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June 28, 2004 Someone, somewhere - Adam Smith? - said this to emerging European governments at the beginning of the industrial revolution ( John Maynard Keynes may have collaborated later): “In order to exert and maintain an upward pressure on the lower end of the labour market, it is necessary to allow a small percentage of your labour force to remain unemployed”. No one will admit to anything else but that this is just an observation although in many places in the world, this observation is still part of the scene because it remains such sage economic advice: It keeps the buggers in line, mate! So, to me, it’s not difficult to understand why Keyne’s theory that unemployment is the rule rather than the exception, is, however absurd, true: Of course it’s the rule! It’s an economic Law! For more than three hundred years that ‘advice’ – or observation - has been part and parcel of the Western economic paradigm! That it has caused ‘untold misery’ has, of course, been ‘told’ by people like Robert Tressell and others. Tressell’s “Ragged Trousered Philanthropists” takes us gently with (Socialist) eyes wide open over the turn of the last century in peri-urban England employing a wonderful word-picture of a group of carpenters, plasterers, painters-and- decorators, and general labourers who are too often ‘put off’ to literally starve – with their families! It is also a compassionate literary parody about a group of men at the very bottom line of the bottom of the labour ‘force’ and the men who control them – “There’s plenty of chaps who’d jump at your job in a minute, Laddie!” says the foreman (in the book, not ever in downtown New York or Chicago!) But this is not a book review. Unemployment has been the scourge of the economist class since the birth of the discipline: How do we as governments combat, alleviate, nay, stop the system of unemployment when we are actually mandating it? Damned if you do, damned if you don’t. Alvin Toffler and others have amply discussed economic patterns and trends - but few solutions – (South African Graham Linscott’s Umgeni Valley Authority is a solution). No, this is a review of a half-century’s observation from the outside looking in on the economic nature of management, beginning with the Ragged Trousered Philanthropists and followed by the Time-and-Motion Study people who came into our faces back in the sixties. The other side of the story? It’s actually not that difficult to create jobs. Of course it takes a Statesman rather than an economist to actually create work with the abundant resources the earth has at hand: Theodore Roosevelt’s Tennessee Valley Authority must come to mind. The South African economy is rich in all resources including basics such as food and, today, with the help of the rest of the world, the necessary medicines to keep AIDS a manageable, non-life-threatening problem. This country possesses first world economic, communication, financial and industrial infrastructures that exist nowhere else in sub- Saharan Africa. But back to mundane truths stretching into our lives today: The view through those oh-so-clear retrospective lenses by which we see that the T & M boys must have been acting on way back then: The forceful briefs from the United Nations Studies on Population which capitalist governments of the First World (whose customers were beginning to dry up): The conclusion that Zero Population Growth (ZPG) had finally reared its economic cul- de-sac. Simplistically the first leg of the capitalist milking stool is Labour, the second is Added Value and the third leg is Gree … sorry, Growth. (How else can you satisfy Shareholders’ demand for their annual increase in returns? The concept of Sustained Economic Activity is only now being mooted as an alternative to ZPG realities – watch the press. So the customer base, the new babies being born who were all potential customers, was about to stop expanding. T & M showed us how to get lean and: No new customers meant no growth in profit through a customer base that had been expanding for three hundred years. Yes, up until the sixties, growth had been a natural progression based on population. From the early seventeenth century it had become a bedrock prediction which in turn became a dependable which in turn became the norm which in turn became the paradigm which in turn became the demand: Growth is now by definition part and parcel of any capitalist enterprise. And, of course, it being the nature of the beast created, Growth became the new God. But this god now has feet of clay – just as the god of communism has stumbled with its feet in the mire of failed idealism: Back to the sixties - pretty soon capitalists were indeed lean and mean and increased efficiencies did produce better bottom lines across the board – Growth! But, more and more, the only new customers available were the ones you could steal from other organizations in your line of business. Then along came the eighties and “Thank God for computers!” “Shit, we got rid of around ten million middle managers in the eighties in America alone! “How did we live with quarterly report backs when we could now plug a computer straight into the factory floor and monitor it on a daily basis?” “There are only three people between me and my lowest brand managers in Hong Kong. There used to be twenty-three!” – Unilever chairman, 1978. Well, without that huge middle management wage bill, we can post a slightly better profit. The multinationals ‘flattened’ themselves - against the floor, the walls, and the ceilings. They decentralized then centralized again looking for ways to keep feeding the shareholders while management gurus – T&M graduates all - proliferated. Growth! Growth! Into a world which had permanently stopped growing customers! And it’s just clicked in the western corporate mind: ZERO POPULATION GROWTH = NO NEW CUSTOMERS! At this point I found the capitalist world becoming quite amusing. The invention of the term “Small, Medium and Micro Enterprise’ (SMME) for the work now occupying those redundant ten million middle managers is the biggest employer on the planet today! But the new values are slightly different. The workforce now ‘kept’ unemployed is highly educated, observant and cynical. As I watched this first leg begin to wither, a new paradigm came into being: Driven by the ‘growth at all cost’ pressure from ‘shareholders’, a new way of thinking found itself able - by brute economic pressure - to force a purchase of an organization in what became known as the leveraged buyout or the hostile takeover. The objective, driven by the ubiquitous shareholders who (wait!) will be blamed for everything, was, of course, simply more profit – Growth! The bottom line here meant the unbundling and stripping of the assets of the acquisition and selling them. Well, and this is just an observation, mind you, once there were no more unbundleable assets to buy and entire nations became seriously concerned that the capitalist engines that drive them cannot forever sustain growth there appeared two alternative solutions: Solution One is the “Big Business Bullshit Baffles Brains Solution”: You are, say, Enron or WorldCom and you are in deep shit – there is no room left for Growth. So you get hold of your bookkeepers, Arthur Anderson, (R.I.P.) and simply ask them to lie – there being no choice other than the truth, which is: “we’ve reached the end of our tether.” Your shareholders are happy enough in their plastic mansions to believe it. And there are plenty more examples today, chaps, but the bubble has actually burst. Solution Two is my T. R. Dennen (copyright, 2004) “Big Government General Economic Macro Modern Art-Nuveau Solution”: You are, say, America. You get hold of the guys who haven’t yet fallen into the panic-driven gun-to-the-head, back-to- the-wall downright lying mandated by Solution One. Now, you go back to history. You call in your military / industrial complex I believe it’s called, and you say to the people who run it, “I know where we can find a whole bunch of new customers in a place I just heard of called the Third World. “And we have a policy that will work there – Regime Change!” If you think for half a nanosecond that the United States of America has changed its foreign policy one iota over the last fifty years, you haven’t been paying very close attention. We are simply now doing it overtly. In other words, without hiding the underground workings of the C I A. I have to admit, given that US foreign policy has not changed except by execution, I do not understand how the US government allowed the Enron / WorldCom domino debacle. Not to mention the FBI craziness following 911. (Perhaps it was just a case of the left hand not knowing what the right hand was doing or keeping them from each other?) Macy’s still don’t tell Gimbles I’m sure, but research could possibly find interesting insights as to which side of the American political spectrum the economic liars are leaning. Parmelat? Bunch of Commies, obviously. Watch for buzz words like ‘Sustainability’ and ‘Profit Optimization’. Put your money into organizations that already have a history of returning pretty much what they did last year. And the year before. And, of course, next year. Or continue with the capitalist model and flog off your excess Nike shoes and hamburgers to the growing markets in Afghanistan, Iran, and Iraq. But remember where you read it first. And don’t pay too much for printer ink refills; rather buy shares in the industry, in reality it’s too much of a growth market to ignore. ------------ About the author Thomas Richard Dennen: I have an 11,000 word children's book being illustrated in the UK by a chap called Edward Carter (who won the under-30 Best Cartoonist of the Year award there last year). It is still in the publishing stage, but watch the press... Email: tomdennen@hotmail.com Tell a friend about this site! ------------ |
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