Are Indian businessmen being unfairly targeted?

By Girish Menon

Following revelations in the suicide note of V G Siddhartha - the founder of Cafe Coffee Day, the corporate world has started a whispering campaign that Indian businessmen are being unfairly targeted by government bureaucracies. This piece will try to examine the elephant in the room.

Indian businessmen are not one cohesive group. There are many sub groups varying in size and population; from the one man tea vendor to Ambani who aspires to be the biggest tycoon in the world. Not all business-persons receive the same treatment from the governments they have to encounter in their daily endeavour.

As far as the Ambanis are concerned, it was rumoured that his office would receive a copy of any government initiative even before it was announced in parliament. Some even suggest that policies are often drafted in their offices. Clearly, such businessmen are like the Goldman Sachs of the USA i.e. too big to fail. Rivals of Ambani envy the unfair distribution of advantages to this group. However, they don’t want it to be stopped but wish they could replace him instead. This group is large and growing.

If the free market mantra is to be applied then governments should not be indulging in such behaviour. This logic states that governments should recognise property rights, make necessary rules and let citizens pursue their self interest. They should not favour any businessperson.

Economist Ha Joon Chang attributes the growth of Toyota, Samsung and many other global MNCs due to the nexus between governments and businesses. He suggests that developing countries follow this strategy else their domestic firms will lose out to already existing western MNCs. Others term this government corporate nexus as crony capitalism.

The Indian corporate world has enjoyed the benefits of crony capitalism since 1947. Under the socialist policies till 1990s the Tatas, Birlas and Bajajs were among the few recipients of licences to do business. In the 40 years of their protected status they did not produce any world beaters. They even formed ‘The Bombay Club’ to lobby against the opening up of the Indian economy.

Even after the Indian economy opened up corporates lobbied the government to make arbitrary rules that gave them an advantage over their rivals. These corporates received loans from government banks and even more loans to avoid loan defaults. It is almost thirty years since the opening up of the economy and yet there are no world class products that have emerged from these corporates. Often, such corporates have only aspired to the takeover of monopoly public sector firms so that social profit can be converted to private profit.

However, the above group do not represent Indian business-persons. The largest group of Indian business-persons run small and medium enterprises. They definitely have a rightful claim to harassment by the government. They are victimised by the government’s bureaucracy in so many ways that I am surprised they still continue to do business. S Gurumurthy, the RSS ideologue on the board of the Reserve Bank of India, is right when he advocates that the Indian government should ease the conditions of doing business for this large group. Demonetisation was a recent  tsunami that further overwhelmed this group of drowning businesspersons. Often, their only plea is that their outfits should be outside the scope of government bureaucrats. And there is some merit in their argument.

It is an irony that the pleas of persecution by large Indian corporates are being aired when the real victims of government harassment, i.e. the small and medium enterprises, die a silent death. It used to be said of the Christian church,’The church complains of persecution whenever it is not allowed to persecute’. The cries of India’s large business houses seem to echo the Christian church.

As a doctor, I say it’s time to nationalise GP surgeries

Practices refuse to take on work that benefits patients because it isn’t in their business interest. Let’s bring them into the NHS writes Dr Paul Williams, a GP and the Labour MP for Stockton South, in the Guardian

  

‘Public satisfaction with general practice remains relatively high, but not all practices work as well as they should for their patients.’ A receptionist at a GP surgery. Photograph: Anthony Devlin/PA


General practices support patients through every stage of their life. They are the heart of their communities and the gateway to our NHS. Every day, around a million GP consultations take place in English practices. We should rightly be very proud of our system of primary care.

But it isn’t perfect. As data published this week shows, patient demand for general practice services is increasing while the number of GPs is actually falling – according to the survey, one in 10 GPs are in contact with 60 or more patients a day, which is double the safe limit. At a time when people are living longer, and health problems are becoming more complex, the government has spectacularly failed to deliver its promise of an extra 5,000 GPs. Not enough medics want to be GPs, and too many doctors leave general practice too early.

Simple changes might make things better for staff working in primary care, and for patients. When the NHS was founded in 1948, hospitals were brought into public ownership and general practice was left in the private sector, where, mostly, it has remained. Most of the time your GP doesn’t get a salary. They have contracts with the NHS and local authority for a variety of services and they take home the “profit” that they make.

While some think the partnership model is more productive than being employed like hospital colleagues, it is not right for everyone. Increasingly, GPs do not want to become partners because of the levels of responsibility and financial risk involved. Evidence suggests that many GPs would be open to moving to a salaried model. At the same time, there are many other staff who work in primary care who would like more influence over the organisation they work for.

Public satisfaction with general practice remains relatively high, but not all practices work as well as they should for their patients. In many practices you can see a doctor on the same day, but in the area I represent as an MP, in March 4,437 people had to wait more than 28 days between making an appointment and having a consultation. In some parts of my constituency, poor access to a GP is the biggest issue that people contact me about.

 ‘Evidence suggests that many GPs would be open to moving to a salaried model.’ Photograph: Alamy Stock Photo

As a health service leader, I was astounded by the number of times practices wouldn’t take on work that was clearly beneficial to their patients, because it wasn’t in their business interest. I have battled with GPs who told me that they weren’t paid enough to do annual health checks for adults with learning disabilities (they get more than £100 per check), wouldn’t take student nurses on placement because the profits weren’t large enough, and wouldn’t offer appointments in early mornings or evenings because it was “optional”. That clearly isn’t right or fair to their patients.

Our health services should be designed around need. The places with the oldest people and the highest levels of deprivation should get the greatest resources. The inverse care law tells us that in the real world the opposite happens. Practices emerge where doctors want them to be, rather than where public health needs assessment tells us they should be.

Culture and leadership are always more important than organisational structure, but a new ownership model for primary care would create an environment that facilitates happy staff and healthier patients.

Employee-led mutuals should be created within the NHS with nurses, doctors, pharmacists, therapists, managers and patients all having a say in how the organisation is run. These new organisations – instilled with a progressive and innovative culture – would be much better working environments for staff, with improved career pathways for nurses and more incentives to invest in people. As they would be within the NHS, there would be no profit motive. Crucially, they wouldn’t be able to pick and choose which services to offer to their patients. Struggling practices could receive investment to bring them up to the level of the best.

This model would enable a strategic shift from reactive and hospital-based care to preventive community care – without the NHS having to pay a premium price that includes GP profit. All existing GPs should be offered salaried employment within these organisations. Those that wish to retain their existing contractual arrangements should be allowed to do so. This is likely to be particularly important in rural communities.

Groups of general practices are already coming together into primary care networks. This is a step in the right direction. Why not give them the option to go one step further, become NHS primary and community care organisations, and complete Nye Bevan’s NHS?

In Britain’s boardrooms, Brexit is already here. And the warning is stark

For Westminster, leaving Europe is months away: for business, it’s the present. And our prospects are already dwindling writes Aditya Chakrabortty in The Guardian 

 

Part-built private housing development project on the outskirts of Llanelli, Wales, which was abandoned after the developer went bust. Photograph: Alamy


On the one hand, you have the self-inflating chaos at Westminster, the fever dreams of Jacob Rees-Mogg’s gang and the rehearsed rage of the Democratic Unionists. And on the other, you have the truth nailed by Philip K Dick. “Reality,” he wrote, “is that which, when you stop believing it, doesn’t go away.” So let’s remind ourselves of some reality.

While Tory MPs jostled over a replacement for Theresa May the head of the Confederation of British Industry, Carolyn Fairbairn, warned that millions of pounds were “flooding out” of business investment and into preparing for Britain crashing out of Europe with no deal. Food warehouses said they were running out of space. And auto-parts manufacturer Schaeffler announced that it would shut factories in Plymouth and Llanelli, leaving more than 600 workers facing the dole.


An entire rotten political-corporate regime is crumbling away – and its replacement threatens to be even worse

Even as politicians and the press fantasise about how Britain will leave Europe, big business is already at the departure gate. For Westminster, Brexit is months in the future; for boardrooms making plans, it is the present. Big carmakers have this year halved their investment in new models and factory machinery. The consultancy EY records a 31% slump in the number of foreign businesses setting up headquarters in Britain. Boris Johnson certainly makes good copy – but money talks much louder.

“The banks and insurers are moving, the big pharmaceutical firms are investing abroad,” says Paul Drechsler, who was CBI president until June and now chairs London First. “These trains are leaving the station, and when they leave, they won’t come back.” The country he describes is already shrinking, its job opportunities dwindling, its reputation abroad in eclipse.

This is the real national emergency. An entire rotten political-corporate regime is crumbling away – and its replacement threatens to be even worse. It will be worse, specifically, for those parts of the country, like Llanelli and Plymouth, that voted leave as the ultimate kick against the pricks of a hollow economy and a deaf government.

The succinct definition of our current model comes from the head of the Bank of England. The UK relies, said Mark Carney in 2016, on the “kindness of strangers”. The willingness of overseas investors to keep ploughing in their cash keeps us in the style to which we’ve grown accustomed. Out of all the 28 members of the European Union, the UK is second only to Ireland in its dependence on investment from abroad. Margaret Thatcher’s eagerness to sell off whatever she could get her hands on and her mandarins’ carelessness over ownership has turned us into one of the biggest foreign-capital junkies in the developed world. 

Those investors don’t come here out of charity. Our government competes with others around the world to lure in cash from overseas. But look what inducements we offer. Just weeks before the Brexit referendum, David Cameron’s government published its Invest in the UK brochure, promising “the most competitive” labour costs in western Europe, and “the least strict regulation in the EU.”. Why buy euros when you can have Poundland?

No other country does this. Analysis by Kevin Farnsworth at York University shows that, while all states assure investors they’re competitive locations, Sweden boasts of its “anti-corruption” and “good industrial relations”, while Germany highlights its “efficiency” and “training”. The UK, he writes, “uniquely competes for international capital by offering a package of a low-tax, low-cost, low regulatory business environment”.

Here, whether Conservative or Labour, successive governments have marketed us as the open-all-hours, bargain-basement landing strip off mainland Europe. Until, that is, Britons vote in a referendum to kick away two of the three legs of the post-Thatcherite economic model, namely openness and closeness to the continent. What’s left then is our cheapness – in taxes, in wages and in regulation.

This is Britain in 2018, paying the price for decades of underinvestment and cutprice competition. We have a highly skilled workforce, with almost half of Britain’s young people holding a university degree. And yet in 2014, Charlie Mayfield, former boss of John Lewis and then head of the UK Commission on Employment and Skills, pointed out that over one in five British jobs required only primary-school education. We have a world-class car-manufacturing industry, yet over half of the components in the cars that roll off the lines in Sunderland or Ellesmere Port come from abroad.

This is the point at which the kindness of strangers starts to get rather strained. In a survey this spring, well before the chaos of the past few weeks, EY found that 30% of foreign investors now expect to move money out of the UK after Brexit. The current value of foreign direct investment in the UK is estimated by the government to be over £1 trillion. If even a quarter of that were to move abroad, then £75 billion of assets are already at risk. No wonder the Welsh government is offering sweeteners to Ford to stay at Bridgend. No wonder when Nissan made noises about scaling back at Sunderland, May immediately opened the door of No 10 and offered some kind of deal – although precisely what, the voting public was never told.

You can expect a lot more of this over coming months and years: panicky politicians paying your tax money to grumpy-looking corporate executives. You can expect other countries to try to poach our businesses, just as after the 2016 vote Paris began advertising itself as the ideal post-Brexit corporate headquarters. Their posters read: “Tired of fog? Try the frogs”

You can also expect this government to press even harder the case that Britain is the low-tax, low-wage capital of the rich world. But ministers will get a disappointing response from businesses, believes EY’s chief economist in the UK, Mark Gregory. He thinks multinationals will shift away from using Britain as a stepping stone into Europe and the rest of the world – which is logical, given that any new trading arrangements will take years to settle and will almost certainly not be as smooth as the regime Britain currently has. Instead of building factories to make things to sell to the world, big businesses will instead put their money into storage and showrooms to sell things to Britons. The UK will become, Gregory says, “a warehouse economy: low skills, low productivity and low growth”.

That projection was already a reality for lots of people I met who plumped for Brexit in 2016. They were on minimum wage and had minimum rights and minimum prospects. If Brexit is to be radically changed now, it is those voters – the disenfranchised Labourites, the sod-them-all brigade – whose support is needed. A second referendum, in which well-meaning metropolitans offer those in the Rhondda the status quo, probably deserves to fail. Instead, any remain option will have to come with a worked-out argument about rebalancing power in this country. And that means reshaping the relationship between capital and the rest of us.

Big Business Strikes Again, this Time Through Modi Government's Assault on RBI

The unprecedented invocation of Section 7 is not in enlightened public interest – it is a brazen move to force the RBI to open bank funding to desperate corporates.

M K Venu in The Wire.In

Reserve Bank of India Governor Urjit Patel with former governor Raghuram Rajan in the background. Credit: Reuters/Danish Siddiqui 

The business cronies of this government have done it again. And they manage such coups each time with unfailing precision. This time, the Centre has taken the unprecedented action of sending a direction to Reserve Bank of India (RBI) under Section 7 of the RBI Act, the first step in a process of virtually issuing a diktat that the central bank must do whatever is necessary to resolve the potential credit freeze in the non-banking finance sector and relax norms for lending to small business.

The RBI over the past year placed lending restrictions on weaker banks, where non-performing assets (NPAs) and other warning indicators were much higher than normal, consequently eroding much of their capital. You can be sure once these norms are relaxed by an RBI under duress, bank funds will start flowing again to the cronies directly or indirectly because moneys are essentially fungible.

I’m told that one celebrated big business promoter from Gujarat, who is known to travel with Prime Minister Narendra Modi on official trips abroad, is currently borrowing short-term money at over 18% to meet his past loan servicing needs.

But once RBI relaxes the current stringent lending norms for banks and adequate liquidity is provided to trapped NBFCs, select big business cronies – owing nearly Rs 4 lakh crore to banks – will continue to get access to funds. In any case, these powerful promoters have managed to avoid going into bankruptcy proceedings as mandated by the RBI’s circular of February 12, 2018. Some of the power projects of the Adani Group, Essar, the Tatas and so on, who have repayment overdues of over Rs 1 lakh crore, are currently being given a fresh lease of life.
So make no mistake, the unprecedented invocation of Section 7 of the RBI Act, never done since independence, not even during the financial crises of 1991 or 2008, is not guided by enlightened public interest as the finance ministry may claim.

It is a brazen move to force the RBI to open bank funding to desperate corporates who need to save themselves so that they are also in a position to give the necessary funds to political parties via anonymous electoral bonds.

Also read: Modi Government Invokes Never-Used Powers to Direct RBI Governor: Reports

These corporate groups and their promoters remain immortal and untouched through all regimes. They manage to get a share of juicy defence contracts even while they owe over Rs 1 lakh crore of overdue loans to banks. Modi will also have to answer why a select group of promoters are getting special treatment by avoiding the RBI circular of February 12, 2018. Is there pressure on the central bank to dilute its rule which mandates that all borrowers above a certain level have to enter bankruptcy proceedings? Is a special dispensation being created for cronies?

These questions will surely haunt the Modi regime in the run-up to the 2019 elections. The sheer power exercised by these business houses is now becoming more and more apparent and naked.

Earlier these powerful forces ran a campaign against Raghuram Rajan and ensured he didn’t get an extension because Rajan had sent a list to the prime minister’s office (PMO) of politically-connected promoters who may have fraudulently diverted bank loans for purposes others than the financing of their projects.
Rajan had asked for a multi-agency probe against these errant promoters because RBI felt it alone did not have the wherewithal to do it. An RTI application by The Wire confirms that the list was sent in 2015 and the PMO is refusing to part with it even to a parliamentary committee headed by BJP leader Murli Manohar Joshi after several reminders.

Also read: Exclusive: RTI Confirms Raghuram Rajan Sent Modi List of NPA Defaulters, Action Taken a Secret

So, it is clear the government is hiding something and is now feeling impelled to get rid of the RBI chief by initiating action under the never-before-used Section 7 provision.

RBI governor Urjit Patel cannot heed the Centre’s directive as it would lower the dignity of the institution and erode the integrity of some of the tough decisions that the central bank has taken to clean up the banks and bring errant promoters to their heels. If Patel quits, India will become a laughing stock among global investors and the money markets could see unprecedented volatility. Remember, in his speech last Friday, deputy governor Viral Acharya had invoked the 2010 Argentine example where the central bank governor there resigned in protest after the regime tried to force him to part with the institution’s reserves to fill the government’s fiscal gap. The markets went for a toss after that in Argentina.

There is a strong parallel here as the finance ministry is also coercing the RBI into parting with a part of its contingency reserves (over Rs. 2.5 lakh crore) to meet the Centre’s growing fiscal deficit in an election year. All this is happening under the shadows of high oil prices, a growing current account deficit and a weakening rupee.

If the RBI governor resigns in these circumstances there could be huge repercussions. The invocation of Section 7 of the RBI Act is, therefore, an act of desperation that is bound to boomerang on the Modi government.

Trump as defender of democracy

George Monbiot in The Guardian

He gets almost everything wrong. But last weekend Donald Trump got something right. To the horror of the other leaders of the rich world, he defended democracy against its detractors. Perhaps predictably, he has been universally condemned for it. 

His crime was to insist that the North American Free Trade Agreement (Nafta) should have a sunset clause. In other words, it should not remain valid indefinitely, but expire after five years, allowing its members either to renegotiate it or to walk away. To howls of execration from the world’s media, his insistence has torpedoed efforts to update the treaty.

In Rights of Man, published in 1791, Thomas Paine argued that: “Every age and generation must be as free to act for itself, in all cases, as the ages and generations which preceded it. The vanity and presumption of governing beyond the grave is the most ridiculous and insolent of all tyrannies.” This is widely accepted – in theory if not in practice – as a basic democratic principle.

Even if the people of the US, Canada and Mexico had explicitly consented to Nafta in 1994, the idea that a decision made then should bind everyone in North America for all time is repulsive. So is the notion, championed by the Canadian and Mexican governments, that any slightly modified version of the deal agreed now should bind all future governments.

But the people of North America did not explicitly consent to Nafta. They were never asked to vote on the deal, and its bipartisan support ensured that there was little scope for dissent. The huge grassroots resistance in all three nations was ignored or maligned. The deal was fixed between political and commercial elites, and granted immortality.

In seeking to update the treaty, governments in the three countries have candidly sought to thwart the will of the people. Their stated intention was to finish the job before Mexico’s presidential election in July. The leading candidate, Andrés Lopez Obrador, has expressed hostility to Nafta, so it had to be done before the people cast their vote. They might wonder why so many have lost faith in democracy.
Nafta provides a perfect illustration of why all trade treaties should contain a sunset clause. Provisions that made sense to the negotiators in the early 1990s make no sense to anyone today, except fossil fuel companies and greedy lawyers. The most obvious example is the way its rules for investor-state dispute settlement have been interpreted. These clauses (chapter 11 of the treaty) were supposed to prevent states from unfairly expropriating the assets of foreign companies. But they have spawned a new industry, in which aggressive lawyers discover ever more lucrative means of overriding democracy.

The rules grant opaque panels of corporate lawyers, meeting behind closed doors, supreme authority over the courts and parliaments of its member states. A BuzzFeed investigation revealed they had been used to halt criminal cases, overturn penalties incurred by convicted fraudsters, allow companies to get away with trashing rainforests and poisoning villages, and, by placing foreign businesses above the law, intimidate governments into abandoning public protections.

Under Nafta, these provisions have become, metaphorically and literally, toxic. When Canada tried to ban a fuel additive called MMT as a potentially dangerous neurotoxin, the US manufacturer used Nafta rules to sue the government. Canada was forced to lift the ban, and award the company $13m (£10m) in compensation. After Mexican authorities refused a US corporation permission to build a hazardous waste facility, the company sued before a Nafta panel, and extracted $16.7m in compensation. Another US firm, Lone Pine Resources, is suing Canada for $119m because the government of Quebec has banned fracking under the St Lawrence River.

As the US justice department woke up to the implications of these rules in the 1990s, it began to panic: one official wrote that it “could severely undermine our system of justice” and grant foreign companies “more rights than Americans have”. Another noted: “No one thought about this when Nafta implementing law passed.”

Nor did they think about climate breakdown. Nafta obliges Canada not only to export most of its oil and half its natural gas to the US, but also to ensure that the proportion of these fuels produced from tar sands and fracking does not change. As a result, the Canadian government cannot adhere to both its commitments under the Paris agreement on climate change and its commitments under Nafta. While the Paris commitments are voluntary, Nafta’s are compulsory.

Were such disasters foreseen by the negotiators? If so, the trade agreement was a plot against the people. If not – as the evidence strongly suggests – its unanticipated outcomes are a powerful argument for a sunset clause. The update the US wanted was also a formula for calamity, that future governments might wish to reverse. But this is likely to be difficult, even impossible, without the threat of walking out.

Those who defend the immortality of trade agreements argue that it provides certainty for business. It’s true that there is a conflict between business confidence and democratic freedom. This conflict is repeatedly resolved in favour of business. That the only defender of popular sovereignty in this case is an odious demagogue illustrates the corruption of 21st-century liberal democracy.

There was much rejoicing this week over the photo of Trump being harangued by the other G7 leaders. But when I saw it, I thought: “The stitch-ups engineered by people like you produce people like him.” The machinations of remote elites in forums such as the G7, the IMF and the European Central Bank, and the opaque negotiation of unpopular treaties, destroy both trust and democratic agency, fuelling the frustration that demagogues exploit.

Trump was right to spike the Trans-Pacific Partnership. He is right to demand a sunset clause for Nafta. When this devious, hollow, self-interested man offers a better approximation of the people’s champion than any other leader, you know democracy is in trouble.

Tangled in Brexit, the Tories are failing their business supporters

Patience Wheatcroft in The Financial Times


The single market is absolutely vital to Lucas,” declared Brian Pearse, chairman of the engineering group. “We have to be very much a global company.” Deeply concerned by the seeming hostility of much of the Conservative government’s attitude towards Europe, Sir Brian cancelled Lucas’s donation to the party. 

That was in 1995. Much has changed since then. Lucas industries now trades only as an offshoot of a German company. Since 2000, legislation has demanded that shareholders should approve corporate donations to political parties and such donations are effectively outlawed for quoted companies. But the issue of the UK’s relationship with the EU remains troublesome. On Tuesday it will reach another crisis point as the House of Commons votes on whether to avoid the hardest of Brexits. 

Sir Brian feared the government was not listening to the concerns of business 20 years ago, but in recent years the sound barrier seems to have become almost impenetrable. Business has been cast as the political pantomime villain. In July 2016, as she set out her personal manifesto for party leadership, Theresa May attacked “unscrupulous bosses” and “corporate irresponsibility” and was adamant that: “Under my leadership, the Conservative party will put itself completely, absolutely, unequivocally at the service of ordinary working people.” The trade union bosses of old would have applauded the resurrection of such “us and them” language. 

It has become commonplace for ministers. Only this week, Michael Gove was roundly condemning “crony capitalists who have rigged the system in their favour and against the rest of us”. The secretary of state for environment, food and rural affairs managed glancing references to the water industry and sustainability in his speech to the Policy Exchange think-tank, but it was largely a tirade against the corporate world. 

Few would argue that modern capitalism is without failings. From the financial crisis of 2008 to the collapse of Carillion (according to the National Audit Office, this will cost the taxpayer at least £148m), colossal mistakes have been made. Executive remuneration is widely, and not unjustly, perceived to be unfairly generous. That perception has been the driving force behind the rise of populism on both sides of the Atlantic. It is a big reason why the UK is mired in a potentially disastrous breach from Europe. 

Yet, for all its inadequacies, business remains a force for good. Politicians on all sides are now loath to even whisper such a thought. Business leaders, conscious of the zeitgeist, have not been keen to make the defence case publicly for fear of being shot down as stooges for the transgressors. So their efforts towards being responsible corporate citizens go unremarked, except in annual reports. Businesses are still perceived as using charitable giving as a cover for securing tickets for the opera rather than providing training and jobs for ex-offenders or breakfasts for children in deprived areas. Apart from the small matter of wealth creation, business today has extensive involvement in education, fosters volunteering among its staff and generally, in the interests of longer term survival, endeavours to keep its customers happy. 

Politicians, however, tend to make a distinction between big business, equating it to crony capitalism, and plucky entrepreneurs who deserve support and encouragement. Knowing this, most big businesses ask little of government beyond a stable environment, an educated and skilled workforce, effective infrastructure and a degree of regulatory and legal certainty. That enables them to get on with creating jobs and generating tax revenue to keep the country going. 

Traditionally, they have found the Conservative party the most supportive of these needs, although the Blair administration, with its embrace of free markets, was an exception. What now causes real concern is that the May government also confounds the norm. According to Paul Drechsler, president of the CBI employers group: “There are more anti-business Conservatives in the party than at any time in recent history.” Fortunately, he adds, there have been enough in the cabinet, including the prime minister, “to do just enough to prevent immense damage so far”. 

But significant damage has already been inflicted. The long-delayed decision over a third runway for Heathrow means that transport links to foster trade with China, for instance, will be inadequate for many years to come. The difficulty in obtaining visas for skilled workers is a problem for business, just as it is for a National Health Service desperate to recruit doctors. 

Above all, though, we face Brexit. It is glaringly apparent that the government triggered Article 50 and the process of EU withdrawal without any inkling of the implications. What was true for Lucas in 1995 is even more the case today, when business has integrated European supply chains and multinational workforces. Without the frictionless trade that membership of the single market and customs union provides, our economy will shrink drastically. 

For many months, business leaders tried to get that message across to government but they could barely get over the threshold of Downing Street. Only as they have become more vocal, and the difficulties of engineering a smooth Brexit become apparent, have some ministers begun to pay attention. 

Mrs May would not wish to be perceived as making the Conservatives the party of business, but perhaps there is just time for the government to realise that unless business thrives, everyone will suffer.

Why we should bulldoze the business school

There are 13,000 business schools on Earth. That’s 13,000 too many. And I should know – I’ve taught in them for 20 years. By Martin Parker in The Guardian

Visit the average university campus and it is likely that the newest and most ostentatious building will be occupied by the business school. The business school has the best building because it makes the biggest profits (or, euphemistically, “contribution” or “surplus”) – as you might expect, from a form of knowledge that teaches people how to make profits.

Business schools have huge influence, yet they are also widely regarded to be intellectually fraudulent places, fostering a culture of short-termism and greed. (There is a whole genre of jokes about what MBA – Master of Business Administration – really stands for: “Mediocre But Arrogant”, “Management by Accident”, “More Bad Advice”, “Master Bullshit Artist” and so on.) Critics of business schools come in many shapes and sizes: employers complain that graduates lack practical skills, conservative voices scorn the arriviste MBA, Europeans moan about Americanisation, radicals wail about the concentration of power in the hands of the running dogs of capital. Since 2008, many commentators have also suggested that business schools were complicit in producing the crash.

Having taught in business schools for 20 years, I have come to believe that the best solution to these problems is to shut down business schools altogether. This is not a typical view among my colleagues. Even so, it is remarkable just how much criticism of business schools over the past decade has come from inside the schools themselves. Many business school professors, particularly in north America, have argued that their institutions have gone horribly astray. B-schools have been corrupted, they say, by deans following the money, teachers giving the punters what they want, researchers pumping out paint-by-numbers papers for journals that no one reads and students expecting a qualification in return for their cash (or, more likely, their parents’ cash). At the end of it all, most business-school graduates won’t become high-level managers anyway, just precarious cubicle drones in anonymous office blocks.
These are not complaints from professors of sociology, state policymakers or even outraged anti-capitalist activists. These are views in books written by insiders, by employees of business schools who themselves feel some sense of disquiet or even disgust at what they are getting up to. Of course, these dissenting views are still those of a minority. Most work within business schools is blithely unconcerned with any expression of doubt, participants being too busy oiling the wheels to worry about where the engine is going. Still, this internal criticism is loud and significant.
The problem is that these insiders’ dissent has become so thoroughly institutionalised within the well-carpeted corridors that it now passes unremarked, just an everyday counterpoint to business as usual. Careers are made by wailing loudly in books and papers about the problems with business schools. The business school has been described by two insiders as “a cancerous machine spewing out sick and irrelevant detritus”. Even titles such as Against Management, Fucking Management and The Greedy Bastard’s Guide to Business appear not to cause any particular difficulties for their authors. I know this, because I wrote the first two. Frankly, the idea that I was permitted to get away with this speaks volumes about the extent to which this sort of criticism means anything very much at all. In fact, it is rewarded, because the fact that I publish is more important than what I publish.

Most solutions to the problem of the B-school shy away from radical restructuring, and instead tend to suggest a return to supposedly more traditional business practices, or a form of moral rearmament decorated with terms such as “responsibility” and “ethics”. All of these suggestions leave the basic problem untouched, that the business school only teaches one form of organising – market managerialism.

That’s why I think that we should call in the bulldozers and demand an entirely new way of thinking about management, business and markets. If we want those in power to become more responsible, then we must stop teaching students that heroic transformational leaders are the answer to every problem, or that the purpose of learning about taxation laws is to evade taxation, or that creating new desires is the purpose of marketing. In every case, the business school acts as an apologist, selling ideology as if it were science.

Universities have been around for a millenium, but the vast majority of business schools only came into existence in the last century. Despite loud and continual claims that they were a US invention, the first was probably the École Supérieure de Commerce de Paris, founded in 1819 as a privately funded attempt to produce a grande école for business. A century later, hundreds of business schools had popped up across Europe and the US, and from the 1950s onwards, they began to grow rapidly in other parts of the world.

In 2011, the Association to Advance Collegiate Schools of Business estimated that there were then nearly 13,000 business schools in the world. India alone is estimated to have 3,000 private schools of business. Pause for a moment, and consider that figure. Think about the huge numbers of people employed by those institutions, about the armies of graduates marching out with business degrees, about the gigantic sums of money circulating in the name of business education. (In 2013, the top 20 US MBA programmes already charged at least $100,000 (£72,000). At the time of writing, London Business School is advertising a tuition fee of £84,500 for its MBA.) No wonder that the bandwagon keeps rolling.

For the most part, business schools all assume a similar form. The architecture is generic modern – glass, panel, brick. Outside, there’s some expensive signage offering an inoffensive logo, probably in blue, probably with a square on it. The door opens, automatically. Inside, there’s a female receptionist dressed office-smart. Some abstract art hangs on the walls, and perhaps a banner or two with some hopeful assertions: “We mean business.” “Teaching and Research for Impact.” A big screen will hang somewhere over the lobby, running a Bloomberg news ticker and advertising visiting speakers and talks about preparing your CV. Shiny marketing leaflets sit in dispensing racks, with images of a diverse tableau of open-faced students on the cover. On the leaflets, you can find an alphabet of mastery: MBA, MSc Management, MSc Accounting, MSc Management and Accounting, MSc Marketing, MSc International Business, MSc Operations Management.

There will be plush lecture theatres with thick carpet, perhaps named after companies or personal donors. The lectern bears the logo of the business school. In fact, pretty much everything bears the weight of the logo, like someone who worries their possessions might get stolen and so marks them with their name. Unlike some of the shabby buildings in other parts of the university, the business school tries hard to project efficiency and confidence. The business school knows what it is doing and has its well-scrubbed face aimed firmly at the busy future. It cares about what people think of it.

Even if the reality isn’t always as shiny – if the roof leaks a little and the toilet is blocked – that is what the business-school dean would like to think that their school was like, or what they would want their school to be. A clean machine for turning income from students into profits.

What do business schools actually teach? This is a more complicated question than it first appears. Much writing on education has explored the ways in which a “hidden curriculum” supplies lessons to students without doing so explicitly. From the 1970s onwards, researchers explored how social class, gender, ethnicity, sexuality and so on were being implicitly taught in the classroom. This might involve segregating students into separate classes – the girls doing domestic science and the boys doing metalwork, say – which, in turn, implies what is natural or appropriate for different groups of people. The hidden curriculum can be taught in other ways too, by the ways in which teaching and assessment are practised, or through what is or isn’t included in the curriculum. The hidden curriculum tells us what matters and who matters, which places are most important and what topics can be ignored.

 

Illustration: Michael Kirkham

In many countries, a lot of work has been done on trying to deal with these issues. Materials on black history, women in science or pop songs as poetry are now fairly routine. That doesn’t mean that the hidden curriculum is no longer a problem, but at least in many of the more enlightened educational systems, it is not now routinely assumed that there is one history, one set of actors, one way of telling the story.

But in the business school, both the explicit and hidden curriculums sing the same song. The things taught and the way that they are taught generally mean that the virtues of capitalist market managerialism are told and sold as if there were no other ways of seeing the world.

If we educate our graduates in the inevitability of tooth-and-claw capitalism, it is hardly surprising that we end up with justifications for massive salary payments to people who take huge risks with other people’s money. If we teach that there is nothing else below the bottom line, then ideas about sustainability, diversity, responsibility and so on become mere decoration. The message that management research and teaching often provides is that capitalism is inevitable, and that the financial and legal techniques for running capitalism are a form of science. This combination of ideology and technocracy is what has made the business school into such an effective, and dangerous, institution.

We can see how this works if we look a bit more closely at the business-school curriculum and how it is taught. Take finance, for instance. This is a field concerned with understanding how people with money invest it. It assumes that there are people with money or capital that can be used as security for money, and hence it also assumes substantial inequalities of income and wealth. The greater the inequalities within any given society, the greater the interest in finance, as well as the market in luxury yachts. Finance academics almost always assume that earning rent on capital (however it was acquired) is a legitimate and perhaps even praiseworthy activity, with skilful investors being lionised for their technical skills and success. The purpose of this form of knowledge is to maximise the rent from wealth, often by developing mathematical or legal mechanisms that can multiply it. Successful financial strategies are those that produce the maximum return in the shortest period, and hence that further exacerbate the social inequalities that made them possible in the first place.

Or consider human resource management. This field applies theories of rational egoism – roughly the idea that people act according to rational calculations about what will maximise their own interest – to the management of human beings in organisations. The name of the field is telling, since it implies that human beings are akin to technological or financial resources insofar as they are an element to be used by management in order to produce a successful organisation. Despite its use of the word, human resource management is not particularly interested in what it is like to be a human being. Its object of interest are categories – women, ethnic minorities, the underperforming employee – and their relationship to the functioning of the organisation. It is also the part of the business school most likely to be dealing with the problem of organised resistance to management strategies, usually in the form of trade unions. And in case it needs saying, human resource management is not on the side of the trade union. That would be partisan. It is a function which, in its most ambitious manifestation, seeks to become “strategic”, to assist senior management in the formulation of their plans to open a factory here, or close a branch office there.

A similar kind of lens could be applied to other modules found in most business schools – accounting, marketing, international business, innovation, logistics – but I’ll conclude with business ethics and corporate social responsibility – pretty much the only areas within the business school that have developed a sustained critique of the consequences of management education and practice. These are domains that pride themselves on being gadflies to the business school, insisting that its dominant forms of education, teaching and research require reform. The complaints that propel writing and teaching in these areas are predictable but important – sustainability, inequality, the production of graduates who are taught that greed is good.

The problem is that business ethics and corporate social responsibility are subjects used as window dressing in the marketing of the business school, and as a fig leaf to cover the conscience of B-school deans – as if talking about ethics and responsibility were the same as doing something about it. They almost never systematically address the simple idea that since current social and economic relations produce the problems that ethics and corporate social responsibility courses treat as subjects to be studied, it is those social and economic relations that need to be changed.

You might well think that each of these areas of research and teaching are innocuous enough in themselves, and collectively they just appear to cover all the different dimensions of business activity – money, people, technology, transport, selling and so on. But it is worth spelling out the shared assumptions of every subject studied at business school.

The first thing that all these areas share is a powerful sense that market managerial forms of social order are desirable. The acceleration of global trade, the use of market mechanisms and managerial techniques, the extension of technologies such as accounting, finance and operations are not routinely questioned. This is a progressive account of the modern world, one that relies on the promise of technology, choice, plenty and wealth. Within the business school, capitalism is assumed to be the end of history, an economic model that has trumped all the others, and is now taught as science, rather than ideology.
The second is the assumption that human behaviour – of employees, customers, managers and so on – is best understood as if we are all rational egoists. This provides a set of background assumptions that allow for the development of models of how human beings might be managed in the interests of the business organisation. Motivating employees, correcting market failures, designing lean management systems or persuading consumers to spend money are all instances of the same sort of problem. The foregrounded interest here is that of the person who wants control, and the people who are the objects of that interest can then be treated as people who can be manipulated.

The final similarity I want to point to concerns the nature of the knowledge being produced and disseminated by the business school itself. Because it borrows the gown and mortarboard of the university, and cloaks its knowledge in the apparatus of science – journals, professors, big words – it is relatively easy to imagine that the knowledge the business school sells and the way that it sells it somehow less vulgar and stupid than it really is.

The easiest summary of all of the above, and one that would inform most people’s understandings of what goes on in the B-school, is that they are places that teach people how to get money out of the pockets of ordinary people and keep it for themselves. In some senses, that’s a description of capitalism, but there is also a sense here that business schools actually teach that “greed is good”. As Joel M Podolny, the former dean of Yale School of Management, once opined: “The way business schools today compete leads students to ask, ‘What can I do to make the most money?’ and the manner in which faculty members teach allows students to regard the moral consequences of their actions as mere afterthoughts.”

 

Illustration: Michael Kirkham

This picture is, to some extent, backed up by research, although some of this is of dubious quality. There are various surveys of business-school students that suggest that they have an instrumental approach to education; that is to say, they want what marketing and branding tells them that they want. In terms of the classroom, they expect the teaching of uncomplicated and practical concepts and tools that they deem will be helpful to them in their future careers. Philosophy is for the birds.

As someone who has taught in business schools for decades, this sort of finding doesn’t surprise me, though others suggest rather more incendiary findings. One US survey compared MBA students to people who were imprisoned in low-security prisons and found that the latter were more ethical. Another suggested that the likelihood of committing some form of corporate crime increased if the individual concerned had experience of graduate business education, or military service. (Both careers presumably involve absolving responsibility to an organisation.) Other surveys suggest that students come in believing in employee wellbeing and customer satisfaction and leave thinking that shareholder value is the most important issue, and that business-school students are more likely to cheat than students in other subjects.

Whether the causes and effects (or indeed the findings) are as neat as surveys like this might suggest is something that I doubt, but it would be equally daft to suggest that the business school has no effect on its graduates. Having an MBA might not make a student greedy, impatient or unethical, but both the B-school’s explicit and hidden curriculums do teach lessons. Not that these lessons are acknowledged when something goes wrong, because then the business school usually denies all responsibility. That’s a tricky position, though, because, as a 2009 Economist editorial put it, “You cannot claim that your mission is to ‘educate the leaders who make a difference to the world’ and then wash your hands of your alumni when the difference they make is malign”.

After the 2007 crash, there was a game of pass-the-blame-parcel going on, so it’s not surprising that most business-school deans were also trying to blame consumers for borrowing too much, the bankers for behaving so riskily, rotten apples for being so bad and the system for being, well, the system. Who, after all, would want to claim that they merely taught greed?

The sorts of doors to knowledge we find in universities are based on exclusions. A subject is made up by teaching this and not that, about space (geography) and not time (history), about collectives of people (sociology) and not about individuals (psychology), and so on. Of course, there are leakages and these are often where the most interesting thinking happens, but this partitioning of the world is constitutive of any university discipline. We cannot study everything, all the time, which is why there are names of departments over the doors to buildings and corridors.

However, the B-school is an even more extreme case. It is constituted through separating commercial life from the rest of life, but then undergoes a further specialisation. The business school assumes capitalism, corporations and managers as the default form of organisation, and everything else as history, anomaly, exception, alternative. In terms of curriculum and research, everything else is peripheral.

Most business schools exist as parts of universities, and universities are generally understood as institutions with responsibilities to the societies they serve. Why then do we assume that degree courses in business should only teach one form of organisation – capitalism – as if that were the only way in which human life could be arranged?

The sort of world that is being produced by the market managerialism that the business school sells is not a pleasant one. It’s a sort of utopia for the wealthy and powerful, a group that the students are encouraged to imagine themselves joining, but such privilege is bought at a very high cost, resulting in environmental catastrophe, resource wars and forced migration, inequality within and between countries, the encouragement of hyper-consumption as well as persistently anti-democratic practices at work.

Selling the business school works by ignoring these problems, or by mentioning them as challenges and then ignoring them in the practices of teaching and research. If we want to be able to respond to the challenges that face human life on this planet, then we need to research and teach about as many different forms of organising as we are able to collectively imagine. For us to assume that global capitalism can continue as it is means to assume a path to destruction. So if we are going to move away from business as usual, then we also need to radically reimagine the business school as usual. And this means more than pious murmurings about corporate social responsibility. It means doing away with what we have, and starting again.

From inboxing to thought showers: how business bullshit took over

Andre Spicer in The Guardian

In early 1984, executives at the telephone company Pacific Bell made a fateful decision. For decades, the company had enjoyed a virtual monopoly on telephone services in California, but now it was facing a problem. The industry was about to be deregulated, and Pacific Bell would soon be facing tough competition.

The management team responded by doing all the things managers usually do: restructuring, downsizing, rebranding. But for the company executives, this wasn’t enough. They worried that Pacific Bell didn’t have the right culture, that employees did not understand “the profit concept” and were not sufficiently entrepreneurial. If they were to compete in this new world, it was not just their balance sheet that needed an overhaul, the executives decided. Their 23,000 employees needed to be overhauled as well.

The company turned to a well-known organisational development specialist, Charles Krone, who set about designing a management-training programme to transform the way people thought, talked and behaved. The programme was based on the ideas of the 20th-century Russian mystic George Gurdjieff. According to Gurdjieff, most of us spend our days mired in “waking sleep”, and it is only by shedding ingrained habits of thinking that we can liberate our inner potential. Gurdjieff’s mystical ideas originally appealed to members of the modernist avant garde, such as the writer Katherine Mansfield and the architect Frank Lloyd Wright. More than 60 years later, senior executives at Pacific Bell were likewise seduced by Gurdjieff’s ideas. The company planned to spend $147m (£111m) putting their employees through the new training programme, which came to be known as Kroning.

Over the course of 10 two-day sessions, staff were instructed in new concepts, such as “the law of three” (a “thinking framework that helps us identify the quality of mental energy we have”), and discovered the importance of “alignment”, “intentionality” and “end-state visions”. This new vocabulary was designed to awake employees from their bureaucratic doze and open their eyes to a new higher-level consciousness. And some did indeed feel like their ability to get things done had improved.

But there were some unfortunate side-effects of this heightened corporate consciousness. First, according to one former middle manager, it was virtually impossible for anyone outside the company to understand this new language the employees were speaking. Second, the manager said, the new language “led to a lot more meetings” and the sheer amount of time wasted nurturing their newfound states of higher consciousness meant that “everything took twice as long”. “If the energy that had been put into Kroning had been put to the business at hand, we all would have gotten a lot more done,” said the manager.

Although Kroning was packaged in the new-age language of psychic liberation, it was backed by all the threats of an authoritarian corporation. Many employees felt they were under undue pressure to buy into Kroning. For instance, one manager was summoned to her superior’s office after a team member walked out of a Kroning session. She was asked to “force out or retire” the rebellious employee.

Some Pacific Bell employees wrote to their congressmen about Kroning. Newspapers ran damning stories with headlines such as “Phone company dabbles in mysticism”. The Californian utility regulator launched a public inquiry, and eventually closed the training course, but not before $40m dollars had been spent.

During this period, a young computer programmer at Pacific Bell was spending his spare time drawing a cartoon that mercilessly mocked the management-speak that had invaded his workplace. The cartoon featured a hapless office drone, his disaffected colleagues, his evil boss and an even more evil management consultant. It was a hit, and the comic strip was syndicated in newspapers across the world. The programmer’s name was Scott Adams, and the series he created was Dilbert. You can still find these images pinned up in thousands of office cubicles around the world today.

Although Kroning may have been killed off, Kronese has lived on. The indecipherable management-speak of which Charles Krone was an early proponent seems to have infected the entire world. These days, Krone’s gobbledygook seems relatively benign compared to much of the vacuous language circulating in the emails and meeting rooms of corporations, government agencies and NGOs. Words like “intentionality” sound quite sensible when compared to “ideation”, “imagineering”, and “inboxing” – the sort of management-speak used to talk about everything from educating children to running nuclear power plants. This language has become a kind of organisational lingua franca, used by middle managers in the same way that freemasons use secret handshakes – to indicate their membership and status. It echoes across the cubicled landscape. It seems to be everywhere, and refer to anything, and nothing.

It hasn’t always been this way. A certain amount of empty talk is unavoidable when humans gather together in large groups, but the kind of bullshit through which we all have to wade every day is a remarkably recent creation. To understand why, we have to look at how management fashions have changed over the past century or so.

In the late 18th century, firms were owned and operated by businesspeople who tended to rely on tradition and instinct to manage their employees. Over the next century, as factories became more common, a new figure appeared: the manager. This new class of boss faced a big problem, albeit one familiar to many people who occupy new positions: they were not taken seriously. To gain respect, managers assumed the trappings of established professions such as doctors and lawyers. They were particularly keen to be seen as a new kind of engineer, so they appropriated the stopwatches and rulers used by them. In the process, they created the first major workplace fashion: scientific management.

Charlie Chaplin ‘satirising the cult of scientific management’ in 1936 film Modern Times. Photograph: Allstar/Cinetext

Firms started recruiting efficiency experts to conduct time-and-motion studies. After recording every single movement of a worker in minute detail, the time-and-motion expert would rearrange the worker’s performance of tasks into a more efficient order. Their aim was to make the worker into a well-functioning machine, doing each part of the job in the most efficient way. Scientific management was not limited to the workplaces of the capitalist west – Stalin pushed for similar techniques to be imposed in factories throughout the Soviet Union.

Workers found the new techniques alien, and a backlash inevitably followed. Charlie Chaplin famously satirised the cult of scientific management in his 1936 film Modern Times, which depicts a factory worker who is slowly driven mad by the pressures of life on the production line.

As scientific management became increasingly unpopular, executives began casting around for alternatives. They found inspiration in a famous series of experiments conducted by psychologists in the 1920s at the Hawthorne Works, a factory complex in Illinois where tens of thousands of workers were employed by Western Electric to make telephone equipment. A team of researchers from Harvard had initially set out to discover whether changes in environment, such as adjusting the lighting or temperature, could influence how much workers produced each day.

To their surprise, the researchers found that no matter how light or dark the workplace was, employees continued to work hard. The only thing that seemed to make a difference was the amount of attention that workers got from the experimenters. This insight led one of the researchers, an Australian psychologist called Elton Mayo, to conclude that what he called the “human aspects” of work were far more important than “environmental” factors. While this may seem obvious, it came as news to many executives at the time.

As Mayo’s ideas caught hold, companies attempted to humanise their workplaces. They began talking about human relationships, worker motivation and group dynamics. They started conducting personality testing and running teambuilding exercises: all in the hope of nurturing good human relations in the workplace.

This newfound interest in the human side of work did not last long. During the second world war, as the US and UK military invested heavily in trying to make war more efficient, management fashions began to shift. A bright young Berkeley graduate called Robert McNamara led a US army air forces team that used statistics to plan the most cost-effective way to flatten Japan in bombing campaigns. After the war, many military leaders brought these new techniques into the corporate world. McNamara, for instance, joined the Ford Motor Company, rising quickly to become its CEO, while the mathematical procedures that he had developed during the war were enthusiastically taken up by companies to help plan the best way to deliver cheese, toothpaste and Barbie dolls to American consumers. Today these techniques are known as supply-chain management.

During the postwar years, the individual worker once again became a cog in a large, hierarchical machine. While many of the grey-suited employees at these firms savoured the security, freedom and increasing affluence that their work brought, many also complained about the deep lack of meaning in their lives. The backlash came in the late 1960s, as the youth movement railed against the conformity demanded by big corporations. Protesters sprayed slogans such as “live without dead time” and “to hell with boundaries” on to city walls around the world. They wanted to be themselves, express who they really were, and not have to obey “the Man”.

In response to this cultural change, in the 1970s, management fashions changed again. Executives began attending new-age workshops to help them “self actualise” by unlocking their hidden “human potential”. Companies instigated “encounter groups”, in which employees could explore their deeper inner emotions. Offices were redesigned to look more like university campuses than factories.

Mad Men’s liberated adman Don Draper (Jon Hamm). Photograph: Courtesy of AMC/AMC

Nowhere is this shift better captured than in the final episode of the television series Mad Men. Don Draper had been the exemplar of the organisational man, wearing a standard-issue grey suit when we met him at the beginning of the show’s first series. After suffering numerous breakdowns over the intervening years, he finds himself at the Esalen institute in northern California, the home of the human potential movement. Initially, Draper resists. But soon he is sitting in a confessional circle, sobbing as he tells his story. His personal breakthrough leads him to take up meditating and chanting, looking out over the Pacific Ocean. The result of Don Draper’s visit to Esalen isn’t just personal transformation. The final scene shows the now-liberated adman’s new creation – an iconic Coca-Cola commercial in which a multiracial group of children stand on a hilltop singing about how they would like to buy the world a Coke and drink it in perfect harmony.

After the fictional Don Draper visited Esalen, work became a place you could go to find yourself. Corporate mission statements now sounded like the revolutionary graffiti of the 1960s. The company training programme run by Charles Krone at Pacific Bell came straight from the Esalen playbook.

Since new-age ideas first permeated the workplace in the 1970s, the spin cycle of management-speak has sped up. During the 1980s, management experts went in search of fresh ideas in Japan. Management became a kind of martial art, with executives visiting “quality dojos” to earn “lean black-belts”. In their 1982 bestseller, In Search of Excellence, Tom Peters and Robert Waterman – both employees of McKinsey, the huge management consultancy agency – recommended that firms foster the same commitment to the company that they found among Honda employees in Japan. The book included the story of one Japanese employee who happens upon a damaged Honda on a public street. He stops and immediately begins repairing the car. The reason? He can’t bear to see a Honda that isn’t perfect.

While McKinsey consultants were mining the wisdom of the east, the ideas of Harvard Business School’s Michael Jensen started to find favour among Wall Street financiers. Jensen saw the corporation as a portfolio of assets. Even people – labelled as “human resources” – were part of this portfolio. Each company existed to create returns for shareholders, and if managers failed to do this, they should be fired. If a company didn’t generate adequate returns, it should be broken up and sold off. Every little part of the company was seen as a business. Seduced by this view, many organisations started creating “internal markets”. In the 1990s, under director general John Birt, the BBC created a system in which everything from time in a recording studio to toilet cleaning was traded on a complex internal market. The number of accountants working for the broadcaster exploded, while people who created TV and radio shows were laid off.

As companies have become increasingly ravenous for the latest management fad, they have also become less discerning. Some bizarre recent trends include equine-assisted coaching (“You can lead people, but can you lead a horse?”) and rage rooms (a room where employees can go to take out their frustrations by smashing up office furniture, computers and images of their boss).

A century of management fads has created workplaces that are full of empty words and equally empty rituals. We have to live with the consequences of this history every day. Consider a meeting I recently attended. During the course of an hour, I recorded 64 different nuggets of corporate claptrap. They included familiar favourites such as “doing a deep dive”, “reaching out”, and “thought leadership”. There were also some new ones I hadn’t heard before: people with “protected characteristics” (anyone who wasn’t a white straight guy), “the aha effect” (realising something), “getting our friends in the tent” (getting support from others).

After the meeting, I found myself wondering why otherwise smart people so easily slipped into this kind of business bullshit. How had this obfuscatory way of speaking become so successful? There are a number of familiar and credible explanations. People use management-speak to give the impression of expertise. The inherent vagueness of this language also helps us dodge tough questions. Then there is the simple fact that even if business bullshit annoys many people, in most work situations we try our hardest to be polite and avoid confrontation. So instead of causing a scene by questioning the bullshit flying around the room, I followed the example of Simon Harwood, the director of strategic governance in the BBC’s self-satirising TV sitcom W1A. I used his standard response to any idea – no matter how absurd – “hurrah”.

Still, these explanations did not seem to fully account for the conquest of bullshit. I came across one further explanation in a short article by the anthropologist David Graeber. As factories producing goods in the west have been dismantled, and their work outsourced or replaced with automation, large parts of western economies have been left with little to do. In the 1970s, some sociologists worried that this would lead to a world in which people would need to find new ways to fill their time. The great tragedy for many is that just the opposite seems to have happened.

Simon Harwood (Jason Watkins, centre) of W1A, the BBC’s fictional director of strategic governance. Photograph: Jack Barnes/BBC

At the very point when work seemed to be withering away, we all became obsessed with it. To be a good citizen, you need to be a productive citizen. There is only one problem, of course: there is less than ever that actually needs to be produced. As Graeber pointed out, the answer has come in the form of what he calls “bullshit jobs”. These are jobs in which people experience their work as “utterly meaningless, contributing nothing to the world”. In a YouGov poll conducted in 2015, 37% of respondents in the UK said their job made no meaningful contribution to the world. But people working in bullshit jobs need to do something. And that something is usually the production, distribution and consumption of bullshit. According to a 2014 survey by the polling agency Harris, the average US employee now spends 45% of their working day doing their real job. The other 55% is spent doing things such as wading through endless emails or attending pointless meetings. Many employees have extended their working day so they can stay late to do their “real work”.

One thing continued to puzzle me: why was it that so many people were paid to do this kind of empty work. One reason that David Graeber gives, in his book The Utopia of Rules, is rampant bureaucracy: there are more forms to be filled in, procedures to be followed and standards to be complied with than ever. Today, bureaucracy comes cloaked in the language of change. Organisations are full of people whose job is to create change for no real reason.

Manufacturing hollow change requires a constant supply of new management fads and fashions. Fortunately, there is a massive industry of business bullshit merchants who are quite happy to supply it. For each new change, new bullshit is needed. Looking back over the list of business bullshit I had noted down during the meeting, I realised that much of it was directly related to empty new bureaucratic initiatives, which were seen as terribly urgent, but would probably be forgotten about in a few years’ time.

One of the corrosive effects of business bullshit can be seen in the statistic that 43% of all teachers in England are considering quitting in the next five years. The most frequently cited reasons are increasingly heavy workloads caused by excessive administration, and a lack of time and space to devote to educating students. A remarkably similar picture appears if you look at the healthcare sector: in the UK, 81% of senior doctors say they are considering retiring from their job early; 57% of GPs are considering leaving the profession; 66% of nurses say they would quit if they could. In each case, the most frequently cited reason is stress caused by increasing managerial demands, and lack of time to do their job properly.

It is not just employees who feel overwhelmed. During the 1980s, when Kroning was in full swing, empty management-speak was confined to the beige meeting rooms of large corporations. Now, it has seeped into every aspect of life. Politicians use business balderdash to avoid grappling with important issues. The machinery of state has also come down with the word-virus. The NHS is crawling with “quality sensei”, “lean ninjas”, and “blue-sky thinkers”. Even schools are flooded with the latest business buzzwords like “grit”, “flipped learning” and “mastery”. Naturally, the kids are learning fast. One teacher recalled how a seven-year-old described her day at school: “Well, when we get to class, we get out our books and start on our non-negotiables.”

In the introduction to his 2015 book, Trust Me, PR Is Dead, the former PR executive Robert Phillips tells a fascinating story. One day he was called up by the CEO of a global corporation. The CEO was worried. A factory which was part of his firm’s supply chain had caught fire and 100 women had burned to death. “My chairman’s been giving me grief,” said the CEO. “He thinks we’re failing to get our message across. We are not emphasising our CSR [corporate social responsibility] credentials well enough.” Phillips responded: “While 100 women’s bodies are still smouldering?” The CEO was “struggling to contain both incredulity and temper”. “I know,” he said. “Please help.” Phillips responded: “You start with actions, not words.”

In many ways, this one interaction tells us how bullshit is used in corporate life. Individual executives facing a problem know that turning to bullshit is probably not the best idea. However, they feel compelled. The problem is that such compulsions often cloud people’s best judgements. They start to think empty words will trump reasonable reflection and considered action. Sadly, in many contexts, empty words win out.

If we hope to improve organisational life – and the wider impact that organisations have on our society – then a good place to start is by reducing the amount of bullshit our organisations produce. Business bullshit allows us to blather on without saying anything. It empties out language and makes us less able to think clearly and soberly about the real issues. As we find our words become increasingly meaningless, we begin to feel a sense of powerlessness. We start to feel there is little we can do apart from play along, benefit from the game and have the occasional laugh.

But this does not need to be the case. Business bullshit can and should be challenged. This is a task each of us can take up by refusing to use empty management-speak. We can stop ourselves from being one more conduit in its circulation. Instead of just rolling our eyes and checking our emails, we should demand something more meaningful.

Clearly, our own individual efforts are not enough. Putting management-speak in its place is going to require a collective effort. What we need is an anti-bullshit movement. It would be made up of people from all walks of life who are dedicated to rooting out empty language. It would question management twaddle in government, in popular culture, in the private sector, in education and in our private lives.

The aim would not just be bullshit-spotting. It would also be a way of reminding people that each of our institutions has its own language and rich set of traditions which are being undermined by the spread of the empty management-speak. It would try to remind people of the power which speech and ideas can have when they are not suffocated with bullshit. By cleaning out the bullshit, it might become possible to have much better functioning organisations and institutions and richer and fulfilling lives.