Image of Superman taken from bbs.sxrb.com
The of Theory of the business superman or why the British economy is constantly under performing
The readers of Marvel comics are not the only believers in superheroes and supermen, so are British politicians and other members of the various elite groups. Readers of ‘Superman’ realise that it is only a story but that is not true of the British political class, they do believe not only in one but several supermen. In the original ‘Superman’ can be rendered helpless and weak by kryptonite and the belief in British political and business circles that there is a kryptonite in the British society which turns business supermen into ordinary weak fallible human beings. It is this kryptonite which is responsible for the constant poor performance of British business.
What is this kryptonite that turns members of the business elite into mere ordinary mortals, that prevents these supermen from ever shedding their Clark Kent persona and revealing their true nature? This kryptonite is something known to us all, it is high taxes and over regulation, the familiar red tape. Governments have responded quickly to remove this poison from society. Taxes for the productive entrepreneur have been reduced by staggering amounts, from a marginal tax rate of 79% in the mid 1980s to 50% today. In fact few executives pay the 50% income tax, as a pro-business has made it possible to reduce that tax burden to 2%, through offshoring income to what in effect are shell companies. In fact the government through Her Majesties Revenue and Customs (HMRC) have collaborated with rich individuals and big corporations to help them reduce their tax burden.
The other poison which paralyses these supermen the government has reduced to such a minimum that its toxic effects are barely noticed. The government has reduced the cost of labour by removing all those employment protections that pushed up the cost of labour for the employer. Trade unions have been so emasculated by legislation that they can no longer effective bid up the price of labour or even resist the reduction in its price. The recent industrial problems at Grangemouth illustrated this when the government supported the employer Ineos in its planned programme of wage cuts for refinery employers. In the same vein the government has removed most of the employment protections that prevented employers using their workers as they please or how they believe they will be used most effectively. No longer does dismissing a worker involve expensive redundancy payments or trip to the industrial tribunal to defend against the claim of wrongful dismissal. (The government has reduced the possibility of employees taking their employer to an industrial tribunal by imposing a tribunal fee of £1200.)
If the stories of the business superman had any truth in them Britain would now be one of the most productive and prosperous countries in Europe, as it would be not only the fastest growing economy in Europe but also the world. However the reverse has happened economic growth has remained mediocre, increasing numbers of people have been falling into poverty and the productivity of the British worker has fallen. What political and business classes failed to realise was the main cause for failure lie not within a poisonous anti business society, but in the very ordinariness of the business class. Rather than being a superior group they are very like the other members of society, no better or worse. They don’t have any special talents. People such as Michael O’Leary the Chief Executive of Ryanair are unique, few business leaders have their acumen. Rather than liberating the inner superman the changes have liberated the inner Clark Kent. A series of mediocre managers claim the mantle of an O’Leary vastly overpaying themselves and underperforming.
At present I am reading Robert Burton’s ‘The Anatomy of Melancholy’ and the words that he quotes from an unidentified philosopher on leadership which ‘Of an infinite number, few alone are senators, and of those few, fewer good, and of that small number of honest, good, and noble men, few that are learned, wise, discreet and sufficient, able to discharge such places’ (p.82) these are words that our hero worshipping politicians should heed. What instead of there being a group of supermen running our business corporations, there are instead a group of Clark Kent’s who should never aspire to leadership positions.
What economists of a Neo-Liberal persuasion, politicians and business classes fail to realise is that high status and superior position does not confer greatness on an individual. Yet all too often these people assume the role of Demi Gods, regarding themselves as superior to the ordinary run of mankind. Again I rely on the words of Robert Burton to express the reality of this situation. He writes that where the wrong type of men are in power ‘all things are ugly to behold, incult, barbarous, uncivil,a paradise is turned to a wilderness” (p.86)
Given that men in power whether in business or politics are more often than not men of mundane abilities and wisdom, they are unfitted for roles of leadership. They will abuse the position which they are granted, often using it to extort from the company large sums in payment for their services. There are occasions when it is hard to believe that these people are working in the interests of the company rather than themselves. Given positions of responsibility for which they are unfitted, these men will either through their mediocre performance turn the business is into a underperforming one or through their recklessness bankrupt the business. Despite the claim that in a competitive market economy there is no reward for failure this is untrue for senior company executives. The failing director is dismissed with a generous severance package, so generous that they will never experience want. If the company fails through their incompetence they will have taken steps to ensure that their income and wealth is protected. Any observer of the Stock Exchange will be able to name companies that thorough the incompetence of their senior executives have ended up in the hands of the administrator.
It is not the interest of the common good that these mediocre individuals should be allowed to run large business enterprises as they please. There needs to be some legislative or regulatory framework that forces senior executives to improve their performance. What is notable is that there has been a collective dumbing down of business management since the bonfire of regulations that was the Neo-Liberal economic revolution, as these executives are accountable to non one. The one exercise in democracy the company Annual General Meeting is but a stage managed show in which the company directors talk about how well they have performed.
One change that would improve the performance of these under performing executives is a change in the law that made company directors and other senior executives accountable for the poor performance of the business under their stewardship. A financial charge on those directors incomes and wealth made in the event of the firms failure would see the end of much poor and irresponsible decision making. Bankruptcy law as it protects poor performing senior executives from any financial penalty as all debts to creditors are charged to the failed business, never to the executives who drove the business into bankruptcy.
The author believes that what is desperately needed is a new statutory regulatory framework to force senior executives to work to a higher levels of performance. A system that imposes no penalties for failure allows many corporate duds to thrive in the board rooms of British businesses. Neo-Liberalism goes against the grain of human nature as evidence demonstrates that the corporate geniuses are few and far between, and the so ordinary people that dominate businesses are incapable of performing well in a regulation free world. A much tougher regulatory regime would not prevent the few corporate geniuses such as Michael O’ Leary from thriving. What it would do is prevent British board rooms being dominated by the corporate duds, as is so often the case now.