Capitalism's Last Gasp?

If the latest plethora of books on the subject is anything to go by - probably not. An article in The Spectator critiques the latest offering by a C4 presenter and Left wing ideologue. Yet again, a left winger is predicting that Capitalism is doomed, and that it will be replaced by 'greater sharing of resources' - which seems to be Left wing speak for 'Sodomy non sapiens'. Essentially, this prediction has been trotted out since Marx and probably before him and they still haven't managed to come up with a workable alternative.

Capitalism is as old as humanity. I would suggest that it began when Ugg first discovered that he could trade a leg of mammoth for a months supply of fish, which could be traded for a wife, new sandals, a years supply of leather loincloths and a bag full of freshly napped arrow heads and axes. That he could trade those for the rest of the year and keep everyone else working to supply him with more trade opportunities and food probably arrived at the same moment. And, I would venture, that ever since some 'thinker' in the group has whinged that Ugg's enterprise approach to trade is 'unfair' and fails to 'distribute the proceeds evenly.

I suspect that Capitalism, love it or hate it, will always be around in some form. The reason is that, unlike the Left's ideal society and system, it is flexible. It responds to change. It adapts, and it rewards effort, enterprise and innovation - all of which are anathema to the sort of 'managed' redistributive economic systems favoured by most people on the Left of the political spectrum. Ironically efforts to 'control' economic activity, or to redistribute the rewards usually result in a widening of the gaps between 'rich' and 'poor' and ultimately in the 'means of production' actually being moved entirely abroad.

Recently I have indulged myself, reading some of Owen Jones' work and making an attempt to read several other tomes on 'non-capitalist' economic systems. I've given up. None of them seems able to see that any system such as they propose doesn't actually 'fix' anything. In fact they simply exchange to entrepreneur with some Party Hack and associated Apparatchiks who reward themselves and patronise everyone else in the name of 'fairness'. Nor do they seem able to recognise that every attempt to create the sort of systems they favour fail for the same reason every time. People do not like being told what they may and may not have. They do not like having some faceless bureaucrat serving a 'leader' enjoying the fruits of everyone else's labours, telling them they aren't entitled to some reward for their efforts because it is 'unfair' to the bone idle twerp they work alongside.

As The Spectator article says -

Oddly enough, the recent batch of left-wing doom and conspiracy books, from those of Russell Brand and Owen Jones to the more serious and informed Mason, point to a unified worldview. This sees human beings in democracies not as people with free will and unimaginable potential, but as inanimate beings to whom things are done. 

I do agree that raw unadulterated Capitalism produces some big inequalities, but teaching me to be envious of the guy who ventures his capital (earned or unearned) in some new business venture and strikes it rich, isn't addressing the problem. Most folk need only three things - a regular income, security and a 'home'. Yes there are those who live in sixty room mansions, own a yacht and four cars, but most of us never could even if we lived in some Left wing Utopia.

If there is one thing I have learned reading history and travelling in my work capacity, it is that there is a distinction between ideological theory and reality. I would love to see a more equal society in which no one goes hungry, no one is homeless or without medical care, but I also recognise that, no matter how attractive the ideological theory, it is unlikely to be achieved in any human society. Simply because humans are not all the same. We come with all manner of personal abilities, skills and ambitions. Ideology seldom takes account of that. In addition every Left wing regime I have ever encountered ran on the same principle - the belief that the 'State' owned the money in everyone's pockets and could spend it. So they floated loans, printed more money, raised taxes until it hurt, spent the money and then wondered why their economies flatlined. As Mr Micawber famously said; "Income Twenty Pounds per annum, Expenditure Nineteen Pounds, nineteen shillings and sixpence - happiness. Expenditure Twenty Pounds and sixpence - disaster." A lesson there the Left simply refuse to learn. Their solution to everything - raise taxes! Tax the rich until the pips squeak as one Left wing Chancellor of the Exchequer put it. The result of his idiocy was a massive departure of 'capital' and a fall in revenue income.

Recently I was surprised to learn that in present day Russia income tax is a flat rate irrespective of income. Health care, social welfare and so on are all set at 'basic' levels. If you want better, you are free to buy it, but the 'State' doesn't provide it. That applies across a range of former communist countries, and, contrary to what writers like Owen Jones believe was the case, often this replaces a system where everyone paid for the best for the ruling elites, and got just the basic care themselves. Many other nations have similar systems. Hong Kong was one and still is, and China, Taiwan, India and several other major growing economies have the same idea - one rate of tax for everyone. In Hong Kong the super rich were encouraged to be 'philanthropic' - and they were often very generous.

I have to agree with the writer of The Spectator article. There is clearly something in the left wing mindset that refuses to acknowledge that no system is entirely 'fair'. Or that there will always be inequalities. That, after all, is the human condition.

Brain Drain

My thanks to Josephus for a couple of recent reports and articles on matters close to both our hearts. The first was an item on the finally published report on the tragic deaths of firefighters in Warwickshire in 2007. The report states, inter alia, that the Fire and Rescue Service training system had become limited in scope, and required significant review. It went on to say that the "Integrated Personal Development System" (IPDS) "competence based scheme" was not meeting the services' expectations as personnel were training to complete "portfolios" rather than focusing on "firemanship".

Funny that, this was exactly what both Josephus and I identified and argued when the scheme was first "rolled out" with great fanfare as the future of fire and rescue service training. The reality is that both of us were long enough in the tooth to have witnessed the failures of so-called "on station training" and "learning on the job" when not reinforced by formal progression training with examination and practical assessment. No amount of "ticks in boxes" can ever substitute for experience reinforced by knowledge, yet the champions of IPDS (all, one might add, rewarded with 'Honours' or very nice promotions and postings for their efforts) publicly declared that "knowledge of theory was unnecessary, you only had to know how to 'do' something".

Tragically, their wonderful scheme is now showing just how deeply flawed IPDS is. Deaths on duty have climbed steeply since its introduction and the scrapping of knowledge based examinations. There are other factors in play as well, however, one being played out right before our eyes at the present moment. While, on the surface, the battle over Fire Service Pensions appears to be simply about changing the retirement age, it is part of a much deeper ailment. It is now openly declared that a fire fighter should not expect to spend his/her entire career in the service. One young HR Director (in my day this post would have been filled by a crusty and battle scarred SDO or ACFO), blithely told me at a meeting that she discouraged people from thinking they could expect a 30 year career and a pension. In her view it was "healthy" for the Service to have a high staff turnover. Worryingly, at least in the meeting, the CFO of the FRS concerned, agreed with her!

Which brings me to the second article. It is rather long, and can be read here with the title "Inside the World of HR" . The author opens with the experience of Tesco, just a few years ago set to take over the world - or so it seemed - but now in deep trouble financially. The article identifies one of the major flaws that has entered business in the last 40 or so years - the haemorrhage of knowledge and experience due to high staff turnovers. The author cites several studies conducted by scientific bodies which identify that fact that any organisation actually 'owns' about 10% of its "knowledge" - the other 90% is in the heads of its employees. Now most employers will argue they "own" that as well, but the fact is they don't, and can't. Each individual has developed special and unique experience, it cannot be transmitted in any other way than the much maligned "sitting next to Nelly" system of sharing. Add to this now the most revealing findings of the studies cited in the article I've linked.

Most major organisations have a 15% per annum change of staff. The authors of the study from which that comes argue that this is a success; according to them, it makes business more flexible and less likely to be "locked into" the past. However, what they don't acknowledge is that it takes, on average, only 7 years for any organisation to undergo a complete change of staff at that rate. With that goes all knowledge of what worked and what didn't work in the past. Thus, as with Tesco, wheels get reinvented, mistakes get repeated and ultimately, a successful and healthy business ends up in trouble.

The reason is quite simple. It takes at least a year (in the FRS it is regarded as 2 years for a recruit firefighter and, in the past, a further 4 years as a firefighter before you could be considered for promotion) for a newcomer to an organisation to learn the ropes and become fully productive. Now comes another devastating statistic - in all the studies cited the maximum length of time most spend in an organisation is 5 years. So, as an employer and, if I'm lucky, my new recruit today, will have just reached his/her most useful range of knowledge and experience when they depart, taking 90% of the knowledge and experience I could use, with them. As the author of the article shows by example after example, this haemorrhage of knowledge and experience is steadily destroying organisations.

There are a number of factors at work here, among them the prominence and power of accountants who see everything in the short term and in terms of "cost". Pensions "cost" so the solution, for an accountant, is make sure you have only the minimum numbers qualifying for one. Experienced and long serving employees "cost" in terms of higher salaries, benefits and "on costs" such as pension contributions - so reduce the number you have on the books as much as possible. Then there is the whole question of "management" as a "profession" (and I'll confess that I have a number of "Management" qualifications). The academic belief that there is such a profession is, in my view, serious wrong. "Management" is a function, not a "profession", and, if one cares to look at the most successful managers in the world they are all people who have a very wide understanding and deep experience of the things they manage. If you want examples of poor management practice, look no further than an organisation which has "generalist" managers parachuting into senior roles with little or no understanding of what they are managing.

I was amused to see that the author of the article I have linked, cites the UK Civil Service as just such an example.

How does one fix this situation? I'm inclined to think it will require a major shift in thinking, and a return to the idea that a career is for life and not just a short term step on the ladder to the next "job". It will require a total rethink in what is being taught in MBA and various other "Management" courses, and it will require a complete change of direction in "Human Resources" so that the value of retaining staff, and the knowledge and experience they hold will be seen. It is perhaps too much to hope for that the "short-termism" of our western business culture can also be eroded and the longer vision held by other cultures adopted.

Answers on a post card please ...

Human Resources or Human Beings: The difference between 'things' and 'people'

Among my reading lately was an article on LinkedIn (which is why I cannot post a working link here) on the subject of getting “your” Human Resources Department to work properly. Obviously the article is aimed at managers and possibly at Human Resources staff, but it made interesting reading. The main thrust of the article was that many HR Departments are not functioning well or efficiently. The author flagged up several areas of concern, among them a ‘disconnect’ between the people they are supposed to be sourcing, developing or disciplining. In part this is because there are differences between what ‘Corporate Management’ think the department does, and what the HR Manager thinks it does, but there may also be a lack of certain skills within HR, or even a lack of communication between ‘cells’ within it. 

Many years ago now, I held the “HR” management function for my then employer, a Fire and Emergency Service. It was a very interesting task, and something of a major challenge, but I enjoyed it in the main. The foregoing will tell readers that I'm old enough to remember when "HR" was called "Personnel" and frankly, the change of title is part of the problem. Suddenly 'people' became a 'resource' and thus 'objects' or 'goods'. The very word ‘resource’ suggests some sort of warehouse from which ‘workers’ can be drawn at will, and which, when worn out or no longer required, can be discarded. Treat people as objects and soon their motivation to do anything more than the absolute minimum goes straight out the window. They also become very reluctant to discuss anything at all with anyone from ‘HR’ lest it be used against them, or used to impose new responsibilities or workloads on them. 

One of the points the article raised is that a properly functioning HR Department is also about ‘developing’ skills for an employer. For many corporate employers this is an ideal situation, but all too many don’t make proper use of the possibilities it offers. Coming from a uniformed service background, it is a function that is often separated from HR under the label of “Training and Development”. For a service such as mine it was and is a key function, and it can quite easily fit within a HR remit. However, I would also caution that it must be managed by someone who understands the difference between managing the kitchens of a hotel and being able to manage a fire station with multiple functions. While some skills of management are common and therefore transferable, some of the technical skills and knowledge required to make a good Station Manager/Commander/Officer in a fire service are unique and cannot be gained through an generalised management course. Once again, my experience of trying to explain some of this to HR managers leads me to think there may be a reluctance to accept that a NVQ for managing a shop or office is not a suitable qualification for managing a crew or station in an emergency service.

As I said earlier, I am a retired senior fire officer, and one of the things one learns in 'command' is to know your people, know them, trust them, and know what makes them tick. Far to many of the HR 'professionals' I have encountered in my latter years of employment didn't understand this and could frequently undo years of trust and respect by imposing some new system or policy without consultation. This is often compounded by a refusal to discuss anything of concern to individuals with the person. Many HR Managers I have encountered in recent years insist the person must take their concerns to “their Union” so it can be aired at a “Union Consultation”. In my view, this is not the right way to handle something, the “Union” often has a wider agenda, and the individual’s ‘issue’ may not fit it. As someone who was, at best, a reluctant member of a Trade Union (I disagree strongly with their direct involvement in political ideology and links to specific political Parties), I resented being made to join one (and continuously have to explain why I refused to make a ‘donation’ to an affiliated political party) just so I could get certain concerns about the manner in which contracts were being ‘adjusted’ without consultation or appeal.

I lost count of the number of times I have been told by HR managers that the department was there to 'provide support and services to 'the management' and not to 'staff'. An employee encountering that is likely to immediately clam up and avoid disclosing anything beyond what is demanded of them. I have also found that many of those I encountered didn't know the Employment Laws as well as they should. They often made something worse when they did take a wrong turn, by trying to blame the employee, or by creating a situation which brought about a conflict with the Unions. For me the worst moment came when I was told by an HR 'Director' (who had replaced a uniformed senior officer with many years experience and success at keeping the staff happy and onside) that “no one in the fire service should expect to have a career in it” and that the “average length of ‘career’ should not exceed 12 years”. The individual concerned did not understand the fact that the fire service relies heavily on experience as well as qualification. In fact, quite clearly, there was absolutely no interest at all in even being informed of it. Remove the experience element and you have a recipe for disaster, which, unfortunately, has been borne out in reality since that discussion.

In fairness, senior management can often put the HR personnel into an unenviable position of having to implement policies which they may know will cause hardship. The management is abusing their HR Department in this case, and using them as a buffer between themselves and the difficulties their policy may cause. A typical example is the ‘policy’ that imposes some operational requirement which those who will be affected by it know is going to cause them to come into conflict with the public. Having been there, I can tell you it is useless trying to raise those concerns, so you are faced with either disobeying the policy and hoping to get away with it - or letting the proverbial wheels fall off. Either way you know you, and you alone, as the “resource” involved will be blamed, and will be punished for it having gone wrong. No wonder “HR” are frequently seen as the enemy.

It is my experience that all to often, HR managers adopt an 'adverserial' approach to legitimate staff concerns and generally ramp up the conflict. Sometimes this is down to 'management' decisions requiring the shedding of staff, but more often than not it is down to sheer bad  communications skills and sometimes to clumsy efforts to change employment contracts by stealth. For many the concept of 'consultation' is to send round a letter stating something is to be ‘changed', and when the staff object, tell them to 'like it or leave it'. As you may gather, my experience of modern 'HR' is not a happy one. There is, I feel, too much emphasis on the ‘resource’ and not enough on the people. Too much generalisation instead of addressing some of the real problems and difficulties - like bullying, or constant playing of the ‘minority’ card to cover poor skills or knowledge gaps, and not enough attention to addressing identified problems rather than, as was common in my last employer, blaming everyone for the problems created by one or two individuals instead of dealing with the individuals concerned. I still remember with enormous anger having notices plastered everywhere setting out “our core values” (the same one’s I, and every other uniformed employee had worked to our entire careers) and threatening disciplinary action if we failed to adhere to them. I should mention that the very same people who put these up everywhere, were the worst offenders in breaking them …  

The author of the article that set me off on this listed ten suggestions for improving Human Resources functions. Four of the listed items would, in my view help. They included breaking down the tendency toward isolating skills within the department, adopting a more consultative approach, getting to know peoples’ needs and development ambitions and being less remote. I think that the first step is to have an HR manager who actually understands the 'operations' the 'Human Resources' he manages are engaged in, what stresses and strains those impose on individuals and then to find ways not to compound them. All too frequently, the HR Manager is someone from outside the organisation who has little, if any, knowledge of what the resources they are managing actually do. While it would be impossible to know in detail what each and every post does and how it does it, it would help to actually talk to the individual before attempting to change it. Consulting the Union doesn’t cut it, since the Union representative probably doesn’t know either. 

How do we fix the disconnect between what management think HR does, what HR think they do, and what the staff think HR is there for? It will certainly go a very long way if "HR" stops treating people as 'assets' in the manner of 'goods' to be pigeon-holed, costed and measured all the time.

The wheel turns slowly ...

As someone who grew up in the 1950s and early 1960s I sometimes look back and wonder at the hubris that sprang from the 'triumph' over Nazism and Japanese expansionism, which coupled with the Doomsday angst of the Cold War, to produce the world we live in now. As the saying is; "We didn't see THAT coming!" Mine was probably the last to grow up with teachers and parents word being 'law', in a world where 'drugs' were used by losers and idiots and we recycled everything glass, and even tin cans. Compost was something you made yourself if you were a gardener, and you didn't go to the supermarket for your groceries, meat, spare tyres, car parts and everything else. Even dog and cat food was bought raw from a butcher, and cooked, then minced by hand and sealed into 'preserve jars' and stored in the refrigerator.

Fresh vegetables came in bulk from the local 'German' Market held every Saturday in the Municipal Market Halls, which often supplied a plump fresh chicken for our Sunday dinner. Chickens and eggs were all 'free range' in those days, and, yes, not cheap. I look back in amazement now that roast chicken was our 'luxury' once a week, and we ate stews, meat loaf, fish pie and many other dishes which 'stretched' whatever meat was available. My grandmother (who lived above us with my grandfather) baked biscuits, cakes and other treats, and made jam - her speciality was orange marmalade - and also pickled and preserved a lot of the vegetables. Peas came in the pods, in large string sacks, and my brother and I had the job of shelling them and storing them in large glass storage bottles. Beans also had to be cut and the 'string' removed so they could be stored and there was very little went to waste. It wasn't that we couldn't afford the odd bit, it was more a case of being very aware that by some standards, we were very well off, and waste was definitely something to be avoided.

Groceries were bought daily from the local greengrocer who also stocked a range of tinned and bottled goods, liquor came from an 'off-licence' and meat from a local butcher (who happened to be my uncle). Fish we bought fresh from the fishing boats, or at our local fishmonger, milk was delivered in a hand drawn cart and the empties collected, washed and refilled, as were almost all other bottles. We could make a bit of pocket money going round looking for 'lost' empty cold drink bottles and returning them to the shops who paid 1d (One whole Penny!) per bottle. But then, a Mars Bar about three times as big as the ones you get now, cost 6d and a slab of Cadbury's chocolate cost 2s 0d (Two shillings, or twenty-four pennies, for the post metrication generation!). Wages were, by todays standards, low - my father earned only Thirty-two Pounds, ten shillings (32/10s/0d) a month and my mother around Twenty Pounds. Out of that they paid the rent, fed and clothed my brother and I and ran a car. There were few 'luxuries' - but heck, we had plenty and appreciated what we had.

Looking back I can now see the gradual change that came over our world, starting in the late 1950s, probably around 1958/9. First came the supermarket. Instead of carry a basket up to Henry's Shop as it was known locally, we all ended up going to the supermarket on Saturday after the German Market. Then we had to carry the shopping out to the car in the large paper bags. It wasn't long and 'Henry's Store' was downsizing, then closed. Our trips to the Market became less frequent - usually only now for the occasional fresh chicken. After all, we could get everything we needed at the supermarket - and it was cheaper.

Somewhere along this road, cold drinks stopped coming in glass bottles. First they went into tins - actually aluminium, and later into plastic 'bottles' which you threw away. Convenient, yes, but now we had a rubbish problem. Being a 'free-range' kid, something else I noticed was the way in which suburbs and townships were expanding. By the time I left school, a lot of the places I'd hiked through as a Scout were now covered in houses, laid out as townships and simply no longer 'wild space'. That accelerated from around 1965 and by the time I married whole tracts of land I'd camped on, or visited or known as farmland was covered in houses. And that brought with it the first 'ecological crisis' - rubbish.

Between 1945 and 1965 we'd somehow managed to shift from a society that minimised waste, recycled as much as possible (even clothing was 'passed down', collars and cuffs 'turned', shoes resoled and so on) to one which threw everything away at the first sign of wear, or the first sign of an 'improved' version, and the 'consumer' society took off. Great for the profits of the companies feeding this, not so good for the animals now being 'factory' farmed as things to be bred, fed, slaughtered and packed for the supermarket without compassion. Some say we turned the African Slave Trade into an 'industrial' process - you should see how we treat animals in our 'consumer' desire for cheap excess.

The first indication that something was going very wrong was the streamers of discarded plastic shopping bags adorning every fence around our cities (I grew up in Africa in case readers don't know) and the waste dumps began to overflow. It got worse, waste simply couldn't be cleared fast enough in some areas, and most of it was ecologically non-degradable. I hadn't been in the fire service lonbg when the first recycling businesses started to spring up, someone having realised there was more to the old Yorkshire saying of "where there's muck, there's brass" than just a quaint expression. At first though, they could only handle paper and clothing, but gradually that extended into other things.

For some of us, it was funny to watch as the wheel turned slowly back to doing things we remembered as kids as being 'normal'. This is why, now resident some six thousand miles north of where I was until 1987, I sometimes find it annoying to be lectured by soime snotty nosed 'Green' clutching his/her iPad/iPhone/Android/(Insert Name of Latest Gizmo Here) and dressed in designer jeans, teeshirt and synthetic jacket and expensive trainers, about the need to 'save' the planet by cutting down my 'consumerist' lifestyle. I should laugh, after all, my wife is constantly nagging me about wearing shirts I bought almost twenty years ago, or my extreme reluctance to give up perfectly serviceable furniture to the Crunchy-Munchy truck when I'm damned sure someone, somewhere out there would love to have it and use it.

Yes, it is convenient to be able to go to the supermarket and buy cheap produce. It is convenient to be able to discard my drinks carton/can/bottle, but there is a hidden cost to all this 'consumerism' and it is one we all end up paying. Yesterday I raised the issue of energy, and here again, I must point out that back in the 1950s, our power was locally generated by a small coal burning power plant (as Josephus pointed out, the coal creates steam, which turns the turbines, which ...) and our home had only one power socket per room, one central light fitting and in the kitchen we had a grand total of two power sockets, the light and an electric stove! Luxury. Power was expensive, and we didn't 'waste' it. If you left a room, you turned the light off. Nor did you waste water. the supply was metered and my father was always quick to 'have a go' if the monthly bill was higher than usual.

I think we have reached a turning point as a society. The straightforward 'consume-'til-you-bust' model is broken. The model most 'Green' organisations promote is unworkable and unsustainable with our populations at present levels. Somewhere between the two we need to find a balance, consume less, recycle more efficiently (I've just watched a perfectly good lounge suite be destroyed by the Crunchy-Munchy truck - one which, if there was a decent furniture recycling system in place would have been cleaned, any defects restored, and passed to someone who needed it) and relearn the art of living, rather than existing in a constant rush.

Yes, the 1950s were probably the apogee of the western dream lifestyle for many, but the naked consumerism that began in the 1960s is not an ideal model either. As Fagan says in Oliver Twist, "I t'ink I better t'ink it out again". Perhaps not me, but perhaps some of those very clever people in the corridors of power - assuming they can stop gourging long enough to do so ...

Mr Cameron? Mr Milliband? Mr Clegg? Frau Merkel? Anyone?