work, and thinking just from the standpoint of organization studies, I think that one striking and problematic feature of the subject is just how little it actually has to say about work. This is partly to do with the demise of what used to be called industrial sociology and the concomitant rise of studies that are more concerned with consumption and identity than production and the workplace. It probably also reflects the way that organization studies takes place almost entirely inside management and business schools, with more emphasis on management than on work per se. It certainly reflects the growing ‘theoreticism’ of the academic literature, with a disdain for ‘merely’ reporting what is actually happening in the workplace and an insistence that each academic paper should make a suppose ‘theoretical contribution’, something I’ve discussed elsewhere on this blog. As Barley & Kunda argued in 2001, there is a need to “bring work back in” to the discipline, but it is an argument that more than decade later shows little sign of being heeded.

In 1974, in a book probably better known in the United States than elsewhere, the writer and oral historian Studs Terkel published Working. People Talk About What They Do All Day and How They Feel About What They Do, the title of which is self-explanatory. Its coverage ranged from farm workers to dentists, tennis players to nuns. It’s difficult to think of anything remotely like this book now, and certainly not anything by an organization studies academic. The neglect of work within political discourse may be an intractable problem but within the more limited terrain of organization studies may not be irredeemable. And who knows, perhaps the two might be linked. After all, an organization studies that educated students into the realities of contemporary working life might not only prepare them better for those realities but also encourage them to ask political questions about it.

 

References

Barley, S. and Kunda, G. 2001. ‘Bringing work back in’, Organization Science 12: 76-95.

Terkel, S. 1974. Working. People Talk About What They Do All Day and How They Feel About What They Do. New York: Pantheon/Random House.