what you get here

This is not a blog which opinionates on current events. It rather uses incidents, books (old and new), links and papers to muse about our social endeavours.
So old posts are as good as new! And lots of useful links!

The Bucegi mountains - the range I see from the front balcony of my mountain house - are almost 120 kms from Bucharest and cannot normally be seen from the capital but some extraordinary weather conditions allowed this pic to be taken from the top of the Intercontinental Hotel in late Feb 2020

Sunday, June 28, 2015

Flushing out what's worth reading

A couple of months ago, in a post headed No Excuse for Apathy I reminded readers (and myself!)  that one of my unfinished projects has been a mapping of the different paths which various authors have suggested  in recent years we need to take in order to improve (if not replace) the mad economic system which has had the globe in thrall (and peril) for at least the last thirty years.

The project started with a short essay in 2001 (updated in Notes for the Perplexed) and moved into higher gear with the opening last autumn of a website Mapping the Common Ground which acts as a library of useful material for those keen to effect social change.
The Global Crisis – Telling it as it is  is an edited version of the posts which record the reading I have been doing in recent years – with my common complaint being the failure of writers to give credit to others and indeed to make any attempt to do what Google Scholar exhorts us to do – “stand on the shoulders of giants”.

Most books about the “global crisis” focus on the easy part of the story – “diagnosis” and “blame” – and skate over the really challenging (later) stages of the process of social change – such as prescription (“what is to be done?”); and, most of all, “coalition-building” (with what sources of power?).

Indeed I now have three tests for any book about the global crisis I look at –
- What proportion of space they devote to the later, prescriptive, stage
- What awareness they show of the “problems of agency” ie of the tenuous nature of the “toolkit of change” which the change management literature introduced us to in the 1980s
- How generous their references to other literature are

Most writing demonstrates a naïve belief in the power of persuasion – the belief that argument can mobilise change. Many people can indeed be persuaded of the “need” for change – but fewer about its precise “direction” and shape….. Robert Quinn is one of the few people who has powerfully pointed out how mechanistic is the discourse of reformist “persuasion” – with its assumption that an intellectual elite has the capacity to “mobilise” people to its way of thinking……His books talk rather of the power of example…..and the growing literature on systems theory of the “emergence” of new methods and models…

The post I referred to in the opening paragraph linked to a fascinating American project – The Next System whose short, initial publication promised to
launch a national debate on the nature of “the next system” using the best research, understanding, and strategic thinking, on the one hand, and on-the-ground organizing and development experience, on the other, to refine and publicize comprehensive alternative political-economic system models that are different in fundamental ways from the failed systems of the past and capable of delivering superior social, economic, and ecological outcomes.
By defining issues systemically, we believe we can begin to move the political conversation beyond current limits with the aim of catalyzing a substantive debate about the need for a radically different system and how we might go about its construction. Despite the scale of the difficulties, a cautious and paradoxical optimism is warranted. There are real alternatives. Arising from the unforgiving logic of dead ends, the steadily building array of promising new proposals and alternative institutions and experiments, together with an explosion of ideas and new activism, offer a powerful basis for hope.
And the last week has seen several more straws in the wind –
Democratic Wealth – being a little E-book of Cambridge and Oxford University bloggers’ takes on the crisis
Civic Capitalism – ditto from some Sheffield University academics
Laudato-Si – the latest Papal Encyclical. A summary is available here. Its entire 184 pages can be read here
We All Want the Change the World is a book which represents the mature thoughts of one (American) lefty and, for me, is a superb illustration of why the left is in such deeptrouble. The book starts brilliantly but quickly degenerates into cultural tripe

Friday, June 26, 2015

Beacons of Hope

Employee-ownership is not the most obvious of subjects to set one's spirits soaring  - but two books I’ve just been reading on this subject are positively inspirational and probably the best guides available for those of us who have been searching for a plausible challenge to the amoral corporate power tearing our societies and planet apart. The  books are -
Beyond the Corporation: Humanity Working by David Erdal (2011); and 
Owning Our Future: The Emerging Ownership Revolution by Marjorie Kelly  (2012)

Each complements the other beautifully - Erdal’s book uses the story of the employee buy-out he led in the 1980s of his family’s Fife-based paper business (Tullis Russell) as an introduction to employee-owned businesses the world over (amongst many others, the John Lewis Partnership in the UK, the Mondragón group in Spain and the US supermarket chain, Publix) – and then examines the history of the legal structures that underpin modern capitalism and convincingly exposes the gross errors in the conventional models economists use to describe people and businesses (which he labels ‘just-so stories’) - showing how and why employee-owned businesses are superior to publicly listed companies in every way.

Marjorie Kelly’s book helps us understand the “financialisation” which has overtaken companies in the last thirty years – I was able to download the first draft of the book (minus a couple of the chapters) by simply tapping the title and author’s name and the preface and first chapter can be read here   

The first section of Erdal’s book demolishes the predictions made by traditional economists about the supposed efficiency of the Market (a word that Erdal capitalises) and the supposed flaws of employee-owned concerns: 
Very little of the money raised by public shares is invested in strategically building businesses – most of it is used for (often destructive) acquisitions and lining the pockets of shareholders and top management.For companies to flourish in the long term, employees must have a real sense of ownership. No management techniques can substitute for the rights and benefits of genuine ownership, but even the managers of employee-owned concerns need to work hard to ensure workers feel involved.
Communication is key: managers must make information fully and openly available, must listen, and must allow employees to make contributions to improving how things are done.Although employee-owners need leaders, given the same quality of leadership employee-owned businesses always outperform those owned by outsiders. The former are more productive, they survive better in bad times, they have lower employee turnover and absenteeism and they give better service (the top-rated companies for service in both the UK and the USA are employee-owned).
Employees in employee-owned companies learn more participation skills, they are better trained, they contribute more innovative ideas, they implement change quicker, and they are wealthier, with communities in which they live benefiting from both money and skills.Many economists are blind to all the above, repeatedly citing old papers based on nothing but theory, and falsely claiming that such organisations will be overwhelmed by free-riders, that decision-making will be impracticably slow, and that employee-owners will forever be falling out with each other. These unevidenced views of economists place significant obstacles in the way of those hoping to set up employee-owned concerns.
As he ironically puts it -
‘Ironically, capitalism itself is built on the idea that owners will work more energetically and creatively, and with greater commitment, than people who are employed by others. Instead of following through [this] logic […], the owners of capital […] have built company structures in which employees have none of the participation of ownership: they have no right to influence the choice of leader or the policies set, and no right to participate in the wealth that they create together. The vast majority of people are systematically deprived of any ownership stake. It is as if they are seen as coming from a different species, insensitive to the galvanising effect of ownership.’
The second section describes the horror of working for publicly traded companies subject to so-called ‘market discipline’ and contrasts this with the experience of employee-owners, and shows why ‘market discipline’ is powerless to curb excessive executive pay and does nothing to promote stability and innovation. It also relates the jaw-dropping history of the employee contract (which Erdal contends violates what should be inalienable rights) and of the present economic system – rigged from the outset in the favour of the rich and powerful.
The impact of asset-stripping by private equity investors on the employees and customers of Debenham’s, as well as its suppliers, is powerfully conveyed. After all but destroying staff morale, delaying payment for suppliers, decreasing investment in new stores and the refurbishment of old ones, and making various cut-backs and redundancies, investors left the company nearly £1 billion in debt. 
.........Crucial to the success of all employee-owned businesses are consultation and keeping employees informed: ‘If it feels to the managers like overkill – as if they are giving out too much information – then they may be close to giving out enough’. People must also be allowed to make a difference, and increased efficiency should not result in people being sacked – they can be redeployed or given further training. Although hierarchies do exist in employee-owned concerns, their purpose is simply ‘to enable the front-line workers to be wholly effective’.
Sustaining employee ownership requires some thought: ‘The structuring of the ownership is of crucial importance in ensuring longevity. When all the shares are held by the individual employees a substantial ‘repurchase liability’ – the need eventually to find the cash to buy back the shares – builds up.’ Erdal discusses this topic in some depth, suggesting various alternatives and criticising US ESOPs (Employee Stock Ownership Plans, where shareholding trusts take the form of pension funds) as being ‘vulnerable to Wall Street types’. He champions the capital account system used by Spain’s Mondragón group, and urges tax concessions to support this.
However employee-owned businesses are structured, Erdal believes that in the end they can ‘be made effective only through the courage, energy and personal ethics of those involved’. Nonetheless, he maintains that they are certainly less vulnerable to abuse of power by CEOs than public corporations where ‘CEOs are running away with the loot’.......
.......Contrary to economists’ predictions, reinvestment is not a problem for employee-owned concerns as people generally ‘want to keep the company strong for their own sakes and they want to pass it on strong to the next generation’. As Erdal says, ‘They are much more than the money-grubbing automata of economists’ models’.
If by this stage you are still not persuaded of the virtues of employee-ownership, perhaps you will find Erdal’s measurement of the wider effects of employee ownership on communities in Italy convincing. Erdal compared three similar towns, differing only with regard to the proportion of their residents working for employee-owned concerns. He found that where many people worked for such businesses, residents lived a lot longer, they enjoyed larger and more supportive social networks, they perceived political authorities as being more on their side, more voted, they believed that domestic violence was less prevalent, they donated more blood, their children stayed at school longer and did better, and, ‘to a radically greater extent’, they continued being trained and educated throughout their lives. Most intriguingly, they apparently didn’t bother buying big cars to show off their wealth, despite having higher disposable incomes! Employee-ownership kills conspicuous consumption?

Monday, June 15, 2015

Introducing the Romanian Realists

I’ve been stuck this past week on the hot Bucharest plain - so not exactly fizzing with ideas. I took the opportunity to pull together some of the material which has been lying on my PC about the Romanian Realist painters of the late  19th and early 20th Century

Introducing the Romanian Realists is 200 pages long – and excludes the well-known work of TheodorAmman, Nicolae Grigorescu, Ion Andreescu, Camil Ressu, Stefan Luchian and Nicolae Tonitsa!!

Friday, June 5, 2015

Why are the Brits schizophrenic?

The British public remains proud of its National Health Service – although electors have shown little apparent concern at the non-stop organisational upheavals to which it has been subject over the past 30 or so years. The latest survey showed that 89% of adults in Great Britain support a national health system that is tax-funded, free at the point of use and provides comprehensive care for all citizens.
Oddly, however, 43% of those polled didn’t seem to care whether the service was provided by the NHS or another provider (e.g. private company or not-for-profit body such as a charity or social enterprise). 39% expressed an active preference for this care to be delivered by the NHS.

Although I’ve been out of the country for 25 years I understand this apparent schizophrenia.
I was heavily influenced by the anti-institutionalism of the post ‘68 period – seeing with my own eyes the complacency and protectionism of local bureaucracies. I avidly devoured the critiques of The Local State and the works of Ivan Illich (of Deschooling Society and Medical Nemesis fame)

I belonged to that small wing of the Labour Party which regretted that the party had, in the 1940s, turned its back on its “voluntarist” tradition and opted for the centralisation model (Egalitarian thought and labour politics – retreating visions; Nicolas Ellison (1994) nicely sets out the three strands (or “visions”) of Labour thought) 

Presented, however, with a choice between professional or managerial power, I opted for the latter - consoling myself that the “new managers” being promoted in the 1970s in the wave of enthusiasm for corporate management would challenge the complacency I saw. 
I never imagined that the managers would take over – and pave the way for the privatisation and commodification of everything!

At a personal level, I have always been wary of the “health system” – seeing its overworked doctors as too much as the prey of the pharmaceutical industry; and the fashion for monstrous new “factory” hospitals as horrific expressions of gigantism. Hence my activity in the World Health Organisation’s Healthy Cities Network – with its emphasis on health promotion and prevention.
And, from a distance, I have followed with distaste the various scandals which have erupted whether about medical malpractice or hospital mismanagement….
And yet I have never supported the neo-liberal project of privatising health care.

My partner challenged me yesterday on this apparent contradiction – how could I still support “the British model” given the views I have expressed over the years (let alone my own rejection of the idea of ever being hospitalised)?

I knew that the French health system represented one of the world’s best – and the US one of the worst but had been getting conflicting signals recently from the various international league tables with which we are now assailed. One table (in 2007) told me that the NHS was only 17th globally for healthcare systems. Another (just a few months ago) focused on health and wellbeing (ie outcomes) and put Britain in 27th place. But a survey conducted by The Commonwealth Fund last year ranked the UK first overall, scoring it highly for its quality of care, efficiency and low cost at the point of service, with Switzerland coming an overall second.

What are mere mortals to make of such contradictory reports? Fortunately there is help to hand – for example from something called “The Health Foundation” which published earlier in the year this short pamphlet which shines light on both the strengths and weaknesses of the British system. Knowing the scale of money from dubious sources behind Think Tanks, I checked out their website which gives reassuring answers to the obvious questions. Of course there are other, even better-known places where such analysis is conducted (such as the King’s Fund)…..  

But perhaps the most interesting find was this survey commissioned by the Health Care Commission
Views of the NHS and Healthcare have to be viewed at three levels.
Views of the NHS as a whole are often very different from, and influenced by different issues, than public perceptions of local health services, and different again from patient perceptions.
- The NHS as a whole, and in particular the principles it embodies, remains a huge source of latent pride. It is still perceived by the British general public to be one of the best of its kind in the world. People also see the NHS as critical to society, and despite concerns about its management, they feel it needs to be protected and maintained rather than re-invented.
- Despite this, the NHS regularly features as one of the biggest issues facing Britain today for the public. In early 2006, levels of optimism about the future prospects of the NHS reached their lowest recorded levels since 2002.
- However, public satisfaction with the NHS at a national level, and patient satisfaction, have remained relatively stable since 2000 and have recently shown signs of improvement. Patient ratings of their treatment are always far higher than ratings of the NHS as a whole.
 Our analysis highlights the impact of media coverage and politics on the NHS at a national level, where people rely on media coverage to form judgement.

Not surprising that the barrage of hostile comment about health care from those in the pay of corporate power (waiting to pick up rich pickings) has been having an affect.

I remain an unrepentant “mutualist” – believing that healthcare is too important to be left to commercial, managerial, political or medical interests on their own. It needs to be locally owned – with citizen interests balancing the others…..

I appreciate that this is a minority position which may indeed be seen as positively "cavalier" (Don Quixote) these days - so will try in future posts to explore what might be involved.....

Tuesday, June 2, 2015

Praising - not Burying

People writing books on social affairs will usually spend at least a couple of years on their book – only to see it dealt with in a 1,000 word review (if they are lucky) – even in professional journals. That’s why I’m a big fan of the Crooked Timber book seminars which produce at least 50 page overviews of selected books – made up of 6-7 contributions. The last (on Red Plenty) had 135 pages!

I am currently reading Will Hutton’s new book How Good We Can Be (not to be confused with As Good as it Gets!) – an update of the series of books Hutton has been writing on the DNA of Anglo-American capitalism since “The State We’re In” (1995) 
Hutton is that rare character – a British journalist who cares about ideas and shares his wide and deep reading in his books; someone who can and does try to build bridges between the worlds of academia and action which I have been blogging about recently.
But, as I’ve said before here, the trouble with bridges is that, in peacetime, horses shit on them and, in wartime, they are blown up!

A lot of people therefore “have it in” for Hutton - Frederic Mount is a good example. Someone who was at one time Head of Margaret Thatcher’s Policy Unit but reengineered himself a few years ago to write a devastating critique of the new British oligarchy. His review of Hutton’s latest book has a fairly typical tone
If a book’s worth writing once, it’s worth writing several times. This homely maxim has often proved a recipe for success. Will Hutton is a case in point. Twenty years ago, he had a runaway hit with The State We’re In. He followed that up with "The State to Come" (1997), then came "TheWorld We’re In "(2002). As Hutton moved from the editor’s chair at the Observer to the Work Foundation and now to the Principal’s lodge at Hertford College, Oxford, he has stayed heroically on his own message. The title’s tweaked, but the melody lingers on.
The continentals are enlightened, the Anglo-Saxons are deluded. Europe is the future and we would be crazy to stay out of the euro. John Maynard Keynes is good, Friedrich Hayek and Milton Friedman are no good. The state is the solution, not the problem. It already showers blessings on us and would shower many more if only we could overcome our misguided suspicions. Government regulation and high taxes are the way to make us happy.For painting in black and white there are few like Hutton. There is no hesitation or deviation, although there is quite a bit of repetition, …….. 
Yet, oddly enough, many of Hutton’s proposals will appeal to a wider audience than social liberals and socialists. In fact, they are pretty much the new consensus: the separation between high street banks and the casino banks; a stiffer stewardship code to deter looting in the boardroom; Treasury guarantees for big construction projects; restoring the insurance base of the welfare state; a return to the old sliding scale for capital gains tax, in order to encourage long-term holding of shares; an end to the tax advantages of debt over equity; reforming council tax and giving local authorities back their financial independence.
I warm to all this, and I also like Hutton’s proposals to reinvent the trade unions as co-partners with business, particularly the idea that they might set up mutually-owned service companies to sell their services to employers.
These days we are all in favour of diversifying patterns of ownership beyond the standard plc model, to include more co-operatives and also “public benefit companies,” which guarantee under charter to deliver certain public benefits and enjoy tax advantages in return. Free enterprise used to be more diverse and could be so again.
The awkward truth is, though, that these alluring alternatives are no more risk-free than the old limited company. It is an awkward thought that the best-known alternative corporations of this sort over the past few years have been the Co-op, Railtrack/Network Rail and the BBC—none of them exactly without problems of governance.
But it’s Hutton’s grand narrative that seems the more rickety. We are constantly told that the past 20 or 30 years have been a disaster for the United Kingdom. Yet at the same time we are also told that “Britain has more world-class universities per head of population than any other country,” that “The triangle bounded by the M3 in the south M40 to the north and with Heathrow at its centre boasts the highest concentration of high-tech start-ups outside California and Massachusetts,” that the BBC remains the finest broadcasting service in the world, that the National Health Service is “the cheapest system in the world producing the best health results across a range of key indicators” and “on measures of effectiveness, safety, patient-centredness, co-ordination, quality and access, Britain scores number one.”

I must confess that my eyes did begin to glaze over after the fifth or sixth of the series of injunctions Hutton gets started on later in the book. I longed for a lighter touch - and was therefore quite fascinated to discover this issue touched on in this detailed and very serious treatment of the sort calculated to warm the cockles of all writers - it's called Calling Capitalism to account by Steve New
Writers who want to engage seriously with economic and political reality face a problem. How to pitch the tone of what they say? Every simple story needs goodies and baddies; more complex stories need some sort of moral trajectory. But how explicitly should you tell the story? The vast bulk of serious academic work avoids offence by talking in the abstract, layering oblique evasion upon tactful qualification. Academics settle for the low temperature, formal modality of the learned journals; passion is excluded. Much is made of broad generalisations; no-one is criticised directly. ‘Firms’ and ‘Markets’ feature, as do ‘agents’, but mostly they don’t have names: authors can be pretty sure they’re not going to be sued by anyone, even in the rare event that a normative judgement is explicitly made.
Even academic work which reflects some kind of moral or political purpose (not all does) tends to be scrupulously anodyne, and keen not to offend. You’d really struggle to find explicit criticisms of particular firms or managers in the Academy of Management Review or the Journal of Finance or the Harvard Business Review2.
Politicians and activists can be more specific – we don’t like Shell, we don’t like Nike – but, often deliberately, tend to prioritize effect over accuracy or content3.
Journalists can be more direct, but mostly without the tedious necessity of consistency or depth. Will Hutton – over a prolific career operating in the relatively unpopulated overlap between journalist, academic and (perhaps) politician – has mastered a kind of middle ground. He writes about general ideas, but he also names names; he treads a line between rounded argument and polemical assertion; he tries to be critical
Writing about companies and business people and their ethics is tricky because it is easy to blunder into two equally stupid traps: you can declare them all horrible, beyond sympathy and empathy, or you can end up fawning and cooing in line with corporate propaganda. Nuanced and balanced treatment is hard: that’s part of why academics often stick to the abstract or typical case. If you get specific, you risk being a bombastic Spart or a corporate patsy.
Hutton navigates this carefully; he talks about particular firms, but from one particular angle at a time. So, in HGWCB, Apple is hailed as an example of innovation, with its ‘handsome, well-designed devices’ (26). But the working conditions in the supply chain are not discussed.
On the other hand, INEOS and Sports Direct are bad because of their employment practices; ARM is good because it’s successful and hasn’t been bought up by foreigners. Unilever has a declared purpose (of which more, later) and doesn’t do quarterly reporting (good). 
Virgin uses tax havens (bad). News International is beyond the pale because of its ‘purpose-free amoral culture’ (87).
Hutton uses specific examples of firms to point out particular virtues and vices, praising for X, damning for Y.