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The alliance against optimism

Thu, 26th Feb 2015

As a business writer, it’s hard work being an optimist these days. It’s not that there aren’t potential good news stories out there in both public and private sectors, nor that creative thinking  – and thoughtful practice – aren't going on in the background. But you wouldn’t know it because the pall of the dominant narrative is so heavy, so all-blanketing, that no hint of an alternative can leak out.

And despite the cynical political boasting of economic and employment growth, the tone of the underlying ‘official’ narrative is overwhelmingly pessimistic. It takes the form of gloomy variations on Mrs Thatcher’s notorious TINA (‘there is no alternative’), constantly repeated until anyone querying them risks being ferried away by men in white coats. Thus in the public sector the conventional wisdom tells of remorselessly increasing demand and sense of entitlement, leaving authorities no option but to beat it back by rationing, reducing service levels and cutting costs, not to mention importing the ‘discipline of the market’. In the private sector, it’s the pressure of capital markets that is adduced to justify paying fortunes to bankers and CEOs, while the firms that they run can apparently no longer afford first pensions, then career, now full-time employment or even a living wage (the narrative glosses over the fact that 80 per of the £6.5bn paid out in Working Tax Credit goes to subsidise poverty wages in the private sector, mainly in retail, care and hotels and restaurants).

In fact, none of the conventional wisdom is true, or at least not that it is inevitable. What we see is actually the result of poor choices, whether made by politicians or business or both. Thus it’s not underlying demand for public services that’s ramping inexorably up; it’s failure demand inflicted by an outdated, unfit management model. Excessively high and low pay in firms does not happen by virtue of natural law; on the contrary, they are reverse sides of a single coin, directly linked by the incentives that have been deliberately (mis)designed to align the interests of managers with those of shareholders.

If choices are made, they can be unmade too. Unfortunately, unpicking them is made harder by two powerful second-order grounds for pessimism. The first is that today’s prevailing management model, being based on a fundamentally dark view of human nature, is itself gloomy, justifying sharp top-down application of carrots and sticks to oblige opportunist workers to do their jobs. The second reason is that these and other perverse assumptions the dominant narrative is based on remain hidden because of the media’s shameful failure to question them or the vested interests that they serve, let alone construct a more convincing alternative narrative. In an excellent recent article in the London Review of Books (it takes a literary journal to do a proper sceptical job on economics, apparently), Oxford economics professor Simon Wren-Lewis shows how to a man the media have bought the government’s ‘no alternative to austerity’ line in the face of compelling evidence that it is being deployed not for economic benefit (we are all £1500 worse off as a result) but as an excuse to shrink the state. Austerity, he says bluntly, is a con.

At least economics gets a hearing; the idea that there are choices to be made in the way companies are run and directed is raised only tangentially in the press, if at all. Thoughtfully reviewing Will Hutton’s new book, How Good We Can Be, Peter Wilby correctly describes the nature of New Labour’s historic betrayal: after a brief flirtation with the idea of stakeholder capitalism, he writes, ‘far from bringing the public interest to bear on the private sector, ... New Labour brought the private sector and its values to bear on the public sector’ through measures like PFI and the NHS internal market. That’s spot on. But even the perceptive Wilby falls for the prevailing determinism, adding that instead ‘Labour preferred to leave the free market undisturbed’ – as if there was anything free or given about a market consciously rigged in favour of shareholders during the arch-ideological Thatcher and Reagan years. That too was a choice, an audacious and foolhardy one, whose results we are not only still living with but doing nothing to challenge.

Testimony to the corrosive effect of the gloomy narrative and its accompanying determinism is the meek acceptance of another bogus inevitability, the race to the bottom. So ingrained is the notion of private good, public bad, and so strong the cognitive dissonance from asserting that there is an alternative, that instead of reacting logically – demanding that companies live up to their responsibilities to all itheir employees, not just CEOs – there are increasingly strident media and political calls for ‘feather-bedded’ public-sector workers to be reduced to the private sector’s pitiful levels.

The same divisive rhetoric is used to depict a supposed war for society’s scarce resources between the generations. But here again the blindingly obvious answer is not to rob granddad Peter to pay teenage Paul, setting society against itself, but to work to boost the available outputs (private enterprise) and distribute the resources created more effectively (public). It’s the supply side, stupid.

Let’s face it, if the private sector, the engine room of capitalism, is now too feeble to keep people in work, in food and shelter and in decent retirement, then either capitalism ceases to be defensible, or the engine room needs a complete and urgent overhaul.

That’s good news because despite the institutional pessimism the latter is perfectly possible – if we choose to do it. The bad news, of course, is you’d never guess it from the dominant narrative, incessantly parroted and almost never challenged by the mainstream media, which have thus, even the parts of it that think themselves ‘progressive’, become part of a de facto alliance against optimism, action and change. For journalists and everyone else alike, that is not a happy thought.

 


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User comments

Andy Lippok :: 26th Feb 15
Simon. Thanks again for a great article! Are there any places, people where the alliance against optimism is being challenged either in infancy or effectively in a grown up way? Does Greece begin to show this or are they too small to make a difference?
John Watson :: 26th Feb 15
Your previous fellow page colleague in the Observer, the excellent William Keegan, has not bought the government’s ‘no alternative to austerity’ line and has continually shown how Osbourne "the most dangerous chancellor (he) can remember" ( I think I quote him correctly) has conned the vast majority into accepting this false premise. You are absolutely right in seeking to reframe the whole debate.
Paul Reading :: 26th Feb 15
Glen Greenwald documented the growth of the culture of untouchable private and public elites in "With Justice and Liberty for Some" (Metropolitan, NYNY, 2011) meanwhile back in Manchester, how can we not have realised that the solution to the problems in the NHS Simon has descibed so clearly is further re-organisation! Transferring budgets from politically controlled PCTs to clinician controlled CCGs is to be overtaken by transferring overall budgetary control back to a government approved politician. Amazing.
Aidan Ward :: 26th Feb 15
Accurate and to the point, thank you. My questions are about whether there is a constinuency that knows it is all balls, just a constituency that has been thoroughly deprived of a voice? There are certainly protest votes, and certainly campaigns. If there is any appetite for alternatives then what is needed is the platform for dialogue on a regular basis.I absolutely agree there is no sensible discussion of extremely important issues.
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