A few years back I was interviewing the head of press relations at the Union General de Trabajadores (a leading union in Spain that is closely linked to the Socialist Party). Part of my work – well a large part – consists of interviewing and researching organized labour.  On this occasion, I was researching the role of the Internet and how unions were responding to such developments.

The trade union movement had not been slow in responding to the possible uses of websites and emails as a vehicle for communication to members.  Trade unions often express concern at the uses of such technological developments in changing and often worsening working conditions (e.g. the role of surveillance at work). However, they are just as quick to use them as part of their strategies.  As I spoke to the PR head the telephone rang. His response was illuminating. He pointed out that the media only contact him when there was a major strike or some significant political crisis between the trade union and the socialist party.

“The problem is that unions are understood as being fundamentally linked to bad news.”

The phone rarely rang to discuss the way the union was developing a major communication project, a major publicity campaign or the development of a very significant trade union role in the nation’s training regime. In the case of training, the Spanish unions have played a significant role through their institutional links with the state and employers – assisting the development of workers both in and out of employment. This has been a major feature of unions throughout Europe as they steer workers into new professions and new skills – through counselling, training, mentoring and advice.

The problem is that unions are understood as being fundamentally linked to ‘bad news’.  This was a concern of the Glasgow Media Group in the 1980s.  Trade unions are seen – normally – in terms which emphasize their more negative characteristics.  Part of this problem rests with the nature of the media, which is normally short-termist and sensationalist in nature.

Yet if we are to speak of trade unions and how they are evolving in a ‘new’ 21^st Century world then we must be alert to the broader reality of developments and changes. Irrespective of one’s views – and mine are clearly marked by a positive attitude to the organized labour movement – we must understand how unions are evolving and learning. How they engage with the reality of a more diverse workforce and complex employment system is an area where unions have innovated and renewed in many features of their work.

“The age of the ‘hero manager’, the lone leader, and the spirited entrepreneur has not quite gone to plan. We know that now we are all paying the price of the neoliberal project as practised in the banking sector and in the business schools of the ‘West’.”

The supposed decline of unions in terms of membership and political influence has occupied many minds since the 1980s.  The presence of neoliberal and more market facing social democratic governments, the emergence of anti-union organizations, the changing composition of the workforce with a declining industrial legacy in Europe, and the steady disquiet between political forces and those of the labour movement masks a quite unique period of trade union renewal.

The continued presence of trade unions in many parts of the world has not fitted the narrative of decline and fall many would have preferred, especially those preaching a more managerialist storyline.  The age of the ‘hero manager’, the lone leader, and the spirited entrepreneur has not quite gone to plan. We know that now we are all paying the price of the neoliberal project as practised in the banking sector and in the business schools of the ‘West’.

The idea that the world in social and economic terms is populated by a variety of organizational types such as non-government organizations and trade unions questioning the ethics and practices of the global firm has been reluctantly accepted in various quarters. Managers are not alone, theirs is not the only voice. Be it the British Airways dispute in Britain or major campaigns against particular transnational corporate practices in China, unions and NGOs appear to be throwing cold water on the assumptions of a free capitalist world unfettered and lead by ‘heroes’. Instead we have seen encouraging signs of a new politics of engagement.

“The development of centres in the United States of America, for example, has brought unions closer to the reality of new and informal types of work.”

First unions have realized to some degree or another that work is in many cases no longer concentrated within large factory units.  Instead work is more dispersed and more diverse in terms of sector and workplaces. This requires a more professionally informed and extensively trained system of union officers and representatives.  The importance of legal training has become a prevalent feature of the labour movement’s repertoire of activities.  In addition, there is a realization that you need to connect outside a workplace in terms of local communities and centres.  The development of centres in the United States of America, for example, has brought unions closer to the reality of new and informal types of work. Hence, in structural terms there has been much experimentation through worker centres and advice centres.

Second, in countries such as the United Kingdom, Australia and the USA unions are developing a range of mobilizing strategies aimed at improving working conditions and generating greater levels of worker recognition.  These ‘organising’ strategies have been able to raise the profile of campaigns, target companies with unfair employment practices, and build new generations of activists and organizers. It is as if the union has noted the marketing and sales potential of its campaign processes and many have begun to look outwards and communicate more broadly.

An example is the way UNITE and USDAW in the UK have been able to expose the treatment of workers in meat packing centres which serve the major supermarkets.  This is clearly a page taken out of Michael Moore’s new political ‘name and shame’ approach to high profile companies, which serve us and offer us ‘great deals’ due to the low costs they can generate  - costs that come with a high social price.  One cannot say all trade unions are adopting such practices. And to some degree they create a sense of awkwardness – especially amongst those who draw the attention to there being a close and working relation between workers and companies, which can undermine a more independent mobilization based strategy.  However, the emergence of these new structural and strategic dynamics is the subject of much research.

“Trade unions appear to be professionalizing and with that comes a social cost in terms of their traditional identity and purpose.”

Thirdly, within this broad sweep of developments there is a noticeable tendency towards sharpening and focusing union activities.  The emergence of the Internet has brought forth an array of highly sophisticated union websites offering new materials and communications for members.  These have been supported by a range of independent labour friendly websites, which report news and developments on a daily basis.  This dimension of the labour movement’s activities documents a large range of activities and injustices. They also coordinate campaigns and maintain a strong network of individuals in and around the official trade union movement. This has been a systematic development since the 1990s.

More recently unions have turned attention to sharpening and enhancing these developments by focusing on the way members can communicate upwards and amongst themselves, along with the developments of more focused databases and records. These particular developments in terms of union modernization have been the subject of research and evaluation conducted at Leeds University with myself as part of their team.  They have also involved studying the way forms of union representation have become more focused as in the development of equality representatives in the UK.  The use of the Internet and the use of more focused specialist forms of representatives have helped unions represent the needs and concerns of a new and more diverse workforce.

In the late 1980s John Edmonds – General Secretary of the General, Municipal and Boilermakers union of the UK – argued at the annual Trade Unions Congress that unions were faced with the need to develop a ‘new agenda’ for industrial relations.  Many began to echo and develop this concern. This would be an agenda that understood the different working conditions and needs of workers (especially female workers), that faced up to questions of equality and the needs of black and minority ethnic workers, that understood the new pressures of work in terms of stress and uncertainty, and that realized that work formed one amongst many segments of a worker’s existence and identity. The challenge set then was that workers would need support and a basis for expression and participation which transcended the narrowness and confines of their immediate employment.

Since then, in such areas as the European Union a new agenda has been addressed to some extent or another. They have seen the emergence of health and safety representatives at work, more equality strategies, a greater concern for the quantity and quality of training, and a much broader engagement with the desire for a more fulfilled and balanced existence.  Some trade union movements, especially in Nordic countries, have had the political support and resources to enact such strategies.

Those in Anglo-Saxon countries have been highly innovative in terms of what was discussed earlier in part due to the lack of such support. In Southern Europe many trade unions have used their stronger community presence and local roles to forge strategies of support around advice and training. Trade unions appear to be professionalizing and with that comes a social cost in terms of their traditional identity and purpose.

However, what is not in dispute is the highly innovative and diverse ways in which unions are beginning to reshape their relationship with the workforce and a changing workplace.  In the UK, many business schools retain an Industrial Relations tradition within their diverse portfolio of teaching and research activities.  This has allowed students to understand the role, benefits and realities of trade unions and employment regulation in social and economic terms.  A tapestry of workplace representation and interests has emerged that retains a social dimension and a concern with how workers are treated, as the real creators of the objects and environments that supports us.  Union renewal is a topic, which whilst hotly debated, has caught the increasing attention of scholars and commentators even if the phone still rings to cover more traditional matters.

Miguel Martínez Lucio is a Professor in the HRM, Employment Relations and Employment Law Group at Manchester Business School

Image provided courtesy of: http://www.flickr.com/photos/proimos/4045973322/

Aditya Chakrabortty warned that sticking to contractionary policies “in the absence of any force to lift the economy forward” could see the UK economy spending a number of years trapped “in a cul de sac marked zero growth”.

“If we look at the four main legs of our economy three out of four legs have gone and the other one is looking pretty shaky.”

His comments echo similar concerns voiced this week by the British Chamber of Commerce who warned that the accelerated pace of fiscal retrenchment would increase the danger of a double dip recession.

Offering his analysis of the British economy, Chakrabortty said that if you looked at the four main sources of national income a worrying picture emerged.

“If you look at exports we’ve had a 30 per cent drop in the value of the pound and there’s been no export boom,” he said. “Unbelievable. Secondly there’s Government spending and we know the Tories are not interested in carrying on with the high levels of spending that we saw under Labour during the crisis. The third is to have business investment. Well, I see no signs of business investment anywhere. And finally there’s shopping consumption. What we’re going to have is a high rate of VAT introduced in January and also a great deal of worry about job losses.

“The rest of the electorate will be so distracted by looking at the beatings given to public sector workers and people living on disabled living allowance that they don’t notice their own standard of living has taken a severe drop.”

“So I would say if we look at the four main legs of our economy three out of four legs have gone and the other one is looking pretty shaky.”

With latest polls showing that the Coalition Government appear to be winning the argument on the economy and that voters back austerity measures to reduce the deficit, Chakrabortty suggested the Government were pinning their hopes on exports and business investment picking up.

“They will hope that people can bear with this story that everything was terrible beforehand, Gordon Brown made a big mess and we will have to go through a lengthy period of sweeping up,” he said. “This will be messy and painful and will take time. But it’s not politically ruinous for the Conservatives.”

However, if growth does not come along, as is widely predicted, he suggested that the Conservatives would have to come up with a different message. This could see them fine-tune their rhetoric to a more divisive narrative, he argued.

“They will come up with an account of what’s going on which relies on picking losers, if you like, and ring fencing certain victims; people who work in the public sector perhaps. Certainly people who receive welfare. And they will say, ‘these are the two groups who are going to get it harder than anyone else.’ And the rest of the electorate will be so distracted by looking at the beatings given to public sector workers and people living on disabled living allowance that they don’t notice their own standard of living has taken a severe drop.”

Nick Clegg, Deputy Prime Minister, claims in today’s Financial Times that the Coalition’s policies are “fair” and we shouldn’t get hung up on “the numbers”. Nice try Nick, but no prize I’m afraid.

It is easy to see why he should complain about “the numbers”. Two reports in the past week have put a huge dent in the argument that it is possible to carry out “progressive cuts” that are “fair” to all.

The first, and less noticed report, came from the OECD – hardly a left-wing institution. Their careful analysis of trends in OECD countries over the past couple of decades shows that overall the advanced democratic capitalist countries have become more unequal during this unprecedented period of global growth, hence their title: “Growing Unequal”.

“It is curious how Messrs Osborne, Clegg et al now ask us to believe Treasury figures about the Budget’s impact and disregard the independent IFS. Only three months ago they were telling us you cannot rely on Treasury figures because they are politically biased and so we needed the ‘independent’ Office of Budget Responsibility.”

The OECD report illustrates two very uncomfortable facts – first, that levels of inequality tended to rise even during periods of economic growth in most OECD countries. And second, that in those countries that supposedly “successfully” implemented radical cuts in public spending – most notably Sweden and Canada in the 1990s – inequality rose as a result.

The only exceptions seem to be some countries that managed, during periods of growth, to reduce inequality through active attempts to do so – most notably Greece, Mexico and Britain since 2000.

The second report, which captured the media spotlight and so enraged the Treasury and government, came from the IFS. Having spent a decade using IFS figures to castigate the Labour Government, the Tories and their junior Liberal Democrat partners now apparently think the IFS can’t add up when it says the impact of their tax and benefits policies will be regressive.

“If it is difficult to reduce inequality in a period of growth, as the OECD report shows, how much more so in a period of radical cutbacks?”

Incidentally, it is curious how Messrs Osborne, Clegg et al now ask us to believe Treasury figures about the Budget’s impact and disregard the independent IFS. Only three months ago they were telling us you cannot rely on Treasury figures because they are politically biased and so we needed the ‘independent’ Office of Budget Responsibility. Has HMT suddenly become non-political then?

The main argument in Mr Clegg’s FT piece is that we all understand “fairness” and it is just about fair opportunities. His ‘killer’ point about the IFS’s analysis is that it disregards the family who get jobs and move out of poverty. What he is saying, in effect, is it doesn’t matter how much inequality or poverty there is, so long as everyone has a “fair” chance of escaping it. But, as the OECD report says, inequality is about both opportunities and outcomes.

Capitalism is generally good at creating wealth but it has two big problems: first, it is prone to catastrophic crises that destroy huge amounts of wealth; second, it is appallingly bad at distributing the wealth it creates fairly. Capitalism generates inequality as well as wealth. Advanced democracies – represented by the OECD – have evolved systems for trying to deal with both these problems.

“I am not sure if it is Naïve Nick or Nasty Nick who is trying to gloss over this stark reality with talk about equal opportunities and ignoring outcomes, but either way it’s hardly the ‘straight talking’ we have been promised.”

On the equality front every OECD country takes a substantial portion of national wealth, through taxation, and redirects it into benefits and services that create a more equal society. It should not come as a surprise to anyone, therefore, that if you suddenly and radically reduce the level of redistributive benefits and services inequality will rise and the poor will be hit hardest.

So far we have only seen the start of the regressive impact of the reduction in benefits. In October we will start to get the detail about the fierce cutback in public services that will have its own regressive impact.

If it is difficult to reduce inequality in a period of growth, as the OECD report shows, how much more so in a period of radical cutbacks?  If, as the Coalition hopes, we see strong growth in the private sector alongside a qualitative reduction in the size of the state inequality in Britain will rise. If we see weak economic growth alongside retrenchment in the public sphere, it will probably rise even more, especially through rising unemployment.

I am not sure if it is Naïve Nick or Nasty Nick who is trying to gloss over this stark reality with talk about equal opportunities and ignoring outcomes, but either way it’s hardly the ‘straight talking’ we have been promised. Noble Nick would tell us the truth – Britain will be a more unequal society, with higher poverty, in five years time. He can blame that on the previous Labour government if he wants, or on the banks if he’s more honest, but the one thing he can’t do is wish it away with fanciful talk about ‘fairness’ that just means we all have a supposedly equal chance of getting rich, or of ending up in poverty.

Colin Talbot is professor of public policy and management at Manchester Business School. This post first appeared at: http://whitehallwatch.org

Image supplied courtesy of: http://www.flickr.com/photos/libdems/4520562138/

John Monks sounds a worried man. “It’s three years since the first signs of the financial crisis emerged,” he says, down the line from Brussels, adding ruefully, “This should have been our moment.”

The weariness in his voice is hardly surprising, and reflects a growing unease in some quarters that, with speculative trading back to pre-crisis levels, the impetus for financial reform is fast losing momentum.

Certainly the brave new world that Barack Obama’s chief of staff Rahm Emanuel pointed towards in 2008 when he stated, “this crisis provides us with the opportunity to do things that we could not do before”, has failed to materialise.

“It’s the end of Keynesian stimuli and the start of belt tightening austerity. The effects will be felt by everyone, from universities to construction to schools and health. Domestic policies and trade unions will dominate the years to come.”

Looking back at the turbulent straits of currency crises, burst financial bubbles and sovereign defaults, Monks tells a story of missed opportunities and timid tinkering in the margins, warning that there could still be worse to come.

“The form of deregulated casino-led speculative capitalism that became all conquering had a heart attack and was only kept going by a massive public injection of funds,” he says. “The initial response from Governments was good and it looked like we were on our way to a different system.

“But since the Greek crisis broke industrial countries have all moved to austerity measures with Britain very much at the fore. Meanwhile, in banking it’s looking like business as usual. The markets are running the show.

“It’s a sorry story. In the 1930s the banks were solid in the UK. They didn’t need any Government bailouts but we’ve now occurred debts, which my grandchildren will be paying off in 2033. If it happens again the country can’t afford it. This Government seems very uncertain about what to do to prevent a repeat of the crisis.”

“Unions have got to use this crisis to keep saying to members that unrestrained capitalism brought us this mess and sticking with your union and working together is the only way to pull through and get us the kind of policies we need to prevent this happening again.”

As anyone knows uncertainty breeds fear and panic, and with an especially austere October Spending Review looming, confidence is in short supply.

“We’re now going into a new phase,” he explains. “It’s the end of Keynesian stimuli and the start of belt tightening austerity. The effects will be felt by everyone, from universities to construction to schools and health. Domestic policies and trade unions will dominate the years to come.”

Not so very long ago this last remark would have been dismissed as pure hyperbole. After all, trade unions have seen membership levels significantly decline since their 1970s heyday. But in a week when the Prime Minister signaled that he’s ready to invite trade union bosses to Downing Street, Monks knows that big opportunities lie ahead.

“Unions have got to use this crisis to keep saying to members that unrestrained capitalism brought us this mess and sticking with your union and working together is the only way to pull through and get us the kind of policies we need to prevent this happening again,” he argues.

It’s a typically bold rallying cry but one that masks a harsher truth; that union leadership has not been heard nearly enough in demonstrating their renewed relevance to a new generation of workers.

“Just as it was for Lancashire workers to organise in their mines and mills so it is now for Chinese workers. The centre of gravity is shifting to Asia.”

This is something Monks readily acknowledges. “We’re all struggling with change in our society,” he admits.

“The decline of mills, mines and factories has seen a huge shift in the way people work and live. In the 1950s seven percent of us went on to higher education – most people went into an apprenticeship. The economy has changed the natural territory of unions. The workforce has changed radically and we’ve lost ground. We haven’t yet found the key to organizing workers in the service sector and getting young people involved in trade unions in the same way that their fathers and grandfathers and grandmothers did.”

But he’s quick to dismiss any suggestions that unions no longer have an important role to play, particularly on the global stage.

“The new workshop of the world is China and there has been a surge in strikes and the formation of industrial unions recently,” he explains. “Japan and Korea are countries that have all faced huge strike action. Just as it was for Lancashire workers to organise in their mines and mills so it is now for Chinese workers. The centre of gravity is shifting to Asia. We still have a lot of work to do in the West to be more relevant but trade unionism will always be a force when workers are in trouble.”

On the immediate threats facing British workers he says he’s most concerned about the impact of the Coalition Government’s austerity drive and the increasingly tough rhetoric around welfare.

“In the U.S. if you lose your job you lose your healthcare, your retirement plan, you can lose your house, everything can be taken away. That’s not the case in Europe.”

“I think the Coalition Government has been reckless in their plunge into austerity and they have got away with it because people don’t like red ink in their accounts,” he reflects. “They don’t like debt. But this winter will be very difficult and I wouldn’t like to be a Liberal Democrat councilor in Manchester when all the chickens come home to roost.

“On welfare it wasn’t that long ago when everyone was saying it’s a good job we’ve got the welfare state and that Governments will spend to help us through the crisis. In Germany they were subsidizing short-term working and all of this was hailed as the automatic stabilisers that would see Europe through the recession. Then Greece nearly collapsed, Spain and Portugal ran into big difficulties and suddenly the message shifted dramatically to one of austerity. Will that change the welfare state? I don’t know. I don’t see anyone taking a scythe to welfare benefits in the post-war period and I hope we don’t get to that point. In the U.S. if you lose your job you lose your healthcare, your retirement plan, you can lose your house, everything can be taken away. That’s not the case in Europe.”

Keen for that to remain, he speaks passionately about the gains made by trade unionism in recent years including the working time directive, four weeks paid holiday and current work on the rights for temporary agency workers. But he’s only too aware of how progress can quickly be reversed and repeats a growing concern of his that the threat of a double dip recession across Europe could see a revival in the fortunes of the far right.

“The battle for us is about a more sustainable system of capitalism that doesn’t go crazy at the casino like the last one.”

“Things are happening in Europe that worry me,” he says. “I wouldn’t compare it to the rise of Mussolini or Franco but there are a lot of tin pot nationalists like Geert Wilders in the Netherlands and the Flemish nationalists in Belgium that show us the real dangers of people turning right wing. I don’t want to exaggerate their strength and power but they are there and I have concerns that a prolonged downturn might play into their hands.”

Whether our own faltering economy topples back into recession, he suggests, could well depend on the influence of Vince Cable, a politician he openly admits an admiration for.

“Vince Cable had some interesting ideas but the forces of banking are now being cleverly marshalled in favour of the status quo to keep things as they are,” he says. “I’ve always rather respected Vince’s intuitive social democratic politics but now he has collective responsibility and we’re all watching him very closely. He’s had to resist any split between investment banks and retail banks, which is what Roosevelt did under the Glass-Steagall Act in the 1930s and this is what we should be doing.”

With our interview drawing to a close, it seems fitting to return to the current climate of public sector bashing and ask if he thinks the bankers seem to have now escaped much of the media opprobrium?

“Let’s be clear, the conduct of bankers has been absolutely outrageous. Selfish, short-sighted, short-termist and downright greedy,” he answers. “They found devices where they could create businesses and win on both sides of their balance sheets. They were being feted up to 2007 for their cleverness but all they were doing was dumping risk on people. And the State picked up the bill.”

His sense of anger is palpable. With every crisis since the mid 1990s being worse than the last one – from the Asian crisis to the dot.com collapse and now the credit crunch – a further crisis could do unimaginable damage.

“Lessons have got to be learned,” he argues. “The battle for us is about a more sustainable system of capitalism that doesn’t go crazy at the casino like the last one.”

John Monks is an honorary professor at Manchester Business School and General Secretary of the European Trade Union Confederation.

The changing face of consumerist society has many implications for business and supply chain strategy. Following his recent ‘death of the consumer’ public lecture, Peter Kawalek explains why the business/consumer relationship is undergoing a radical transformation.

Is the consumer dead?

No, the consumer is not dead.

Instead we see the ideal or system of consumerism hold a tight grip in advanced nations. Meanwhile, we also see consumerism advance to other nations like China.

It is Clay Shirky’s essay that declares “RIP The Consumer.” He does so because of the Internet and its likely effects. This is interesting. Mass media was the means by which big business has passed its messages to large populations. The Internet loosens commerce’s grip of media and gives us a new social media.

“Labour unions will surely get organized around social media and show us conditions in factories, in supply etc.”

In our age of social media, the business/consumer relationship is changed because of at least three factors:

1. Big business is less able to pass its messages to large populations (at the moment, at least).

2. Business is subject to a more demanding environment, encompassing transparency, complaint and rumour. To take these in turn, on transparency, labour unions will surely get organized around social media and show us conditions in factories, in supply etc.  Customers are already actively grading and evaluating the goods and services that they receive e.g. Apple’s iPhone 4. Finally, there will be the cranks and mischief-makers who use the Internet to say things true or untrue about companies.

3. Alternative lifestyles, voices and ideals are also allowed to circulate. These can be significant e.g. the open source movement, Creative Commons, Wikipedia et al.

Beyond the Internet, there is the challenge of sustainability.

So, there is a plausible argument that consumerism as we have known it, is now passing.

How has the meaning of consumer society changed in recent years?

Well, I think that in a country like the UK it is becoming increasingly obvious that we cannot do anything about inequality. The pressures of consumerism are increasingly associated with this inequality, through personal debt held by people with no means to pay and, also, arguably, a political passivity.

“Bankers have positioned themselves as a kind of gas industry; a kind of inlet-valve to the happy system. The more happy gas they pump in, the more they get to inhale for themselves.”

This positioning of politics as a kind of unfashionable or bad service within consumer society is a corrosive change. People routinely talk as though you cannot do politics if you do not want to. In other words, they interpret it as just another consumer choice. In truth, giving up every Saturday to go shopping is a political act.

So, I would argue that what we are seeing is that a consumer society in the form we currently know it, necessarily increases inequality.

Your lecture pays considerable attention to the influence of Freud’s nephew Edward Bernays on mass consumerism. What do you consider his legacy to be?

It was Margaret Mead who said “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” I guess we place Bernays at the centre of a small, linked group of people who brought a new understanding of the human mind to problems of social control and economic growth. In Adam Curtis’s film (’The Century of the Self’), the Freud family features most strongly, but there are other important names like Ernest Dichter, Sigmund Freud’s neighbour in Vienna.

“Ultimately, human beings learn. They learn from their experience. They learn from mum and dad. They learn from their grandparents. I think that we increasingly know now that consumerism does not bring happiness.”

An important point is that this is not about goodies and baddies. This is not about pro-consumer or anti-consumer. All of these were fascinating, remarkable people who helped make our times. I wonder if Bernays, if he were alive now, might claim that decades of peace amongst former European foes and then the fall of Communism in Europe are in some ways part of his legacy. I certainly think he has a plausible claim to make.

Interestingly, your lecture quotes a Wall Street banker working for Lehman Brothers in the 1930s arguing that ‘we must shift America from a needs to a desires-culture.’ Given that this man employed Bernays, can we also see his influence on the largest bankruptcy filing in US history when Lehman’s collapsed in 2008?

Well, there is a lot of dramatic value in that quote from Paul Mazer. Consumerism of course relies on a supply of money and one can see that there has been pressure in the system for decades. Society has needed to keep on pumping desire. Bankers have positioned themselves as a kind of gas industry; a kind of inlet-valve to the happy system. The more happy gas they pump in, the more they get to inhale for themselves. So whilst one could not claim any direct link to the stock market crash, one can see the pressure.

I think the quote also makes you think about the role government as the keeper of the long-term interests in society. Clearly, the role of government should have been to represent interests bigger and more long-lasting than the immediate desires of consumerism.

The former US President Herbert Hoover wrote to Bernays in 1928 saying: “You have taken over the job of creating desire and have transformed people into constantly moving happiness machines, machines which have become the key to economic progress.” Is this strategy still on course or is the constantly moving happiness machine grinding to a halt?

This idea of the “constantly moving happiness machine” is really key. It tells us more about our current condition than any other phrase I can think of. The quote was actually delivered by Hoover to the new advertising and marketing industries, not just to Bernays (though he was easily the most prominent at the time).

Ultimately, human beings learn. They learn from their experience. They learn from mum and dad. They learn from their grandparents. I think that we increasingly know now that consumerism does not bring happiness. Perhaps we even know that the concept of happiness itself isn’t as simple as the billboards and commercials would represent it.

If we put this inner questioning together with the Internet and the challenges of sustainability, perhaps we see the limits to our current social model, and maybe a hint of what might come after.

Peter Kawalek is a Professor of Information Systems at Manchester Business School.

Image supplied courtesy of: http://www.flickr.com/photos/x-ray_delta_one/3943850948/

Britain has one of the least corrupt public services in the world. Mistakes, yes they happen. Inefficiencies, certainly – what large complex organisations don’t have a constant battle with becoming overweight? But public servants pocketing public funds, or demanding bribes to do their jobs, is mercifully a very rare occurrence, now.

“The reason we have one of the least corrupt systems is because we made it that way, by creating a rigorous system of policing to ensure probity in public office.”

It was not always so – some of us are old enough to remember that as late as the 1970s there were cases of personal corruption, and sometimes organised corruption, in parts of the public services. Local government and the police featured in most of these cases. And as late as the 1980s there were cases of political corruption (Westminster Council) or political maladministration (Lambeth) that were deemed inappropriate.

People now forget that this was one of the principle reasons for the creation of the Audit Commission (AC), the NAO and the other audit bodies in Scotland, Wales and Northern Ireland. The reason we have one of the least corrupt systems is because we made it that way, by creating a rigorous system of policing to ensure probity in public office.

A secondary reason for creating the AC was to provide the public with rigorous analysis of how well various local public bodies were doing in spending public money, not just honestly but efficiently and effectively as well. This role vastly increased in the 1990s under the previous Conservative government, not least after their failure with the Poll Tax. It was not New Labour that gave the AC the role Eric Pickles now finds so objectionable – that of monitoring the performance of local services. It was his Party.

“Getting rid of the Audit Commission  is not just about abolishing a quango. The AC, alongside the National Audit Office, has an almost constitutional position – indeed in most countries the audit bodies are constitutional.”

This new role continued to be controversial, and it is true that the AC sometimes over-reached itself. Whilst Comprehensive Performance Assessments (CPA) of local authorities were generally regarded as a success, the successor Comprehensive Area Assessment (CAA) was viewed as a step too far by many. But the comparative performance data that the AC has published on local government, over nearly two decades now, has proved an invaluable source. Ministers, Councillors, citizens and academics have all been able to use this information to make judgements about local services.

The AC was limited, by statute, not to criticise government policy. But just occasionally it got around that, not least by teaming up with the NAO. Their joints reviews – especially the one of the youth criminal justice system some years back – were insightful and had a massive impact. No wonder some in Whitehall hate them.

Now all that is likely to disappear.

Or will it? The hasty announcement of the AC’s death has been characterized by a complete lack of clarity about what will replace it – for both financial and performance audit. The usual suspects have rushed to reassure us it will ‘save’ £50m, but given the uncertainties about how the new system will work this is not just speculation, it’s pure spin. In reality, many of the things the AC does will continue, but either being done by unaccountable private audit firms or they will disappear into the bowels of Mr Pickles ministry.

“This is not about cuts, or the need to cull Whitehall, it is about a major feature of our democratic system. Margaret Thatcher, for all her faults, understood that.”

Many of us probably thought the new Coalition would make an interesting experiment in seeing how a more left-of-centre, or maybe centre-of-centre Party might restrain a more right-of-centre one. The announcement of the abolition of the AC is an example of how rather than 1 plus 1 equalling 1.5, with this government it is more often than not making 3, or even 4.

Neither the Lib Dems nor the Tories promised to abolish the AC in their Manifestos to the British people. Nor did the Coalition Agreement. What the Coalition did promise was a more open, consultative, style of government. What they clearly meant was they’d be open with and consult each other and the rest of us could go hang.

Getting rid of the AC is not just about abolishing a quango. The AC, alongside the National Audit Office, has an almost constitutional position – indeed in most countries the audit bodies are constitutional. The AC is responsible for the performance audit of nearly all the services that matter to people on the ground, besides health. Its future deserves a much more serious debate than a quick chat in Whitehall between the Coalition buddies and an almost instant decision by Mr Pickles.

Whatever the criticisms that can be levelled at the AC, and they are mostly not the ludicrous self-serving drivel being spouted by Ministers, it is far too important to be put to the sword on a whim. This is not about cuts, or the need to cull Whitehall, it is about a major feature of our democratic system. Margaret Thatcher, for all her faults, understood that – which is why the AC was formed under her government and strengthened by John Major. It’s about time someone told Mr Pickles, and his Lib Dem friends, that the term ‘elective dictatorship’ is a term of abuse, not something to be desired.

Colin Talbot is professor of public policy and management at Manchester Business School. This post first appeared at: http://whitehallwatch.org

Image of Eric Pickles supplied courtesy of: http://www.flickr.com/photos/communitiesuk/4624682386/

With the oil giant having raised an additional $5billion through a syndicated bank loan to cover the ongoing costs of the Gulf of Mexico oil spill this week, Paul Jackson, a professor of corporate communications at Manchester Business School, said BP could mount a similar recovery to Shell from their current crisis.

“The most famous example of an oil company in deep, deep crisis who dug their way out is Shell with their issues many years ago with Brent Spar,” he said. “Shell thought they had done the right things in dealing with the politics and the science and engineering, but they forgot the green politics. Shell has learned a huge amount since then and are a radically different company now from what they were.

“We’ve already got a coded message from Bob Dudley saying we’re going to focus on safety culture and that’s maybe his way of saying we screwed up before. He didn’t say it in those terms but maybe we’ll find out that’s what did happen.”

“BP seemed to have paid attention to the engineering, but perhaps they focused on the greenwash, the Beyond Petroleum logo and all the rest too much. But they clearly have got some lessons to learn. Not just about PR, but in how to engage with people and build strong relationships with people who are critical to their business.”

At the height of the Brent Spar crisis in 1995, when Shell announced it planned to dump a disused oilrig in the North Sea, the oil company lost millions of dollars and suffered major damage to their reputation as customers boycotted Shell across the world.

As a result of mounting protest, Shell subsequently announced that it was not going to sink the Spar and finally dismantled the oilrig in a deep bay in Norway.

Professor Jackson added that BP’s new CEO Bob Dudley had made a good start in signalling that safety culture would be paramount.

“One of the things that it is easy to lose sight of is safety and there are plenty of instances in other safety critical industries like nuclear power and so on where when you start focusing on cost you put yourself in grave danger,” he said, “and we’ll find out whether BP did this. We’ve already got a coded message from Bob Dudley saying we’re going to focus on safety culture and that’s maybe his way of saying we screwed up before. He didn’t say it in those terms but maybe we’ll find out that’s what did happen.”

Image supplied courtesy of: http://www.flickr.com/photos/dahlstroms/3959191879/

Earlier this year, my International Business project took me to one of the fastest growing cities in the world: New Delhi. The three-month live consultancy project is a key feature of the MBA at Manchester Business School and provides a great opportunity to broaden students’ international work experience.  While in the Indian capital, I was fortunate enough to be given a guided tour of The Global Open University of Nagaland. The university is one of the many Indian academic institutions now offering the MBA qualification. One reoccurring message caught my attention as I wondered through the university campus, staring down at me from posters in almost every room – “Be a job provider, not a job seeker”. It got me thinking….

“Surely there must be thousands of recent MBAs starting new ventures, ready to man the engine room to economic recovery in the western world? Not the case, I’m afraid.”

The Indian economy is currently growing much faster than western economies. While there are many factors behind this trend, a contributory factor is undoubtedly the huge increase in the number of Indian entrepreneurs. Enterprise is flourishing as the country loosens its bureaucratic control and laws restricting competition.

In contrast, the number of entrepreneurs setting up in the UK and the US has generally fallen over the last few years. Arguably, if either Western economy is going to credibly tackle their deficits, without incurring a massive welfare bill as a result of cuts, we need entrepreneurs more than ever. Entrepreneurs are the eternal optimists undeterred by the fragile nature of our economy.

Who could be better suited to answer this call to arms than a freshly qualified MBA graduate, having received a master-class in the science of commerce and a newly acquired network consisting of the brightest prospects in business?

Indeed, entrepreneurship is the second most popular form of MBA specialization, with top business schools such as Harvard, Stanford, Wharton and Babson all offering programmes oriented towards entrepreneurship.

Additionally, recent MBA graduates from UK and US business schools face a national commercial environment vastly different to how it was before they began their degrees. Two of the sectors that historically used to recruit the bulk of fresh MBA graduates, namely finance and management consultancy, are almost undistinguishable from what they were two years ago.

Surely there must be thousands of recent MBAs starting new ventures, ready to man the engine room to economic recovery in the western world? Not the case, I’m afraid.

“I believe that the spirit of enterprise can be taught, but characteristics such as intuition and appetite for risk are harder to learn in a lecture hall.”

Allow me to illustrate; Stanford Business School is recognized as one of the world’s leading business schools, even offering an MBA specialized in entrepreneurship. The Stanford campus is situated in the fertile environment of Silicon Valley, the world’s leading hub of high-technology innovation and development, an area accounting for no less than one third of all venture capital investment in the United States. There is no doubting Stanford’s contribution to the evolution of Silicon Valley, yet information published by Stanford, suggests that only 3-6% of their MBAs become entrepreneurs upon completing their course.

Conversely, many of the World’s most famous and successful entrepreneurs wouldn’t go near an MBA, despite the undisputed relevance to their businesses. I could not picture Richard Branson sitting through a three hour-long financial accounting exam.…

There has been an unresolved age-old argument as to whether or not entrepreneurship can be taught. Branson is certainly testimony to the fact that a good education is not a necessary pre-requisite to being a successful entrepreneur.

I believe that the spirit of enterprise can be taught, but characteristics such as intuition and appetite for risk are harder to learn in a lecture hall. It is necessary to get into the mindset of an entrepreneur to understand their constitution. Entrepreneurs will take massive personal risks, often in defiance of logic. MBA programmes tend to encourage students to apply logical frameworks. All entrepreneurs will make mistakes in business. The MBA knowledge can help to reduce the frequency and cost of wrong decisions, whereas entrepreneurs with a limited education sometimes learn the hard way.

The skills taught on MBA programmes also provide an overview of the essential building blocks of business and, in most cases, offer an insight into the valuable softer management skills such as negotiation and relationship building. This knowledge can only aid people starting a new venture. A strong business acumen breeds confidence that is visible to business associates and rivals.

Despite having highlighted the disparities, there are plenty of similarities between stereotypical entrepreneurs and fresh MBA graduates. Shared characteristics between the two groups include being competitive, dominant, tenacious and driven. MBA students are not totally risk averse either; it’s a brave decision to sacrifice salary, time and money to study for a MBA.

The question remains, why do so few newly graduated MBA take the entrepreneurship route? Only the very brave will continue to sacrifice further salary, time and money at the end of their studies to set up a new venture. For many it’s simply not an option.

There are no guarantees at the end of an MBA programme. Statistics issued annually by business schools and publications like The Financial Times are evidence of how the MBA can accelerate careers and increase earning potential. The temptation is for new MBA graduates to be drawn to lucrative corporate jobs, with many having borrowed money to pay for the tuition and living costs. When the initial debt is cleared, they often become used to a good salary and are generally saddled with mortgage and family commitments. This is where I consider a big part of the problem lies.

“I had a turning point during my MBA course when I found myself completing a 25-page application form for a commercial role with a large multi-national company. I found I could not even justify to myself why I wanted to work for such a huge organization.”

There is some light at the end of the tunnel; research published by IE Business School suggests that 25% of MBA graduates will start up their own business at some stage during their career. Perhaps new MBA graduates want further commercial experience and connections before taking the leap of faith.

Western governments are now in desperate need of entrepreneurs to seize opportunities from the downturn, while others look to be led out of the gloom. Indeed there is a need for enterprising types to provide services no longer offered by governments. Very few people will be better suited to answer the call to arms than business savvy recent MBA graduates. If MBAs are to continue to be recognised as future business leaders, then we need a higher percentage to be creating their own innovative businesses.

I had a turning point during my MBA course when I found myself completing a 25-page application form for a commercial role with a large multi-national company. I found I could not even justify to myself why I wanted to work for such a huge organization. The application form ended up in the waste bin. From that point onwards it was always going to be something a bit more maverick.

I graduated from the MBA course earlier this year and set up a joint venture with a local successful businessman I met on my MBA journey. ‘The Sympo’ is our innovative product – the antidote to the dullness of conventional conferences.

I have to be honest, I am not on a personal crusade to fix the UK economy, but I’m pleased to report I am no longer a job seeker. My next challenge is to be a job provider……

To check out the Sympo visit www.bearhunt.org.uk

Richard Branson image supplied courtesy of: http://www.flickr.com/photos/shankbone/4594428872/

No, not the irritating Kaiser Chiefs song, a real riot. The revelations that up to 15,000 jobs, and 22% of the budget, is probably going to be slashed from the Ministry of Justice – which runs prisons in England and Wales – started that little ditty running around my head again.

We were asked at a Public Finance roundtable several months back, before the Election where the ‘pressure points’ would be when the cuts started, and I said – ‘Prisons’.

“Prisons was always a prime candidate for cuts – not because it is massively overspending (it isn’t) or because it is unnecessary (it has to carry out the sentences of the Courts), but because no-one cares much about them – until there’s a riot, or a serious escape.”

Prisons are already overcrowded and the Prison Service has been doing a frankly heroic job in trying to stop things getting so dire that they erupt into riots again, as they have in the past. Conditions have, in some respects anyway, improved in the last 15-20 years – the disgusting ‘slopping out’ has gone, for example. But the relentless rise in Prison numbers has caused enormous friction in the system. Prisoners are moved about to try and maximise space, solving one problem – overcrowding – by creating another – disgruntled prisoners often being shoved from pillar to post and back again, sometimes hundreds of miles from friends and family.

The chances of serious rehabilitation work fades as prisoners are never in the same place long enough to complete programmes, and staff time is absorbed in constant removals.

Prisons was always a prime candidate for cuts – not because it is massively overspending (it isn’t) or because it is unnecessary (it has to carry out the sentences of the Courts), but because no-one cares much about them – until there’s a riot, or a serious escape.

“One idea I put forward was that Prisons should be funded by a per capita mechanism, thus ensuring that as the prison population rose, or fell, funding would be automatically adjusted.”

The Coalition government’s Damascene conversion to a more enlightened incarceration policy is of course to be welcomed, but there is a huge danger it will be used as a further excuse to prematurely slash prison spending before prison numbers start to drop. It wouldn’t be the first time that the Ministry responsible, and the Treasury, made over-optimistic forecasts and then went ahead with spending decisions regardless of the reality.

Back in the aftermath of the sacking of Derek Lewis as DG of Prisons in 1995, I was on the Review that was set up to look into the management of prisons. One idea I put forward was that Prisons should be funded by a per capita mechanism, thus ensuring that as the prison population rose, or fell, funding would be automatically adjusted. This is a system used, at least partially, in several other countries. Not surprisingly, both the Home Office (then responsible for prisons) and the Treasury were not impressed although some of the HMPS management were interested. Of course, nothing came of it.

Today such a mechanism would ensure that the prisons budget wasn’t prematurely slashed before numbers reduce. Instead, they almost certainly will be, and the pressure cooker will be pushed closer to the point of exploding, again. If, or more likely when, it happens don’t be surprised.

Colin Talbot is professor of public policy and management at Manchester Business School. This post first appeared at: http://whitehallwatch.org

Image supplied courtesy of: http://www.flickr.com/photos/kashklick/3406972544/

Richard Murphy, an advisor to the Tax Justice Network and director of Tax Research LLP, said the Government had taken the wrong approach to managing the deficit.

“We’re going for cuts, which are undeliverable and which will create mass unemployment,” he said. “We should instead be going for tax. We should be increasing some taxes on those better able to pay but in particular we should be looking at the tax gap we have in the UK – a gap which is made up of 28 billion of late and unpaid tax owing to the revenue, 25 billion or thereabouts of tax avoidance – that is the artificial use of loopholes, partly by individuals, partly by companies – and 70 billion in my estimation of tax evasion representing the shadow economy in the UK.”

“If we had an office for tax responsibility whose job it is to monitor the tax gap, to say we need to allocate adequate resources to HM revenue and customs to collect that money…then I believe we would raise substantial revenues.”

With the Prime Minister announcing today that he intends to use private agencies as ‘bounty hunters’ to reduce benefit fraud by £1billion, Murphy argued that the Government could recover far bigger sums in other areas

“If we had an office for tax responsibility whose job it is to monitor the tax gap, to say we need to allocate adequate resources to HM revenue and customs to collect that money instead of cutting the number of people they’re employing right now and set annual targets for improving our collection, then I believe we would raise substantial revenues, which would help clear the deficit,” he said. “This is a source of money we aren’t tapping.”

He added that additional efforts to make banks more accountable would also yield significant sums. The best approach, he said, would be to require banks to account on a country-by-country reporting basis so that annual accounts included an individual profit and loss account for every country in which they operate, showing their transactions not only with the rest of the world but on an intra group basis. “Because that is how they shift their profits around to avoid tax.”

But while making the case very strongly for an urgent crackdown on tax evasion, he rejected David Cameron’s recent argument that reducing the deficit was the most urgent issue facing Britain.

“Debt is just like a mortgage and we’ve got a very low mortgage on our income right now,” he said. “It’s got 14-years to run. And it’s about 60% of our income. Whereas people borrow hundreds of percent of their income to buy a house, this is a very manageable situation. And the people who are buying that debt are pension funds and others who need it to fund the income of the growing older population of this country. There is no crisis about government borrowing in other words. It’s affordable. It’s deliverable. We will not default.”

Image supplied courtesy of: http://www.flickr.com/photos/alancleaver/4105756012/