As Larry Elliott noted in The Guardian recently, since the 1960s the liberal state has been stood on its head. Whereas 40 years ago markets were framed by strong checks and balances, while within the law individuals could, and did, tell officials to mind their own business, the reverse is now true.
Individual behaviour is regulated by armies of surveillants enforcing guidelines on drinking, smoking, parenting, loitering, dog-pooping, refuse disposal, even school catchment areas, to make the world safe for unregulated markets, particularly financial ones.
Much the same has happened in management. In the 1960s there was less management, and although it was more paternalistic, it was (mostly) reined in by convention as well as stronger trade unions and collective bargaining (there’s a blast from the past). But managers grumbling about the ‘right to manage’ and leader writers fulminating about workers’ demands now seem from another world. In the ‘flexible’ economies, there are now, by design, very few constraints on management action. And, boy, have they used their freedom.
In the wholesale outsourcing of risk from the organisation to the individual, first to go was responsibility for careers. Next overboard was pensions, with companies seemingly competing nearly as hard to shore up their finances by closing schemes as by winning new customers. At the same time, financially trained managers increasingly looked to employees as their first resort for costs to cut. And a tightly yoked performance-management regime of targets and inspection (aka appraisal) made it clear that at work, as at home, people were not to be trusted, needing sharp sanctions and incentives to get them to perform.
In both cases, the cure was worse than the illness. After a couple of practice runs, free financial markets duly obliterated pension pots and savings that individuals had put aside after being booted out of company schemes, with governments utterly impotent to intervene except in the futile role of Humpty-Dumpty. Meanwhile, expecting the corporate officer class to look after the interests of the ranks proved as vain as the unions always said it would be.
Globally, the share of income going to capital has steadily risen at the expense of labour. At a human level, what this means at the coalface was revealed in a rich and fascinating report from the TUC last week. Life in the Middle (www.tuc.org.uk/touchstone/lifeinthemiddle.pdf) shows that the real middle Britain – the stratum of clerical and administrative workers, supervisors, lower-tier man agers, small entrepreneurs and skilled manual workers – has lost out sharply over the last 30 years compared with almost everyone else.
Thus the pay of median earners (pounds 377 a week) has gone up far less than the average – 60% versus 78% – and the gap has widened where 30 years ago the UK was one of Europe’s most equal societies, it is now among the most unequal. Middle-income Britons are less likely to have a university degree, a final-salary pension, or shares and savings, and more likely to have been unemployed than those just above them on the income scale. Four out of 10 think they are in a lower-status job than their fathers.
How all this has happened is not just economics. In their bold, original and agreeably opinionated The Puritan Gift , brothers Will and Kenneth Hopper argue that up to the 1970s, US management (which the British gamely follows at one remove) was living on the strength of its Puritan inheritance, part of which (with idealism, mechanical aptitudes and unparalleled ability to galvanise energy behind a single aim) was a belief that the coherence of the collective was more important than any individual.
But the obverse of US willingness to live in the present is the ease with which it forgets its past. Managers abandoned true north in favour of ‘neo-Taylorism’ – quantitative techniques, ‘the cult of the expert’, of which the temples were business schools, and heroic CEOs. Raging self-interest and the malign influence of shareholder value did the rest as it did in the UK, where, lacking their own tradition and burdened by inferiority complex, UK managers were all too easy to drag in the same direction.
The Hoppers end on a note of qualified optimism. Just as the French had to go to the US to reintroduce resistant vines after their own had been wiped out by phylloxera, so the most thoughtful Anglo-US firms are relearning what they once knew from Japan, inheritor of the human-centred US tradition via Deming and others after the war.
The crunch reinforces the urgency of renewal, as does the scandal of MPs’ expenses, both egregious management failures that focus the plight and the fury of the TUC’s ‘sinking’ middle. A new tax and mobility agenda is the TUC’s remedy; returning management to its virtuous roots would do more.
The Observer, 31 May 2009