[I apologise
to readers in non-cricket playing countries, or those who have no interest in
cricket: this post will be largely incomprehensible to you. And apologies to all for the strangely large gaps between paragraphs, which for some reason I just cannot reduce].
So the
England cricket team have been defeated in the Ashes. Well, not just defeated
but humiliatingly eviscerated, despite having been the favourites to win at the
start of the series. It was not just that they lost, it was that they scarcely
even competed. I used to be a passionate follower of English cricket. Sitting
literally at my father’s knee in the 1960s and 70s I learned the game from the
BBC TV coverage, and subsequently played quite a bit, albeit not very well (and, more than any other
sport I think, cricket is hard to appreciate fully if you haven’t played it). It’s difficult to recreate those days. We had a black and
white television and so although my father must have known that cricket was
played on green grass, in white flannels, with coloured caps (not, in those
days, helmets), I had no such knowledge, and it was quite a revelation when our
first colour television arrived in 1975. But even without colour pictures I was
enthralled as we watched together; him explaining first the cruder, then the
finer, points; to be supplemented by our playing sessions in the back garden.
And how I remember
the first test match – the first cricket match for that matter – I ever saw in
person, again with my father, in the long, hot summer of 1976 when the West
Indies thrashed England. It was the series that began with Tony Greig, the
white South African-born England captain, declaring that he would make the tourists ‘grovel’. That word, from someone of his background during the
Apartheid era, spoken about a black team, had a horrible political resonance
(although that is not to say that this was Greig’s intention). So too did the power
of the West Indies side for its substantial Afro-Caribbean fan base in
post-colonial Britain, as documented in the 2010 film Fire in Babylon. It was cricket, but it was politics in a big way.
The match we
saw was the final test at The Oval, the day that in scorching sunlight Viv Richards scored most of his magisterial 291, but that was a culmination of a
summer that had marked a kind of shift from old to new cricket. The old cricket
was represented by the – literally old – English batsmen facing the West Indian
pace attack. John Edrich, 39, and Brian Close, an unbelievable 45, being
peppered by Michael ‘whispering death’ Holding’s bouncers in the Old Trafford test being the symbolic example. It was like seeing the changing of an age. At
the end of the Oval test, West Indies took the series 3-0 but that scoreline
flattered England who had been comprehensively destroyed by a far superior
side. In another symbolic moment, Tony Greig went on hands and knees and
‘grovelled’ in front of the Oval crowd.
It’s hard
now to remember how amateurish English cricket was in the 1970s. I suppose that
one minor index is the way that each Sunday during the season the team would be
announced for the next test. We – my father and I – would see it during the tea
interval of the John Player League tournament on the BBC. Even that is archaic
– sport sponsored by a tobacco firm; county cricket matches on the BBC for
hours on end. But, anyway, the team was in no way predictable. There were in
those days no central contracts; a likely lad would receive the summons on Sunday
and play for England in the test match on the following Thursday (in those
days, test matches always started on a Thursday, running for five days to the
end of Tuesday because Sunday was a ‘rest day’). This was often a moment of
excitement for me because my particular heroes – Graham Roope and Pat Pocock
come to mind – were never regular picks, but from time to time got the call up.
So it was fun, but although in those days there was less of a gap between
county and international standards, it didn’t begin to meet the exigencies of
what cricket had become.
Post-1976
things began to change, especially after the development of Kerry Packer’s rebel World Series Cricket in 1977 (in which Tony Greig was a pivotal figure),
although I must admit that at the time I adhered to my father’s considerable
disapproval of this rupture in the traditional order. At all events, through
the 1980s and 1990s England had some real, albeit fluctuating, success,
‘Botham’s Ashes’ in 1981 being a particularly memorable landmark. Even so,
reading David Gower’s recent autobiography it is striking how haphazard and
unprofessional the organization of the team was in that period. This continued to
be the case at least until the creation of the English Cricket Board in 1997and the MacLaurin reforms which introduced, amongst other things, central
contracts. The benefits were soon felt and the turning point was symbolised by
England’s series victory over the by now much weaker West Indies side in 2000,
secured at The Oval test, which I myself attended, 24 years after the 1976 rout
and 31 years since England had recorded a series win over West Indies.
Since then,
England have been a competitive and often very successful side, at times the
best in the world. Perhaps the great high point was the extraordinary,
heart-stopping, chest-heaving, Ashes series win in 2005 when I, along with, it
seemed, the whole country was riveted (we will not dwell on the re-match in the
Australian season). How sadly ironic that, with national success and interest
at its height, this was the moment that the free-to-air TV rights were sold off,
never to return. Since then, I have never watched a test match on television
and ceased to follow it closely. There will be far fewer English children from
now on who have the experience that I had, watching and learning with my
father.
What is the
organizational significance of this walk down cricketing memory lane? Apart
from simple self-indulgence it is that much that I have recounted in this very
brief history pertains to the organization of cricket in general and the England
team in particular. And the withering defeat that England have just suffered is
largely being discussed in organizational terms. That is, it is not that the
players have suddenly ceased to be technically competent but that issues such
as leadership, or the complacency bred by success affecting motivation, or even
the protection offered by central contracts are being held responsible. As one influential commentator has noted, the problem is 'over-professionalism'.
I certainly
do not think that a return to the ‘amateurish’ days before central contracts
will serve us well. But it does seem to me that in recent years English cricket
has been gripped by a kind of soulless managerialism. When players, captain or
manager are interviewed, they will couch their comments in stilted, bloodless
terms: putting the ball in the right areas, executing our game plan, winning
the percentages and so on. What seems to be missing is a sense that these are
not ends in themselves, but means towards playing good or even great cricket.
God forbid that we should adopt the debased argot of reality TV shows, with
ubiquitous statements of how ‘passionate’ we are. But the difference between
Australia and England in the latest Ashes does seem to show how the Australians
were fired by something more than the mechanics of team management. I have no
idea how to create or harness such a feeling and perhaps that is the point: the
most important things in cricket may be precisely those things that cannot be
controlled or managed. If so, there is also a wider lesson for, as all cricket
fans know, cricket is not just a game but a microcosm of life itself.
Monday, 27 January 2014
Sunday, 5 January 2014
History matters
No sooner had I posted some thoughts about the First
World War than Michael Gove, the British Education Secretary, popped up with
his own. In an article in the right-wing British newspaper the Daily Mail (see my recent post to understand where this paper is coming from) he denounced “Left-wing academics” for “belittling true British heroes”. Instead, he offered his own
interpretation of it as “a just war” because “the ruthless social Darwinism of the German
elites, the pitiless approach they took to occupation, their aggressively
expansionist war aims and their scorn for the international order all made
resistance more than justified”. Of course this kind of simplistic analysis
wouldn’t even pass muster in a high school project, and unfortunately for Gove
his opposite number, Shadow Education Secretary Tristram Hunt happens to be a
professional historian by background, and issued a sharp rejoinder. Even more unfortunately, Gove chose to position his arguments against one of the most popular British comedy shows - Blackadder Goes Forth, set in, and satirizing, WW1 - and has also been attacked today by one of its most popular actors.
Management and organization studies has a very similar relationship with history. On the one hand, it is the most ahistoric of disciplines. There is very little in the way of detailed scholarship on the history of management and organizations or on managerial and organizational thought (it’s true that there is a research sub-genre of business history, but it is not very connected to either the mainstream of the discipline, nor very present in the teaching curriculum). Students tend to be very impatient of case studies that are not of the moment. In this they have wiling accomplices in their teachers, who, as Paul Adler argues in his introduction to an indispensable Handbook have disconnected themselves from classic thought in the field. That is even reflected in the referencing patterns of journal articles. On the other hand, almost everything written about management and organizations is replete with history, albeit of the crudest and most unexamined sort. It is full of what I refer to in the book as “cartoon concepts” (p.104), especially as regards bureaucracy (old, discredited) and post-bureaucracy (new, shiny), but also in terms of its naïve story of an unfolding enlightenment from scientific management (old, nasty) to human relations (new, nice).
This kind of implicit, unexamined history serves – like Gove’s newspaper article – to pursue a particular agenda, primarily that current organizational developments are both inevitable and right. On the other hand, the neglect of history serves to pursue another agenda, primarily that organizations are completely decontextualized and unrelated to the world around them. Almost everything about the historiography of management and organization studies is unsatisfactory either in commission or omission. It remains the great unexplored territory of the subject. At least when someone like Gove pontificates about history it can be seen and understood that this matters for what we do now and in the future. In organization studies that has still to be seen and understood.
The way
that we remember history is not, in any case, likely to be much affected by the
pronouncements of politicians – collective memory simply doesn’t work that way. But
the fact that politicians might seek to fight over historical interpretation
tells us how important those interpretations are. There’s a line in George Orwell’s novel 1984 to the effect that ‘he who controls the past controls the
future’ and it is this that is at stake. Gove’s jingoistic rant is not
primarily about the past, it’s about trying to advance a present day agenda.
Most directly, it’s a coded way of talking about Germany and the EU; more
diffusely about trying to resurrect the pieties of nationalism. In other words,
history matters – not just, or even primarily, because of the past but because,
as the French philosopher Paul Ricoeur elegantly put it ‘cultures recreate
themselves by telling stories about their own past’.
In a
very minor way that was brought home to me the other day when I was watching a documentary about the BBC music show ‘Top of the Pops’ in 1979. I was watching it because
this was the music of my teenage years, but embedded throughout the programme
was a narrative about how trade unions were a destructive, reprehensible force.
In a general way, the music of the year was set against images of strikes and
the election of Thatcher; in a specific way the BBC was depicted as engaging in
restrictive, fuddy-duddy practices because of union controls. Of course this
wasn’t a programme ‘about’ political history, it was a programme about pop
music ‘in the past’. But embedded in it was, precisely, a political history.Management and organization studies has a very similar relationship with history. On the one hand, it is the most ahistoric of disciplines. There is very little in the way of detailed scholarship on the history of management and organizations or on managerial and organizational thought (it’s true that there is a research sub-genre of business history, but it is not very connected to either the mainstream of the discipline, nor very present in the teaching curriculum). Students tend to be very impatient of case studies that are not of the moment. In this they have wiling accomplices in their teachers, who, as Paul Adler argues in his introduction to an indispensable Handbook have disconnected themselves from classic thought in the field. That is even reflected in the referencing patterns of journal articles. On the other hand, almost everything written about management and organizations is replete with history, albeit of the crudest and most unexamined sort. It is full of what I refer to in the book as “cartoon concepts” (p.104), especially as regards bureaucracy (old, discredited) and post-bureaucracy (new, shiny), but also in terms of its naïve story of an unfolding enlightenment from scientific management (old, nasty) to human relations (new, nice).
This kind of implicit, unexamined history serves – like Gove’s newspaper article – to pursue a particular agenda, primarily that current organizational developments are both inevitable and right. On the other hand, the neglect of history serves to pursue another agenda, primarily that organizations are completely decontextualized and unrelated to the world around them. Almost everything about the historiography of management and organization studies is unsatisfactory either in commission or omission. It remains the great unexplored territory of the subject. At least when someone like Gove pontificates about history it can be seen and understood that this matters for what we do now and in the future. In organization studies that has still to be seen and understood.
Saturday, 28 December 2013
1914 and 2014
There is
beginning to be a large amount of media attention given to the approaching
centenary of the outbreak of the First World War in 1914. This led me over the
Christmas holidays to re-read Vera Brittain’s memoir Testament of Youth where she recounts her experience as a volunteer
nurse in that war, during which her fiancé, her beloved brother, and many of
her friends were killed. One of the striking things in her account is how readily
those men went to their fates. Indeed not just readily but happily, relishing
their chance to serve. A hundred years ago, in Britain and many other places,
it was self-evident that the verities of Church, Nation and Empire were immutable.
Now that seems, to most of us, not just misguided and wrong, but silly and
absurd – and deadly. It is hard, now, to see the First World War as anything
but a pointless slaughter.
That’s not so surprising. In the past they thought their realities solid. Now we see that they were not. So what, then, of those things that we ourselves take as being solid reality? Isn’t one lesson of history to be sceptical about these? It may seem bathetic to shift from talking of war and death to talking about work organizations, but death is present in these, too, sometimes literally as I wrote about in my post on suicide. An excellent new book by Nancy Harding – On Being at Work – talks about how “organizations … murder the selves that might have been” (p.175), meaning that they seek to make us into “zombie-machines” who are less than human, negating our potentials. If that sounds bleak, then read Carl Cederström and Peter Fleming’s recent book Dead Man Working for a real New Year boost. What both of these books have in common is an understanding of the way that even – no, not even, especially – the kind of humanized, fun workplaces of modern capitalism suck the life out of us by demanding not just our labour but the commitment of our very selves. Something similar, though less nihilistically expressed, is present in the discussion in my book of the post-bureaucratic workplace.
That’s not so surprising. In the past they thought their realities solid. Now we see that they were not. So what, then, of those things that we ourselves take as being solid reality? Isn’t one lesson of history to be sceptical about these? It may seem bathetic to shift from talking of war and death to talking about work organizations, but death is present in these, too, sometimes literally as I wrote about in my post on suicide. An excellent new book by Nancy Harding – On Being at Work – talks about how “organizations … murder the selves that might have been” (p.175), meaning that they seek to make us into “zombie-machines” who are less than human, negating our potentials. If that sounds bleak, then read Carl Cederström and Peter Fleming’s recent book Dead Man Working for a real New Year boost. What both of these books have in common is an understanding of the way that even – no, not even, especially – the kind of humanized, fun workplaces of modern capitalism suck the life out of us by demanding not just our labour but the commitment of our very selves. Something similar, though less nihilistically expressed, is present in the discussion in my book of the post-bureaucratic workplace.
What’s the
link with 1914? It’s two-fold. Firstly, in both cases there is a willing
embrace of the sacrificing our literal or metaphorical lives. In the workplaces
described by Harding and by Cederström and Fleming the tragedy is not that we
are forced to be zombies, it is that we accept and welcome it, just like Vera
Brittain’s contemporaries accepted and welcomed their assigned fate. Secondly,
this is orchestrated through a set of supposedly immutable verities – in the
case of the contemporary workplace these might include ideas of the necessity
of a ‘global competitive race’, of the implacable reality of ‘the market’, and that ‘change is the only constant’ and so on.
But if we
can accept that the solid realities of the past were not what they seemed, then
we must accept that the same applies to the solid realities of the present. We do not need to wait for historians to pass
judgment.
Happy New
Year!
Friday, 6 December 2013
Happy birthday?
So this blog is just about exactly one year old,
reflecting the fact that the third edition is also a year old. It is ‘fairly
interesting’ to look at the site statistics. So far there have been 3367 visits
(390 in the last month), although there is no way of telling whether this
represents a small number of people looking at it several times, or a larger
number of less frequent visitors. The
most viewed post is the one about Thatcher’s death and legacy. The top 10 country
breakdown is:
But what is more surprising is to see occasional
visitors from far flung places: this week, Aruba.
Anyway, there has been another birthday this week, namely my own 49th anniversary (or, as a colleague rather depressingly put it, I am now entering my 50th year). I am becoming more and more grumpy as I get older – in fact, I realise that somewhere along the line I have turned into my father. My current pet hate is people walking around looking at their mobiles, requiring others to jump out of the way to avoid a collision.
Another peeve is more directly related to the book where, on p.131, I talk about the free labour that customers perform when dialling up call centres through automated telephone systems, sometimes even paying for the privilege. Something very similar is becoming more and more common in shops, where increasingly the checkouts are self-service. Thus we scan our goods, bag them and pay without the need for a checkout operator. This is presented as an extension of choice, but the choice is limited by the fact that there are fewer and fewer staffed tills with longer and longer queues as a result.
United Kingdom
|
1219
|
United States
|
647
|
Germany
|
148
|
Russia
|
133
|
Ireland
|
82
|
France
|
73
|
Ukraine
|
68
|
China
|
67
|
Norway
|
65
|
Australia
|
53
|
Anyway, there has been another birthday this week, namely my own 49th anniversary (or, as a colleague rather depressingly put it, I am now entering my 50th year). I am becoming more and more grumpy as I get older – in fact, I realise that somewhere along the line I have turned into my father. My current pet hate is people walking around looking at their mobiles, requiring others to jump out of the way to avoid a collision.
Another peeve is more directly related to the book where, on p.131, I talk about the free labour that customers perform when dialling up call centres through automated telephone systems, sometimes even paying for the privilege. Something very similar is becoming more and more common in shops, where increasingly the checkouts are self-service. Thus we scan our goods, bag them and pay without the need for a checkout operator. This is presented as an extension of choice, but the choice is limited by the fact that there are fewer and fewer staffed tills with longer and longer queues as a result.
Yesterday I was standing in one such queue, with
most of the self-service tills unused, a sign in itself that, as a matter of
choice, many people, not just me, prefer not to use them. My particular dislike
is the way that the recorded voice barks aggressively at you – for example ‘foreign
item in bagging area’ or ‘item not scanned’ or ‘return to bagging area’, the
last of which I don’t even understand. I half expect to hear it say, like a bossy
schoolteacher, ‘you’re only letting yourself down’ or ‘I’m not angry, just
disappointed’.
As we queued, a member of the shop staff kept
reminding us that we could use these tills and, like all good English people,
we pretended we could not hear, or that the message was for someone else. But
after being told this two or three times I muttered ‘I hate those things’. It obviously
came out louder than I had intended, because suddenly everyone in the queue
started pitching in and complaining about the fact that they had staff standing
around telling us to go self-service, whilst all but one of the manual tills
was closed.
Of course it was not the fault of the staff – they were
simply doing what they had been told to do. But the sad thing about that is
that eventually, perhaps, we will all be duly accultured to serve ourselves and
the expectation of being served by a human being will become, to use the term that has been applied to smoking, ‘de-normalised’. All the manned tills will
disappear (and, with them, even the chimera of ‘choice’). And almost all of the
staff will be out a job as we become their replacements, labouring unpaid,
belaboured for our faults by the pitiless shouts of the automatic overseer. It
depresses me to think that we will probably not even notice or, worse, will
celebrate it as a new found freedom.
Or perhaps we will be found to be such
unsatisfactory workers that the recorded voice will tire of us and announce
that we, too, have been sacked. Or perhaps bagged. Or perhaps, even, ‘returned
to the bagging area’ for re-programming.
Monday, 18 November 2013
Norman Geras (1943-2013)
I recently learned of the death of Norman Geras, whose obituary is here.
Norman was a pivotal influence on me, intellectually and politically. In the book (pp. 11-12) I mention how as an undergraduate at Manchester University in the 1980s I switched from studying Economics to studying Political Philosophy. Norman taught me 'Modern Political Philosophy' and introduced me to the works of Marx and Weber amongst other authors. He subsequently encouraged me to do a PhD and at that time we had many conversations and arguments.
He was a big man in all senses of the word: physically imposing, intellectually forceful. But he was incredibly generous to me - generous with his time, generous in relation to my naivety - and he taught me, both in classes and outside, both in content and approach, much that I still live with. It is no exaggeration to say that, had it not been for him, I would never have become an academic; there would have been no book for this blog; and so no blog of this book.
I am sure that for him the encounters we had were entirely ephemeral, but for me they were formative. These kind of things are the invisible part of academic careers and of teaching, but they are so important. Unmeasured by quality assurance systems, unknown in performance evaluations, these are the invisible 'gift relationships' of teaching.
When I knew him, Norman was one of the most important and original thinkers about Marx and Marxists. His books on Marx and Human Nature and on Rosa Luxemburg remain classics. In more recent years he became associated with the Euston Manifesto group with which I vehemently disagreed. But I will never forget or cease to be grateful for what he taught and gave me - freely but preciously - when I was his student, why, over 25 years ago now.
Norman was a pivotal influence on me, intellectually and politically. In the book (pp. 11-12) I mention how as an undergraduate at Manchester University in the 1980s I switched from studying Economics to studying Political Philosophy. Norman taught me 'Modern Political Philosophy' and introduced me to the works of Marx and Weber amongst other authors. He subsequently encouraged me to do a PhD and at that time we had many conversations and arguments.
He was a big man in all senses of the word: physically imposing, intellectually forceful. But he was incredibly generous to me - generous with his time, generous in relation to my naivety - and he taught me, both in classes and outside, both in content and approach, much that I still live with. It is no exaggeration to say that, had it not been for him, I would never have become an academic; there would have been no book for this blog; and so no blog of this book.
I am sure that for him the encounters we had were entirely ephemeral, but for me they were formative. These kind of things are the invisible part of academic careers and of teaching, but they are so important. Unmeasured by quality assurance systems, unknown in performance evaluations, these are the invisible 'gift relationships' of teaching.
When I knew him, Norman was one of the most important and original thinkers about Marx and Marxists. His books on Marx and Human Nature and on Rosa Luxemburg remain classics. In more recent years he became associated with the Euston Manifesto group with which I vehemently disagreed. But I will never forget or cease to be grateful for what he taught and gave me - freely but preciously - when I was his student, why, over 25 years ago now.
Dealing with disaster
The catastrophe of the Philippines typhoon has, like all disasters in the media age, been played out on our TV screens nightly*. That it is a natural catastrophe sharpens and simplifies our moral sense of it, perhaps because unlike those associated with war, such as in Syria, it is more easily understood as something where we can take sides. That is, we can readily empathise with, and side with, those who have had their lives destroyed because the causes of that destruction seem random and so there is no fault attached to them. Of course that is also true of the refugees from the war in Syria but the war itself is something that seems for many of us morally ambiguous and complex, and its solutions intractable. A natural disaster invites an emotionally and morally more simple response. Around the edges (climate change, governmental response) there is a politics, but its core seems to be, to use that peculiarly quaint term from insurance policies, an ‘Act of God’.
I happen to have a Philippino neighbour, who was much moved by the fact that the British people have this week donated some £33M** to the relief effort and that the British government have sent military resources to assist it. Thinking about this I was struck by something. When a major catastrophe strikes, the assistance is delivered bureaucratically and via command-and-control organizations. The UK relief effort was co-ordinated by the Disasters Emergency Committee (DEC), the very name of which straightforwardly speaks its purpose and bespeaks of a kind of bureaucratic traditionalism (a ‘committee’ no less, not even a task force), whilst the military response is delivered by the most traditional of hierarchies.
What is notably absent in such situations is any recourse to networked organizations, values and vision workshops, key performance indicators, quality assurance mechanisms, charismatic leadership or anything else from the sorry lexicon of contemporary managerialism. When something serious happens, we simply don’t need or want these things. But if this is so, perhaps we don’t need or want them at all?
In the same way that natural catastrophes clarify our emotional and moral priorities, perhaps they also serve to clarify our organizational ones?
* I notice that this week there has been a Philippino reader of this blog. Good wishes to you.
** By contrast the first two days of the DEC Appeal for Syria raised £3.4M and has to date raised £23M.
I happen to have a Philippino neighbour, who was much moved by the fact that the British people have this week donated some £33M** to the relief effort and that the British government have sent military resources to assist it. Thinking about this I was struck by something. When a major catastrophe strikes, the assistance is delivered bureaucratically and via command-and-control organizations. The UK relief effort was co-ordinated by the Disasters Emergency Committee (DEC), the very name of which straightforwardly speaks its purpose and bespeaks of a kind of bureaucratic traditionalism (a ‘committee’ no less, not even a task force), whilst the military response is delivered by the most traditional of hierarchies.
What is notably absent in such situations is any recourse to networked organizations, values and vision workshops, key performance indicators, quality assurance mechanisms, charismatic leadership or anything else from the sorry lexicon of contemporary managerialism. When something serious happens, we simply don’t need or want these things. But if this is so, perhaps we don’t need or want them at all?
In the same way that natural catastrophes clarify our emotional and moral priorities, perhaps they also serve to clarify our organizational ones?
* I notice that this week there has been a Philippino reader of this blog. Good wishes to you.
** By contrast the first two days of the DEC Appeal for Syria raised £3.4M and has to date raised £23M.
Friday, 1 November 2013
More on power
This issue of how to organize electricity generation and supply is a pressing and controversial one across the globe, from Turkey to Nigeria to India to the USA, and it is at the top of the political agenda in the UK, where the cost of electricity is a hot issue. I heard the government’s energy minister, Ed Davey, interviewed the other day and he was talking about all sorts of complicated measures he had in mind to make the energy market work, including a state-funded network of advisors, state rebates for the most vulnerable and so on. And of course his central idea is about switching between providers - but that is absurd because the big energy companies offer more or less the same prices and because what is the best deal when you sign up will, possibly within a few hours, be a poor deal - and yet typically you are locked into it. Or, if not, then you have to engage in constant market scanning and switching. This is an aspect of the paradox of choice, discussed in the book (p.75).
All these absurd gyrations arise from the refusal to acknowledge a basic truth - electricity supply is a textbook natural monopoly and, as such, the most efficient way to run it is through state provision. That refusal exists as much in the opposition Labour Party, which has proposed a price freeze, as in the government. It's pointless to blame the electricity companies - the scope they have to compete in the way that, say, supermarkets do is virtually nil, even if they were minded to (and why should they be - as Adam Smith observed long ago, markets do not work on the basis of charity or, as we might nowadays say, social responsibility and we should not expect them to). That comparison is an instructive one: no one thinks that to make the supermarkets be competitive we have to have community advisors, rebates for the poor, complicated rules about switching, statutory requirements to offer the best deal and a government regulator because (whatever one thinks of supermarkets) all that consumers have to do if they are not satisfied is do their next shop somewhere else. With many caveats it more or less works as a market.
This week, the big six electricity suppliers were called to the British parliament, accused of price fixing, because they all more or less simultaneously announce more or less similar price rises. Their defence was that their price rises were because almost all their costs – the wholesale electricity price and taxes – are beyond their control. But if we turn that round, it also means that they cannot compete on price. So what else might they compete on? In most markets it would be product quality and product innovation, but that too is impossible: electricity is just electricity, so there is no way of offering ‘really good electricity’. For the same reason, they can’t even compete on brand image: no one would think there was something especially worthwhile about electricity from, say, E-On as opposed to EDF, would they?
So electricity (like other utilities such as gas and water) simply does not and cannot a function as a competitive market. By pretending otherwise we have to bear all the costs of an entirely ineffective regulatory system in order to pay both in supply and - as mentioned in my previous post - in generation often state owned companies of other countries to deliver the chimerical benefits of privatization and competition.
Thus, to use an over-used phrase, there is a huge elephant in the room that no mainstream British politician will talk about: the whole thing needs to be re-nationalised. And, curiously, given politicians unwillingness to talk about it, this is supported by 69% of the British electorate.
All these absurd gyrations arise from the refusal to acknowledge a basic truth - electricity supply is a textbook natural monopoly and, as such, the most efficient way to run it is through state provision. That refusal exists as much in the opposition Labour Party, which has proposed a price freeze, as in the government. It's pointless to blame the electricity companies - the scope they have to compete in the way that, say, supermarkets do is virtually nil, even if they were minded to (and why should they be - as Adam Smith observed long ago, markets do not work on the basis of charity or, as we might nowadays say, social responsibility and we should not expect them to). That comparison is an instructive one: no one thinks that to make the supermarkets be competitive we have to have community advisors, rebates for the poor, complicated rules about switching, statutory requirements to offer the best deal and a government regulator because (whatever one thinks of supermarkets) all that consumers have to do if they are not satisfied is do their next shop somewhere else. With many caveats it more or less works as a market.
This week, the big six electricity suppliers were called to the British parliament, accused of price fixing, because they all more or less simultaneously announce more or less similar price rises. Their defence was that their price rises were because almost all their costs – the wholesale electricity price and taxes – are beyond their control. But if we turn that round, it also means that they cannot compete on price. So what else might they compete on? In most markets it would be product quality and product innovation, but that too is impossible: electricity is just electricity, so there is no way of offering ‘really good electricity’. For the same reason, they can’t even compete on brand image: no one would think there was something especially worthwhile about electricity from, say, E-On as opposed to EDF, would they?
So electricity (like other utilities such as gas and water) simply does not and cannot a function as a competitive market. By pretending otherwise we have to bear all the costs of an entirely ineffective regulatory system in order to pay both in supply and - as mentioned in my previous post - in generation often state owned companies of other countries to deliver the chimerical benefits of privatization and competition.
Thus, to use an over-used phrase, there is a huge elephant in the room that no mainstream British politician will talk about: the whole thing needs to be re-nationalised. And, curiously, given politicians unwillingness to talk about it, this is supported by 69% of the British electorate.
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