I don’t usually write political material in this blog. Instead I like to focus on issues of culture and engagement at work. But these things don’t occur in a vacuum: underlying everything, the highly intertwined political and capitalist systems with which we live are the bedrock on which all is built and sustained. They affect the culture in our workplaces, in turn the engagement of workers and therefore the performance of our organizations. With my co-author and friend Professor Sir Cary Cooper, we strongly expressed the view in our 2012 book that capitalism…of which we are both huge fans… has to change, it has to work for everyone, not just the few. What I find very interesting at this time is that the 2016 election process here in the US has laid bare issues with capitalism which came to light most strongly with the 2008-9 financial crash but were also fueled by accelerating globalization and ever-increasing automation; we now find two leading contenders for president tapping into an anger about where things stand.
In rally after rally, the candidates with the biggest “buzz” and the largest crowds are Mr Trump and Senator Sanders, who seem to electrify their audiences with rather similar messages even though they are from different political parties and disagree on many ways of fixing things. But on the question of capitalism and government actions or inactions which affect the workplace, they seem to be aligned: enough with outsourcing of jobs by indifferent companies fixated with getting the lowest tax rates for themselves and the lowest wages for their workers; enough with unlimited and illegal immigration which dilutes the value of entry-level and lower education-based jobs and has decimated employment among native-born workers in industry after industry, like construction. Enough with trade deals which say they are equal and fair but always seem to leave the US side running deficits and result in the loss of many US jobs. China is the example they both give, and with good data backing them up. Enough with big companies committing financial crimes and making us all vulnerable, then facing no consequences.
At the basis of a lot of this darker side of capitalism, is what Jack Welch called a “dumb” idea, and which other writers and bloggers hammer as often as they can: “maximizing shareholder value“. It sounds like a good idea, but it isn’t: it rewards just one of the stakeholders of a for-profit organization, at the expense of others. What about workers (who are often not shareholders)? What about communities in which the businesses are based? What about customers? What about the country as a whole, often abandoned when “inversions” are used to escape to low tax havens like Ireland? They are all stakeholders too, don’t they matter? “Shareholder value” is also a sly way to enrich C suite level executives, already paid far, far more than others around the world: CEOs in the US make some 500x the average workers in their own companies compared to those in nearly all other developed countries. This in turn demoralizes workers in the same company, especially when that CEO stands up in difficult times and says “we’re all in this together”. “Shareholder value” focus makes this huge discrepancy in pay not only possible but almost inevitable.
So when Donald Trump talks of “making America great again”, which is his core theme, can we blame people whose lives have been affected by all this from attending his rallies and expressing rage at what they see has happened? When Bernie Sanders thrills his mostly young listeners with talk of a “revolution”, should we be shocked that people feel that things are stacked against them? That they might be the first US generations not to take part in the American Dream?
I repeat that I say all this as a huge fan of capitalism and I want to emphasize that I am not naive enough to think that all this is some big conspiracy by leaders of our companies. As Daniel Pink has written in his brilliant book, A Whole New Mind, technology advances and globalization are inevitable trends which will put people out of work no matter what. But that is not all that is happening, there are choices being made and besides it is how we respond to all this, that is important. And as Ronald Reagan’s former speechwriter and Wall Street Journal editorial writer Peggy Noonan recently wrote in a superb piece, people are fed up feeling like they are left “unprotected” as these massive events wash over them, while political elites (Peggy’s word not mine) float above the fray with all the protection in the world. Perversely, these elites often prescribe taking away some of the few protections which the unprotected might have gained over time, such as health care.
For Bernie Sanders, a move towards a European like socialism is the way forward. I grew up in pre-Thatcher socialism in England and my response to that is a big “no thanks!!” Mr Trump would scrap all trade deals and attempt to deport 11 million illegal immigrants: an impossible and expensive task. There has to be a better way, and there is: without the heavy hand of government regulation, our capitalists and politicians need to wake up and start to focus more on making the system work for everyone, and not for the already “protected”. Lets dump “shareholder value” for a start. Forget the shameful talk of scrapping the new health care law (“Obamacare”) which has brought more than 10 million into the ranks of the insured, a perfect example of making life better for some of Peggy Noonan’s “unprotected”. Get tougher on trade deals. There is much to do, not moving towards a socialist utopia as Senator Sanders would wish, but by fixing the capitalist system which has brought so much to so many. If we don’t make this happen, the rage of the “unprotected” might just push us towards something far, far less capable of delivering the American Dream to future generations. As Peggy Noonan says in her article, this is a moral issue which for me includes but extends well beyond politics: capitalism can…it must…change.
For more about my work as a speaker, author, consultant and researcher in work morale, engagement, culture and emotional intelligence, please visit my website at: http://www.davidbowlesphd.com
LinkedIn profile/contact: http://www.linkedin.com/in/davidbowlesphd