Looting and Rioting – Bob Diamond Again

Over the past few days, the famine in East Africa, the US loss of its S&P triple A credit rating, the Murdoch disgrace, the Eurozone indebtedness and Greece’s odious debt, and even the World Championship Hen Races in Derbyshire, have all been driven from the front pages, at least in UK, by the looting and burning street riots. Consideration of their underlying causes and recommended solutions have dominated the media. Prime Minister Cameron, for example, expert in policing and broken societies, apparently wants to appoint a native from gun-toting America, to show British police how to do their job.

This blog’s intent is to flag up the impacts of theory on practice. The focus is mainly on the management and governance of real economy organisations, because they are what pays for our education, health and security, and they are where most of us work. The broad contention which has emerged from postings on this site, is that the theory which impacts on those organisations has had a profound, very widespread and more or less wholly negative effect. And that almost certainly includes some motivation for the looting and burning riots.

What is the main difference between those young people stealing mobile phones, laptops, trainers, and so on, and the likes of Fred ‘the Shred’ Goodwin, Bob Diamond and Stephen Schwarzman? One-time RBS CEO Fred Goodwin broke the bank with brainless debt and acquisitions and ‘shredded’ many thousands of jobs. Bob Diamond, currently CEO of Barclays Bank, has featured from time to time on this site primarily for his socially useless work and exorbitant take home pay. Stephen Schwarzman is billionaire boss of Blackstone Group, the private equity outfit that among other things, stripped the now bankrupt Southern Cross healthcare group of its main assets and made off with an estimated £500million. They differ from the looting, burning rioters in two main respects. Firstly, the scale of their looting far exceeds anything which has happened on the streets. And, secondly, what Goodwin, Diamond and Schwarzman do, has over the last thirty years been legalised, so they can do it with impunity. The legalisation of their theft and looting has occurred directly as a result of the universal acceptance of the Friedmanite free market fundamentalist theory which underpins the ‘greed is good’ culture.

Dealing with the rioters is not too difficult. David Cameron’s naïve bluster might be good PR short term, but is irrelevant to the real problem. The rioters were probably emboldened by the relatively mild approach of the police in the first couple of days, but the more forceful strategy quickly brought things under control. Underlying discontents no doubt remain and should be dealt with, but the British police are clearly up for it. And, if they were too gentle to start with, well, that’s a fault we might prefer to its converse. But dealing with Goodwin, Diamond, Schwarzman and their ilk, is going to be less straightforward. Successive governments, both in UK and US, fervently believe in the busted theory which makes their activities not only legal, but largely tax free. That’s got to be changed and that’s the aim of this site.

As for the World Championship Hen Races in Derbyshire, they are just a reminder that there are other things in life than money and possessions.

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