Steel stories

I’ve recently read two extraordinary and, I suppose, largely forgotten novels, both published in the early 1940s, and both three-generational sagas set mainly in the Pittsburgh steel industry from the 1870s to the 1930s. That setting will immediately pique the interest of students of organizations because of course it was here that Frederick Taylor developed the tenets of Scientific Management, in a context which I mention briefly in the book (p.33-35). The steel mills of Pittsburgh and surrounding towns might very well be regarded as the birthplace of many of the management techniques and organizational processes that dominated industrial capitalism and continue to have much purchase today.

The novels are The Valley of Decision by Marcia Davenport, originally published in 1942 (hereafter, Valley) and Out of this Furnace by Thomas Bell, originally published in 1941 (hereafter, Furnace). It is perhaps telling that both books were subsequently re-published by the University of Pittsburgh Press, attesting to their significance as historical records as much as works of fiction. Both were based to a degree on direct and indirect personal experience.

The authors

Marcia Davenport (1903-1996), born Marcia Glick, was for a time married to Russell Davenport Junior, whose father, Russell Davenport Senior was a senior manager at, first, Midvale Steel and, later Bethlehem Steel. Those names are again resonant within organization studies as they were the companies where Taylor worked and, indeed, Davenport and Taylor was close associates at Midvale, and Taylor was hired by Bethlehem on the recommendation of Davenport (Misa, 1999: 184). Apart from this family connection, Marcia Davenport had, during a previous marriage, lived in Pittsburgh and amassed documents and letters about its steel industry which were the basis of the book (these are now archived at the University of Pittsburgh).

Thomas Bell (1903-1961), born Adelbert Thomas Belejcak in Braddock, one of the Pittsburgh steel towns, was the grandson and son (on his mother’s side) and the son (on his father’s side) of Slovakian (more precisely Lemko and Rusyn) immigrants who worked in the steel and other industries in and around Pittsburgh. Bell himself worked as an apprentice in the steel industry before becoming a full-time writer. Furnace is a fictionalised account of three generations of his family.

The Valley of Decision

Valley tells the story of three generations of the Scott family, of Presbyterian Scottish ancestry, who own a small but successful steel mill in Pittsburgh, but the pivotal character is Mary Rafferty, who is from a working-class Irish Catholic family and in 1873 begins working life as a maid to the Scotts. Her brother, James, works in the Scott mill and is an organiser for the ‘Amalgamated’ (the Amalgamated Association of Iron and Steel Maker). Mary and Paul Scott, the son of William, the firm’s owner, fall in love and despite the class and religious differences his family support their engagement. However, the marriage is abandoned after James Rafferty murders William Scott in the course of a bitter strike.

Subsequently, in a long and convoluted drama, Mary ends up being Paul’s housekeeper and also begins to befriend the newly arrived Slovak immigrants. Disparagingly called ‘Hunkies’ (meaning Hungarians, though in fact most of them are not), they are kept out of the best jobs by the earlier generation of Irish immigrants and are regarded as almost sub-human by the mill owners. Mary’s particular friend is Julka, matriarch of the Hrdlicka family (in fact, partly Czech and partly Slovak: there is a brief reference to Czech disparagement of Slovaks).

In the third generation, Claire Scott marries Anton, the son of Julka (she has become an official in the newly independent Czechoslovakia). And, indeed, Pennsylvanian Czechs and Slovaks had played an important role in the achievement of this independence, which was declared by Tomas Masaryk – who became its first President in 1920 – in Philadelphia in 1918. His son, Jan, who was Czechoslovakia’s Foreign Minister from 1940 until his death in 1948, was Marcia Davenport’s lover and Anton appears to be based upon him. The later sections of the book are concerned in particular with rise of Nazism and the occupation of Czechoslovakia, and the case against US isolationism.

Throughout the long book, which has many sub-plots and characters, there are recurring themes of class (including fine gradations within the middle and upper classes) and ethnicity, and of violent capital-labour conflicts. There is also an ongoing story of attempts to keep the Scott mill as an independent family-owned and run firm in the face of massive consolidation within the steel industry, led by the magnate Andrew Carnegie, to form what eventually became the United States Steel Corporation. This gives rise to frequent family and boardroom conflicts over the decades (and a sub-theme is how the successive generations shift from being active entrepreneurs to remote stockholders). It could be regarded as showing the distinctions between early capitalism, very much informed by the Protestant Work Ethic à la Weber, and the development of monopoly and finance capitalism.

Out of this Furnace

If Valley focusses primarily on the steel industry owners and their interrelations with the Irish and, then, Slovak workers who labour in their mills, Furnace is centrally and solely concerned with the experience of Slovak workers and their families. As alluded to in Valley, but shown in minute detail in Furnace, this is a story of appalling hardship told through the central characters of the Kracha and Dobrejcak families. The first generation story centres on Djuro Kracha, the second on his daughter Mary and her husband Michael Dobrejcak, the third on their son Dobie.

These families, like the Hrdlickas, are emblematic of the massive flow of  Slovak emigrants (and elsewhere in central and eastern Europe), fleeing poverty, persecution and compulsory military service under the Austro-Hungarian Empire. Some half a million Slovaks came to the US between 1880 and 1920, of whom about half came to Pennsylvania, mainly to Pittsburgh and surrounding areas. Bell regarded their treatment as a hidden and shameful part of American history, and their contribution to US industrial development as having been ignored. The Slovaks, largely from rural and agricultural backgrounds, arrived in the hope of a better life but experienced grindingly hard and very dangerous work (death and maiming are commonplace, and Michael is killed in an industrial accident) for pitiful wages.

They also face discrimination and cruel stereotyping from both mill owners and managers and from Irish workers, which keeps them in the very worst jobs and housing. Although not depicted in the book, Bell’s uncle was effectively murdered by Irish or possibly Scottish workers (there was also a major group of Welsh workers in the Pittsburgh steel industry, but they do not appear in either book). In short, a life of constant struggle is depicted – a struggle to survive and to create the basic elements of a decent life against almost insuperable barriers.

Shared themes

One of the central themes of Furnace, as in Valley but more strongly so, is the struggle of trade unions to organize and to improve working conditions and pay. In both books there are references to the 1892 Homestead strike – a pivotal defeat for American organized labour in the period - and in Furnace there are accounts of brutal strike-breaking activities during the failed 1919 Great Steel Strike and, again, the growing dominance of Carnegie’s big corporate conglomerate – though here seen from the perspective of the workforce rather than the owners of an independent firm.

In the third generation, through the character of Dobie, and with the Amalgamated giving way to the Steel Workers Organizing Committee (SWOC) trade unionism finally achieves a degree of success and is certainly represented by Bell as the best and only hope for the workers to achieve a modicum of dignity. (In Valley, a SWOC activist in the 1930s refers disparagingly to the Amalgamated, James Rafferty’s union in the 1870s, as outmoded, just as, for Rafferty, the Sons of Vulcan union that was one of the Amalgamated’s precursors was ancient history).

Another very important theme in both books, but again more strongly in Furnace, is the pivotal role played by women in holding together Slovak families (and also, in Valley, Mary’s role in holding together the Scotts, but this is depicted more as a feature of her individual character than as a wider cultural characteristic). Often, they were brought over to America after their husbands or fiancés had established themselves in a job. They are depicted as only having had paid employment when unmarried and this seems also to be the case for the Irish women, and that work appears to have been mainly domestic service. Before her marriage, Mary Kracha has a job as a maid with a wealthy mill owning family just as Mary Rafferty’s working life began as a maid with the Scotts in Valley. In both cases the contrast of the opulent houses where they work is compared sharply with the squalor of their own homes.

Once married, with their husbands working backbreaking 12 hour mill shifts (when work was available), women faced the constant drudgery of housework in an environment made filthy by industrial pollution, the expectation of near annual childbirth, the common experience of early widowhood, and, frequently, their own early deaths (Mary Dobrejcak dies of TB as, in real life, had Bell’s father). Yet they maintained their families and frequently supplemented family incomes by taking in boarders – typically young male steel workers, since men outnumbered women greatly at least in the early period. The strong sense of community Bell depicts is partly down to the role of women but also because, in common with, but possibly to an even greater extent than, other immigrant groups the Slovakian migrants of this period lived in close proximity.

Whilst Valley contains many realistic depictions of the hardship of both Irish and Slovakian workers – and there are some oblique references to prostitution and drunkenness - it is to a degree a romantic melodrama and not a demanding read (it was, in fact, turned into a film with Gregory Peck and Greer Garson). Furnace is far more gritty and harrowing, and although it does depict the very tender love between Mary and Michael Dobrejcak that love is blighted by hardship and tragedy. Nor is it a romanticised picture in that some characters, especially Djuro Kracha, are shown to be cruel, sometimes violent, frequently drunk, and in some cases dishonest and manipulative.

Overall, despite the partial uplift of growing union success towards the end of the 1930s it is – and, based on the Afterword to the University of Pittsburgh edition, it’s clear that Bell intended it to be – a deeply painful account of lives deformed by poverty, injustice, and prejudice. In that, it speaks to the experience of so many immigrant groups both past and present. There is passing reference (in Furnace, but not Valley) to the experience of Black Americans, with “negroes” brought in, initially as strike breakers, and experiencing discrimination from Slovaks which, as Dobie observes, replicated some of the hostility Slovaks had themselves previously faced from Irish workers, just as the Irish had from the English settlers.

Relevance for Organization Studies

Together, apart from many other things, these two books fill out the point I make in the book about the role that ethnicity played in the development of Taylorism. Much of that was about discrimination and prejudice, epitomised by Taylor’s dehumanising and derogatory use of the “mentally sluggish” Bethlehem worker ‘Schmidt’ (actually Henry Noll, of Dutch descent) to illustrate the benefits of his system. Bill Cooke (2003) includes this example in his explanation of the continuities and inter-relationships of slavery, and the management of slaves, and modern management theory and practice – something that has been systematically excluded from established histories of management.

Arguably there were ways in which it broke some of these prejudices down. I note (p.35) how the Taylorist emphasis on managers hiring ‘scientifically’ on merit broke down the power of work gang leaders and even give the hypothetical example of Irish foremen discriminating against East European immigrants. I am not sure where I got the idea of that particular example from, but, amazingly, something almost identical features in one of the most dramatic scenes in Valley, when it emerges that a skilled Slovak worker – Charlie Hrdlicka, Julka’s husband -  trained at the Skoda works, has been forced to do menial work because the Irish work gang leader will not hire “Hunkies”. Paul Scott immediately promotes him (and, when criticised by the Irish foreman, challenges him to strike with the reminder of what had happened at Homestead).

I suggest in my book that this is a version of the ‘ethic of impersonality’ which forms part of Paul du Gay’s defence of bureaucracy. Yet it can also be read as an example of one of the ways that Taylorism, in particular, formed part of a much more complex history of ‘race management’ (Roediger & Esch, 2012). On Roediger & Esch’s analysis this history (as Cooke also argues) reaches back to slavery, and also explains the racial segmentation of hierarchies such as that between the Irish and Slovak workers (or between white and Chinese workers in the construction of railroads), with Taylorism as a new, ‘integrationist’ but still racialised episode within this history.

It’s no longer a novel (no pun intended) proposition in organization studies that novels can be a source of great insight and ‘respectable’ evidence, and I find these two to be particularly so, for several reasons. Firstly, they provide a quite extraordinary amount of really detailed information about working practices and industrial relations in the steel industry in this period. Second, and perhaps relatedly, their structure and focus means that taken together they provide a multi-generational, multi-ethnic and multi-class set of perspectives on that industry and period.

Third, and I think most significant, is the way that these novels disclose a small but significant part of the hidden history of management and organizational theory. Within the textbooks, certainly, you would hardly discern what these theories are actually about or where they came from. I am quite sure that Taylorism would be far better taught and understood through reading novels such as these rather than through the sanitised, ahistoric, asocial, bloodless non-stories of most ‘Introductions to Organizational Behaviour’.

References

Bell, T. (1941) Out of this Furnace. New York: Little, Brown and Company.

Cooke, B. (2003) ‘The Denial of Slavery in Management Studies’, Journal of Management Studies 40 (8): 1895-1918

Davenport, M. (1942) The Valley of Decision. New York: Charles Scribner’s Sons

Misa, T. (1999) A Nation of Steel. The Making of Modern America 1865-1925. Baltimore: Johns Hopkins University Press.

Roediger, D. and Esch, E. (2012) The Production of Difference. Race and the Management of Labor in US History. New York: Oxford University Press.

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.

An undeveloping country?

A House of Lords report this week has concluded that forensic science in England and Wales is “in crisis” and “has now reached breaking point”. This matters, hugely, because it is central to the effective functioning of the criminal justice system and, hence, to the rule of law.

It’s a crisis which has been brewing for a while. I referred to it on this blog in January 2017, but it has been in the making since its privatization in 2012, and the introduction of market competition. The dangers were warned about at the time.

This is an important story in itself, but it’s indicative of a wider and all-encompassing crisis right across the provision of public services in the UK. Evidence of this can be found in relation to legal aid, prisons and young offenders’ institutions, the probation service (£), housing, the National Health Service, the railways, bus services, and schools. The list could go on and on, but just in relation to the last of them we now have schools where one day a week the lights are turned off to save money.

Scratch beneath the surface of any of these separate stories and you find, invariably, funding shortages but, equally invariably, failed reorganizations and, almost always, contracting-out to the private sector. It should not be thought that these are separate explanations, because what would in any case be hard-pressed services because of funding cuts are made more so by the money wasted on reorganization and contracting out. What little money there is gets wasted.

The ideological roots of what is happening lie in market-managerialism – that strange ensemble of the ‘classic’ neo-liberalism of privatisation and its country cousin of private sector disciplines in the public sector which morph, bizarrely, into precisely the ‘bureaucratic red tape’ that neo-liberalism was supposed to be averse to. As such, it has a 40 year history in the UK.

The effects are disparate and disjointed, so that it is easy to see each story in isolation, and because they have unfolded over a long time period it is easy to miss their cumulative effect. But there is a cumulative effect, and it is neatly captured by the concept of Britain being in a process of ‘undeveloping’, which has been analysed by researchers at the Sheffield Political Economy Research Institute (SPERI).

Their argument is that the notion of a country as ‘developed’ mistakes a fluid process for a static category. Development in not a uni-directional process which, once achieved, is fixed. Rather, it is possible to ‘go back’. The SPERI argument is that Britain, having been the first nation to develop in the modern sense is now the first developed nation to be undeveloping – to be, if we think of development as linear – going backwards.

In support of that argument, the SPERI researchers cite a range of issues not all of which relate to the theme of public sector reorganization, although many do. Their analysis draws attention to the myriad of ways in which daily life in Britain seems to be getting worse, using macroeconomic indicators like productivity and measures like food bank use and road pothole incidence. Taken together, these make out a compelling case for their ‘undevelopment’ thesis.

Like all compelling ideas, it’s not new, though. The great economist J.K. Galbraith made a similar case in The Affluent Society (1958) where he introduced the notion of private affluence co-existing with public squalor. It’s a book that still speaks to our present situation. In a similar way, what might be seen as the counterpart of Galbraith’s macroeconomic analysis at the level of work, Arthur Miller’s play Death of a Salesman (1949), is seeing a widely-acclaimed revival on the London stage.  Its themes of insecurity and fantasy still speak  – or speak anew – to the world of zero-hours contracts and fantasies of success.

Trains hit the buffers

The biggest organizational story in Britain at the moment – the abject chaos on the railways – is one which happens to affect me personally. I use one of the routes on the Govia Thameslink Railway (GTR) network which, along with Northern Trains, introduced massive changes to the timetable on May 20. The time for every single service on the GTR network was changed and in the process some stations saw a larger number of services but, certainly at my station, most of the fast services to London were removed. Thus a service which used to have several trains a day that took 40 to 45 minutes into London now has a few trains with a 50 minute journey time but most scheduled to take 70 minutes.

That would be cause for dissatisfaction, but it is not the cause of the chaos. Rather, from the moment that timetable was introduced it failed disastrously, with almost all the new services cancelled or massively delayed. Journey times rose in some cases to three hours and, of course, where these trains ran they were massively overcrowded. The result was misery, frustration, missed appointments and disrupted lives.

Although GTR put out statements about teething problems being expected, it was very soon clear that what was happening was far worse than that implied. Thus, a week after it all started, an amended timetable was created in which almost all of the faster trains were stripped out. But, even amongst the services left, cancellations and delays abounded. Nor is there even an official timetable to try to plan by – what has been created, and is still the case as I write this, is a service, if one call it that, which changes hour by hour.

Trains are mysteriously announced, apparently randomly, and sometimes run but often are just as mysteriously cancelled. Or they run, but don’t stop at the stations they say they are going to, or terminate at a different station to what was said. Or are delayed for unexplained ‘operational reasons’. Information is minimal, and often incorrect. So a 45 mile journey to London is now an excursion into the unknown that can take hours, often in extremely unpleasant conditions.

It is difficult to overstate how utterly dismal this experience is. People’s lives are completely built around being able to travel to places of work and education and are intricately calibrated around public transport. And whilst for many year the British rail system has been marred by cancellations, delays and overcrowding, what is happening now is on a scale beyond anything that certainly I have ever known before. Nor should it be forgotten what a terrible situation it has put those working on the railways in. It is they who have to bear the brunt of the anger and distress – and, I wouldn’t be surprised, threats and violence - of passengers, yet they are powerless to do anything and don’t even have any accurate information to pass on.

So far as can be ascertained from what has been said in public, the reason all this has happened is that the train companies failed to recruit and train (for the new routes) enough drivers. It is as simple, and as absurd, as that. Given that the timetable changes had been planned for many months, possibly as long as a year, this represents a level of organizational and managerial incompetence on a quite extraordinary scale.

I expect that, eventually, we will learn more about what happened organizationally, but a few things are already obvious. It may not be the case that what has happened is directly attributable to privatization – although there are good reasons for criticising that on general grounds, including the far higher subsidies paid to the private companies than were ever available to British Rail. But it certainly appears that the fragmented structure created by privatization is part of the explanation. This encompasses both the split between responsibility for the network infrastructure and for train operations, and the way that routes are bundled and unbundled together under every-changing franchises (for example, GTR is I think third or possibly fourth company that has run my train service in the last 20 years). This creates co-ordination problems, loss of organizational memory and, I have no doubt, cost-cutting pressures.

At the same time, what is happening now exposes starkly the lack of meaningful accountability. There are calls for the Transport Secretary, Chris Grayling, to resign. He’s a politician with such a track record of incompetence in the various ministerial roles he has held that he is widely dubbed ‘failing Grayling’; indeed he was the Justice Secretary responsible for the disastrous reforms discussed elsewhere on this blog. He has resisted these calls, on the grounds that it is not he, but the rail and train companies that are responsible.

This points up the basic, structural problem of the various ways that political and administrative systems have been increasingly separate over the last 30 years or so (sometimes by privatization, sometimes by the creation of arms’ length agencies, sometimes by sub-contracting) with the State no longer itself providing services. It enables politicians to avoid responsibility, in some sense with justification in that no one seriously thinks that the Minister resigning will, in and of itself, resolve this crisis.

Yet, as Grayling is finding, there are limits to that. As with the supposed transfer of risk to the private sector through PFI projects and outsourcing, when basic services fail people will, ultimately, blame politicians. It may also feed support for rail nationalization, which stood at 60% just before these recent events. And it may add to the public outrage about executive high pay (see pp. 117-118 of my book), given that Charles Horton, the CEO of GTR was paid almost £500M in 2016 despite many service problems even before the present ones.

But none of this will help with the immediate situation that I and tens of thousands of people are currently stuck with, which has made a chaotic mess of our lives.

Windrush, targets and the cultural panic about immigration

The still ongoing Windrush scandal has now claimed the scalp of Home Secretary Amber Rudd, primarily for misleading Parliament by saying that there were no deportation targets when, in fact, there were. The wider picture is that it was these targets which were part of the reason why the Windrush citizens were wrongly identified as illegal immigrants (for those unfamiliar with how and why this happened, see this briefing).

The organizational use of targets and the effects of doing so are widely discussed within organization theory, and figure frequently in the concept of goal displacement discussed in my book (pp. 26-30). In brief, one way that goal displacement arises is when following the target (or, more generally, a rule) becomes an end in itself: that is, as if the purpose of the activity were to meet the target, rather than the target being a means of achieving that purpose. The Windrush scandal is a textbook case: the purpose of the rules was (ostensibly – I’ll come back to this) to remove illegal immigrants. The targets were a means of achieving this.

What happened in practice was that staff sought to meet the target and focussed solely on that. It is easy to envisage how this happened. Under, presumably, great pressure to meet their targets staff would seek any reason to identify someone for deportation. Thus any inexactitude or deficiency of documentation would be ceased on, and there was no incentive at all to try to understand the reasons for it. On the contrary, there was a disincentive to do so: the system was set up to look for reasons to deport more people, not to find reasons not to do so.

The calamity for the Windrush generation was that although they were perfectly legally entitled to live in Britain, they did not have the necessary paperwork to prove it (having not been required in the past to have such paperwork). Thus they appeared to meet the criteria for deportation and were treated accordingly. In the terms discussed in my book, this is an illustration of what happens when instrumental rationality trumps substantive rationality. Following the rules (no paperwork = no right to remain) trumped both ultimate purpose and ethical conduct. In the process, many lives have been destroyed.

Nor was the issue just one of Home Office staff, targets and deportation. Under recently introduced laws, landlords, employers, the NHS and benefits offices were also required to check immigration status. When Windrush people could not do so, they lost their jobs, benefits, homes and healthcare. In this way, too, lives were destroyed. To call it a scandal is to understate things: what has happened is an abomination: an example of the horrific potentials of instrumental rationality (as discussed on p.23 of my book).

But this did not arise simply as a result of organizational incompetence. It grew out of a political and cultural panic about immigration going back many decades. For as long as I can remember there has been a populist meme that “we’re not allowed to talk about immigration” and that “the elite is ignoring the people’s concerns about immigration”. This is nonsense. Again for as long as I can remember immigration has been talked about and complained about.

In recent times it has become common to hear anti-immigration sentiment expressed in terms of ‘of course it wasn’t a problem in the past, it’s just now that the numbers are higher that it’s a problem’. Nonsense, again – it was complained about just as much in the past, and in exactly the same terms, as it is now. Indeed, the treatment of the Windrush generation when they originally arrived is testament to this (in fact, amongst the far Right, the date 21 June 1948 [when the original Windrush ship docked in London] is still used as a code for ‘when Britain ceased to be “racially pure”’).

Moreover, for an equally long time – certainly going back to the 1971 immigration controls (which are directly relevant to Windrush, since it was these which ended the entitlement that they had, but those who had arrived prior to 1971 had been guaranteed the right of permanent residence) – the ‘elite’ have been bending over backwards to address complaints about immigration. Indeed, politicians have quite erroneously endorsed wholly exaggerated complaints about, for example, ‘benefit tourism’ and ‘health tourism’. Indeed, the latter are two of the reasons for the introduction of the rules of which the Windrush generation have fallen foul.

It is out of that fetid soil that the Windrush scandal has developed. And although the public and the press are now up in arms about it – perhaps, it has been argued, because those affected are depicted as ‘the right kind of immigrant’ - they should remember that it was public and press demand that pushed politicians into creating the “hostile environment” that led to it. That represents a major failure of political leadership, for sure, but in a democracy the public also have to accept responsibility for the policies they have sought and endorsed.

That phrase – “hostile environment” – is being justified on the basis that it ostensibly related just to illegal immigrants. But the reality is that it is impossible to separate it from a wider hostility, not least because it created an environment of presumption of guilt of illegality in the absence of proof to the contrary. Indeed, that is precisely what has been revealed by the scandal. Moreover, it has a much longer history than even the post-1948 period.

So, as always, but in this case particularly strikingly, the way that organizations conduct themselves is inseparable from broader political, ideological and cultural issues. The laws that were made, the targets created to enforce them, and the way in which those targets were operationalised may be the immediate focus of the Windrush scandal, but they are the end result of a deeper, older and much darker story.

Your money and your life

The still emerging scandal of the use of Facebook users’ data by Cambridge Analytica for political campaigning has numerous dimensions to it – political, technological, ethical and social. One particular aspect that I find interesting is the idea that users (may) have given their consent to the various ways their data is used by signing up for services. It has apparently long been a truism in the tech world that ‘if the product is free then you are the product’, and on that basis it is claimed that signing up for services is a matter of caveat emptor or ‘buyer beware’ - or should that, in this case, be ‘donor aware’ since the point seems to be that what we should beware of is not buying?

There seems an obvious difficulty with this: how can we make such judgments if we do not know what we are agreeing to? The answer, invariably, is that what is required is greater transparency. However, as Jana Costas and I wrote in our book on secrecy in organizations, using exactly the example of accessing on-line services, transparency is not what it appears to be:

“Indeed, one can even see how increased transparency also entails increased secrecy, as the very proliferation of information makes it easy to hide secrets which get overlooked in the overwhelming torrent of disclosure. For example, consider the ubiquitous ‘terms and conditions’ to which one signs up when using web-based services. These are so detailed and complex that few of us bother to read them, and fewer still will understand them. So we just check the box indicating agreement. If subsequently this causes problems the provider can quite legitimately say that nothing was kept secret and, indeed, that there had been the fullest transparency possible. Yet it is a transparency that obscures rather than reveals.” (Costas & Grey, 2016: 53)

In these circumstances, the idea of a choice being made seems deeply unrealistic. Of course, a ‘hardline’ response would be to say that if people cannot be bothered to read and understand the T&Cs then that is, precisely, their choice. After all, they could simply not sign up to Facebook. In fact, 2.2 billion people worldwide log in to it at least once month, which is getting close to a third of the global population. No one forces them to.

That is true and, personally, I have never had a Facebook account. But it’s increasingly difficult, if not impossible, to exist without signing up to anything at all. It isn’t as if it is just a matter of social media, it is also about the multitude of on-line services that people need to use in some cases including very basic things without which it is impossible to function, including state welfare. The space for an off-line life is becoming very small indeed (generating the new phenomenon of 'cyber insecurity'). No one can, realistically, ‘choose’ to opt out of the entirety of this, even if we have choice about using this or that platform. Nor is it the case (so far as I know) that any on-line provider of anything offers not to collect any data on its users, and that is the case as much for paid for products as for ‘free’ products. Indeed, just browsing websites requires agreement (assumed as given if we continue to browse) to the use of cookies.

Choice and informed decision making in this context are therefore highly precarious, if not meaningless. Apart from the general issue of take-it-or-leave it sign ups to T&Cs, my experience, at least, is that opting out of specific permissions for, for example, receiving marketing materials from companies are often breached. And I frequently receive marketing messages from companies I have never had any contact with which offer the option of unsubscribing – but only if I provide my email address. So I am expected to ‘choose’ to provide data in order to avoid messages that I have never chosen to receive in the first place. Beyond that, my computer and phone are constantly chuntering away doing things that I have no understanding of at all, and constantly nagging me to provide more information about myself (for example my geographical location). There are even cases of phones and other mobile devices continuing to harvest such data despite users having (supposedly) disabled its provision.

Some of these issues are not new in principle. Over 30 years ago I began work on my PhD which was concerned with financial services regulation. Some of the big issues at the time were (as they continue to be) whether people actually understood what they were signing up for when they took out, for example, a life insurance policy, pension, or mortgage. This was all about, in effect, terms and conditions and hidden costs. Associated with this was the question of the sales and marketing tactics used in the industry. And, indeed, in the intervening years we have seen ongoing scandals about the mis-selling of, for example, endowment mortgages and Payment Protection Insurance (PPI) – and, ironically, the subsequent scandals around the pressure selling of PPI compensation claims. The regulation of such matters was, again, primarily conceived of in terms of transparency of information in order to promote ‘informed choice’. Yet this in turn has generated a mass of information which only someone already highly knowledgeable is really in a position to evaluate.

However, the current situation of the mining of on-line data whilst similar in principle is far more extensive in scope. It is all-encompassing in the way that buying a financial product is not, reaching far more deeply into our lives – and also, as the Facebook scandal seems to suggest, into the lives of the people we interact with (that is, Facebook friends). There also seems to be something qualitatively different about the ‘if the product is free then you are the product’ mantra in that whereas it is pretty clear that what, say, a financial advisor is after – your money – what the data wranglers are after seems to be not just your money but your life. 

Reference

Costas, J. & Grey, C. (2016). Secrecy at Work. The Hidden Architecture of Organizational Life. Stanford, CA: Stanford University Press.

Carillion: the Enron moment for public sector outsourcing?

Since the very early days of this blog, I have written several posts about the danger and damage done by public sector outsourcing and it’s also discussed in my book (pp. 88-90 and elsewhere). It is a practice which developed extensively from the 1980s onwards, and was given a particular boost during the New Labour period of ‘high managerialism’, but has by no means diminished since then. Indeed, one might say that it became normalised as the standard way of delivering public services so that what started out as a controversial ideological principle became a routine administrative technique, with its ideological roots concealed from view.

Those ideological roots are worth reflecting on. At one level, they derived from what might be called first phase neo-liberalism, in which it was assumed that markets and private companies were by definition more efficient ways of delivering goods and services of any kind. Such a view was most manifest in outright privatizations, but also informed the outsourcing of services which were either politically impossible to privatize, or which because of their cost structure would not attract any buyers.

This then morphed into a rather more curious second phase of neo-liberalism, whereby it was not markets as such which were lionized but a kind of state sponsored “market managerialism”, to use Martin Parker’s (2002) term. Here, the idea was less about ownership and more about the idea that private sector management methods were a guarantor of ‘efficient’ delivery: the entire distinction of public and private began to be erased. Typically, if not invariably, what that meant in practice was reducing the employment security and pension rights of erstwhile public sector workers re-employed by the new contractors. What was curious about it was that it created a kind of corporate welfare state – not simply in the sense of state services being delivered by corporations but in the sense of corporations being entirely dependent upon payments from the state – the real welfare scroungers, as I put it in a previous post on this blog.

It is highly doubtful whether any of this actually reduced the costs of service delivery in the round. Even if headline delivery costs were reduced, the extra cost of paying shareholders needed to be factored in and, more than that, the changing employment terms of workers created both a bill for tax credits to supplement earnings and contributed greatly to the emergence of a far more precarious and insecure workforce, with multiple economic and political consequences. In fact, a National Audit Office (NAO) report published this week shows Private Finance Initiative (PFI) construction projects are far more expensive than using the public sector.

Moreover, outsourcing was dogged by one failure after another as documented in the posts I have linked to. At the core of the myth of public sector outsourcing is the idea that it transfers risk to the private sector (with this, in turn, justifying the return to shareholders). The reason this is a myth is that, politically, the state always ends up having to deal with the consequences of a failure to deliver public services. This was well-demonstrated by the way that during the 2012 London Olympics the government had to use troops to deliver security when the outsourced contract failed to do so. In the end, the government can’t walk away and is stuck with the risk.

These failures revealed another myth: that is the firms to which services were outsourced did a poor job they would not get any more contracts. But they did, partly because there are only a few firms who can bid for the contracts (which in turn actually exacerbates risk to the government, since if one fails, it has huge consequences) and partly because the over-riding belief that this was the way to administer services had become so normalised. But in any case, each failure could easily be dismissed as a particular episode rather than revealing anything systematic about the entire approach.

Arguably, what has been created is a situation which, perversely, combines the worst stereotypes of both public and private sectors. On the one hand, there is no real competition to provide market discipline; and no public service ethic to provide normative discipline.

And so we come to this week’s news that Carillion has gone into administration. This construction firm holds massive numbers of contracts right across the public sector, including in education, schools, prisons, the military and transport and thus reaching far into the most basic functions of the State. These are precisely the kinds of PFI projects criticised by the NAO report, although that was prepared (albeit not published) before the news of Carillion’s insolvency. But Carillion did far more than build public facilities, it also had contracts to run and maintain them, right down to cleaning.

The Carillion crisis goes far beyond the failure of this or that outsourced service and reveals for perhaps the first time the massive transfer, and therefore vulnerability, of public services and the state as a whole into private hands. And whilst the government have not underwritten the company (if they had, it would presumably have stayed solvent but at great potential public liability) it is already clear that they will have to undertake to provide the services it has been providing or – more likely, at least in the long term – to transfer the outsourced contracts to new providers.

But the story does not end there. Because alongside the central issue of public service outsourcing another part of the business model – typical of the “new capitalism” described in chapter 5 of my book - is the creation of lengthy chains of sub-contractors, and sub-contractors to the sub-contractors. These, much smaller, organizations are likely to suffer considerably from Carillion’s collapse not least because this financialized model partly relies on very slow payments to sub-contractors who will now be on a long list of creditors. Even if they get paid eventually, it may be too late for businesses which are likely to have very tight cash flows to survive. At the other end of the chain, the massive salaries and bonuses of Carillion executives exemplify the huge inequalities which are associated with the new capitalism (pp. 117-118 of my book).

I apologise again to those who have read this blog regularly over the last few years for my recent neglect of it, which is due to the work I have been doing on my Brexit blog. But it is worth nothing that there is a Brexit connection to the Carillion collapse. Back in December 2016, shortly after the Referendum result, Carillion and other outsource giants identified the Brexit vote as impacting adversely upon them. There are many reasons for Carillion’s demise, and the deep flaws in the model of public outsourcing are nothing to do with Brexit. But nothing that happens in Britain now is entirely separable from Brexit, including the Carillion debacle.

At all events, the collapse of Carillion has now brought to the centre of political debate all of the issues that I (and of course many other people, both in academia and politics) have been raising for years now, especially the incoherence of the idea of risk transfer. It may be too early to say that Carillion is a ‘Lehman moment’ for public sector outsourcing, but perhaps it is its ‘Enron moment’.

 

Reference

Parker, M. (2002) Against Management. Cambridge, UK: Polity Press.