Showing posts with label wage. Show all posts
Showing posts with label wage. Show all posts
Monday 4 January 2021
Monday 20 February 2017
Cricket Captains aren't that important anymore. Same for high paid Business Leaders
Tim Wigmore in Cricinfo
It has been a seminal fortnight for the England cricket team. The country has a new Test match captain, and Joe Root's appointment could herald obvious changes to the team's approach, on and off the field. Yet whether the change of captaincy will have any positive or negative effect on results is an altogether different matter.
How much does individual leadership really matter? It's a question valid in cricket, sport and beyond.
"Being in charge isn't what it used to be," writes Moisés Naím in The End of Power. He shows how, for all the focus on the figureheads of teams, the powers of leaders are being eroded, in everything from business to politics and the military. "In the 21st century, power is easier to get, harder to use - and easier to lose," Naím says, arguing that, because of the digital revolution, the collapse of deference, and increased accountability within organisations, the powerful now face more limitations on their power than ever before. In the second half of the 20th century, weaker sides (in terms of soldiers and weapons) achieved their strategic goals in the majority of wars. The tenures of chief executives are becoming shorter, and those in charge also face more internal constraints on their power than ever before.
The most successful leaders have never been more venerated: the leadership-coaching industry is worth an estimated US$50 billion every year, brimming with corporate bigwigs attempting to learn the "lessons" of other leaders' success. Yet there is no real evidence of the enduring superstar qualities of those who cash in. Award-winning chief executives subsequently underperform, both against their own performance and against non-prize-winning CEOs, as research by Ulrike Malmendier and Geoffrey Tate shows. A lot of the lauded CEOs' previous success, in other words, might have been simply luck, and their subsequent underperformance regression to the mean.
The obsession with leadership extends to sport, yet leaders' power is being reduced here also. "In early-modern sports - the late 19th century - there was little or no coaching and hence the captain on the field had a significant leadership role to play," explains the sports economist and historian Stefan Szymanski. "As sport became more organised and coaching strategy developed, the role of the captain on the field diminished."
Compared with other sports, cricket is unusual in giving as much power to the captain as it does. Yet the cricket captain has not been immune to the wider erosion in the importance of leadership across sport. "The role is declining as the potential of coaches to add analytical support based on data analysis has increased," Szymanski says.
It is instructive to compare the responsibility of Mike Brearley to that of Root today. While Root will be supported by a coterie of coaches, physiologists and analysts, Brearley operated before the modern coach, and had to oversee warming up and stretching before each day. In the days of amateurism, captains even had to motivate amateurs to play at all. Today the captain is far more important in club cricket, where they have no coaches to aid them and often face an arduous task to even get a full team together, than in the professional game.
The power of individual coaches has also been diminished, because the responsibilities that were once the preserve of one man are now divided up among a multitude of personnel. In international cricket teams today, what were, 25 years ago, the sole functions of the coach are now divided up among what often amounts to a 2nd XI of support staff.
While the narrative of football's Premier League now revolves around managers, each result explored through the prism of their success or failure, perhaps they have never mattered less. In the 1930s, Arsenal manager Herbert Chapman not merely coached innovatively but led Arsenal to introduce numbered shirts, and build floodlights and a new stand. Unless they are named Arsene Wenger, the average Premier League manager now lasts a year in the job. Given the complexities of modern sport, there is a limit to what they can do. Indeed, studies of poorly performing clubs find that performances improve by an almost identical amount whether or not a new manager is appointed. The new boss, then, is rarely much better or worse than the old boss.
The book Soccernomics finds a 90% correlation between wage bills and league finishes over a ten-year period; just 10% of top-flight managers consistently overachieve when wages are factored into account. So, brilliant leadership can make a difference, but only in exceptional cases. It was not merely modesty that led Yogi Berra, when asked what made a great baseball coach, to reply: "A great ball team."
Joe Root will enjoy the services of several coaches, analysts and managers in his role as England's Test captain, thereby diffusing his leadership responsibilities © Getty Images
The captain in golf's Ryder Cup has a job akin to the coach in other sports. It offers a prime example of how narratives are constructed around the leader, assigning them more power than they really have. In The Captain Myth, Richard Gillis explores how victories or defeats are retrospectively explained through a captain's mistakes or shrewd decisions. Every match must consist of a Good Captain and Bad Captain, and the Good Captain is always the victor. The trouble with this simplistic narrative is that, as Paul Azinger, who led the US to victory in the 2008 Ryder Cup, reflects, "There have been some captains who have micro-managed everything and lost. There have been captains who were drunk every night and won. There is no blueprint on winning."
There is a paradox to leadership in modern sport. Leaders have never faced more scrutiny - but most have never had less power. Professionalism and the explosion of money in sport means that decisions once the sole preserve of a captain or head coach are now influenced by dozens of others behind the scenes: specialist coaches, performance analysts who mine data, dieticians, psychologists and those responsible for nurturing academy players. Perhaps the cricket team that has performed most above themselves in recent years is Northamptonshire in the T20 Blast. Reaching three finals in four years has not just been a triumph for Alex Wakely's astute captaincy, but also for the coaching staff, the data analyst, the physio and all those involved in player recruitment.
The reluctance to recognise the limits of leadership has deep roots. We are a storytelling species. People make for much better stories than underlying, impersonal factors; Soccernomics shows that success in international football can broadly be explained by three factors - population size, GDP, and experience playing the sport - that have nothing to do with leadership. In The Captain Myth, Gillis writes that, because of psychological biases "meshed with our obsession with celebrity, it's easy to understand how the captain has become such a prominent figure in the sports world". In cricket, he tells me that "the decisions of the captain can be significant, but the relationship between the decisions and the outcome is not linear, it's far messier than that, and makes a far less enjoyable tale".
As much as coaches and fans crave inspirational leadership, in modern sport, with huge and complex professional structures to manage, perhaps it is easier for a single leader to make a negative difference than a positive one. "Good captaincy and coaching have far less of an impact on outcomes than bad captaincy and coaching does," believes Trent Woodhill, a leading T20 coach. Bad leadership can marginalise and disempower the backroom team, effectively preventing support staff from doing their jobs properly. Beyond sport, Naím believes that we are in an age of "heightened vulnerability to bad ideas and bad leaders". The analysis extends beyond sport. Disruptive technology has not only changed the nature of power, Naím believes, but also led to an age of "heightened vulnerability to bad ideas and bad leaders".
Root has captained in just four first-class games, yet this is in keeping with modern norms. That Virat Kohli, Steven Smith and Kane Williamson have all been successful after their appointments as captain, despite a derisory amount of prior leadership experience in professional sport, suggests that captaincy experience - and, by implication, captaincy skill - is simply not that important. The absence of specialist captains, at both domestic and international level, also reflects a recognition of the limits of what a skipper can achieve.
"Playing in the middle and understanding the demands is more important than captaincy," Andrew Strauss said when Root was unveiled. The greatest potential boon of a Root captaincy lies not in a new culture he might create, or more enterprising leadership, but the possibility of greater run-scoring: if Alastair Cook is reinvigorated without the leadership, while, in keeping with recent England captains, Root's own batting initially enjoys an upswing.
Leadership is not irrelevant. Occasionally cricketers are particularly suited to a leadership role - Brearley, Graeme Smith, or Misbah-ul-Haq, say; some, like Kevin Pietersen, might be the opposite. But the overwhelming majority of captains are bunched in the middle - and, in any case, a captain's ability to do good is marginal, now more than ever. For all the tendency to focus on a team's figurehead, great leadership is a collective endeavour, and operates against wider limitations. Perhaps this is why Strauss is so unperturbed by Root's lack of captaincy experience. Only rarely does the identity of a captain really matter.
It has been a seminal fortnight for the England cricket team. The country has a new Test match captain, and Joe Root's appointment could herald obvious changes to the team's approach, on and off the field. Yet whether the change of captaincy will have any positive or negative effect on results is an altogether different matter.
How much does individual leadership really matter? It's a question valid in cricket, sport and beyond.
"Being in charge isn't what it used to be," writes Moisés Naím in The End of Power. He shows how, for all the focus on the figureheads of teams, the powers of leaders are being eroded, in everything from business to politics and the military. "In the 21st century, power is easier to get, harder to use - and easier to lose," Naím says, arguing that, because of the digital revolution, the collapse of deference, and increased accountability within organisations, the powerful now face more limitations on their power than ever before. In the second half of the 20th century, weaker sides (in terms of soldiers and weapons) achieved their strategic goals in the majority of wars. The tenures of chief executives are becoming shorter, and those in charge also face more internal constraints on their power than ever before.
The most successful leaders have never been more venerated: the leadership-coaching industry is worth an estimated US$50 billion every year, brimming with corporate bigwigs attempting to learn the "lessons" of other leaders' success. Yet there is no real evidence of the enduring superstar qualities of those who cash in. Award-winning chief executives subsequently underperform, both against their own performance and against non-prize-winning CEOs, as research by Ulrike Malmendier and Geoffrey Tate shows. A lot of the lauded CEOs' previous success, in other words, might have been simply luck, and their subsequent underperformance regression to the mean.
The obsession with leadership extends to sport, yet leaders' power is being reduced here also. "In early-modern sports - the late 19th century - there was little or no coaching and hence the captain on the field had a significant leadership role to play," explains the sports economist and historian Stefan Szymanski. "As sport became more organised and coaching strategy developed, the role of the captain on the field diminished."
Compared with other sports, cricket is unusual in giving as much power to the captain as it does. Yet the cricket captain has not been immune to the wider erosion in the importance of leadership across sport. "The role is declining as the potential of coaches to add analytical support based on data analysis has increased," Szymanski says.
It is instructive to compare the responsibility of Mike Brearley to that of Root today. While Root will be supported by a coterie of coaches, physiologists and analysts, Brearley operated before the modern coach, and had to oversee warming up and stretching before each day. In the days of amateurism, captains even had to motivate amateurs to play at all. Today the captain is far more important in club cricket, where they have no coaches to aid them and often face an arduous task to even get a full team together, than in the professional game.
The power of individual coaches has also been diminished, because the responsibilities that were once the preserve of one man are now divided up among a multitude of personnel. In international cricket teams today, what were, 25 years ago, the sole functions of the coach are now divided up among what often amounts to a 2nd XI of support staff.
While the narrative of football's Premier League now revolves around managers, each result explored through the prism of their success or failure, perhaps they have never mattered less. In the 1930s, Arsenal manager Herbert Chapman not merely coached innovatively but led Arsenal to introduce numbered shirts, and build floodlights and a new stand. Unless they are named Arsene Wenger, the average Premier League manager now lasts a year in the job. Given the complexities of modern sport, there is a limit to what they can do. Indeed, studies of poorly performing clubs find that performances improve by an almost identical amount whether or not a new manager is appointed. The new boss, then, is rarely much better or worse than the old boss.
The book Soccernomics finds a 90% correlation between wage bills and league finishes over a ten-year period; just 10% of top-flight managers consistently overachieve when wages are factored into account. So, brilliant leadership can make a difference, but only in exceptional cases. It was not merely modesty that led Yogi Berra, when asked what made a great baseball coach, to reply: "A great ball team."
Joe Root will enjoy the services of several coaches, analysts and managers in his role as England's Test captain, thereby diffusing his leadership responsibilities © Getty ImagesThe captain in golf's Ryder Cup has a job akin to the coach in other sports. It offers a prime example of how narratives are constructed around the leader, assigning them more power than they really have. In The Captain Myth, Richard Gillis explores how victories or defeats are retrospectively explained through a captain's mistakes or shrewd decisions. Every match must consist of a Good Captain and Bad Captain, and the Good Captain is always the victor. The trouble with this simplistic narrative is that, as Paul Azinger, who led the US to victory in the 2008 Ryder Cup, reflects, "There have been some captains who have micro-managed everything and lost. There have been captains who were drunk every night and won. There is no blueprint on winning."
There is a paradox to leadership in modern sport. Leaders have never faced more scrutiny - but most have never had less power. Professionalism and the explosion of money in sport means that decisions once the sole preserve of a captain or head coach are now influenced by dozens of others behind the scenes: specialist coaches, performance analysts who mine data, dieticians, psychologists and those responsible for nurturing academy players. Perhaps the cricket team that has performed most above themselves in recent years is Northamptonshire in the T20 Blast. Reaching three finals in four years has not just been a triumph for Alex Wakely's astute captaincy, but also for the coaching staff, the data analyst, the physio and all those involved in player recruitment.
The reluctance to recognise the limits of leadership has deep roots. We are a storytelling species. People make for much better stories than underlying, impersonal factors; Soccernomics shows that success in international football can broadly be explained by three factors - population size, GDP, and experience playing the sport - that have nothing to do with leadership. In The Captain Myth, Gillis writes that, because of psychological biases "meshed with our obsession with celebrity, it's easy to understand how the captain has become such a prominent figure in the sports world". In cricket, he tells me that "the decisions of the captain can be significant, but the relationship between the decisions and the outcome is not linear, it's far messier than that, and makes a far less enjoyable tale".
As much as coaches and fans crave inspirational leadership, in modern sport, with huge and complex professional structures to manage, perhaps it is easier for a single leader to make a negative difference than a positive one. "Good captaincy and coaching have far less of an impact on outcomes than bad captaincy and coaching does," believes Trent Woodhill, a leading T20 coach. Bad leadership can marginalise and disempower the backroom team, effectively preventing support staff from doing their jobs properly. Beyond sport, Naím believes that we are in an age of "heightened vulnerability to bad ideas and bad leaders". The analysis extends beyond sport. Disruptive technology has not only changed the nature of power, Naím believes, but also led to an age of "heightened vulnerability to bad ideas and bad leaders".
Root has captained in just four first-class games, yet this is in keeping with modern norms. That Virat Kohli, Steven Smith and Kane Williamson have all been successful after their appointments as captain, despite a derisory amount of prior leadership experience in professional sport, suggests that captaincy experience - and, by implication, captaincy skill - is simply not that important. The absence of specialist captains, at both domestic and international level, also reflects a recognition of the limits of what a skipper can achieve.
"Playing in the middle and understanding the demands is more important than captaincy," Andrew Strauss said when Root was unveiled. The greatest potential boon of a Root captaincy lies not in a new culture he might create, or more enterprising leadership, but the possibility of greater run-scoring: if Alastair Cook is reinvigorated without the leadership, while, in keeping with recent England captains, Root's own batting initially enjoys an upswing.
Leadership is not irrelevant. Occasionally cricketers are particularly suited to a leadership role - Brearley, Graeme Smith, or Misbah-ul-Haq, say; some, like Kevin Pietersen, might be the opposite. But the overwhelming majority of captains are bunched in the middle - and, in any case, a captain's ability to do good is marginal, now more than ever. For all the tendency to focus on a team's figurehead, great leadership is a collective endeavour, and operates against wider limitations. Perhaps this is why Strauss is so unperturbed by Root's lack of captaincy experience. Only rarely does the identity of a captain really matter.
Friday 23 December 2016
Monday 19 December 2016
Don’t complain about the strikers – they’re only doing what we all should in 2017
Paul Mason in The Guardian
We seem to love the working class as long as it is a) white and b) passive. The real working class is neither. It is multi-ethnic and, from Southern Rail to British Airways, it is set to strike.
Predictably, the Conservatives are calling for more legal restrictions on strike action. Theresa May accused strikers of “contempt for ordinary people”. And – as always – the neck veins of TV reporters are bulging as they express outrage on behalf of those affected.
Union leader says No 10 demonising working people in strikes row
Yet, try as they might, the politicians and journalists have failed to stir up mob hatred against the strikers, some of whom – such as the Southern Rail drivers and guards – have been taking industrial action for weeks. And the reasons for this are obvious: they are ordinary people.
While the miners and steelworkers of the 1980s worked in relatively insular steel and mining towns, everybody knows a BA cabin steward, a train guard, a baggage handler or a Post Office counter worker. What’s more, because so much of our work has become modular, low-paid and deskilled, many people know, or can guess, exactly what they are going through.
We have near full employment yet near wage stagnation. The strikes taking place over Christmas are happening among workers who have not seen a pay rise for years. BA’s onboard customer service managers, for example, have been stripped of their union negotiation rights and had their pay frozen for six years.
One of the most pitiful things about the political class, and the economists who whisper certainties in their ear, is their distance from the actual experience of work. As trade union rights have become eroded throughout the private sector, and large chunks of the public sector become privatised, a culture of coercion has taken root at work.
A commuter protests in support of Southern Rail staff. at Victoria Station in London. Photograph: Andy Rain/EPA
It does not have to be as bad as the leading fast-food cafe chain where a secret shopper deducts the bonus of an entire shift if one person does not smile. But it is pervasive.
Generally, you are supposed to smile, supposed to exhibit happiness for your seven quid an hour, obey orders without question, to hit meaningless targets or scam them on the instruction of your line manager – and, increasingly, you’re supposed to pretend you are self-employed.
You can spend entire days, if you think about it, being served only by people with no actual employment status: the Uber driver, the hairdresser, the physiotherapist. Even businesses where you’re paying a limited company through your credit card now routinely require their “associates” to be self-empolyed.
The result looks like a fake-tan version of Downtown Abbey with all the same levels of deference but zero paternal responsibility. And deep down, people who work for a living understand the modern “contract” between worker and employer is barely worth the paper it is written on.
That’s why workers with union rights and relative job security use the strike weapon. It’s never pleasant. But every cabin worker at BA and Virgin knows that, without the unions, they would see their pension rights stolen and their conditions eroded to the same levels enjoyed by their counterparts at the budget airlines.
And what’s driving the attacks is always the same familiar, financial pressure. Public services, once privatised, are forced to enter a race to the bottom in terms of pay, conditions and pensions for their workers. Once financial logic overtakes the logic of providing a service as efficiently as possible, you get the stupidities of Southern Rail, which cut its services to passengers in order to provide itself with an achievable target.
Jeremy Corbyn has been condemned for failing to condemn the strikes – and for attending a Christmas party with the Aslef union. If it were up to me, Corbyn would actually throw a Christmas party, not just for the Aslef strikers but for all the workers toiling on basic pay, fictitious contracts and unachievable targets over the festive period.
Those of us in unions – and there are still millions of us – know they make a massive and positive difference. Because workers on London Underground are unionised, there is a guard at my local tube station who refuses to wear any other name badge than one with “Lenin” on it.
No 10 accuses striking workers of 'contempt for ordinary people'
Although I do not recommend this level of resistance for everybody, it is a physical symbol of the fact that unionised workers are people you do not mess around with.
The Southern strikers, the BA crews and the Post Office workers are showing a different side of what it means to express your collective identity at work. So did the junior doctors, whose determined action got them a better deal than their leaders originally thought they could achieve.
Coming on top of the strikes by Deliveroo riders and a union-led court victory for Uber drivers, these are signs that even the heavily casualised workforce of the 21st century will not suffer indignity for ever.
In economics, it has become common to hear that one of the main failings of the current system is wage stagnation; even the Bank of England would like to see more inflation. So don’t complain about the posties, train drivers, cabin crews and baggage handlers – they’re only doing what we all should in 2017.
Ask for a pay rise, defend your pension rights, insist that work conditions are respectful and safe – and demand your employer negotiates with a real trade union and pays the rate for the job.
We seem to love the working class as long as it is a) white and b) passive. The real working class is neither. It is multi-ethnic and, from Southern Rail to British Airways, it is set to strike.
Predictably, the Conservatives are calling for more legal restrictions on strike action. Theresa May accused strikers of “contempt for ordinary people”. And – as always – the neck veins of TV reporters are bulging as they express outrage on behalf of those affected.
Union leader says No 10 demonising working people in strikes row
Yet, try as they might, the politicians and journalists have failed to stir up mob hatred against the strikers, some of whom – such as the Southern Rail drivers and guards – have been taking industrial action for weeks. And the reasons for this are obvious: they are ordinary people.
While the miners and steelworkers of the 1980s worked in relatively insular steel and mining towns, everybody knows a BA cabin steward, a train guard, a baggage handler or a Post Office counter worker. What’s more, because so much of our work has become modular, low-paid and deskilled, many people know, or can guess, exactly what they are going through.
We have near full employment yet near wage stagnation. The strikes taking place over Christmas are happening among workers who have not seen a pay rise for years. BA’s onboard customer service managers, for example, have been stripped of their union negotiation rights and had their pay frozen for six years.
One of the most pitiful things about the political class, and the economists who whisper certainties in their ear, is their distance from the actual experience of work. As trade union rights have become eroded throughout the private sector, and large chunks of the public sector become privatised, a culture of coercion has taken root at work.
A commuter protests in support of Southern Rail staff. at Victoria Station in London. Photograph: Andy Rain/EPA
It does not have to be as bad as the leading fast-food cafe chain where a secret shopper deducts the bonus of an entire shift if one person does not smile. But it is pervasive.
Generally, you are supposed to smile, supposed to exhibit happiness for your seven quid an hour, obey orders without question, to hit meaningless targets or scam them on the instruction of your line manager – and, increasingly, you’re supposed to pretend you are self-employed.
You can spend entire days, if you think about it, being served only by people with no actual employment status: the Uber driver, the hairdresser, the physiotherapist. Even businesses where you’re paying a limited company through your credit card now routinely require their “associates” to be self-empolyed.
The result looks like a fake-tan version of Downtown Abbey with all the same levels of deference but zero paternal responsibility. And deep down, people who work for a living understand the modern “contract” between worker and employer is barely worth the paper it is written on.
That’s why workers with union rights and relative job security use the strike weapon. It’s never pleasant. But every cabin worker at BA and Virgin knows that, without the unions, they would see their pension rights stolen and their conditions eroded to the same levels enjoyed by their counterparts at the budget airlines.
And what’s driving the attacks is always the same familiar, financial pressure. Public services, once privatised, are forced to enter a race to the bottom in terms of pay, conditions and pensions for their workers. Once financial logic overtakes the logic of providing a service as efficiently as possible, you get the stupidities of Southern Rail, which cut its services to passengers in order to provide itself with an achievable target.
Jeremy Corbyn has been condemned for failing to condemn the strikes – and for attending a Christmas party with the Aslef union. If it were up to me, Corbyn would actually throw a Christmas party, not just for the Aslef strikers but for all the workers toiling on basic pay, fictitious contracts and unachievable targets over the festive period.
Those of us in unions – and there are still millions of us – know they make a massive and positive difference. Because workers on London Underground are unionised, there is a guard at my local tube station who refuses to wear any other name badge than one with “Lenin” on it.
No 10 accuses striking workers of 'contempt for ordinary people'
Although I do not recommend this level of resistance for everybody, it is a physical symbol of the fact that unionised workers are people you do not mess around with.
The Southern strikers, the BA crews and the Post Office workers are showing a different side of what it means to express your collective identity at work. So did the junior doctors, whose determined action got them a better deal than their leaders originally thought they could achieve.
Coming on top of the strikes by Deliveroo riders and a union-led court victory for Uber drivers, these are signs that even the heavily casualised workforce of the 21st century will not suffer indignity for ever.
In economics, it has become common to hear that one of the main failings of the current system is wage stagnation; even the Bank of England would like to see more inflation. So don’t complain about the posties, train drivers, cabin crews and baggage handlers – they’re only doing what we all should in 2017.
Ask for a pay rise, defend your pension rights, insist that work conditions are respectful and safe – and demand your employer negotiates with a real trade union and pays the rate for the job.
Friday 9 December 2016
Wolfgang Streeck: the German economist calling time on capitalism
Aditya Chakrabortty in The Guardian
Decadence… Caravaggio’s Boy Bitten by a Lizard. Photograph: The National Gallery London
You don’t merely look at a Caravaggio; you square up to one. The scenes are tightly cropped, with characters that jostle and stare at the viewer. Their mordancy is a tonic to Streeck, who laughs with delight. He pauses in front of Boy Bitten by a Lizard and admires how the lizard clings on with its teeth to the boy’s finger. At a scene of cardsharps he exclaims, “Feel the decadence! The threat of violence!”
He notes how many paintings date from just before the thirty years’ war: “They’re full of the anticipation that the world is about to fall apart.”
Then comes The Taking of Christ, a dark, dense painting that shows Jesus just after his betrayal by Judas. Gripped by his treacherous former disciple, Christ looks down, ready to be bundled off by the armoured Roman centurions. “Caravaggio is always there just before the explosion,” Streeck observes. “This morning might have been a Caravaggio moment: just before the election of Trump.”
Like Caravaggio before the explosion, Streeck has been hanging around this crash scene for years – long before the plane came hurtling down and the centrist politicians and pundits began rushing around.
At a time when macroeconomists have failed and other academics have retreated into disciplinary solipsism, Streeck is one of the few (other exceptions include Mark Blyth, Colin Crouch and the Centre for Research on Socio-Cultural Change) to have risen to the moment. Many of the themes that will define this year, this decade, are in his work. The breakup of Europe, the rise of plutocrat-populists such as Trump, the failures of Mark Carney and the technocratic elite: he has anatomised all of them.
Why should oligarchs be interested in their countries’ democratic stability if, apparently, they can be rich without it?
This summer, Britons mutinied against their government, their experts and the EU – and consigned themselves to a poorer, angrier future. Such frenzies of collective self-harm were explained by Streeck in the 2012 lectures later collected in Buying Time:
Professionalised political science tends to underestimate the impact of moral outrage. With its penchant for studied indifference … [it] has nothing but elitist contempt for what it calls “populism”, sharing this with the power elites to which it would like to be close … [But] citizens too can “panic” and react “irrationally”, just like financial investors … even though they have no banknotes as arguments but only words and (who knows?) paving stones.
Here he is in 2013, foreshadowing the world of LuxLeaks, SwissLeaks and the Panama Papers and their revelations of a one-sided class war – by the 1% against the rest of us:
Why should the new oligarchs be interested in their countries’ future productive capacities and present democratic stability if, apparently, they can be rich without it, processing back and forth the synthetic money produced for them at no cost by a central bank for which the sky is the limit, at each stage diverting from it hefty fees and unprecedented salaries, bonuses, and profits as long as it is forthcoming – and then leave their country to its remaining devices and withdraw to some privately owned island?
And in a 2015 essay, he warns that resentment against such elites will not be wholesomely Fabian but will instead take the form either of “public entertainment” or “some politically regressive sort of nationalism”. It will look less like Hillary than Donald:
Politicization is migrating to the right side of the political spectrum where anti-establishment parties are getting better and better at organising discontented citizens dependent upon public services and insisting on political protection from international markets.
In such long, precise, comfortless sentences, Streeck sets out the crises facing Britain, the US and the continent. His diagnosis is both political and economic, and it makes him what Chris Bickerton, a lecturer in politics at Cambridge, thinks might be “the most interesting person around today on the subject of the relationship between democracy and capitalism”.
Lehman Brothers headquarters in New York’s Times Square, 2008. Photograph: Mark Lennihan/AP
Which makes him the most interesting person on the most urgent subject of our times. Eight years after Lehman Brothers keeled over and nearly took the entire banking system down with it, capitalism remains broken. British workers are suffering their most severe pay squeeze in at least seven decades. And even though politicians and the policymakers have pulled on every lever – cuts, investment, housing boom, hundreds of billions pumped into the markets – still the engine refuses to purr. The failure is international: the Bank of International Settlements, the central banks’ central bank, warned a few months ago that “the global economy seems unable to return to sustainable and balanced growth”.
Not for the first time, the sandwich board-wearers are declaring the end of capitalism – but today Streeck believes they are right. In its deepest crises, he says, modern capitalism has relied on its enemies to wade in with the lifebelt of reform. During the Great Depression of the 30s, it was FDR’s Democrats who rolled out the New Deal, while Britain’s trade unionists allied with Keynes.
Compare that with now. Over 40 years, neoliberal capitalism has destroyed its opposition. When Margaret Thatcher was asked to give her greatest achievement, she nominated “Tony Blair and New Labour. We forced our opponents to change their minds.” The prime minister who declared “There is no alternative”, then did her damnedest to extirpate any such alternative. The result? The unions are withered, the independent tenants’ associations have disappeared along with the stock of council housing, the BBC is forever on the back foot, and local, regional and national newspapers are now the regular subjects of obituaries. A similar story can be told across the rich world.
Public discontent is fitful and fragmented, ready to fall into Trump’s tiny hands. Meanwhile, capitalism – unrestrained and unreformed – will die.
This isn’t the violent overthrow envisaged by Marx and Engels. In The Communist Manifesto, they argued that capitalism’s “gravediggers” would be the proletariat. Nearly 170 years later, Streeck is predicting that the capitalists will be their own gravediggers, through having destroyed the workers and the dissidents they needed to maintain the system. What comes next is not some better replacement but is more akin to the centuries-long rotting away of the Roman empire.
And, yes, his latest book is out just in time for Christmas. Not so long ago, such catastrophism would have been the stuff of Speakers’ Corner. Today, it goes right to the brokenness of politics.
Streeck is admired by the team around Jeremy Corbyn and John McDonnell, and was invited to this year’s Labour conference in Liverpool (work commitments forced him to decline). One senior adviser described his relevance to British politics thus: “He is pretty blunt about how serious the situation is, for social democracy and capitalism.”
That we could modify capitalism towards equality and tame the beast – now those are utopian ideals
What gives Streeck’s analysis extra force is that he comes from the very establishment he now attacks. He has played many key roles: joint head of Germany’s top social science institute, an adviser in the late 90s to Gerhard Schröder’s government, one of Europe’s most eminent theorists of capitalism. While never a Third Way-er, he was friendly with David and Ed Miliband.
“I spent a long time in my life exploring the possibilities for an intelligent social democratic solution of the class conflict,” he explains over lunch. “The idea that we could modify capitalism towards equality and social justice. That we could tame the beast. Now I think those are more or less utopian ideals.”
He is thus a case study in the very thing he writes about: the demoralisation of centrist politics – and its radicalisation.
The great disillusionment came upon returning to Germany in 1995, after years teaching industrial relations in the US. It was the era of Germany being labelled “the sick man of Europe”, when one in five east German workers were unemployed. Through the metalworkers’ trade union, Streeck was invited to join a committee of trade unions, employers and government. Called the Alliance for Jobs (Bündnis für Arbeit), its task was to reform labour laws. Streeck believed this was “the last call for trade unions and social democracy”: the final chance to get more people into work without stripping workers of their rights.
“We came up with a good model, but everything we proposed was blocked – not just by the employers but by the unions, too.”
The Alliance fell apart and within a couple of years, Schröder had brought in the Hartz reforms – policies drawn up by a former Volkswagen executive that set up a new regime of workfare and benefit sanctions, and kicked the bottom out of the labour market.
A member of the Social Democratic Party, Germany’s counterpart to Labour, since the age of 16, Streeck finally cancelled his subs a few years ago. Would he still place himself as a social democrat? He quotes Keynes: “When the facts change, I change my mind.” In another interview he has described “the most urgent task for the left” as “sobering up”.
The constant sobriety might prove wearing, were it not for his easy companionship. Listening back to the recording, the primary sound is Streeck’s laughter – that and “Jajaja!”, a Bren gun enthusiasm for any new idea or argument.
He also gives good gossip. A “power breakfast” with financial policymakers and investment bankers is dismissed as “clueless and so stereoptypical. They complained about the stupidity of the masses who didn’t understand the expertise that someone like Alan Greenspan was able to bring to central banking.” This is the same Greenspan who, as head of the US central bank in the bubble years, believed financiers could regulate themselves.
On this trip he went to a conference on Brexit. “I was shocked by the unanimous sense of guilt.” One former British ambassador “began by saying we have to apologise to our foreign friends for the vote to leave Europe. I said, ‘You ought to be happy to have sent a warning to the European Union.’”
He sees the support for Brexit and Trump as stemming from the same source. “You have a growing group of all people, who, under the impact of neoliberal internationalisation, have become increasingly excluded from the mainstream of their society.
Visions of London wealth … Canary wharf financial district. Photograph: DBURKE / Alamy/Alamy
“You look out here,” He gestures out of the windows of the National Gallery, at the domes and columns of Trafalgar Square, “And it’s a second Rome. You walk through the streets at night and you say, ‘My God, yes: this is what an empire looks like’.” This is the land of what Streeck calls the Marktsvolk – literally, the people of the market, the club-class financiers and executives, the asset-owning winners of globalisation.
But this space – geographic, economic, political – is off-limits to the Staatsvolk: the ones who fly yearly on holiday rather than weekly on business, the downsized, the indebted losers of neoliberalism. “These people are being driven out of London. In French cities it’s the same thing. This both reinforces them as a political power structure, and puts them completely on the defensive. But one thing they do know is that conventional politics has totally written them off.” Social democrats such as the outgoing Italian prime minister Matteo Renzi are guilty, too. “They’re on the side of the winners.”
International flows of people, money and goods: Streeck accepts the need for all these – “but in some sort of directed, governable way. It has to be, otherwise societies dissolve”.
Those views on immigration landed him in another fight this summer, when he wrote an essay attacking Angela Merkel for her open-door policy towards refugees from Syria and elsewhere. It was a “ploy”, he said, to import tens of thousands of cheap workers and thus allow German employers to bring down wages. Colleagues accused him of spinning a “neoliberal conspiracy” theory and of giving cover to Germany’s far right. Streeck’s defence is simple: “It is impossible to protect wages against an unlimited labour supply. Does saying that make me some proto-fascist?”
What gives this back-and-forth a twist is the little-known fact that Streeck is himself the child of refugees. Both 25 years old when the second world war ended, his parents were among the 12 million displaced people to arrive from eastern Europe in West Germany. Streeck was born just outside Münster in a room requisitioned by the state from a shoemaker. His parents were poor. “I remember they stole vegetables from the fields and coal from passing trains.”
His mother was a Sudeten German in Czechoslovakia, who was given 24 hours’ notice to leave when the war ended, taking only what she could carry. After Streeck left home she began to study the Czech language. “It was a sense of ‘If I can’t go back there I at least want to speak the language of those people who now live where I used to’.”
Her son went to a grammar school founded by Martin Luther, where he was taught Greek and Latin and expected to become a theologian. Instead, he fell in with the then-illegal Communist party. Aged 16, he was in charge of organising the reading circle – “suppressed literature such as the Communist Manifesto and Rosa Luxemburg” – and held it at the local employers’ association “because no one would ever suspect”.
In 1968, he was a student radical at Frankfurt, “but I never had any truck with the ‘marijuana left’. I felt closer to the working class than to the pot-smoking classes”.
Now he lives with his wife in part of a farmyard of a castle in Brühl, a small town just outside Cologne. The retiree is still up by six every morning and at his desk for 8.30. “I have learned to write only till 1pm. After that I give myself over to academic intrigues.” And to novels: when we meet, he is reading I Hate the Internet, by Jarett Kobek, a Silicon Valley engineer who claims that the internet has “fucked up” his life.
After lunch, we cross the Thames to King’s College where Streeck is to deliver a lecture. There is more gossip, this time about Greek politics and the hollowing out of the Syriza government. As teenagers, Streeck’s class travelled to Greece to look at antiquities. Instead, he began reading local newspapers on the king’s attempts to chuck out prime minister Georgios Papandreou. “I wrote a report in the school newspaper that was almost entirely concerned with the emerging military dictatorship.” Sixty years later, he is working on a book about democracy in southern Europe.
The lecture room is packed, students spread across the floor and peering around the wall at Streeck, absent-mindedly playing with a paperclip and quoting Gramsci: “The old is dying and the new cannot be born. [pause] In this interregnum a great variety of morbid symptoms can appear.” In the lecture’s interval, a variety of students buy his books and hover about for him to sign them. At the end, a student asks: “what should the left do?”
Occupy protest in Frankfurt, 2011. Photograph: Arne Dedert/EPA
It is the same question I’d put a few hours earlier. Both times, Streeck warns he is about to disappoint us. To me he cites an Occupy protest in Frankfurt. Days before that, he says, thousands of police were deployed to Germany’s capital of finance. “The authorities were scared shitless. I think more such scariness must happen. They must learn that in order to keep people quiet they need extraordinary effort.”
No mention of ballot boxes; nor of any need for a bigger vision “because the others don’t have a blueprint”.
But, I say, Nigel Farage and the rest are at least pretending to have an answer.
“And we should criticise them.” The press always talks of a lack of business confidence, he says; now is the time for the voters to demonstrate a lack of public confidence.
The analogy doesn’t work and, listening back to the tape, I can hear agitation in my voice. A businessperson can go on an investment strike; he or she can hoard cash. Even if voters sat out an election, they would still face the consequences. Muslim mums would get their headscarves ripped off, a Polish man could get stabbed to death for going in the wrong kebab shop.
In a phone call a couple of weeks later, I press Streeck again. “If I look 10 or 20 years out, I don’t like what I see,” he says. Nor is he alone: he quotes a new book by the former head of the Bank of England, Mervyn King, and his projection of “great uncertainty” ahead.
But doesn’t he want something better than a new dark ages for his grandchildren? “If I am honest, now I am thankful for every passing year that is good and peaceful. And I hope for another one. Very short-term, I know, but those are my horizons.”
Outside was panic. Barely a couple of hours after Donald Trump had been declared the next president of the United States and even the political columnists, those sleek interlocutors of power, were in shock. At the National Gallery in London, however, one of the few thinkers to have anticipated Trump’s rise was ready to see some paintings. Over from Germany for a few days of lectures, Wolfgang Streeck had an afternoon spare – and we both wanted to see the Beyond Caravaggio exhibition.
Nothing in his work prepares you for meeting Streeck (pronounced Stray-k). Professionally, he is the political economist barking last orders for our way of life, and warning of the “dark ages” ahead. His books bear bluntly fin-de-siecle titles: two years ago was Buying Time, while the latest is called How Will Capitalism End?(spoiler: not well). Even his admirers talk of his “despair”, by which they mean sentences such as this: “Before capitalism will go to hell, it will for the foreseeable future hang in limbo, dead or about to die from an overdose of itself but still very much around, as nobody will have the power to move its decaying body out of the way.”
What does such gloom look like in the flesh? Small glasses, neat side parting and moustache, a backpack, a smart anorak and at least a decade younger than his 70 years. Alluding to Trump’s victory, he cheerily declares “What a morning!” as if discussing the likelihood of rain, then strolls into the gallery.
Nothing in his work prepares you for meeting Streeck (pronounced Stray-k). Professionally, he is the political economist barking last orders for our way of life, and warning of the “dark ages” ahead. His books bear bluntly fin-de-siecle titles: two years ago was Buying Time, while the latest is called How Will Capitalism End?(spoiler: not well). Even his admirers talk of his “despair”, by which they mean sentences such as this: “Before capitalism will go to hell, it will for the foreseeable future hang in limbo, dead or about to die from an overdose of itself but still very much around, as nobody will have the power to move its decaying body out of the way.”
What does such gloom look like in the flesh? Small glasses, neat side parting and moustache, a backpack, a smart anorak and at least a decade younger than his 70 years. Alluding to Trump’s victory, he cheerily declares “What a morning!” as if discussing the likelihood of rain, then strolls into the gallery.
Decadence… Caravaggio’s Boy Bitten by a Lizard. Photograph: The National Gallery London
You don’t merely look at a Caravaggio; you square up to one. The scenes are tightly cropped, with characters that jostle and stare at the viewer. Their mordancy is a tonic to Streeck, who laughs with delight. He pauses in front of Boy Bitten by a Lizard and admires how the lizard clings on with its teeth to the boy’s finger. At a scene of cardsharps he exclaims, “Feel the decadence! The threat of violence!”
He notes how many paintings date from just before the thirty years’ war: “They’re full of the anticipation that the world is about to fall apart.”
Then comes The Taking of Christ, a dark, dense painting that shows Jesus just after his betrayal by Judas. Gripped by his treacherous former disciple, Christ looks down, ready to be bundled off by the armoured Roman centurions. “Caravaggio is always there just before the explosion,” Streeck observes. “This morning might have been a Caravaggio moment: just before the election of Trump.”
Like Caravaggio before the explosion, Streeck has been hanging around this crash scene for years – long before the plane came hurtling down and the centrist politicians and pundits began rushing around.
At a time when macroeconomists have failed and other academics have retreated into disciplinary solipsism, Streeck is one of the few (other exceptions include Mark Blyth, Colin Crouch and the Centre for Research on Socio-Cultural Change) to have risen to the moment. Many of the themes that will define this year, this decade, are in his work. The breakup of Europe, the rise of plutocrat-populists such as Trump, the failures of Mark Carney and the technocratic elite: he has anatomised all of them.
Why should oligarchs be interested in their countries’ democratic stability if, apparently, they can be rich without it?
This summer, Britons mutinied against their government, their experts and the EU – and consigned themselves to a poorer, angrier future. Such frenzies of collective self-harm were explained by Streeck in the 2012 lectures later collected in Buying Time:
Professionalised political science tends to underestimate the impact of moral outrage. With its penchant for studied indifference … [it] has nothing but elitist contempt for what it calls “populism”, sharing this with the power elites to which it would like to be close … [But] citizens too can “panic” and react “irrationally”, just like financial investors … even though they have no banknotes as arguments but only words and (who knows?) paving stones.
Here he is in 2013, foreshadowing the world of LuxLeaks, SwissLeaks and the Panama Papers and their revelations of a one-sided class war – by the 1% against the rest of us:
Why should the new oligarchs be interested in their countries’ future productive capacities and present democratic stability if, apparently, they can be rich without it, processing back and forth the synthetic money produced for them at no cost by a central bank for which the sky is the limit, at each stage diverting from it hefty fees and unprecedented salaries, bonuses, and profits as long as it is forthcoming – and then leave their country to its remaining devices and withdraw to some privately owned island?
And in a 2015 essay, he warns that resentment against such elites will not be wholesomely Fabian but will instead take the form either of “public entertainment” or “some politically regressive sort of nationalism”. It will look less like Hillary than Donald:
Politicization is migrating to the right side of the political spectrum where anti-establishment parties are getting better and better at organising discontented citizens dependent upon public services and insisting on political protection from international markets.
In such long, precise, comfortless sentences, Streeck sets out the crises facing Britain, the US and the continent. His diagnosis is both political and economic, and it makes him what Chris Bickerton, a lecturer in politics at Cambridge, thinks might be “the most interesting person around today on the subject of the relationship between democracy and capitalism”.
Lehman Brothers headquarters in New York’s Times Square, 2008. Photograph: Mark Lennihan/AP
Which makes him the most interesting person on the most urgent subject of our times. Eight years after Lehman Brothers keeled over and nearly took the entire banking system down with it, capitalism remains broken. British workers are suffering their most severe pay squeeze in at least seven decades. And even though politicians and the policymakers have pulled on every lever – cuts, investment, housing boom, hundreds of billions pumped into the markets – still the engine refuses to purr. The failure is international: the Bank of International Settlements, the central banks’ central bank, warned a few months ago that “the global economy seems unable to return to sustainable and balanced growth”.
Not for the first time, the sandwich board-wearers are declaring the end of capitalism – but today Streeck believes they are right. In its deepest crises, he says, modern capitalism has relied on its enemies to wade in with the lifebelt of reform. During the Great Depression of the 30s, it was FDR’s Democrats who rolled out the New Deal, while Britain’s trade unionists allied with Keynes.
Compare that with now. Over 40 years, neoliberal capitalism has destroyed its opposition. When Margaret Thatcher was asked to give her greatest achievement, she nominated “Tony Blair and New Labour. We forced our opponents to change their minds.” The prime minister who declared “There is no alternative”, then did her damnedest to extirpate any such alternative. The result? The unions are withered, the independent tenants’ associations have disappeared along with the stock of council housing, the BBC is forever on the back foot, and local, regional and national newspapers are now the regular subjects of obituaries. A similar story can be told across the rich world.
Public discontent is fitful and fragmented, ready to fall into Trump’s tiny hands. Meanwhile, capitalism – unrestrained and unreformed – will die.
This isn’t the violent overthrow envisaged by Marx and Engels. In The Communist Manifesto, they argued that capitalism’s “gravediggers” would be the proletariat. Nearly 170 years later, Streeck is predicting that the capitalists will be their own gravediggers, through having destroyed the workers and the dissidents they needed to maintain the system. What comes next is not some better replacement but is more akin to the centuries-long rotting away of the Roman empire.
And, yes, his latest book is out just in time for Christmas. Not so long ago, such catastrophism would have been the stuff of Speakers’ Corner. Today, it goes right to the brokenness of politics.
Streeck is admired by the team around Jeremy Corbyn and John McDonnell, and was invited to this year’s Labour conference in Liverpool (work commitments forced him to decline). One senior adviser described his relevance to British politics thus: “He is pretty blunt about how serious the situation is, for social democracy and capitalism.”
That we could modify capitalism towards equality and tame the beast – now those are utopian ideals
What gives Streeck’s analysis extra force is that he comes from the very establishment he now attacks. He has played many key roles: joint head of Germany’s top social science institute, an adviser in the late 90s to Gerhard Schröder’s government, one of Europe’s most eminent theorists of capitalism. While never a Third Way-er, he was friendly with David and Ed Miliband.
“I spent a long time in my life exploring the possibilities for an intelligent social democratic solution of the class conflict,” he explains over lunch. “The idea that we could modify capitalism towards equality and social justice. That we could tame the beast. Now I think those are more or less utopian ideals.”
He is thus a case study in the very thing he writes about: the demoralisation of centrist politics – and its radicalisation.
The great disillusionment came upon returning to Germany in 1995, after years teaching industrial relations in the US. It was the era of Germany being labelled “the sick man of Europe”, when one in five east German workers were unemployed. Through the metalworkers’ trade union, Streeck was invited to join a committee of trade unions, employers and government. Called the Alliance for Jobs (Bündnis für Arbeit), its task was to reform labour laws. Streeck believed this was “the last call for trade unions and social democracy”: the final chance to get more people into work without stripping workers of their rights.
“We came up with a good model, but everything we proposed was blocked – not just by the employers but by the unions, too.”
The Alliance fell apart and within a couple of years, Schröder had brought in the Hartz reforms – policies drawn up by a former Volkswagen executive that set up a new regime of workfare and benefit sanctions, and kicked the bottom out of the labour market.
A member of the Social Democratic Party, Germany’s counterpart to Labour, since the age of 16, Streeck finally cancelled his subs a few years ago. Would he still place himself as a social democrat? He quotes Keynes: “When the facts change, I change my mind.” In another interview he has described “the most urgent task for the left” as “sobering up”.
The constant sobriety might prove wearing, were it not for his easy companionship. Listening back to the recording, the primary sound is Streeck’s laughter – that and “Jajaja!”, a Bren gun enthusiasm for any new idea or argument.
He also gives good gossip. A “power breakfast” with financial policymakers and investment bankers is dismissed as “clueless and so stereoptypical. They complained about the stupidity of the masses who didn’t understand the expertise that someone like Alan Greenspan was able to bring to central banking.” This is the same Greenspan who, as head of the US central bank in the bubble years, believed financiers could regulate themselves.
On this trip he went to a conference on Brexit. “I was shocked by the unanimous sense of guilt.” One former British ambassador “began by saying we have to apologise to our foreign friends for the vote to leave Europe. I said, ‘You ought to be happy to have sent a warning to the European Union.’”
He sees the support for Brexit and Trump as stemming from the same source. “You have a growing group of all people, who, under the impact of neoliberal internationalisation, have become increasingly excluded from the mainstream of their society.
Visions of London wealth … Canary wharf financial district. Photograph: DBURKE / Alamy/Alamy
“You look out here,” He gestures out of the windows of the National Gallery, at the domes and columns of Trafalgar Square, “And it’s a second Rome. You walk through the streets at night and you say, ‘My God, yes: this is what an empire looks like’.” This is the land of what Streeck calls the Marktsvolk – literally, the people of the market, the club-class financiers and executives, the asset-owning winners of globalisation.
But this space – geographic, economic, political – is off-limits to the Staatsvolk: the ones who fly yearly on holiday rather than weekly on business, the downsized, the indebted losers of neoliberalism. “These people are being driven out of London. In French cities it’s the same thing. This both reinforces them as a political power structure, and puts them completely on the defensive. But one thing they do know is that conventional politics has totally written them off.” Social democrats such as the outgoing Italian prime minister Matteo Renzi are guilty, too. “They’re on the side of the winners.”
International flows of people, money and goods: Streeck accepts the need for all these – “but in some sort of directed, governable way. It has to be, otherwise societies dissolve”.
Those views on immigration landed him in another fight this summer, when he wrote an essay attacking Angela Merkel for her open-door policy towards refugees from Syria and elsewhere. It was a “ploy”, he said, to import tens of thousands of cheap workers and thus allow German employers to bring down wages. Colleagues accused him of spinning a “neoliberal conspiracy” theory and of giving cover to Germany’s far right. Streeck’s defence is simple: “It is impossible to protect wages against an unlimited labour supply. Does saying that make me some proto-fascist?”
What gives this back-and-forth a twist is the little-known fact that Streeck is himself the child of refugees. Both 25 years old when the second world war ended, his parents were among the 12 million displaced people to arrive from eastern Europe in West Germany. Streeck was born just outside Münster in a room requisitioned by the state from a shoemaker. His parents were poor. “I remember they stole vegetables from the fields and coal from passing trains.”
His mother was a Sudeten German in Czechoslovakia, who was given 24 hours’ notice to leave when the war ended, taking only what she could carry. After Streeck left home she began to study the Czech language. “It was a sense of ‘If I can’t go back there I at least want to speak the language of those people who now live where I used to’.”
Her son went to a grammar school founded by Martin Luther, where he was taught Greek and Latin and expected to become a theologian. Instead, he fell in with the then-illegal Communist party. Aged 16, he was in charge of organising the reading circle – “suppressed literature such as the Communist Manifesto and Rosa Luxemburg” – and held it at the local employers’ association “because no one would ever suspect”.
In 1968, he was a student radical at Frankfurt, “but I never had any truck with the ‘marijuana left’. I felt closer to the working class than to the pot-smoking classes”.
Now he lives with his wife in part of a farmyard of a castle in Brühl, a small town just outside Cologne. The retiree is still up by six every morning and at his desk for 8.30. “I have learned to write only till 1pm. After that I give myself over to academic intrigues.” And to novels: when we meet, he is reading I Hate the Internet, by Jarett Kobek, a Silicon Valley engineer who claims that the internet has “fucked up” his life.
After lunch, we cross the Thames to King’s College where Streeck is to deliver a lecture. There is more gossip, this time about Greek politics and the hollowing out of the Syriza government. As teenagers, Streeck’s class travelled to Greece to look at antiquities. Instead, he began reading local newspapers on the king’s attempts to chuck out prime minister Georgios Papandreou. “I wrote a report in the school newspaper that was almost entirely concerned with the emerging military dictatorship.” Sixty years later, he is working on a book about democracy in southern Europe.
The lecture room is packed, students spread across the floor and peering around the wall at Streeck, absent-mindedly playing with a paperclip and quoting Gramsci: “The old is dying and the new cannot be born. [pause] In this interregnum a great variety of morbid symptoms can appear.” In the lecture’s interval, a variety of students buy his books and hover about for him to sign them. At the end, a student asks: “what should the left do?”
Occupy protest in Frankfurt, 2011. Photograph: Arne Dedert/EPA
It is the same question I’d put a few hours earlier. Both times, Streeck warns he is about to disappoint us. To me he cites an Occupy protest in Frankfurt. Days before that, he says, thousands of police were deployed to Germany’s capital of finance. “The authorities were scared shitless. I think more such scariness must happen. They must learn that in order to keep people quiet they need extraordinary effort.”
No mention of ballot boxes; nor of any need for a bigger vision “because the others don’t have a blueprint”.
But, I say, Nigel Farage and the rest are at least pretending to have an answer.
“And we should criticise them.” The press always talks of a lack of business confidence, he says; now is the time for the voters to demonstrate a lack of public confidence.
The analogy doesn’t work and, listening back to the tape, I can hear agitation in my voice. A businessperson can go on an investment strike; he or she can hoard cash. Even if voters sat out an election, they would still face the consequences. Muslim mums would get their headscarves ripped off, a Polish man could get stabbed to death for going in the wrong kebab shop.
In a phone call a couple of weeks later, I press Streeck again. “If I look 10 or 20 years out, I don’t like what I see,” he says. Nor is he alone: he quotes a new book by the former head of the Bank of England, Mervyn King, and his projection of “great uncertainty” ahead.
But doesn’t he want something better than a new dark ages for his grandchildren? “If I am honest, now I am thankful for every passing year that is good and peaceful. And I hope for another one. Very short-term, I know, but those are my horizons.”
Tuesday 13 September 2016
Britain’s bosses fat and lazy? For once, Liam Fox has a point
Aditya Chakrabortty in The Guardian
Liam Fox ranks among the chief fantasists behind Brexit, deplores gay marriage as “social engineering”, and thinks nothing of claiming 3p from taxpayers for a car journey of less than 100m. But even a snake-oil salesman sometimes speaks the truth and in criticising British business as “too lazy and too fat on our successes”, he has a point.
I know, I know. Why defend a Tory headbanger who otherwise thirsts for cuts to the NHS budget and the slashing of taxes upon the rich? Why entertain lectures from someone whose only attempt at job creation was the boondoggle he shamelessly awarded his former best man?
Yet when the international trade secretary says, “If you want to share in the prosperity of our country, you have a duty to contribute to the prosperity of our country”, I fail to muster up the outrage. I share neither Fox’s views on the causes nor his suggestions on the solution. But he is on to something.
For the past six years, the Tory party has barely paused from laying into British workers. From Iain Duncan Smith to George Osborne, senior ministers wrote off a sizeable chunk of this country as “skivers”. The screws were twisted so hard that jobseekers who decline zero-hours contracts are now penalised with benefit sanctions.
And the Tories did all this with the simpering connivance of Nick Clegg’s LibDems. If you think that era ended with David Cameron, remember that Theresa May’s cabinet boasts luminaries who wrote a report stating: “Too many people in Britain … prefer a lie-in to hard work. Once they enter the workplace, the British are among the worst idlers in the world.”
Ever since 2010, the Tories have tried to pin the blame for economic sluggishness on the shirking Brits. At the same time, their ministers have boasted, with all the regularity of a cuckoo clock, about how the number of British people in work is now at a record high. As a matter of logic, both things cannot be true. The British cannot be both workshy and working more than ever before. The Tories have been fibbing – and at last one of their number has come out and said as much.
The real problem in Britain isn’t its workers: it’s the bosses. By this, I’m not getting at the poor old line managers. I mean those right at the top of big business who have got away with paying themselves too much and investing too little in their workers, their businesses and their society.
Consider pay. While the average British worker is barely better off than in 2008, wages for those at the top of British business have just kept soaring. Researchers at the High Pay Centre recently went through the accounts of the FTSE 100 largest companies. They found that chief executives raked in an average of £5.5m in 2015, up 10% from the year before.
Bung in the lavish pension arrangements and generous bonuses and the average chief executive now earns the same as 129 of their employees. There is no justification for such a wide disparity: no one is as productive as 129 other people. We have gone beyond “Because I’m Worth It” to “Because I Said So” (and my mates on the remuneration committee backed me up). Even when shareholders revolt, as happened at BP over the £14m handed out to its chief executive despite huge losses, they are roundly ignored.
The TUC has just crunched the numbers on how much investment the private sector makes in this country. Of the 29 leading industrialised countries, the UK comes in at 27. Businesses in Estonia, the Czech Republic, Poland: all invest more in plants, equipment and the rest. The only countries that do worse are Greece and Iceland.
We have the same calamitous showing in spending on research and development. A few years ago, the Sheffield University physicist Prof Richard Jones went through the figures. He wrote: “In 1979 the UK was one of the most research-intensive economies in the world. Now, among advanced industrial economies, it is one of the least.” All of our competitors – the US, Japan, France and Germany – have maintained or increased their spending on research. South Korea and China are breathing down our necks. But the British capitalist class prefers the safe bets, the quick bucks – and the mega handouts to the senior executives and the shareholders.
Vice chairman of Stronger In campaign calls off Liam Fox after saying is Britain ‘fat and lazy’
Friday afternoons on the golf course? Fox may have watched one too many episodes of Terry and June. But what’s clear is that Britain’s bosses pay themselves far more than is justified either by comparison with their workers or on their performance. They have spent years relying on taxpayers to top up poverty pay and on the regulators to allow pensions holidays – just so they could hand out more money to shareholders.
They take what academic Kevin Farnsworth estimates at £93bn a year in corporate welfare – cash handouts and subsidies. But they react with horror to the notion of decent wages or chipping in for apprenticeships, rather than treating them as the normal overheads of doing business in a developed country. If that’s not fat and lazy, I don’t know what is.
Of course there are good and non-greedy bosses. But I have spent six years hearing the view that the British are lazy spongers with barely a demurral from most of the media or the political classes. It is high time to push the pendulum back a little.
Fox sees the answer to all this as more slash and burn: of taxes, of red tape, of public spending. That is delusional. Britain has spent 40 years making the burden on business easier, and the results have been to create a capitalist class so sluggish and short-term that it now threatens the continuation of capitalism.
Better, by far, to have a more honest capitalism: in which the responsibilities of business – on taxes, on pay and on investment – are laid out alongside their rights.
Liam Fox ranks among the chief fantasists behind Brexit, deplores gay marriage as “social engineering”, and thinks nothing of claiming 3p from taxpayers for a car journey of less than 100m. But even a snake-oil salesman sometimes speaks the truth and in criticising British business as “too lazy and too fat on our successes”, he has a point.
I know, I know. Why defend a Tory headbanger who otherwise thirsts for cuts to the NHS budget and the slashing of taxes upon the rich? Why entertain lectures from someone whose only attempt at job creation was the boondoggle he shamelessly awarded his former best man?
Yet when the international trade secretary says, “If you want to share in the prosperity of our country, you have a duty to contribute to the prosperity of our country”, I fail to muster up the outrage. I share neither Fox’s views on the causes nor his suggestions on the solution. But he is on to something.
For the past six years, the Tory party has barely paused from laying into British workers. From Iain Duncan Smith to George Osborne, senior ministers wrote off a sizeable chunk of this country as “skivers”. The screws were twisted so hard that jobseekers who decline zero-hours contracts are now penalised with benefit sanctions.
And the Tories did all this with the simpering connivance of Nick Clegg’s LibDems. If you think that era ended with David Cameron, remember that Theresa May’s cabinet boasts luminaries who wrote a report stating: “Too many people in Britain … prefer a lie-in to hard work. Once they enter the workplace, the British are among the worst idlers in the world.”
Ever since 2010, the Tories have tried to pin the blame for economic sluggishness on the shirking Brits. At the same time, their ministers have boasted, with all the regularity of a cuckoo clock, about how the number of British people in work is now at a record high. As a matter of logic, both things cannot be true. The British cannot be both workshy and working more than ever before. The Tories have been fibbing – and at last one of their number has come out and said as much.
The real problem in Britain isn’t its workers: it’s the bosses. By this, I’m not getting at the poor old line managers. I mean those right at the top of big business who have got away with paying themselves too much and investing too little in their workers, their businesses and their society.
Consider pay. While the average British worker is barely better off than in 2008, wages for those at the top of British business have just kept soaring. Researchers at the High Pay Centre recently went through the accounts of the FTSE 100 largest companies. They found that chief executives raked in an average of £5.5m in 2015, up 10% from the year before.
Bung in the lavish pension arrangements and generous bonuses and the average chief executive now earns the same as 129 of their employees. There is no justification for such a wide disparity: no one is as productive as 129 other people. We have gone beyond “Because I’m Worth It” to “Because I Said So” (and my mates on the remuneration committee backed me up). Even when shareholders revolt, as happened at BP over the £14m handed out to its chief executive despite huge losses, they are roundly ignored.
The TUC has just crunched the numbers on how much investment the private sector makes in this country. Of the 29 leading industrialised countries, the UK comes in at 27. Businesses in Estonia, the Czech Republic, Poland: all invest more in plants, equipment and the rest. The only countries that do worse are Greece and Iceland.
We have the same calamitous showing in spending on research and development. A few years ago, the Sheffield University physicist Prof Richard Jones went through the figures. He wrote: “In 1979 the UK was one of the most research-intensive economies in the world. Now, among advanced industrial economies, it is one of the least.” All of our competitors – the US, Japan, France and Germany – have maintained or increased their spending on research. South Korea and China are breathing down our necks. But the British capitalist class prefers the safe bets, the quick bucks – and the mega handouts to the senior executives and the shareholders.
Vice chairman of Stronger In campaign calls off Liam Fox after saying is Britain ‘fat and lazy’
Friday afternoons on the golf course? Fox may have watched one too many episodes of Terry and June. But what’s clear is that Britain’s bosses pay themselves far more than is justified either by comparison with their workers or on their performance. They have spent years relying on taxpayers to top up poverty pay and on the regulators to allow pensions holidays – just so they could hand out more money to shareholders.
They take what academic Kevin Farnsworth estimates at £93bn a year in corporate welfare – cash handouts and subsidies. But they react with horror to the notion of decent wages or chipping in for apprenticeships, rather than treating them as the normal overheads of doing business in a developed country. If that’s not fat and lazy, I don’t know what is.
Of course there are good and non-greedy bosses. But I have spent six years hearing the view that the British are lazy spongers with barely a demurral from most of the media or the political classes. It is high time to push the pendulum back a little.
Fox sees the answer to all this as more slash and burn: of taxes, of red tape, of public spending. That is delusional. Britain has spent 40 years making the burden on business easier, and the results have been to create a capitalist class so sluggish and short-term that it now threatens the continuation of capitalism.
Better, by far, to have a more honest capitalism: in which the responsibilities of business – on taxes, on pay and on investment – are laid out alongside their rights.
Saturday 27 June 2015
The real benefit cheats are the employers who are milking the system
In the last year, Tesco has cost the Treasury £364m in pay-rate supplements. Photograph: Carl Court/AFP/Getty
Deborah Orr in The Guardian
I really don’t know why the government is making such heavy weather of cutting £12bn off the benefits bill. That sum, and much more, could be cut at the stroke of a pen – though it would mean that the government would have to put its money where its mouth is and make it a legal requirement for employers to pay the living wage. If a company really can’t afford to, then it’s the company that should be applying for supplements, not the people who work for it.
Deborah Orr in The Guardian
I really don’t know why the government is making such heavy weather of cutting £12bn off the benefits bill. That sum, and much more, could be cut at the stroke of a pen – though it would mean that the government would have to put its money where its mouth is and make it a legal requirement for employers to pay the living wage. If a company really can’t afford to, then it’s the company that should be applying for supplements, not the people who work for it.
Cameron wants to curb in-work benefits. No wonder: just £8bn on benefits goes to the unemployed, while an estimated £76bn, according to James Ferguson of Money Week, goes to people who are working. The government says this shouldn’t be happening. Cameron insists employers should be paying wages people can live on – which, funnily enough, is the sort of thing unions say, although they no longer have any power to make it happen.
It’s what Labour says, too, now the party is out of power. When it was in power, it avoided confrontation with employers offering poverty wages, and with the unions, by kindly offering to make up the difference between the minimum wage and a living wage via the benefits system.
It would be funny if it wasn’t so sad. The Tories excoriate Labour because Labour accepted the Conservative idea that employers should be freed from the burden of social responsibility. Labour spent a lot of money on protecting employers from such irksome duties. The Conservatives still don’t want to impose such irksome duties, but don’t want to stump up for the hefty bill that ensues from failing to do so either.
Just one of the woeful consequences of Labour’s drive to support employers by supplementing employees is that it makes the figures look like the Department of Work and Pensions is showering taxpayers’ money on the feckless, when it is actually showering taxpayers’ money on businesses. Employing someone has come to be seen as such a noble pursuit that businesses are paid to do it. Businesses don’t, of course, complain that this interferes with the free market. Money spent supplementing wages should be coming from the Business and Enterprise budget, with companies vetted to assess whether they are justified in offering pay below the living wage. Those who are can be offered loans to cover the difference, repayable in much the same manner as student tuition fees. They are hiring staff to grow their own businesses, after all. Such entrepreneurial risk-taking is seen as admirable. But when the taxpayer is taking on so much of the cost, and the benefit-receiving employee is getting so much of the blame, there’s really only sheer nerve and hypocrisy left to be admired.
Businesses, of course, would hate having to admit that they expect the state to prop up their poverty wages. They despise “red tape”, after all. Although that doesn’t stop them employing individuals who must submit themselves and their families to miles of red tape and minute government scrutiny because their wages aren’t enough to live on.
Work in the retail sector is notoriously badly paid, so it should be no surprise that around £11bn in in-work benefit is paid each year to people working in retail. Employees at Next receive more money in pay-rate supplements than the company pays in tax (about £2,087 per low-paid worker). In the last year, Tesco has cost the Treasury £364m in pay-rate supplements. Cameron talks about dysfunctional merry-go-rounds of tax and spend. But the culprits aren’t ordinary people scraping by. The culprits are employers milking the system.
The in-work benefits system also encourages businesses to employ lots of people part-time, rather than fewer people full-time. A couple has to work 24 hours a week to qualify for in-work benefits, and a single person 16 hours. The more part-time people you employ, the more the government is supplementing your payroll, and the easier it is to get competent staff on the cheap.
Much of the reduction in unemployment seen over the last couple of years is because people are taking part-time work when they would prefer full-time work. The government may trumpet the decline in unemployment. But its complaints about the cost of in-work benefits are an acknowledgement that the Department of Work and Pensions is paying out a lot of cash to make that happen.
A system that minimises costs while maximising profits is bound to result in a mismatch between what people earn and what it costs them to live. This tendency can be seen most clearly in the housing market. In 2009-10,according to House of Commons figures, 478,000 people with jobs claimed housing benefit, at a cost of £2.2bn. By 2014-15, it was 962,000 and £4.6bn, and it’s set to continue rising if things don’t change. What things?
It’s endlessly said by everybody that the social housing supply has to increase. But no one seems willing to take their valuable piece of land and render it much less valuable by building social housing on it, when they could keep it as an asset or sell it to private developers instead. Private landlords are the obvious beneficiaries.
But again it’s the person claiming the housing benefit that is seen as the problem, not the person who wants the “market rate” when the market isn’t paying it. Again, the person making the profit gets the benefit, rather than the person who doesn’t have enough income to put a roof over his head. Just as it’s time to restrict state benefits paid to employers via employees, it’s time to restrict benefits paid to landlords via tenants.
The Conservatives, I’m afraid, seem to do nothing at all in government except complain that Labour spent too much money on mitigating the effects of the previous Conservative government’s policies. Employers are allowed to set wages and landlords allowed to set rents without regard to the amount of money people have to live on. The least the state can do is be honest about the amount of state money that is spent on defending the right to make profits, instead of blaming the hapless citizens from whom the profit is wrung.
It’s what Labour says, too, now the party is out of power. When it was in power, it avoided confrontation with employers offering poverty wages, and with the unions, by kindly offering to make up the difference between the minimum wage and a living wage via the benefits system.
It would be funny if it wasn’t so sad. The Tories excoriate Labour because Labour accepted the Conservative idea that employers should be freed from the burden of social responsibility. Labour spent a lot of money on protecting employers from such irksome duties. The Conservatives still don’t want to impose such irksome duties, but don’t want to stump up for the hefty bill that ensues from failing to do so either.
Just one of the woeful consequences of Labour’s drive to support employers by supplementing employees is that it makes the figures look like the Department of Work and Pensions is showering taxpayers’ money on the feckless, when it is actually showering taxpayers’ money on businesses. Employing someone has come to be seen as such a noble pursuit that businesses are paid to do it. Businesses don’t, of course, complain that this interferes with the free market. Money spent supplementing wages should be coming from the Business and Enterprise budget, with companies vetted to assess whether they are justified in offering pay below the living wage. Those who are can be offered loans to cover the difference, repayable in much the same manner as student tuition fees. They are hiring staff to grow their own businesses, after all. Such entrepreneurial risk-taking is seen as admirable. But when the taxpayer is taking on so much of the cost, and the benefit-receiving employee is getting so much of the blame, there’s really only sheer nerve and hypocrisy left to be admired.
Businesses, of course, would hate having to admit that they expect the state to prop up their poverty wages. They despise “red tape”, after all. Although that doesn’t stop them employing individuals who must submit themselves and their families to miles of red tape and minute government scrutiny because their wages aren’t enough to live on.
Work in the retail sector is notoriously badly paid, so it should be no surprise that around £11bn in in-work benefit is paid each year to people working in retail. Employees at Next receive more money in pay-rate supplements than the company pays in tax (about £2,087 per low-paid worker). In the last year, Tesco has cost the Treasury £364m in pay-rate supplements. Cameron talks about dysfunctional merry-go-rounds of tax and spend. But the culprits aren’t ordinary people scraping by. The culprits are employers milking the system.
The in-work benefits system also encourages businesses to employ lots of people part-time, rather than fewer people full-time. A couple has to work 24 hours a week to qualify for in-work benefits, and a single person 16 hours. The more part-time people you employ, the more the government is supplementing your payroll, and the easier it is to get competent staff on the cheap.
Much of the reduction in unemployment seen over the last couple of years is because people are taking part-time work when they would prefer full-time work. The government may trumpet the decline in unemployment. But its complaints about the cost of in-work benefits are an acknowledgement that the Department of Work and Pensions is paying out a lot of cash to make that happen.
A system that minimises costs while maximising profits is bound to result in a mismatch between what people earn and what it costs them to live. This tendency can be seen most clearly in the housing market. In 2009-10,according to House of Commons figures, 478,000 people with jobs claimed housing benefit, at a cost of £2.2bn. By 2014-15, it was 962,000 and £4.6bn, and it’s set to continue rising if things don’t change. What things?
It’s endlessly said by everybody that the social housing supply has to increase. But no one seems willing to take their valuable piece of land and render it much less valuable by building social housing on it, when they could keep it as an asset or sell it to private developers instead. Private landlords are the obvious beneficiaries.
But again it’s the person claiming the housing benefit that is seen as the problem, not the person who wants the “market rate” when the market isn’t paying it. Again, the person making the profit gets the benefit, rather than the person who doesn’t have enough income to put a roof over his head. Just as it’s time to restrict state benefits paid to employers via employees, it’s time to restrict benefits paid to landlords via tenants.
The Conservatives, I’m afraid, seem to do nothing at all in government except complain that Labour spent too much money on mitigating the effects of the previous Conservative government’s policies. Employers are allowed to set wages and landlords allowed to set rents without regard to the amount of money people have to live on. The least the state can do is be honest about the amount of state money that is spent on defending the right to make profits, instead of blaming the hapless citizens from whom the profit is wrung.
Tuesday 23 June 2015
Greece is a sideshow. The eurozone has failed, and Germans are its victims too
'This is what the noble European project is turning into: a grim march to the bottom. This isn’t about creating a deeper democracy, but deeper markets.' Photograph: Matt Kenyon
Aditya Chakrabortty in The Guardian
Aditya Chakrabortty in The Guardian
Nearly every discussion of the Greek fiasco is based on a morality play. Call it Naughty Greece versus Noble Europe. Those troublesome Greeks never belonged in the euro, runs this story. Once inside, they got themselves into a big fat mess – and now it’s up to Europe to sort it all out.
Eurozone creditors raise hopes of Greek bailout deal
Read more
Those are the basics all Wise Folk agree on. Then those on the right go on to say feckless Greece must either accept Europe’s deal or get out of the single currency. Or if more liberal, they hem and haw, cough and splutter, before calling for Europe to show a little more charity to its southern basketcase. Whatever their solution, the Wise Folk agree on the problem: it’s not Brussels that’s at fault, it’s Athens. Oh, those turbulent Greeks! That’s the attitude you smell when the IMF’s Christine Lagarde decries the Syriza government for not being “adult” enough. That’s what licenses the German press to portray Greece’s finance minister, Yanis Varoufakis, as needing “psychiatric help”.
There’s just one problem with this story: like most morality tales, it shatters upon contact with hard reality. Athens is merely the worst outbreak of a much bigger disease within the euro project. Because the single currency isn’t working for ordinary Europeans, from the Ruhr valley to Rome.
On saying this, I don’t close my eyes to the endemic corruption and tax-dodging in Greece (nor indeed, does the outsiders’ movement Syriza, which came to power campaigning against just these vices). Nor am I about to don Farage-ist chalkstripes. My charge is much simpler: the euro project is not only failing to deliver on the promises of its originators, it’s doing the exact opposite – by eroding the living standards of ordinary Europeans. And as we’ll see, that’s true even for those living in the continent’s number one economy, Germany.
First, let’s remind ourselves of the noble pledges made for the euro project. Let’s play the grainy footage of Germany’s Helmut Schmidt and France’s Giscard d’Estaing, as they lay the foundations for Europe’s grand unifier. Most of all, let’s remind ourselves of what the true believers felt. Take this from Oskar Lafontaine, Germany’s minister of finance, on the very eve of the launch of the euro. He talked of “the vision of a united Europe, to be reached through the gradual convergence of living standards, the deepening of democracy, and the flowering of a truly European culture”.
We could quote a thousand other such stanzas of euro-poetry, but that single line from Lafontaine shows how far the single-currency project has fallen. Instead of raising living standards across Europe, monetary union is pushing them downwards. Rather than deepening democracy, it is undermining it. As for “a truly European culture”, when German journalists accuse Greek ministers of “psychosis”, that mythic agora of nations is a long way off.
Of all these three charges, the first is most important – because it explains how the entire union is being undermined. To see what’s happened to the living standards of ordinary Europeans, turn to some extraordinary research published this year by Heiner Flassbeck, former chief economist at the United Nations Conference on Trade and Development, and Costas Lapavitsas, an economics professor at Soas University of London turned Syriza MP.
In Against the Troika, the German and the Greek publish one chart that explodes the idea that the euro has raised living standards. What they look at is unit labour costs – how much you need to pay staff to make one unit of output: a widget, say, or a bit of software. And they map labour costs across the eurozone from 1999 to 2013. What they find is that German workers have barely seen wages rise for the 14-year stretch. In the short life of the euro, working Germans have fared worse than the French, Austrians, Italians and many across southern Europe.
Yes, we’re talking about the same Germany: the mightiest economy on the continent, the one even David Cameron regards with envy. Yet the people working there and making the country more prosperous have seen barely any reward for their efforts. And this is the model for a continent.
Perhaps you have an image of Deutschland as being a nation of highly skilled, highly rewarded workers in gleaming factories. That workforce and its unions still exist – but it’s shrinking fast. What’s replacing it, according to Germany’s leading expert on inequality, Gerhard Bosch, are crap jobs. The low-wage workforce has shot up and is now almost at US levels, he reckons.
Don’t blame this on the euro, but on the slow decline of German unions, and the trend of business towards outsourcing to cheaper eastern Europe. What the single currency has done is make Germany’s low-wage problems the ruin of an entire continent.
Workers in France, Italy, Spain and the rest of the eurozone are now being undercut by the epic wage freeze going on in the giant country in the middle. Flassbeck and Lapavitsas describe this as Germany’s “beggar thy neighbour” policy – “but only after beggaring its own people”.
In the last century, the other countries in the eurozone could have become more competitive by devaluing their national currencies – just as the UK has done since the banking meltdown. But now they’re all part of the same club, the only post-crash solution has been to pay workers less.
That is expressly what the European commission, the European Central Bank and the IMF are telling Greece: make workers redundant, pay those still in a job much less, and slash pensions for the elderly. But it’s not just in Greece. Nearly every meeting of the Wise Folk in Brussels and Strasbourg comes up with the same communique for “reform” of the labour market and social-security entitlements across the continent: a not-so-coded call for attacking ordinary people’s living standards.
This is what the noble European project is turning into: a grim march to the bottom. This isn’t about creating a deeper democracy, but deeper markets – and the two are increasingly incompatible. Germany’s Angela Merkel has shown no compunction about meddling in the democratic affairs of other European countries – tacitly warning Greeks against voting for Syriza for instance, or forcing the Spanish socialist prime minister, José Luis Rodríguez Zapatero, to rip up the spending commitments that had won him an election.
The diplomatic beatings administered to Syriza since it came to power this year can only be seen as Europe trying to set an example to any Spanish voters who might be tempted to support its sister movement Podemos. Go too far left, runs the message, and you’ll get the same treatment.
Whatever the founding ideals of the eurozone, they don’t match up to the grim reality in 2015. This is Thatcher’s revolution, or Reagan’s – but now on a continental scale. And as then, it is accompanied by the idea that There Is No Alternative either to running an economy, or even to which kind of government voters get to choose.
The fact that this entire show is being brought in by agreeable-looking Wise Folk often claiming to be social democratic doesn’t render the project any nicer or gentler. It just lends the entire thing a nasty tang of hypocrisy.
Don’t blame this on the euro, but on the slow decline of German unions, and the trend of business towards outsourcing to cheaper eastern Europe. What the single currency has done is make Germany’s low-wage problems the ruin of an entire continent.
Workers in France, Italy, Spain and the rest of the eurozone are now being undercut by the epic wage freeze going on in the giant country in the middle. Flassbeck and Lapavitsas describe this as Germany’s “beggar thy neighbour” policy – “but only after beggaring its own people”.
In the last century, the other countries in the eurozone could have become more competitive by devaluing their national currencies – just as the UK has done since the banking meltdown. But now they’re all part of the same club, the only post-crash solution has been to pay workers less.
That is expressly what the European commission, the European Central Bank and the IMF are telling Greece: make workers redundant, pay those still in a job much less, and slash pensions for the elderly. But it’s not just in Greece. Nearly every meeting of the Wise Folk in Brussels and Strasbourg comes up with the same communique for “reform” of the labour market and social-security entitlements across the continent: a not-so-coded call for attacking ordinary people’s living standards.
This is what the noble European project is turning into: a grim march to the bottom. This isn’t about creating a deeper democracy, but deeper markets – and the two are increasingly incompatible. Germany’s Angela Merkel has shown no compunction about meddling in the democratic affairs of other European countries – tacitly warning Greeks against voting for Syriza for instance, or forcing the Spanish socialist prime minister, José Luis Rodríguez Zapatero, to rip up the spending commitments that had won him an election.
The diplomatic beatings administered to Syriza since it came to power this year can only be seen as Europe trying to set an example to any Spanish voters who might be tempted to support its sister movement Podemos. Go too far left, runs the message, and you’ll get the same treatment.
Whatever the founding ideals of the eurozone, they don’t match up to the grim reality in 2015. This is Thatcher’s revolution, or Reagan’s – but now on a continental scale. And as then, it is accompanied by the idea that There Is No Alternative either to running an economy, or even to which kind of government voters get to choose.
The fact that this entire show is being brought in by agreeable-looking Wise Folk often claiming to be social democratic doesn’t render the project any nicer or gentler. It just lends the entire thing a nasty tang of hypocrisy.
Sunday 12 April 2015
In rich Qatar, an Indian restaurant lets poor eat for free
DOHA: In a dusty corner of Qatar's booming capital, a sign outside a modest restaurant popular with migrant labourers reads: "If you are hungry and have no money, eat for free!!!"
Sixteen kilometres (10 miles) from the gleaming glass towers of Doha, one of the richest places on the planet, sits the “Industrial Area” of small-scale workshops, factories and low-cost accommodation.
It is only a 40-minute drive south of the centre of the Qatari capital and its luxury shops, upmarket brands and expensive restaurants.
But the “Industrial Area”, rarely seen by outsiders, is a different Qatar—one which provides essential labour and materials for the country's massive and relentless expansion.
It is at the margin of Doha life, both geographically and metaphorically, but home to a restaurant called Zaiqa doing something apparently unique for the oil-rich Gulf state.
Sixteen kilometres (10 miles) from the gleaming glass towers of Doha, one of the richest places on the planet, sits the “Industrial Area” of small-scale workshops, factories and low-cost accommodation.
It is only a 40-minute drive south of the centre of the Qatari capital and its luxury shops, upmarket brands and expensive restaurants.
But the “Industrial Area”, rarely seen by outsiders, is a different Qatar—one which provides essential labour and materials for the country's massive and relentless expansion.
It is at the margin of Doha life, both geographically and metaphorically, but home to a restaurant called Zaiqa doing something apparently unique for the oil-rich Gulf state.
Workers cook food in 'Zaiqa'.— AFP
About three weeks ago the Indian brothers who own Zaiqa decided to put up a small makeshift sign offering free food to customers who cannot afford to pay.
“When I saw the board I had tears in my eyes,” said one of the owners, Shadab Khan, 47, originally from New Delhi, who has lived in Qatar for 13 years.
“Even now when I talk about it, I get a lump in my throat. “He said the idea came from his younger brother, Nishab.
The 16-seater eaterie stands on the prosaically named Street 23, sandwiched between another restaurant and a steel workshop.
It is a busy area—opposite is a mosque and then a road where large trucks hurtle past.
Inside, on brightly coloured tablecloths, “authentic Indian cuisine from the heart of Delhi” is served 24 hours a day, seven days a week. A fish curry costs six Qatari riyals ($1.65, 1.50 euros), an egg roast is three riyals and a spinach dish of Palak Paneer is 10 riyals—for those who choose to pay.
Workers serving the customers.— AFP
The need for free food in Qatar is particularly acute among labourers and those working in heavy industry.
It is estimated that there are anywhere between 700,000 and one million migrant workers in the tiny Gulf kingdom, out of a total population of 2.3 million.
Rights groups have criticised companies in Qatar for not paying workers on time or, in some cases, not at all. The Qatari government, under pressure to introduce salary reform in the run-up to the 2022 World Cup, vowed earlier this year to force companies to pay wages through direct bank transfers.
Even those who do get paid will be intent on sending most of their money back home, said one of Zaiqa's diners, Nepalese mechanic Ghufran Ahmed.
“Many labourers earn 800-1,000 riyals ($220-$275/200-250 euros) per month.
They have to send money back to home. It's expensive here so there are people who need free food,” he said.
Shadab stands outside the restaurant.—AFP
Shadab, who is a filmmaker as well as a restaurant owner, said those asking for food are mostly construction workers from countries such as India, Nepal and Bangladesh.
Just bread and water
"We realise a lot of people out here do not get paid on time and do not have money, not even money to eat," he said.
"So there were people who would come here and just buy a packet of bread. And they would eat the bread with water."
"So, we realised those people don't have money for anything else. They just buy a packet of bread, which comes to about one riyal. So, we would try to offer them food." But it is not easy, added Shadab.
"Self-respect", he said, means many refuse to take something for nothing.
As a result, in the three weeks since the free food experiment started, “the number of people coming here to get free food is like two or three people a day at the most”.
Shadab Khan, one of the Indian owners of the Zaiqa restaurant, poses for a photograph outside his restaurant in southern suburbs of the Qatari capital Doha.—AFP
As if to emphasise Shadab's point, two workers entered the restaurant while AFP was there but left in case their complimentary lunch should become public knowledge.
In another sign of how people fuelling the Qatari boom are struggling to live, it was recently revealed that some Doha market workers were forced to live in their stalls as they cannot afford rents.
For Zaiqa too, there is a black cloud on the horizon.
The restaurant's future is threatened by a dispute over rent with the property owner and may have to close down. Shadab and his brother have a different plan for their next restaurant.
“We are putting a refrigerator outside, so this refrigerator won't have a lock. It will be facing the road and it will have packets of food with dates on them,” he said.
"So anybody who wants to take it, he doesn't have to come inside."
Thursday 18 September 2014
Marriott's Corporate Social Responsibility stunt - Pay low wages and ask customers to pay high tips
Corporations are not people, so don't let them guilt you into tipping the maid
Gratitude is a very good thing. It makes us happy. But this is what happens when Marriott and the corporate do-gooder police co-opt your feelings
If I still somehow retained any capacity to be surprised by the tone-deafness of corporate America, I imagine I’d be pretty taken aback by the news that Marriott International has joined forces with a nonprofit called A Woman’s Nation to launch The Envelope Please, a campaign to encourage hotel guests to leave “tips and notes of thanks for hotel room attendants” in envelopes that Marriott will graciously provide. (You can contribute to Marriott’s marketing budget – sorry, I meant “donate to A Woman’s Nation”! – here.)
As New York magazine’s Annie Lowery and others have pointed out, tipping is a terrible way to try to improve the lot of hotel housekeepers, whose work is stressful, debilitating, unseen and badly paid. On the one hand, tipping is basically useless as a way of encouraging good work; on the other hand, it’s incredibly useful as an excuse for employers to avoid raising wages. In the words of the National Review – and how often does one quote the National Review approvingly when not under the influence of massive quantities of hallucinogenic drugs? – “how about just paying them more?”
Corporate do-gooding efforts, with their obvious potential for ulterior motives, frequently arouse this sort of scornful reaction. (If you’ve ever felt guiltily irritated by a request to donate to charity at the pharmacy or supermarket checkout, you’ll know what I mean.) But there’s something especially irritating about the way that Marriott and Maria Shriver, founder of A Woman’s Nation, have characterized the campaign as an opportunity for guests “to express their gratitude”. “I hope this gratitude initiative will make these women feel seen and validated,” Shriver was quoted as saying.
There’s no doubt about it: gratitude is a very, very, very good thing. The sheer weight of psychological research testifying to this truth isn’t really disputable at this point: it’s associated with increased happiness; increased savoring of positive experiences; better self-worth and self-esteem; more ethical behavior and the nurturing of social bonds. Gratitude journals, despite sounding like the pinnacle of Oprah-esque cheesiness, truly work, if you do them right, by briefly listing a small number of things for which you’re grateful in a notebook each day. And you should probably try keeping one. (You don’t need to tell anyone you’re doing it.)
Yet despite these many benefits – or more accurately, perhaps, because of them – the corporate co-opting of gratitude is something we should resist with every sinew. If you need persuading of this argument, just look at what happened to fun when it started getting used as a weapon in the arsenal of consultants who promised to transform company cultures for the better. Fun (by definition, I suppose) is great. “Fun” imposed by managers on employees, by contrast, is excruciating. It damages productivity, fosters resentment, and generally isn’t remotely fun.
It’s horribly easy to see gratitude heading in a similar direction. Take something good and selfless, then promote it for self-interested reasons, and you seem unavoidably to corrode or cheapen the thing itself. Gratitude has to be “authentic and autonomously derived” if it’s going to have beneficial effects, says the University of California psychologist Sonja Lyubomirsky, who’s led several of the most important studies on the topic so far. “There’s plenty of research showing that when you do something, you have to be the one who chose to do it” in order to reap the benefits. The more you feel guilted into demonstrating gratitude, the less it makes sense to call it gratitude at all.
New data that Lyubomirsky is preparing for publication, she adds, shows that gratitude can trigger negative emotions as well as positive ones. “Though it does make people happier and uplifted, it can also make people feel more guilty, more indebted, more embarrassed and uncomfortable.”
This shouldn’t come as a huge surprise: gratitude belongs to the complex, messy world of real human relationships, where things often don’t conform to the monotone cheer that a branding effort – and that’s all The Envelope Please is, really – seeks to instil. Even if Marriott does succeed in generating waves of gratitude on the part of its customers, it may find they end up associating less-than-positive emotions with its brand.
Oh, by the way: Marriott International’s chief executive, Arne Sorensen, made about $7m in 2012. I just thought you might be grateful for that information.
Sunday 22 June 2014
Why we prefer our immigrants to be invisible
The treatment of cleaners at the University of London highlights our shameful treatment of immigrants
Independent Workers of Great Britain pickets outside the University of London Commonwealth Hall. Photograph: Peter Marshall/Demotix/Corbis
The story of the University of London's cleaners ought to be a modern Made in Dagenham. Immigrant women were scraping a living on a poverty wage from an employer who wanted them to clean up other people's mess and get out of sight when they'd finished. They fought back and, in a rare uplifting moment in these dismal times, won. They forced the university to raise their pay from £6.15 to £8.80 an hour and give them decent holidays and sickness leave.
But no one will make a film about the university cleaners because it lacks the prime ingredient for a feelgood story: a happy ending. Instead, their experience tells a more hypocritical tale about the British attitude to immigrants. Public opinion is set against them. But for all the outrage, Britain still wants foreigners' money, and employers and the middle and upper classes still want foreigners' labour – as long as it is cheap and as long as the workers do as they are told and do not make a fuss.
In 2011, no one noticed the University of London's Latin American cleaners. They travelled on the early-morning buses or trains, when most of London was still in bed, and spent their days doing shifts for two or three different employers. To the academics and students they served they were next to invisible: seen but not noticed; essential but neglected. On the surface, the cleaners, porters, caterers and other contract workers must have looked easy to intimidate. I met Sonia Chura, their leader, and two of her comrades last week. They were all barely five feet tall and couldn't speak English. They were in a strange land that cared nothing for them. "What can they do to us?" their masters must have thought.
As it turned out, they could organise an unofficial strike, get back pay they were owed, attract the attention of the radical press and go on to win better pay and terms and conditions. Their achievement is all the more remarkable because their own union, Unison, did not support them.
Anyone who hopes for a stronger labour movement knows that trade unions must start recruiting the cleaners, shop workers, security guards, carers, maids, nannies and cooks who make up the new working class. By necessity, they must appeal to women and tackle the admittedly formidable task of organising new immigrants. Yet Unison turned on the cleaners.
It found technicalities that allowed it to declare an election in which immigrants ran for union positions invalid. When cleaners protested outside Unison headquarters, its officials locked the doors and called the police. If you want to understand why the British trade union movement is dying faster than grass in a heat wave, the vignette of Unison demanding that the cops control its members tells you all you need to know.
The cleaners did not give up. They joined and helped develop a tiny new union – theIndependent Workers of Great Britain. It is run by Jason Moyer-Lee, another figure who might have stepped out of an inspirational film. He was an American graduate student in London who was appalled by the way employers treated foreign workers and devoted his time to helping them, first in Unison and then in the new union
Now he must help save their jobs. The halls of residence the women cleaned will be closed. The contractors refused to say if they would move the activists to new work. Nor would the University of London, the umbrella body that comprises the London School of Economics, University College London and many another fine liberal institution. I asked its spokesman if the university would guarantee that the women would not be punished for asking for £8.80 an hour. That was a matter for the contractors, he replied. I pointed out that the university paid the contractors. If it said they must keep the activists, the contractors would obey.
"Of course," he said in a sing-song voice, "we absolutely believe in workers' right to peacefully protest." He made the University of London sound like a noble place, while avoiding a promise to ensure that the women were kept on. I later found he had dodged the question for a good reason. As the wretched man was speaking to me, the contractors were telling the activists that not one woman who organised a protest would get a permanent job. I hope they drag them and the university through every employment tribunal they can find.
But even if they lose a tribunal case, the Home Office will not be able to drive them out of Britain. Like so many of the Latin Americans here, they originally moved to Spain. The Spaniards gave them citizenship that allows them to work in any European country. They fled north to avoid the depression the euro crisis brought. As long as Britain stays in the EU, they are safe. They will find other work, too, if they abandon any thought of campaigning for decent treatment. Employers want compliant labour, whether immigrant or native. As immigrants are the easiest to exploit, they will always be popular
It is a nice coincidence that their struggle is taking place in a university. Foreign students are in the opposite position to contract workers. They have money; cleaners do not. Britain wants their cash, but it also wants to get rid of them as quickly as possible. Universities depend on foreigners to subsidise British students – nearly 20% of the output generated by universities comes from non-EU students. Theresa May, however, has driven down the immigration figures by ending the old system that allowed foreign students to pay off debts by working for two years in any job they could find after graduating. The number of foreign students keeping the academic "business" rolling in grew at 5% a year in the last decade but is falling now. I wouldn't be surprised if it fell much further. "We want your money, but we don't want you," isn't the most enticing sales pitch.
The richer parts of London have become creepy places. The streets are deserted and the houses dark. Foreign oligarchs have bought up homes as an investment, thus fuelling the Osborne housing bubble, which provides us with what growth we have, but they don't live in them. What a metaphor for how Cameron's Britain wants its immigrants. If they are poor, it wants them to be invisible, flitting uncomplainingly from one menial job to the next. If they are rich, it wants them to hand over their money and leave. Either way, it doesn't want to see them.
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