Irish politicians, and Irish business leaders, appear to have coasted through recession almost unscathed by the downturn. In contrast the “little people” have borne the downside of risks that they never took. The people who take the risks should suffer the losses. In a society where this is not happening something is fundamentally wrong.
Industrial and Military success have this in common. They both rely upon motivating large masses of front line troops to achieve goals which are mostly relevant only to a small clique at the top.
I am not talking here about Greek style citizen armies, where individuals volunteered to fight for the glory or defence of their Polis. I am talking about peasants fighting for Kings, poorly educated inner-city cannon fodder fighting to keep a politician in office for four more years. I recall when Somalia fell apart and a news crew interviewed a US soldier to ask if he was fighting to defend democracy. The news crew managed to find one of the few thinking grunts in the field. He snarled at the news crew that this war had nothing to do with democracy or freedom. “We are here to protect US commercial interests”. You could sense his frustration. His life was thrown on the line to protect the lifestyle of a few fat-cat tycoons safely curled up on loungers in their summer houses in the Hamptons.
But what has this to do with Industrial success? Richard Cantillon, the Franco-Irish economist coined the term Entrepreneur. He described it as someone who invests their working time and resources against an uncertain outcome. This is in contrast to a worker or employee who sells their labour for a fixed and certain outcome – a pay cheque.
An entrepreneur is risking a lot, and wants to see a healthy return. If all they can expect is to earn the same as a worker, why would they become an entrepreneur, and carry a downside risk? The upside for an entrepreneur MUST be greater than the upside for a worker. That is the basis of capitalism. It is also the reason why communism failed. Not enough risk takers could be bothered to take the risks in the communist system.
But here is where it all falls apart. If the King, or the General, wastefully throws troops into battle with no concern for their safety, they eventually turn their weapons in the other direction. If you want your soldiers to put their lives on the line for you, then you have to demonstrate that you are sharing their losses and their successes. You have to show that you have some skin in the game. Roman Senatorial candidates used to do this by showing off their battle scars on election day, demonstrating that they were prepared to put their own bodies on the line for the defense of the state. The Shakespeare play Coriolanus tells the story well!
In our modern industrial/commercial society, when do we see the battle scars of the CEOs? Do we see them suffer when things go wrong? Any good capitalist would say yes, of course, they are voted out of their jobs by shareholders, they go bankrupt! But do they really? How many times have you seen a CEO or Bank Chairman go to court on fraud charges, serve a token week in jail, and return five years later to a plumb job? How many former CEOs have you seen begging for change in the street?
OK, the skills that got them to the top are still there. They risk big, sometimes lose big, and rise again from the ashes and win big. And all the time the grunts are labouring away, many on minimum wage, under pressure to work longer and longer hours, to give up their personal time, for the good of the “company”.
The greatest success of the capitalist world in the last 50 years has been the near destruction of the trade union movement. As jobs have migrated from heavy industrial to white collar services in developed countries, the union structures have dematerialised. In many work places it is now frowned upon to be a union member. The US employers have used a carrot and stick approach to bring this culture in. The carrot is to offer most of the add on benefits that unions want as standard. Health insurance, reasonable basic pay, holidays etc etc. The stick is to demonise unions, identify them with the Mafia, label them as corrupt structures, refuse to recognise them, refuse to employ unionised staff. 50 years ago it was mandatory for entry level employees to join the union in many Irish companies. Can you imagine going to a job interview today and asking the HR manager “which unions do you recognise”?
In the good times the carrot outweighs the stick. In recession the reverse is true. The fat cats at the top protect their positions, and the cannon fodder are slashed and burned out of the organisation, to populate welfare queues.
I am a capitalist. But there are levels of capitalism. I am not a fan of the US model. Ireland is slavishly following the US model, and we need to stop and think hard about this. The government spout out a lot about the need for the 12% corporate tax rate to attract multinationals, and having a job creation environment. But if that becomes a job exploitation environment, then we are fools. When the top 2% of earners take more and more of the earnings out of the economy, it is time to re-assess the direction of economic policy.
Equal societies are happy societies. Capitalist models based on simple human respect are better than those founded on raw greed. Maybe it is time to root out the Rerum Novarum papal encyclical which is a fundamental pillar that underpins economic structures in Germanic countries. Maybe the Catholic church was good for something after all 🙂
LESSONS OF THE WAR; by Henry Reed
I. NAMING OF PARTS
To-day we have naming of parts. Yesterday,
We had daily cleaning. And to-morrow morning,
We shall have what to do after firing. But to-day,
To-day we have naming of parts. Japonica
Glistens like coral in all of the neighboring gardens,
And to-day we have naming of parts.
This is the lower sling swivel. And this
Is the upper sling swivel, whose use you will see,
When you are given your slings. And this is the piling swivel,
Which in your case you have not got. The branches
Hold in the gardens their silent, eloquent gestures,
Which in our case we have not got.
This is the safety-catch, which is always released
With an easy flick of the thumb. And please do not let me
See anyone using his finger. You can do it quite easy
If you have any strength in your thumb. The blossoms
Are fragile and motionless, never letting anyone see
Any of them using their finger.
And this you can see is the bolt. The purpose of this
Is to open the breech, as you see. We can slide it
Rapidly backwards and forwards: we call this
Easing the spring. And rapidly backwards and forwards
The early bees are assaulting and fumbling the flowers:
They call it easing the Spring.
They call it easing the Spring: it is perfectly easy
If you have any strength in your thumb: like the bolt,
And the breech, and the cocking-piece, and the point of balance,
Which in our case we have not got; and the almond-blossom
Silent in all of the gardens and the bees going backwards and forwards,
For to-day we have naming of parts.