The Greensill scandal

The growing scandal in the UK over corporate lobbing of government – which has implicated the former Prime Minister David Cameron as well as a former civil servant – is a reminder of the uses of bureaucracy and the dangers of its abandonment. Max Weber’s ideal-type bureaucracy is most closely associated with the State civil service, and many of its tenets can be seen in the traditional model of the British Civil Service which emerged from the 1854 Northcote-Trevelyan report (although in more complex ways than some of the received myths – see Greenaway, 2004 for details).

One feature of the Weberian ideal-type which nowadays seems rather quaint is that of the lifetime employment of bureaucrats, which links to the way that in the British system the civil service is a permanent one, existing independently of the government of the day. A virtue of such an approach is that it reduces the incidence of the ‘revolving door’ whereby someone might move between civil service and private sector employment. Of course, lifetime employment was never compulsory, so such moves have always occurred, but they were not the norm and, being rare, could more easily be regulated.

This revolving door (not just for civil servants but for government ministers) is at the heart of the present scandal, but it is much more widespread than that. The particular problem it presents is that the awarding of government contracts, or other favours such as, for example, laxer regulation or favourable planning decisions, is potentially corrupted.

Actually, one aspect of this particular scandal is not even a revolving door but a case in which, it appears, a senior civil servant was working simultaneously as an advisor to a now bankrupt finance company, Greensill Capital, of which he then became a Director after leaving the civil service. This seems to have happened not through oversight or concealment, but with official approval. It was not that the rules were flouted, but that they were followed.

It remains unclear how many similar instances of this there may be, but the more routine ‘revolving door’ cases have become far more common over recent decades because it has become an article of faith since at least the Thatcher governments that private sector expertise is needed to inject competence and dynamism into the supposedly archaic traditional civil service. This has even extended to the extensive use of management consultants not just to deliver policy but to contribute to the making of policy, and not just in the UK (Howlett & Migone, 2013).

At the same time, and for the same reason, the state has been reconfigured so as to be less the provider of public services and more the commissioner of those services from the private sector. This outsourcing, discussed extensively in my book, therefore offers particular opportunities for the award of government contracts, making the revolving door all the more problematic. Again, there are rules in place governing what former civil servants and government ministers may and may not do, but they are fairly lax. So it’s not necessarily a problem of rule-breaking but that the rules themselves are inadequate.

The issue here is not, or not necessarily, an overt corruption involving backhand payments in brown paper envelopes. It is more subtle, and more insidious, than that. It’s partly about conflicts of interest which, whether consciously or unconsciously, shape decisions. It is also about the way that personal networks and contacts – the ‘chumocracy’ – can be the basis for these decisions. So, all too easily, and again it may be both conscious and unconscious, nepotism and patronage creep in, and it flows both ways: ‘I’ll scratch your back if you scratch mine’. This might be to do with individuals (for example, a civil servant anticipating future employment) or organizations (for example a consulting firm which is both advising government but also potentially benefitting from government decisions).

Whilst this isn’t new (and the origins of the Greensill scandal predate the current government) there are reasons to think that it may be more prevalent now. One is that the present Prime Minister has shown, in numerous ways, a cavalier disdain for established norms of conduct, and even for the law (for example in illegally suspending parliament in 2019). He is notoriously dishonest (Oborne, 2021) and exhibits a sense of privileged entitlement which seems to suggest that ‘rules are for the little people’. If, as the saying has it, ‘the fish rots from the head’ then an administration led by such a person may be expected to be tainted.

Related to that, this is a government that is especially resistant to dissent and scrutiny, as shown by its draconian approach to policing protests, hostility to the legal system (‘activist’ lawyers, judicial review) the civil service and 'woke' universities, excessive use of Executive powers (Henry VIII powers, Statutory Instruments), disdain for the ministerial code, resistance to accountability to both the media and parliament, and much more besides. This then becomes the context for an illegal lack of transparency in public procurement with associated accusations of cronyism, assisted by the crisis situation caused by the Covid-19 pandemic which has been used to justify suspending standard rules for such procurement.

What is objectionable about all this isn’t simply the question of whether individuals and companies are lining their pockets – and often already over-filled pockets, at that. It is that they do so at public expense After all, the rationale for bringing private expertise into the civil service, and for outsourcing public services, is supposed to be that this will make more efficient use of public, or taxpayers’, money. Cronyism doesn’t as a matter of logical necessity preclude this – perhaps contracts awarded to cronies are undertaken superbly well – but nor does it require it. It makes it impossible to tell whether ‘value for money’ has been achieved.

Another way of looking at this is the way that the neo-liberal ideology of competitive markets as the most efficient allocator of resources has morphed into a ‘market managerialism’ in which bogus markets are created, with resource allocation being decided managerially by, in this case, politicians and civil servants. It is almost the worst of all worlds in taking the worst features of command economies and combining them with the worst features of capitalist economies.

It might be argued that the very fact that there is currently a scandal means that we shouldn’t worry too much. It shows that there is an accountability in operation. The difficulty with that idea is that we really have no way of knowing whether what has been identified is all that there is to be found, or whether it conceals a hidden iceberg. The only real way to be sure is through a system of formal rules. That entails far more than the often-proposed solution of ‘transparency’ and ‘disclosure’. It is not enough that conflicts of interest be ‘declared’, what matters is that, when declared, they are removed, most obviously by removing an individual from decision making.

That is no easy matter. Much of what is at issue here is extremely difficult to police – late night conversations between friends, for example – and probity requires moral norms as well as procedural rules. Perhaps a different way of putting this is to say that it is not necessarily easy to say where and when ‘decisions’ are made: the meeting room and the written minutes may not tell the whole, or even most, of the story.

So Weberian bureaucracy isn’t by any means the whole answer here. For that matter, we shouldn’t assume that the traditional civil service was free of chumocracy when, no doubt, the ‘old boy network’ was alive and kicking. Similarly, ministers and former ministers of bygone times were not paragons of unalloyed virtue.

But this doesn’t mean that cronyism and more or less overt corruption are simply facts of life. They flourish to a greater or lesser extent according to the particular rules and norms of political administration obtaining in particular places at particular times. Avoiding such problems is always a work in progress, sometimes going in the right direction, sometimes the reverse.

In Britain, at the present time, there is a sense of going in the wrong direction. As Rafael Behr, the Guardian columnist, argues, it is not country “riddled with corruption”, but there is “the stench of decay”. That may have its proximate cause in the particular character of the present Prime Minister and government. But they have been enabled by inheriting a state that had already been hollowed out, and a civil service that had been undermined, by the ‘private good, public bad’ ideology. That gave them a freedom of action that might otherwise been constrained. By the same token, with different ideologies and institutions that freedom of action could be curtailed.

 

The fifth edition of A Very Short, Fairly Interesting and Reasonably Cheap Book about Studying Organizations will be published by SAGE in November 2021.

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.

What will Trump's victory mean?

I wrote in my last post about the possibility of Donald Trump being elected. Now that it has happened, I want to share some preliminary thoughts about what it means. Of course, much is unknown. Trump is an unpredictable character anyway, and in any case all politicians find that their freedom of action is more curtailed than either they or their electors expect.

In my book I frame much of the analysis of contemporary organizations in terms of ‘the new capitalism’, meaning the neo-liberalized, globalizing form of capitalism that has been dominant since the 1970s, especially in the US and the UK. I also (nevertheless) record scepticism about ‘epochalism’ (p.104), but with that caveat it is at least possible that we are witnessing a significant shift away from the new capitalism.

What is distinctive about Trump, as the Guardian journalist Martin Kettle wrote today, is that he is both socially and economically illiberal. That, Kettle argues, has not been true of recent US presidents: they have been illiberal in one or other meaning, or in neither, but not in both.

Trump’s social illiberalism is what made his campaign so controversial and divisive. But it is his economic illiberalism that is truly remarkable amongst, especially, Republicans. He appears to be hostile to the global free trade system that defined the new capitalism. He has promised to reverse the offshoring of US jobs, to punish US companies that relocate abroad and to impose high tariffs on, especially, Chinese imports. It seems highly likely that he will abandon the Trans-Pacific Partnership (TPP), the TTIP negotiations with the EU, and if not scrap then comprehensively re-negotiate NAFTA.

These policies, which I have described as nationalist populism, are, like many forms of nationalist populism, similar to left-wing economic programmes. Equally, Trump’s ambitions to create jobs through national infrastructure projects are akin to neo-Keynesian economics (although likely to be funded by foreign investors rather than state investment and so in that sense understandable as a form of privatization, and somewhat at odds with Trump's 'America First' rhetoric).

These are potentially profound shifts, then, but as a counter to epochal thinking, it should be recalled that other parts of his economic agenda, most notably (probably) holding down the minimum wage, cutting corporation and other taxes and financial deregulation, are part of the familiar repertoire of the political right. Moreover, Trump’s calling card that he can run the country as if it were a business and his embrace and embodiment of macho leadership also suggest continuity rather than abandonment of many aspects of new capitalism.

If aspects of Trump’s rejection of economic liberalism have a leftist tinge to them, it’s important to recognize that their nationalism means that they do not offer any general relief from the consequences of globalization. It is in fact questionable whether they can even deliver this for the people of the US. Globalization may simply be too far advanced for that to be possible: it is highly unlikely that the American rust belt will be re-industrialised. At all events, Trump’s nationalism (like Brexit) marks a retreat from the multi-lateral, global governance that offers to best hope of taming and regulating global capitalism, with climate change agreement the most likely early casualty.

Trump is also likely to reverse Obama’s ‘pivot to Asia’ policy. That is apparent in relation to the points mentioned above about TPP and tariffs against China, but also to the likelihood of his administration taking a relaxed view about Chinese sovereignty claims in the South China Sea and agnosticism on the issue of Taiwan. This links with the wider foreign policy aspect of Trump’s presidency, which appears to entail significant withdrawal from global leadership. Some of that leadership has, of course, been highly damaging and other parts of it ineffective. Nevertheless, Trump’s apparent admiration for Vladimir Putin (it’s no coincidence that the Russian Parliament applauded the result: Trump’s election, like Brexit, represent major foreign policy boosts for Russia) and lukewarm support for NATO could be highly de-stabilising for, especially, the Baltic States and the Balkans. This could have potentially devastating consequences, both for those regions and for the wider world, making anything and everything else that Trump’s presidency may mean completely trivial.

Going back to economic issues, I’ve depicted Trump’s election, like Brexit, as triumphs for nationalist populism. But they also represent a huge threat for it. Nationalist populism operates primarily as a vehicle of protest against the establishment. But when it is victorious it itself becomes the establishment and has to take responsibility for the policies it espouses. So what happens if (and, in my view, when) those policies fail? One possibility is that its supporters realise the error of their ways and return to liberalism and social democracy. Another, far more likely, outcome is that those supporters conclude that their leaders have been thwarted by the establishment or, even, that they have betrayed them. The reaction will be to turn even more harshly against perceived enemies: immigrants, liberals, democracy itself. And to seek and support even more extreme leaders. Many people around the world are scared about what Trump’s success means: the greater fear is what his failure will mean.

Trumping rationality

This week will see the outcome of the US Presidential election, with the possibility of the victory of Donald Trump. If this occurs it will have profound consequences not just for the USA but for the world. It is hardly worth me adding to the many voices that view the prospect of a bombastic, ignorant, vicious narcissist in the White House with alarm.

But whether or not he is elected, Trump’s popularity has a significance as part of the wider rise of a nationalist populism (very evident in Brexit Britain) which can be read as the illegitimate offspring of four decades of neo-liberal globalization. Those decades, as I argue in chapter five of my book, are both the condition and consequence of much contemporary organizational practice. A key theme of nationalist populism is an angry backlash against the loss of secure employment and against immigration, both of which can be ascribed to globalization.

Hence Trump rails against NAFTA, just as Brexiters rail against the EU. At the same time, the very evident crisis of neo-liberalism that has been ongoing since 2008 has not only born down hard on employment and public spending but also opened up a profound sense of injustice and inequality. Allied with this is the idea that powerful elites – corporate, financial, political and intellectual – are profiting at the expense of and unaccountable to the people.

Something like this has become a fairly standard analysis of nationalist populism from the liberal-left (and elements of the right as well), and it clearly captures something of what is going on. However, I feel increasingly unpersuaded by it, for several reasons. Not least because under the guise of understanding, it exhibits a kind of patronizing liberal guilt: ‘those poor little people, left behind by neo-liberal globalization, of course they are angry’. That patronizes because it absolves nationalist populists from responsibility for their choices and actions. There is no reason why their reaction has to be one of vicious denigration of immigrants, for example. Nor is there any reason why it should lead to making choices which will not improve, but worsen, the lot of the left behind.

The liberal-left are often associated – by nationalist populists especially, as it happens – with ‘political correctness’, but there is a new political correctness associated with nationalist populism in which it is unsayable to call out stupidity. Because to do so is just another sign of elitism. We are ‘the people’, and you cannot question the ‘will of the people’ or you are ‘the enemy of the people’. But we are all people, and we are all equally capable of stupidity, and all equally challengeable as to the basis of what we do and think. There are not special rules for those people who proclaim themselves, and only themselves, as ‘the people’.

Nor does it make much sense to think that nationalist populism is confined to those left behind by globalization. In the US (and the UK) it seems as if something like half the electorate is willing to vote for nationalist populism. So many of them are well to do and by no means ‘left behind’ (for some fascinating data on this, see this report showing that Trump’s supporters are actually better off than most Americans). Equally, the other half of the population can hardly be described as ‘the elite’ – or if it can, that’s a hell of a big elite. And in both the US and the UK the populist leaders are themselves very obviously members of the elite, Donald Trump being an obvious example with his inherited wealth and massive business empire.

Beyond all that, nationalist populism long precedes neo-liberal globalization. Barry Goldwater, the Republican candidate in the 1964 Presidential contest, with whom Trump is often compared is an obvious example. So is McCarthyism, perhaps the most shameful element of Twentieth century US history. Both these comparators relate to the period of post-war US prosperity and progress whose loss is supposed to account for the nationalist populism of Trump. Going further back we can see in the America First Committee and Charles Lindbergh very similar political positions. In the UK, it can be seen in Powellism and Thatcherism.

So nationalist populism has long been with us, and whatever the failings of neo-liberal globalization we should not hesitate to say that it is the wrong answer, even if to the right question. But that proposition runs into trouble for a reason which is perhaps new. The philosophical underpinnings of right and wrong answers have been substantially battered by the intellectual climate of postmodernism that is more or less coterminous with neo-liberalism. That is to say, the critique of rationality that has dominated recent decades of intellectual debate has found an unhappy partner in the ‘post-truth’ politics of nationalist populism. So evidence, expertise and rational debate can themselves be dismissed as just another way that ‘the elite’ tries to put one over on ‘the people’. It is a rich and bitter irony that the rarefied intellectual salons of 1970s Paris are being channelled to the American Rust Belt and the former mining towns of Britain. The more bitter since those Parisian salons were also where the Enlightenment was in some part born, and which had so profound a part in the formation and constitution of the United States.

Tax but don't spend

Last February I wrote a post in which I peevishly listed various experiences of organizations not working very well. One item on the list concerned the problems of getting through the HMRC (the British tax office) on the telephone. So I was interested to see that this week the National Audit Office (NAO) published a report on HMRC’s quality of service. This identified a “collapse” in customer service over 18 months in 2014-15 with call waiting times tripling and some customers being kept on hold for up to an hour.

What lay behind this were massive cuts in staffing levels, which in personal tax fell from 26,000 to 15,000 between 2010-11 and 2014-15. This of course is just one of the many consequences emerging across all parts of the public sector as ‘austerity economics’ bites deep under the ideology that eliminating the government’s budget deficit is the sole aim of policy (what Nobel economist Joseph Stiglitz calls “deficit fetishism”). But there is more to it than that: associated with the cuts was the technocratic fantasy of paperless (on line) tax returns and automated telephony.

We’ll break here for another oldster rant: why does everything have to be done online, with endless passwords and usernames in hundreds of different formats? How I long for the days when you could just fill in a form and send a cheque in the post. There are still a few places you can do this and I would single out from my own experiences the insurance company NFU Mutual as particularly good not just for this but for that fact that they have an ordinary phone number that goes to the local office where I talk to a person I have met and who has been in post through all the years I have dealt with them. And, on the one occasion I’ve had to make a claim, they are excellent to deal with. Is it because they are a mutual organization?

Back to the HMRC and what is interesting is to note how this story illustrates some of the recurring – and linked - themes of my book, namely those of unintended consequences and of the ambiguity of efficiency. In terms of unintended consequences the issue is how cost savings in one budget show up as new costs somewhere else. This is especially obvious in relation to HMRC because an effective tax gathering system is vital to meet the costs of government spending departments. So to impinge on the first inevitably has consequences for the second.

The issue of efficiency is linked in that what may be efficient for the HMRC maybe inefficient for other departments but, beyond that, inefficient for the user – in this case the taxpayer or, as they are now called, with tragic inevitability, customers. And let’s just have another break here to remind ourselves how crass, how nonsensical, it is to describe people paying taxes as ‘customers’. The NAO Report is helpful in quantifying this by reference to the HMRC’s own costings of people’s time (£17 per hour, apparently). On this basis, the time spent waiting and talking, and the cost of the call, added up to £97M (of which £66M was the cost of waiting to be answered) in 2015-16. So HMRC’s efficiency savings become its “customers’” costs. According to the NAO and the HMRC things are now getting better, though I must say that this is not my personal experience and, anyway, we have been here before. A damning 2012 NAO Report on phone call waits was also met with promises of improved performance and assurances that this was beginning to happen.

There’s a bigger organizational story here. The HMRC is the result of a merger, in 2005, between what were previously the Inland Revenue and the Customs and Excise office. Culturally very different, many date the problems at HMRC from this archetypical example of reform through reorganization. Subsequently, there have been repeated high-profile scandals. Dave Hartnett, its boss until 2012 when he joined global accountancy firm Deloitte as a consultant, was accused of cutting lax ‘sweetheart deals’ with big corporates like Vodafone and Goldman Sachs, and called “a liar” by the chair of the Public Accounts Committee. His successor, Lin Homer – dubbed ‘Dame Disaster’ by satirists – was criticised for failures in relation to the HSBC tax scandal and also for claiming the HMRC to have had its best year ever in 2015 despite – yet again – massive problems with phone systems. She stood down in April 2016.

As for the future, who knows? HMRC have taken on more staff, but the ongoing closure of 137 local tax offices in favour of 13 regional centres does not bode well, and the latest NAO Report says that HMRC’s capacity to sustain planned cost reductions rest upon its Making Tax Digital initiative, another techno-fantasy, which has already been met with scepticism, if not outright derision, by tax accountants.

It’s tempting to ascribe all this to the well-attested failures of neo-liberal ideology in general and the effects of its application to the public sector in particular. But it’s more complex, and worse, than that. Even the most assiduous neo-liberal assumes, accepts and expects that the State will act as a ‘nightwatchman’, undertaking the basic functions of tax collection, law and policing. But cuts have “brought the court system close to breaking point” and are causing a crisis in policing and in the prison system. It used to be the leitmotif of anti-state ideologues that cuts could be achieved by getting rid of ‘five-a-say Czars’, ‘diversity officers’ and, of course, that perennial favourite ‘faceless bureaucrats’. Now it turns out that even the most basic functions of the state are up for grabs. If proof of that were needed, look no further than current plans to privatise the Land Registry, the body that administers that most basic feature of any capitalist economy, property ownership.

Steel yourself

There are two big news stories in the UK today. One is the closure of the Port Talbot steelworks, following a decision by its Indian owners, Tata, and due mainly to the flood of cheaper Chinese steel into the UK and other markets. The other is the death of the veteran comedian Ronnie Corbett.

They could hardly be more different stories, but I think they are in a certain way linked. The closure of Port Talbot is expressive of the consequences of neo-liberal privatization and globalization. British Steel was privatised in 1988, one of a wave of privatizations under the second Thatcher government, and was subsequently merged with the Dutch group Corus, taken over by Tata in 2007. In recent months the influx of cheaper Chinese steel (a consequence of the slowdown in China) has rendered Port Talbot’s steel uncompetitive.

The fallout of that has exposed many ironies. Some insist that steel must continue to be produced in the UK because of its strategic importance to the defence industry. Here, as in Thatcherism, the tensions of free market and nationalist ideology are evident. Others, arguing for Brexit, complain that the EU has not prevented Chinese steel-dumping. The irony here is that those same people routinely argue against EU ‘meddling’ and yet are now bemoaning the lack of it. A further irony is that the lack of EU action derives from being blocked by the UK government, yet Brexiters say that they are in favour of decisions being made by the UK government, and that the UK has no influence on EU policy. A further irony – or, really, a re-run of the first - is that most Brexiters are free market liberals and yet in their desire to trash the EU they bemoan its lack of protectionism.

What, then, of the death of Ronnie Corbett (a resident of my home town, Croydon, by the way)? Well, the connection for me is that Corbett’s popularity was greatest in the heyday of 1970s broadcasting when he appeared in The Two Ronnies which routinely had audiences of 20 million people. That collective experience was all of a piece with the pre-neo-liberal world of nationalization and of the limited choice (of, in this case, TV channels) to which neo-liberals so vehemently object.

I’ve written elsewhere on this blog about Jonathan Coe’s novels and in particular about his sense of nostalgia, quoting the passage in his 2015 novel Number 11:

“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)

In an earlier (2001) novel, The Rotters’ Club, the central character Benjamin Trotter reflects on watching The Morecombe and Wise Show, which, like The Two Ronnies, attracted mass audiences in the 1970s. I don’t have the book to hand, but the gist of the passage was about Benjamin’s awareness that all over the country millions of people were watching the same show, and that he was part of a collective experience as he sat watching it with his family. Indeed I can remember myself how discussing these kind of shows the day after was the common, shared experience in schools and, I imagine, workplaces in the 1970s.

So what I am suggesting is that there was a relationship between a variety of forms of commonality at that time, ranging from shared ownership of industry to shared cultural experience. Some of that was, surely, nostalgic even at the time: shows like Morecombe and Wise and The Two Ronnies were the lineal and in some cases literal descendants of the music hall and seaside pier traditions of Victorian Britain.

If the two stories are connected, then so are the responses. A significant segment of the Brexit vote (and especially the older demographic from which it derives much of its support) is nostalgic for the days of British economic dominance but also for those shared cultural experiences and, probably, even the peculiarly British tradition of the music hall. I actually share some aspects of that nostalgia but I also recognize that it is not enough. And in particular, I can see that its sentimentality makes easy fodder for a Brexit campaign led not by those who want to protect Britain from the forces of globalization and neo-liberalism but by those whose most fervent dream is for their greater and more untrammelled application. In that dream, any number of workers and strategically important industries will be sacrificed; and as for The Two Ronnies well those who want it can subscribe to a pay-to-view channel or buy the DVD, right?

Fat cats?

The British government have today announced plans to further restrict redundancy pay-offs made to public sector employees. Proposing an £80,000 cap, this will only affect senior staff, and it is in part a response to a populist media campaign, enraged about public sector ‘fat cats’ not just because of redundancy pay-offs but, more generally, high salaries and ‘gold-plated’ pensions.

Fair enough, perhaps – although where is the comparable outrage about private sector rewards? – but it is worth considering how it has come about that public sector managers enjoy the high rewards that they do. For it was not always so. Traditionally, senior managers (then more often called administrators or officials) had substantially lower salaries than in the private sector, and were expected to be motivated primarily by their commitment to public service.

That all changed from the 1980s, when under the general ideology of the market and the particular influence of the ‘New Public Management’ that derived from it, it was argued that the public sector was inefficient because it did not have the dynamic management of the private sector and that, therefore, it had to offer rewards commensurate with those in the private sector so as to attract that talent. This new breed of managers could hardly be expected to work for so fluffy an ideal as public service – no, in line with the motivational theories of what was then called the New Right, they had to be paid top dollar. And they were – bringing with them many of the reforms that have laid waste to the public sector. But that is another story, about which I have written elsewhere in the blog.

One way of understanding this story is to see it as one of a huge number of examples where the consequences of decisions by now long-retired or dead politicians who were in power in the 1980s neo-liberal heyday have now come to fruition. Examples range from the decision to relax planning regulations on flood plain building because the market should decide where to build, leading to the floods of recent years, through to the deregulation that led to the global financial crisis.

It’s the same with the 1980s approach to those parts of the public sector that were not privatised (those that were, by the way, have mostly now died). Wind forward 30 years and we see that the very same ideologues who blasted the public sector for not paying the going rate for top managers now blast the public sector for … paying the going rate for top managers. It is a hypocrisy unleavened by any acknowledgement that the going rate for top managers is ludicrously high. Because of course their quarrel is not with top management pay rates at all, but with the very existence of the public sector.

Indeed, the attack on public sector fatcat pay is really only a way of finding a soft point to attack public sector pay in general. It is part and parcel of two claims. One is that public sector workers are paid more than private sector workers. The other is that public sector workers get 'gold-plated pensions’. Often, the two claims are linked together.

The problem with the first claim is that – again because of the impact of market ideology and neo-liberal reforms – the lowest skilled (and therefore lowest paid) jobs in the public sector have been outsourced to private sector contractors. Thus, of course, average public sector pay is higher. As regards pensions, in 2012 (the latest year for which I have been able to find comparative figures) the median-average public sector pension was £5,600 pa (mean-average £7,800 pa) and the median-average private sector pension was £5,860 pa (mean-average £7,467). It’s true that most final salary pension schemes in the private sector have closed; it’s also true that those in the public sector are closing (one reason being the pressure put on them by high paid managers).

So let’s by all means challenge the high pay and pensions of senior managers in the public sector. But doing so only makes sense if we do so across the board, perhaps by considering a maximum wage. In 1998 FTSE-100 CEOs were paid a huge 47 times the pay of their average employee. Shocked? Well, by 2014 they were paid 130 times as much as their average employee. We might think about Fred Goodwin, who brought down Royal Bank of Scotland and cost the taxpayer billions of pounds, scraping by on a reported pension of £342,500 pa, poor fellow. We might think about Paul Dacre, Editor-in-Chief of the Daily Mail which has so vociferously campaigned against public sector largesse. In 2014 his pay and bonus package was £2.4M. The average UK pay in 2014 was £26,500 or 1.1% of what anti-elitist Dacre earned that year. The highest paid public official, and this by a long chalk, in 2015 was the Attorney-General at £205,000 or 8.5% of what public sector scourge Dacre earned the previous year. We might think about Jonathan Isaby, the Chief Executive of the Taxpayers’ Alliance that campaigns against public sector pay in the interests of transparency – but, alas, so profound is his commitment to transparency that his pay isn’t on the public record, nor are the identities of the donors that fund the Taxpayers’ Alliance. Strange, perhaps, to learn that the Taxpayers’ Alliance are enthusiastic advocates of freedom of information, but we surely can’t doubt that everyone associated with them is an assiduous taxpayer, can we?

So let’s think about all that, let’s understand the hypocrisy of those who decry the consequences of what they advocate, and the underlying agenda they champion, and the kind of world they really want to see.

Everyone needs a Willie

The phrase ‘every Prime Minister needs a Willie’ was uttered by Margaret Thatcher, apparently without realising the double entendre it contained. It was a reference to her sometime deputy as Conservative Prime Minister, William Whitelaw. Whitelaw’s significance to Thatcher lay in the fact that he provided a point of connection between her and the wider Conservative Party, especially during the early years of her leadership in the late 1970s and early 80s. For it is easy to forget that during those years Thatcher was engaged in remaking her party, in a process that was by no means unopposed from within, away from its traditional, pragmatist and patrician form and into a much more ideologically-motivated neo-liberal entity.

This did not happen all at once, by any means, and the presence in her first cabinet in particular of ‘Tory wets’ (the more traditional, centrist, one nation Conservatives) are a testament to this fact. Not only was there an ideological battle here but also Thatcher, both in her class background and her gender, did not fit the established image of a Tory leader. Willie Whitelaw’s significance lay in being both doggedly loyal to his boss but also being trusted by the wider party, since he was very much from its traditional mould (public school, Cambridge, ex-army). He was thus able to be a conduit between traditional and new Tory parties.

In the 1990s, a very similar role was undertaken within Tony Blair’s New Labour party by John Prescott, who also became Deputy Prime Minister. Here again a party was being re-made towards a more neo-liberal posture, but this time against a traditional backdrop defined in terms of socialism, or at least social democracy, and trade unionism. That constituency was alien to Blair’s ideology and his personal background (public school, Oxford, ex-lawyer) but one that Prescott, a working-class former trade union official, was steeped in. Like Whitelaw he formed a key conduit between traditional and new Labour parties.

I have been recalling these two because of the current situation within the Labour Party. Jeremy Corbyn is seeking to re-shape Labour away from Blairism and also, like Thatcher and Blair, has a persona that only appeals to some sections of his party. In some ways his situation is more complicated than Thatcher’s or Blair’s in that he differs from both the new right of his party (too left-wing) and from the old left (too liberal and metropolitan). At all events he faces opposition and mistrust from, at least, its MPs, very few of whom wanted him to become their leader (his support base being, rather, amongst party members). One reason that task is proving so hard, I would suggest, is that there appears to be no one willing and able to act in the kind of conduit role that Whitelaw and Prescott fulfilled; someone trusted by the parliamentary rank-and-file and willing to use that trust in support of the new leadership.

If anything, Corbyn seems more inclined to seek to surround himself with those who agree with him, with this week’s sackings of shadow cabinet members for ‘disloyalty’. That is always a temptation for any leader but it carries with it enormous dangers. In the long run it leads to isolation from dissenting opinions (something that played a part in the downfall of both Thatcher and Blair, and probably of many business leaders) and hence the well-worn problem of ‘group think’, and that of cultism*. But in the short-run it hamstrings the necessary process in any form of politics, including organizational politics, to build what are inevitably forms of coalition. It seems related in some way to the well-known – within critical organization theory, at least - limitations of seeing leadership in terms of individuals: precisely because leadership involves coalition building it also requires a broader set of appeals than are likely to be provided by a single person. Corbyn needs urgently to find his Whitelaw or Prescott or even, given his particular situation of being neither Old nor New Labour, a couple of them.

* For an excellent analysis of cultism in leadership, and indeed of the dangers and difficulties of leadership including the over-focus on the individual, see Dennis Tourish’s The Dark Side of Transformational Leadership: A Critical Perspective (London: Routledge, 2013).

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.

Stuck with choice

I had a plan for today’s post, which was to go back through this blog to find where I had used various news stories to make a point and to revisit those stories asking: what happened next? As I began to do so, I found that it was a completely overwhelming task. Over the last three years I have written about under-employment, corporate tax avoidance, outsourcing, immigration and refugees, global supply chains, public sector reform, economic insecurity, pensions, corporate takeovers, air crashes, the NHS, the Greek crisis, the British establishment, the war in Ukraine, the Chinese economy and many, many other things.

So I have given up on that idea (for now) and instead will return to just a couple of things I’ve written about which are in the news again. In my post More on Power (November 2013) I wrote about the ludicrousness of consumer choice in the electricity ‘market’. Wind forward to today, and the price comparison sites that would supposedly enable such a choice are mired in scandal. In my post Pensions (March 2014) I wrote about the deregulation of personal pensions, a reform supposedly freeing up pensioners to make choices about their pension pots. Wind forward and we find that already scandals are emerging as pensioners are ripped-off or conned into making dangerous investments.

The fallacy that links both these cases (and another current story, that of the need to shop around for the best bank account) is that consumer choice is both efficient and morally impregnable. It is a logic in which corporations and consumer rights associations are complicit (see also my post on The Benefits of Work in July 2015). Choice isn’t an unqualified good.

Of course the neo-liberals are right when they point to the absence of choice as being one of the failings of State Communism. But that Cold War rhetoric doesn’t take us very far because the issue isn’t ‘no choice’ versus ‘unlimited choice’: there are degrees in between. Moreover, as these various examples show, choice in many markets is fairly meaningless. I sometimes think that market ideologues genuinely believe that ‘the market’ always and everywhere has the same form as wandering around fruit and veg stalls, looking at the quality and price of produce before buying. If so, it’s wholly unrealistic.

The reality across huge swathes of products – not just energy, pensions or bank accounts but also mobile phones, insurance or university courses – is nothing like the Economics 101 textbooks. It’s all but impossible to compare products and prices, and even if you did so once then within a few days or even minutes things would change again. Choice in these circumstances is meaningless, and the constant invocation of choice as a cardinal value is in fact an attempt to make as central the idea that we are all ‘choosers’. And the significance of that is not that it is a good thing to be a chooser, but that if choosers make the wrong choice – as some or many will - then they have only themselves to blame.

Writ large, this means that whatever happens to anyone, good or bad, is to their own credit or reflects their own fault. And so any social situation, no matter how unfair or wrong it may be, is not just unavoidable but, actually, right. This grotesque moral spoonerism is the ultimate consequence of the benign or even positive spin put upon choice.

In political philosophy, the most sophisticated expression of this valorization of choice as central is to be found in Robert Nozick’s book Anarchy, State and Utopia (1974). It is a beautifully written and intellectually elegant book that I would recommend to anyone. At its heart (as regards choice) is the ‘Wilt Chamberlain example’ (Chamberlain being a famous basketball player). Nozick argues that if before Chamberlain plays a game everyone agrees that the distribution of income in society is fair (even, say, if it is equal); and if, then, everyone who pays to watch Chamberlain play does so as a free choice; and if, then, as a result Chamberlain has more money than everyone else; then that new unequal distribution of income must also be fair, as everyone has chosen it.

There are two flaws in this argument. One is that it is only Chamberlain and those who paid to see him who have consented to the new income distribution. What about everyone else? If consent is the key principle for fairness then how can it be fair when they haven't consented? The other is that if Chamberlain and everyone who paid to see him had known that his extra income was to be taxed at 100% and redistributed, and he had still chosen to play and they had still chosen to pay, then the resultant equal income distribution would also be fair, on the logic of choice.

So choice doesn’t work, even at the most sophisticated theoretical level, as a guarantor of fairness, and it doesn’t work at the demonstrable empirical level of how choice actually works in markets. Which doesn’t mean that it is of no importance if people don’t have choices. On the contrary, choice is vital for both economic and political well-being. It’s just that it is not the only thing that matters, or the thing that matters above all else. It's not a kind of trump card that beats every other aspect of human existence.