All posts by Gordon Pearson

Sustainable Management Education

Three facts about 2016: UN reported that 102 million people were on the brink of starvation, up 30% on 2015; Sir Martin Sorrell, MBA, defied investors and paid himself £70m; asked why he hadn’t paid any tax over the previous eighteen years, Donald Trump replied ‘[b]ecause I’m smart’. Is there a connection?

The world is facing destruction in various forms, from the loss of social cohesion by unsustainable and ever increasing levels of inequality of wealth and income, both between and within economies, the waste of finite resources, the pollution of oceans and atmosphere, a looming mass species extinction and the avoidable inevitability of global warming. All that against a background of exploding global population, from 1bn in 1800, 3bn by 1960, 7bn by 2012 and forecast to reach around 9.5bn by 2050.

Business historian Alfred Chandler suggested that business was the most important institution in the economy and its managers the most influential. It was, he argued, considerably more powerful than Adam Smith’s ‘invisible hand’ of market forces. Clearly, business could play the lead role in correcting those damages. But business is destroying the Earth.

Business leaders do not just command business. They are also influential over finance and the media, as well as academia through their funding of research and academic institutions, especially business schools. And they are hugely influential over political decision making through their £multi-billion funded lobbying industry, politically oriented think-tanks and the operation of revolving doors through which individuals progress between these various sectors and government. Those are the various components of what Roosevelt referred to as ‘organised money’ when he ended the austerity driven Great Depression by introducing the New Deal back in the 1930s. ‘Government by organized money was,’ he said, ‘just as dangerous as Government by organized mob.’ Today it is far more dangerous.

Those various components of organized money are mostly led by the products of business school education. Continue reading Sustainable Management Education

GDP, Austerity and Wellbeing

GDP is a hugely misleading measure of economic wellbeing. It includes items which are actually destructive of the real economy on which most people’s wellbeing depends. Not only that, but most of it is actually immeasurable.

They used to measure progress by GNP which tried to measure nationally owned economic activity, no matter where it took place. But as successive governments presided over the disposal of UK owned assets to foreign corporates and governments, GNP reported the post-industrial economies as shrinking. Self-interested politicians found GDP a more convenient measure, since it ignored that massive fire sale and provided short term breathing space. So, despite the long term damage done to the real economy, those disposals, nominated as foreign direct investment, were actually celebrated in the UK as demonstrating it as ‘open for business’.

That fits nicely with the Milton Friedman version of the free market open access ideology that took command of Anglo-American politics since the days of Thatcher and Reagan. Initially, that perspective included an acknowledgement of the theoretical importance of the quantity of money circulating in the economy. That quantity would determine the rate of inflation as well as the growth of the economy. Politicians tried it and it failed, to such an extent that even Friedman himself confessed disappointment.
Continue reading GDP, Austerity and Wellbeing

Education, Education, Education

Education is what really matters. Who could possibly disagree?

The globalised economy has moved jobs from the G7 industrialised economies (in alphabetic order: Canada, France, Germany, Italy, Japan, UK and US) to the newly industrialised BRICS economies (Brazil, Russia, India, China and South Africa) which account for half the world’s population. The simple and obvious reason for job migration was initially because labour costs were so much lower in the BRICS economies. But their manufacturing experience has provided a foundation for their future economic development; they now offer much more than simply cheap labour.

President Chump promises to bring those jobs back to America, but he’s going to struggle. The G7 economies will not be competitive at the low end of economic activity, unless and until they fall much further back into the doldrums. G7 success will depend on developing in the high tec, innovative segments of new industries. And to do that, they must lead the world with their educational systems.
Continue reading Education, Education, Education

Sustainable Business

Tony Judt opened ‘Ill Fares the Land’, his valedictory ‘treatise on our present discontents’, suggesting that something was ‘profoundly wrong with the way we live today.’ Since the 1980s we have relied on the free market to maximise monetary wealth and to distribute it with fairness and justice. But it clearly hasn’t worked.

We have been here before. The 1929 Wall Street Crash and the following austerity driven Great Depression, which Roosevelt ended with New Deal investment, has many parallels with today’s situation. The same forces that fostered the prolonged Great Depression are now heading the world to destruction. But today’s global population, which has more than tripled since the 1930s, is not just afflicted by rising and unsustainable inequalities of wealth and income, but also earth’s oceans and atmosphere polluted, its finite resources wasted, its biological species headed for a mass extinction, and these impacts capped by the seeming inevitability of global warming.

Business, if appropriately managed and governed, may have the potential to resolve all these issues by the invention and application of new technologies. No alternative solution appears to have a like chance of success. Business historian Chandler described business as the most important institution in the economy and its managers the most influential. Business controls the real industrial economy. It controls finance. It controls the media. It is hugely influential in academia through its funding of research and academic institutions as well as individual appointments. It also, increasingly, appears to control political decision making through its $multi-billion funded lobbying industry, its politically oriented think-tanks and its operation of the revolving doors through which individuals progress between these various sectors and government. Just about the only thing business does not control is business itself.

Continue reading Sustainable Business

The Road to Armageddon

In Anglo-America and like economies, mature businesses are mostly driven according to Friedman’s command, to make as much money as possible for stockholders. The underlying ideology, which is generally accepted as the way the world works, holds that the free market is the most effective decision maker regarding the allocation of economic resources. Therefore both taxation and regulation should be cut to a minimum since they only distort the market’s most efficient allocations. The ideology also holds, according to Friedman, that the private sector of the economy is twice as efficient as the public sector, which should therefore be privatised wherever possible. Just those two strands of the ruling ideology, combined with a business sector which complies with Friedman’s injunction to maximise shareholder money, is heading the world down the road to Armageddon, a dictionary definition of which is ‘the site of the last decisive battle between the forces of good and evil.’

That dichotomy between good and evil might be very apparent if the ideology was given 100% implementation. Such would involve absolutely no regulation, no taxation and a private sector which was running all public services, as well as business operations, for the sole purpose of maximising shareholder wealth. That at least makes absolutely clear, the direction of travel we are currently taking.
Continue reading The Road to Armageddon

Business as Usual

The shocks and discontinuities impacting the global economy have led governments to seek ‘business as usual’ as the ultimate desirable state. However, they appear not to recognise that business is not a coherent singularity, but a mess of virtue and vice. Fragile start-ups, innovative fast growing SMEs, and predatory extractors of value for the benefit of “investors”, are all classed as businesses. Few politicians have any direct experience of the virtuous categories, though some have made substantial gains from the vice.

Governments need to diagnose and be specific about what categories they are referring to, before offering their so-called ‘business friendly’ prescriptions. Light regulation may benefit the innovative SMEs earning their keep in highly competitive markets. But that same light regulation, if applied generally, will encourage the monopolistic leviathans to use their market power to exploit their customers and all other stakeholders for the sole benefit of shareholders. That predatory action has a negative impact on the real economy and is damaging the common good.

This is not solely the result of actions by powerful but corrupted individuals. There is a natural evolutionary process leading business along those tracks unless constrained by relevant regulation to prevent monopolistic market abuse.
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Science, Divisions and Hope under Islam

Science under Islam: Rise, Decline and Revival’ provided Professor S M Deen’s excellent 2007 analysis of the rise of science (and technology) in the Islamic Golden Age, examined the causes that led to its decline and the failed later attempts for its revival, and finally discussed the social and religious reformations needed for it to flourish in contemporary Muslim societies. (It is a unique, highly relevant and well-written book which is still selling and hugely pertinent to today’s situation and definitely worth a read – see Social reformation would need to include the rule of law, democratic infra-structure and human-rights, while religious reformation would involve the interpretation of scripture. Without such reformations, it was argued, the Muslim quarter of world population would be constrained from full participation in the science-driven 21st century world. That would be despite the magnificent Arabic and Muslim contributions to philosophy, arithmetic, algebra, geometry and trigonometry, astronomy, optics, chemistry, geography, mechanics and medicine achieved during the Golden Age.

Now, almost a decade later, Professor Deen provides further analysis of the divisions in Islam, tracing the historic origins of dissention, including an analysis of the birth of the extreme doctrine of Takfirism, the development of the Sunni/Shia division and the problematic creation of Sharia, based originally on unreliable oral accounts of sayings and deeds of the Prophet. The analysis also includes further examination of the present day sources of financial strength and influence in the conflicted Islamic world and the implications for Muslim and non-Muslim societies. There is hope for a better future, but it will take more resources, understanding and patience for its achievement.


By Professor S M Deen

Origin of Division and its Expansion

In most major religions, the source of division can be traced back to their origin, and in the case of Islam, to division in the Prophet’s own household. The successful group in that household was led by the Prophet’s favourite wife Ayesha, daughter of Abu Bakr who later became the first Khalifa, and the other group led by the Prophet’s daughter Fatima, married to Ali, the Prophet’s cousin and adopted son, who later became the 4th Khalifa. Ali, seeming not to have political acumen, was overwhelmed by grief at the death of the Prophet in 632 CE. He simply sat with Prophet’s dead body for over two days before burying him. In the meanwhile Umar, friend of Abu Bakr and the future second Khalifa, sensed a dangerous political vacuum and negotiated, just in time, a deal with the Medinan tribal leaders, to declare Abu Bakr as the Khalifa, i.e. the successor to the Prophet. This news came to Ali too late. Shortly before his death, the Prophet had acquired a property as war booty, which he had promised to his impoverished daughter Fatima. But the new Khalifa, Abu Bakr, unnecessarily antagonised Fatima (and Ali) by refusing to pass this property to her, pronouncing that the Prophet had no heir. Fatima, who died six months later, never recognised Abu Bakr as the Khalifa, though Ali did so after her death. Some Muslims, particularly Shias, would disagree with the idea that Ali was politically naïve and would view perhaps the election of Abu Bakr as the Khalifa, as a conspiracy against Ali.

Ali failed to succeed Abu Bakr or even Umar. The third Khalifa Usman was assassinated, after which Ali became the 4th Khalifa in 656 CE, but Ayesha opposed and led an army against Ali (battle of Jamal, Nov, 656 CE) in which apparently 20,000 Muslims, many of them revered Companions of the Prophet died. A battle for succession between Prophet’s favourite wife and his adopted son in which 20,000 revered Muslims died does not bring glory to Islam. This battle somehow legitimised in the Muslim psyche that the killing of each other for political power is somehow acceptable in Islam, Ayesha lost the battle and escorted out of the battlefield to safety on Ali’s order by Muhammad, Ayesha’s favourite half-brother, and Ali’s adopted son and supporter. She retired unharmed in Medina where she remained until her death some 20 years later. It is very likely that Ayesha unwittingly found herself leading an army against Ali, which she regretted deeply later, saying “I wish I was never born”. However, for the Muslims worse to follow.
Continue reading Science, Divisions and Hope under Islam