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Vote for Real Business

‘Business as usual’ is the Tory aim, but they never define what they mean by business. It comprises a multitude of formats from start-ups, small and medium sized innovative enterprises, co-operatives, charities, plus a small number of large scale organisations focused on providing for the public good. That is real business.

Then there are the financialised leviathans which already dominate most mature industries. They seek ever more monopolistic or cartelised power, in order to fix market prices of minimised cost products and services, so as to maximise payments to their shareholders. They do so at the expense of not just their customers and employees, but all humanity, as well as the sustainability of the planet. That is financialised business.

The ideology that has dominated all governments since 1979, fails to distinguish between real and financialised business. So ‘business friendliness’, which could be justified to support the development of real business for the benefit of all, is applied for the gain of the financialised monsters which are the main political paymasters. As Mrs May might put it: ‘business is business’!

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Reply to the Prime Minister

13th May, 2017

Rt Hon Theresa May,
Prime Minister,
10 Downing Street,
LONDON, SW1A 2AA

Dear Theresa May,

MAKING BREXIT A SUCCESS IS CENTRAL TO OUR NATIONAL INTEREST

Thank you for your undated letter under the above heading. I appreciate the familiarity of your greeting which I return herewith.

I had thought that your letter was to me personally, although I imagined you must have written likewise to some other postal voters. But then I noted, with the help of a magnifying glass, that your letter was “Promoted by Alan Mabbutt on behalf of the Conservative Party”. So perhaps you were not aware that the office of Prime Minister was being abused in this way.

Regarding the content of your letter, Theresa, (I return the compliment of interspersing my communication with your first name), I have some strong and stable disagreements with your basic argument. You suggest my vote could make the difference between taking advantage of the “enormous opportunity for Britain as we leave the European Union” and the alternative of “higher taxes, fewer jobs, more waste and more debt.” If you believe the opportunity to be so enormous then why did you not vote to leave in the first place?

I don’t think those are the real alternatives. Leaving the EU could have ambiguous short term impacts, but will be bound to cause long term damage. Successive governments from Thatcher on have encouraged the sale of many companies and industries to foreign investors for the sake of short term gains to the exchequer. They have disguised the sell-off as foreign direct investment and evidence of being ‘open for business’. Those foreign owners will take account of Britain’s non EU membership when they come to make the next strategic investment such as a new production unit or model of car. The inevitable result will be “fewer jobs, more waste and more debt.”

You make a valid point regarding “higher taxes”. At present the ones who pay the lowest rates of tax are the richest. The extreme case, Theresa, is your American hand holder, who at one point in his election campaign admitted not paying taxes for 18 years because “I’m smart!” You, Philip Hammond, Peter Mandelson and the members of your chaotic coalition may be ‘intensely relaxed’ about people getting ‘filthy rich’. But you should be more concerned about so many people in this affluent country getting extremely poor, sleeping rough, depending on food banks, etc etc.

You are right that the opinion polls have been wrong and could be again. But, your emboldened postscript, mouthing off all the public relations processed and agreed platitudes, destroys any confidence I might have had in you as leader. You may be right to be so fearful of your opponent, it seems he could well turn out to be as thoughtful and intelligent a first minister, as you seem to fear.
Yours sincerely,

Gordon Pearson
Registered Postal Voter

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.
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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.
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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.

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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.
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