Until we address the profound economic and political disenchantment that led millions of voters to put their faith in the mendacious claims of a ragbag group of political malcontents, populists and opportunists, it will be difficult for our country to dream of a common future again.
—Nick Clegg
In Western society it is often argued that capitalism frees people from the shackles of the state, enabling them to claim ownership of the means of production and have freedom in their choice of activities, primarily who they choose to sell their labor to (Meltzer, 2012). Feudalism and colonialism were the preserve of the rich and powerful, but capitalism placed the power of economic advantage and advancement into the hands of the merchant classes. It allowed anyone to move up the ranks in society, to not be held back as a consequence of their birth, but instead have the freedom to achieve what they believed and made possible for themselves.
Indeed the architect of capitalism and free-market economic thinking, Adam Smith argued in his book Wealth of Nations that self-interest was the central theme: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love and never talk to them of our own necessities but of their advantages” (CQ Research, 2010).
The Pursuit of Ownership
Sometimes it feels like we have all become obsessed with money and the acquisition mentality appears to drive our day-to-day behavior. Regardless of our economic position, the addiction to acquisition has gripped us all, to a point where we measure our own worth not by who we are, but by what material goods we have. But we now find ourselves, like all addicts do, in an ever-tightening grip of dependence. We sell our labor for money in order to acquire material things that require us to have more money to maintain or keep them safe. Our addiction has become terminal as the life span of our acquisitions is getting shorter and as the market focus on growth requires organizations to continue producing the latest, greatest must-haves. In this cycle of dependency on money and addiction to acquisition, the politicians beg big business and consumers to continue in the very behavior that was the cause of our current economic woe in the hope that it will somehow be our savior. Is it wrong to expect our politicians and corporations to begin to question their unwavering belief in the capitalist system? Should we not demand that we reconsider the absurdity of doing the same things but somehow expecting that we will get different results next time? Is it time for society to innovate and create rather than recycle and make do and mend a system that is broken and leads to brokenness? Is it possible to manage an orderly adaptation of the system, rather than succumb to the isolationist and protectionist agenda as advocated by the populist movement?
Our addiction to acquisition has, it seems, been fueled by the promotion of self-interest, which hooks into liberal ideas that emphasize key cultural values and democratic principles. We believe we have a right to indulge our every desire, because capitalism has hijacked values, such as those pertaining to individual rights, freedom, and autonomy to make choices, personal justice, and a noncoercive relationship between state, society, and the individual. But what is missing from capitalist values is the context of universality in securing these political and social freedoms. The equality demanded by the application of liberalism prevents capitalism from truly adopting pure liberal values because of its permissiveness and acceptance of inequality in wealth distribution. The schizophrenic adoption of both liberal and illiberal principles is driven primarily by capitalism’s focus on property before people, individual wealth before societal good, and self before others. The attempt by the West to adopt neoliberal values was developed as a crisis-management response to the contradictions inherent in the capitalist system. The increasing dominance of financial services in the world market and the political will behind laissez-faire rules lulled consumers into a false sense of security regarding their rights and freedom. Capitalism promoted wealth creation as being based on a false promise of a benign global market, which promised to make us all richer on the basis of rational self-interestedness.
And yet for all this freedom, are workers happier today? We have got ourselves into a cycle of debt, consumerism, and misery. The self-destruction thesis argues that the very nature of capitalism’s ethical compass driving self-interest results in its own ethics and processes being undermined. The processes involved in pursuing an agenda of self-interest destroy the ability of individuals to attain the goals that they are interested in and damage the sustainability of capitalism itself. For example, the executive who works 100 hours a week does so with a dream of one day being able to give it all up and buy a plot of land in the country and live the good life, while being prevented from achieving the dream of living a good life in order to create the wealth to achieve it. In the processes of attempting to achieve our own agendas we are confronted by competition and the threat from others pursuing their own agenda. The result is higher levels of anxiety and a perpetual restlessness, which destroys our ability to find peace, and the motion of this cycle intensifies as time goes on, making it harder to live by our values and beliefs. We stop being measured by the value of who we are and instead become judged by the market-dominated perspective of the value of what we do. “People must bear the full cost of choosing to work less, or in safer conditions, as a lower earning power relative to those who are willing to work flat-out (a matter of prudence). But also and primarily because only a certain kind of success is appreciated by the market and people do want to be successful” (Wells and Graafland, 2012). The result is that we have to choose between working longer hours to maintain our sense of self-value, while at the same time distorting our ability to understand the value of who we are beyond what we produce by making the choice to work longer hours.
The reality for most families in the UK today is a requirement for both parents to work. We can’t afford to have Mum or Dad stay at home to look after the kids. We worry about how to heat our homes at winter because fuel prices are increasing year on year and the weekly food shop is getting difficult to afford. We can no longer afford to retire and even when we do, for most it will be retiring into poverty. At the same time, wages have stagnated and governments are engaging in an austerity program cutting public spending. Is it any wonder that 10 times more people suffer from depression now than in 1945? Adam Smith believed that the pursuit of a commercial society would deliver prosperity to the poor and bring economic and personal development benefits, natural justice, and freedom that would make capitalism worth defending. As we look at the world today, we must ask ourselves whether what we see is the freedom we were looking for as organizations continue in their pursuit of the profit agenda. The result appears to be broken homes and a broken society.
The economic crisis, decreasing wages in real terms, and inflationary pressure on basic products and services mean that the consumer has woken up to the fact that the dominance of money makes having more money essential for survival. Without it, life becomes impossible. As capitalism has globalized and monetization has permeated all areas of life, the predominance of illiberal values has increased and inequality has intensified. Neoliberalism has not increased growth rates; instead compared to the decades prior to 1980, growth has slowed for the economy as a whole, while the rich have seen their wealth increased rapidly during the same period (Monboit, 2016).
Globalization and Exploitation
Globalization may have increased the largesse of wealth, but its distribution has shrunk to a smaller percentage of the world’s population. Although many attempts have been made to address the issues of inequality, most notably by numerous UN resolutions, the consequences of fast capitalism and the complexity and scale of global business mean the impact of good intentions based on voluntarism is limited. We are quickly approaching a tipping point where the problems of the capitalist illiberal principles at play in the system are resulting in catastrophic consequences. These consequences span the economy, political sphere, society, and the environment, and the impact they are having may threaten the future of human existence.
Globalization should, according to a liberal democratic tradition, represent a move toward a universality of wealth creation regardless of where an individual is from. However, the universality of wealth does not imply equality, but rather a level of proportionality. The problem with liberal capitalism is that it introduces a hierarchy that produces a gap so vast between rich and poor that inequality becomes accepted as a natural part of the democratic system. Furthermore, the rich West does not use its skills, knowledge, and resources to help enable the poor nations to transition quickly by using their wealth to develop essential infrastructure, such as advanced sanitation, health, and communication and transport networks, which would benefit the wider society. Instead governments represent business interests abroad and organizations seek to exploit the natural wealth resources of countries by focusing on the transactional nature of the capitalist system and investing the bare minimum required for operational reasons. Exploitation and deniability regarding criminality in the supply chain are part and parcel of modern business practice. The old saying about give a man a fish and he will feed his family for a day, teach a man to fish and he will feed his family forever, is never more appropriate. Charity may be given and wells may be dug, but what poor countries really need are assistance, technology, and knowledge that will enable them to build sewerage, water systems, safe housing, schools and health facilities, as well as agricultural support. The organizations that provide this are the not-for-profit and charitable organizations who see a need and try to help, but not in return for the countries’ natural wealth. The organizations that exploit the wealth of third world countries are reluctant to invest for the long term in the communities in which they operate. Liberal capitalist globalization has led, therefore, to a system where production of goods and services in third world countries are directed by “disinterested markets and value-free capital in the direction of value-free outcomes” (Watson, 2004). The capitalist Western markets are not interested in globalization with the goal of creating equality of material wealth and prosperity to those places in the world that do not currently enjoy them. Instead corporations are seeking to reduce their cost base by transferring and outsourcing their operations to areas that have lower wages and lighter workforce regulations. Furthermore, they bring wealth only in regard to increasing the consumer market to which they can sell more services and products as growth begins to slow in their home markets. Globalization is not about spreading liberty and democracy but rather a continued expansion of corporate capitalism’s control of the world’s resources.
Globalization and “free” trade have created an imbalance both socially and environmentally. It is not just wealth that has been distributed unfairly, but the fact that the negative cost of our activities weighs most heavily on those least able to protect themselves from the excesses of others.
The Wealthocracy Replaces the Aristocracy
The trend toward monetization is demonstrated by the way employees and workers are being treated within the corporate workplace. The placement of employees on the corporate profit and loss has reduced their relationship to their corporate masters as little more than numbers on an accountant’s spreadsheet that can be increased or reduced with minimal disruption to the decision-making process within the organization. As employees of a corporate machine, we have become depersonalized and dehumanized by the focus on money and numbers. Because of capitalism connection to liberal democracy and freedom, the oppression of the working classes is tolerated, because we are deemed to have the “choice” as to whom and where we sell our labor. With the abandonment of policies regarding the aim of full unemployment, the labor market has become a buyer’s market. Workers who can find employment have to work harder, and there are fewer jobs available for them to exercise their choice of whom to sell their labor to. Increasing brutalization of the workplace is an indication that the balance of power has shifted to such a degree that employers no longer see their labor as value adding, but as a cost that needs to be controlled. Despite the human resource profession attempting to promote the need for employee engagement, the capitalist market has created a vicious circle where the majority of the population are paid low wages and therefore the products and services that they buy must service a low-cost structured economy. This in turn depreciates the amount, which organizations can afford to remunerate their employees, once again feeding the demand for low-cost goods and services.
Financialization has removed human society from that which is tangible to that which is little more than the religion of money, and in doing so has reduced human society to something that no longer holds any value beyond what wealth can be squeezed out of it. The naturalization of individualism has created a political and social dogma of self-interested behavior, which results in the competitive and egotistic pursuit of personal interest before social needs. We all compete to find our place, but in doing so we lose the ability to form alliances and demonstrate a social and class power that can demand and create change. Democracy today is little more than the juxtaposition of the wealthy asserting power over the running of government and society as a whole. A few years ago, then prime minister of the UK David Cameron claimed that we are all “classless” now. But the truth is there is the wealthy class and then there are the rest of us. The populist movement of 2016 sought to destroy this paradigm, leading to the political shocks of Brexit and a Trump presidency. However, Brexit is an act of national self-harm and Trump’s cabinet has a net worth in excess of $14 billion. In a world that is more interconnected and interdependent than at any other time in history, we have created an environment in which capitalism seems to be a necessity for the continual functioning of society. But we must not mistake globalization as progress. Our society is controlled by
less than three per cent of the world’s population, namely the global capitalist core, [that] dominates the economic, monetary, financial and technological resources of the world in the name of free and open markets, democracy, rules-based fair trade and freedom. Roughly another twenty per cent produces most of the goods and services that gird this class-based democratic system, while very large portions of global humanity are forced to subsist at the margin, consistent with capitalism’s historical tendencies of the concentration of income, assets and wealth in the hands of the relative few. (Watson, 2004)
By removing our identification with class power, capitalism not only robs us of the wealth we could and arguably, should have, but also creates an environment where we have been disempowered of our ability to struggle for equality.
The financialization of the market economy has meant that there has been an increasing level of inequality in regard to income since the early 1980s. Rather than reducing the gap between rich and poor, inequality has risen in the United States, the UK, and other rich countries. Those who contribute economic value in regard to tangible products, services, and knowledge have seen their financial value diminish at a time when intangible wealth in regard to stock prices, asset valuations, and capital gains has resulted in mega-wages and salaries paid to the city-rich. Furthermore, society has become infected with the diseases of the wealthy. If the financial markets are doing well, society experiences a boom; if the financial markets are doing badly, society suffers a crash. Society’s wellbeing has become dependent on the unstable foundations of financial growth, which is based on the vagaries of market confidence, and our wellbeing is no longer determined by our productive capacity or intrinsic value but rather by the machinations of our financial overlords. Equity has replaced land as the new determination of power and riches.
Since the 1980s it has not been politics that has affected the lives of ordinary people; instead the fortunes of the wider population have become inextricably linked to the cycles and bubbles of the business cycle. These crises do not just affect the economic system, but have a major impact on our society. For each crisis that we suffer, we are confronted with significant societal upheavals, the destruction of manufacturing, the breakdown of local communities, political disruption, and slowdown in areas of societal development. Analysts will promote the ideas that the riches of the wealthiest will trickle down to those at the bottom of society, but the truth is that it is only a few who have the wealth and the trickle is barely a drip. Increasing levels of instability, inequality in the areas of income, wealth, and power means that the cost is borne by those at the bottom of the society, and the prizes are being enjoyed by those at the very top. But this cycle cannot continue endlessly. As wealth is driven further and further away from those who can generate value in the economy, the illusion of prosperity begins to grow transparent. The subprime mortgage market, the deck of cards that the equity markets are playing, is no longer generating growth as the wider population deals not only with recession but rising prices.
The financial system needs consumers to consume more in order to drive growth, but the extent of the inequality in incomes and the cost of the 2008 financial collapse to the wider society has meant that there is no stretch left in the consumers’ “knicker elastic”—it is no longer plausible to expect the worst off to drive economic growth.
An output of the capitalist agenda is that everything has a price, “everything has been monetised and any other currency is systematically belittled. If labour is not specifically valuable in a financial marketplace—i.e. profitable—then it is labour without ‘real’ value . . . one sees the ghastly consequences of this inversion of human value everywhere” (Orr, 2012). The joke that a financier would “even sell his grandmother if there was a profit to be made” is becoming too close to the truth.
The Economics of Politics
The issues of our current system are more than simply the way we do business, but they are in the very structure of our democracy itself. In the UK we have adapted our system over a period of centuries and are left with a system, which is an anachronism. History has left an indelible mark on the way in which our political and economic institutions operate. Self-interested capitalism taps into the remnants of colonialism and the social impact is that of a disconnect between the human condition and a passivity of those who could mediate change, remaining alienated from the problems and issues that affect people outside of their domain. The pursuit of private ends for private means subjects us all to a blind acceptance that it is not our problem. Capitalism and liberalism did not save Western society from its feudal or colonial past, but instead it has extended the operation of such structures from land-based wealth to capital-based wealth before finally succumbing to where we are today, power held by the wealthy elite. They are the modern-day equivalent of the feudal knights or colonial overlords, who now rule and suppress using financial wealth, which is not necessarily linked to any tangible products or anything that is “real.” Even those who have the biggest property portfolio have lost their position of dominance to those with the best performing investment portfolio, many of which do not relate to anything other than a mix of financial products that exist purely on paper. But society cannot be built on paper and social ills cannot be improved by placing value on the shuffling of “shares” that in reality have no more substance than a deck of cards. The reason why so many people can lose their fortunes on the merry-go-round called the stock market is that there is no basis to their wealth other than confidence and belief.
Government and big business would have us believe that we have never had it so good, that even though we are experiencing economic austerity and wage stagnation, it is just a blip in our continuing improvement in lifestyle. But just as we have begun to understand the enormity of the devastation we have wreaked on planet earth in our pursuit of profit, so too we have begun to understand that society has also been robbed of true prosperity.
Even in the so-called communist states, the pursuit of power and then the holding onto power ultimately became about the economic advantages having power gives to the power holder. Mao, Saddam, Castro, Mugabe, Putin, Mubarak, and Gaddafi,—their grip on power was not and has never been about politics but the economic advantages bestowed on the position they hold. Furthermore, the misuse of political power is as damaging to equality and society as the current misuse of economic power. It may begin as a social endeavor, but it often ends with coercion and abuse of power, which is destructive and fails to deliver an agenda other than the inevitable self-interest required of capitalism.
Political systems are struggling as governments become focused on retaining power. In the UK, the government is governing with a mandate of less than 50 percent of electorate support, and the current Prime Minister Theresa May has never been to the polls as the leader of the Conservative Party. The electorate quite rightly believes that politicians serve themselves, rather than the people they were elected to serve. The sovereign debt crisis is a result of governments mortgaging the long-term stability of the country they govern in return for short-term popularity.
The Socio-Environmental Cost
But society is not the only casualty of profit. The natural environment has been occupied, harvested, and plundered, since the beginning of industrialization, including the clearing of communities that had been living in harmony with the land, all in the name of progression.
We have destroyed forests, topsoil and farmland and with those the habitat for many species. The loss of biological diversity has been matched by the loss of cultural diversity . . . The waste of natural capital is matched by waste of human capital: vast numbers of unemployed and over a billion of us today, severely malnourished, many starving. (Mayer, 2007)
The exploitative relationship is not restricted to organizational life, but rather is reproduced throughout society and the wider environment (Torrington, 1993). The pursuit of “ambition and self-seeking effort” promoted by the ideas of Adam Smith has meant that capitalism has achieved increased wealth and prosperity, but not for all; rather, for the minority (Cunningham, 2004). Self-interest has resulted in poor stewardship of the earth’s natural resources threatening water supplies, reducing food production, and increasing the instability of the natural environment impacting our towns and cities. Child poverty, pedophilia, homelessness, prostitution, human trafficking, and modern slavery all exist and are on the increase in capitalist economies, the land of the wealthy West and the land of the free.
An Amoral System
But it is more than simple economics that makes capitalism so difficult to tackle. The capitalist economic system is ideologically linked to democracy. Workers are free to sell their labor to the highest bidder, and in return receive an income and benefits for their efforts. The argument goes that the market has natural checks and balances that mean that society and its members are better off. Adam Smith himself explored the need for these checks and balances in his book The Theory of Moral Sentiments, where self-interest is balanced by man’s ability to form moral judgments.
But capitalism is morally agnostic. For 30 years, the growing persuasiveness of the pursuit of individual self-interest and the idea that people should have the freedom to make their own choices have eroded our ability to impose moral judgments on others and have been messing with our ethical and moral compass. The application of being nonjudgmental in the face of personal self-interest has contributed to a societal moral malaise. What is considered right and what is wrong have given way to a passive acceptance that all things are permissible, as long as they are aligned with capitalist values. Take the case of an individual who was jailed for seven months following the summer riots in the UK in 2011. His crime was to encourage others to riot on Facebook, a riot that never did take place and yet not a single person has been jailed for the part they played in creating the 2008 banking crisis.
By maintaining an amoral approach to competition, players can choose to follow only the rules that help them win. If honesty and fairness raise costs, without producing a valuable return, then there is no rationale for remaining honest or fair. Different benchmarks arise in regard to what standards are acceptable. If actions, regardless of their morality, produce profit with no consequence, it is logical that other players in the marketplace will adopt those practices in order to remain competitive. The 2017 United Airlines social media exposure regarding the removal of a fare-paying passenger has highlighted a previously accepted industry practice of removing consumers who have paid for a seat involuntarily from flights. It is only the bad PR and reputational damage that is causing the airline introspection regarding the practice. Therefore, capitalism completely ignores any moral obligations we have to those who will be affected by our decisions and actions. But in any civil society, it is necessary to consider the interests of all stakeholders, and that means there is a requirement for moral decision-making. No decision that affects others can be protected by a belief in self-interest alone. Although we possess the power to make our own decisions, propriety dictates that the power to choose must be balanced with responsibility toward the interests of others in the wider context.
In a system where self-interest rules, social norms of right and wrong lose objective validity; they become important only relative to the individual. Consequently, capitalism’s protection of self-interest elevates each of us to be the sole and final judge of what is right and wrong, guarding the individual’s right to make a self-interested decision, regardless of whether it is dishonest, irresponsible, or damaging to society at large.
Following the banking crisis of 2008, it has become apparent that the reality of capitalism is different from the benign myth of the protector of freedom and democracy, and moral judgment has become lost in the pursuit of self-interest. Rather than a democratic outcome where all benefit, the rich and powerful are being served by the majority and the common man is slave to the mighty corporation. Unable to break free from low wages, restricted in their ability to achieve their potential and suffering from poor education, the exploitation of the poor continues, but under the guise of contracted hours and a job description.
Criminal activities are increasingly linked to the purposeful malfeasance toward the vulnerable in society. Despite slavery being officially abolished worldwide in 1981, modern slavery and trafficking continues unabated. The Trafficking in Persons Report 2015 identified 44,462 victims of forced prostitution, slavery, and labor trafficking in 2015 and the International Labour Organization (2016) estimates that forced labor generates profits of $150 billion per annum with 21 million victims of forced labor at any one time. This is double the number of the 10.24 million enslaved Africans who arrived in the Americas between 1650 and 1900 and just one example of the lack of moral judgment in the market-led economy.
The criminal exploitation of people in the pursuit of profit is not a new phenomenon, and in an ideological debate many may argue that it is overly emotional to compare the machinations of today’s organizations with the slave trade. But, aside from illegal slavery, organizations and specifically the financial institutions that are the beating heart of the capitalist system are little different from the colonial slave traders of the eighteenth century. Brunsson (2015) states that “the United Nations (UN) declaration of human rights, which states that all human beings are born free and equal in dignity and rights (1948: Article 1), is ignored because, within organisations, it becomes obvious that people are indeed unequal.” It may not be systemized, it may not be open, but the exploitation of human beings is alive and well, except it is now called strategic human resource management.
Ask a manager what the extra bank holiday is going to cost the business and he’ll reel off a number, ask him what value spending time with family and friends has to his workers, and you’ll get a response accusing you of having a screw loose. It’s easy to find the cost of training in an organization since it would be a simple case of looking in the right ledger. But if you were to try to find out the value of human potential and talent in an organization, the answer would be impossible to find—we don’t measure value, we only measure cost.
Zero hours contracts, bullying in the workplace, outsourcing to countries that don’t practice the same workforce protections, child labor, long hours culture, burgeoning wage gap, unequal pay, and health and safety violations, they go on all the time. These ethical violations are justified because of the economic climate and because the organization needs to be efficient. But in the pursuit of “growth,” we are living in times of moral hazard.
The Pursuit of Growth
Capitalists would argue that growth is necessary for the greater good, but the economist Richard Easterlin in his paper “Does Economic Growth Improve the Human Lot?” “Concluded after a thorough survey of happiness and GNP in a number of countries” that the answer was “probably, no” (Skidelsky and Skidelsky, 2012). The paper was published in 1974 and it is interesting to note that life satisfaction has not increased at all since that time. Despite our lives changing immeasurably in terms of material acquisition, wealth does not impact positively on how happy we are. Furthermore, growth doesn’t guarantee that everyone will find or enjoy employment. “Unemployment in Europe was very low from the end of the Second World War to the end of the 1960s. Since then it has increased through shocks and recessions, while falling little in years of growth” (Galbraith, 2012). For young people entering today’s workplace, prospects are worse than they have ever been. Graduates, despite their qualifications, are forced to decide whether to accept a low-wage job, which has little relation to their studies, and in doing so, possibly restricting themselves to continuing low-paid employment. Or they may choose to wait for a “better” job that may or may not materialize in the hope that they can begin their career in a higher paying role. There are a growing percentage of 16–25-year-olds that are neither in education, training, or employment, increasing the likelihood of them never being a productive member of society.
Our governments now look to growth as being the answer to our present austerity woes, despite all the evidence showing that it was the pursuit of growth and the love of finance, of and for itself, that led the majority suffering at the folly of the few; “new data suggest[s], instead, that macroeconomics—global macroeconomics, with an emphasis on financial governance and financial instability—is the correct framework for coherently explaining the relationship between inequality, unemployment and growth” (Galbraith, 2012). Those in power continue to plunder and get rich, while justifying their existence by insisting that the markets can deliver the freedom from oppression. The sad truth is that Thatcherism and Reaganomics introduced the cultural acceptance of income inequality and the promotion of a market-led system that meant that “individuals were no longer to be viewed as part of wholes; the wholes were simply the sum of individual parts” (Skidelsky and Skidelsky, 2010). Governments no longer run the economy, nor do the central banks; instead it is organizations and “the market” that produce the framework upon which our economic fortunes are made or lost. Moral and social restraint has been removed from the equation. If a course of action doesn’t make sense for the bottom line, it doesn’t make sense.
The Rise of the Corporate State
The dominance of Greek rationalist thinking and the drive for efficiency have commoditized and dehumanized our society. Management theory taught in business schools across the world teaches managers that the pursuit of shareholder value and efficiency is the primary purpose of organizations. Most management theory has been developed only in the last 100 years, and whether it is bureaucratic or post-bureaucratic, scientific or humanist in flavor, the driving theme is that the purpose of management is the pursuit of better economic performance for the organization and return on investment for its shareholders.
The neoliberal democratic politics of Western cultures and the capitalist economic model and the resulting ideological link with societal notions of democratic freedom prevent governments and organizations from pursuing an ethical and values-driven agenda that furthers the health and wellbeing of society if it conflicts with the short-term delivery of return on investment. Neoliberal policy advocates that government avoids the pursuit of socially conscious policies, instead creating a soft regulatory framework and deregulation that “is good for business” in order to compete globally with other sovereign states.
The muscular entrepreneurialism promoted by Thatcher and Reagan and the drive toward principles of voluntarism have had a major impact on both politics and sociocultural values. “Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency” (Monbiot, 2016). Deregulation was a cornerstone of both the Reagan administration and the Thatcher government, set on the belief that government interference was making the economy weak and disrupting the free market mechanisms. The political elite of the European Union enthusiastically copied the American model of a liberalized labor market, “jettisoning job protections, cutting unemployment insurance, and weakening unions . . . and free wages to adjust to new patterns of supply and demand” (Galbraith, 2012).
In the decades since, self-interest and individual rights have replaced responsibility, and a business-first interest has been prioritized as a consequence of the adoption of a market-outsider model of corporate governance in the UK. The result has been that top managers are rewarded and penalized only on market-based measures of success and isolating the transactional nature of interaction between organization and shareholder from the wider societal context in which the organization operates. There is no noble cause or pursuit of a higher purpose; instead there is only the market and continuing machinations of want and endless pursuit of more wealth, with no consideration as to what more wealth will achieve. Money in and of itself has no intrinsic value, other than what the person who is receiving money deems it to be worth, and so inflation and currency fluctuations can devalue the money that we have labored for.
In recent years, rather than protection provided by the state, it has instead been the rise of “corporate socialism” that has delivered notions such as holistic, organic, sustainable, motivational, diverse, equal opportunity, developmental, and corporate social responsibilities. A recognition, it seems, by organizations that a purely economic agenda has flaws and that people don’t like to be exploited and will resist control. It is extraordinary that economics has become “the theology of our age, the language that all interests, high and low, must speak if they are to win a respectful hearing in the courts of power. Economics owes it special position in part of the failure of other disciplines to impress their stamp on political debate” (Skidelsky and Skidelsky, 2012). For those in positions of power and on the receiving end of wealth, there is a tendency to worship at the altar of the market. The super-rich believe themselves to be God-like in their ability to make money and yet they do not create, they do not preserve life; instead they build empires that have their foundations on numbers, trends, and statistics.
What is most worrying is that it is business that is driving the social agendas of our age. Environmental concerns have only recently been given credence and a voice, not because their quality of argument has improved since the 1960s, but rather because organizations have a self-interest in protecting value resources so that they continue to pursue wealth creation. Programs to support youth and community projects are geared to securing future employees, ensuring that the organization has a reliable source of skills and knowledge to employ, as well as securing favorable PR and developing a loyal customer base. Employee reward programs and diversity programs are approved if there is a business case demonstrating “going the extra mile” discretionary behavior, employee engagement, greater productivity, and a return on investment.
However, despite many trying to fight the good fight and organizations and governments talking about ethical business, the truth is that many organizations outsource parts of the operation for economic reasons to other companies that run sweatshops or practice abhorrent work practices. Management teams learn about the importance of motivation to get the best out of people, but will still increase their own wages by 50 percent, while freezing the pay of their employees. Their reasoning based on having been taught that as long as people have enough to live on, money doesn’t motivate them to go the extra mile and a corporate social responsibility agenda will only be followed as long as it makes economic sense for the organization to do so.
The Devaluation of Human Life
In Greece, hundreds of families were forced to abandon their children because they can no longer look after them, while the European Union insists on austerity measures in response to Greece’s debt crisis. Yet the Greek prime minister was forced to resign and a referendum result ignored so that the EC, IMF, and ECB could force bail out conditions upon the country. In Syria children are tortured by government forces and over 470,000 people have been killed in response to the rebellion against the Assad regime while the United Nations argues over whether to get involved or not. There were 5,098 migrant deaths recorded in the Mediterranean Sea in 2016, a total of over 12,000 deaths since 2014, and the European Union’s response has been to create a new Border and Coast Guard Agency. The millions of people fleeing Afghanistan, Iraq, and Syria by sea are classed as migrants, yet they are fleeing war, poverty, and oppression. The European Union is avoiding the legal ramifications of acknowledging the refugee crisis in order to justify closed borders and the inhumane and miserable conditions these victims of one of the biggest humanitarian crisis since the Second World War are being subjected to.
Not a single person will look at these figures and not think that this is tragic, that the values of human society have somehow got mixed up and yet every day we continue to take part in a system, making decisions that “devalue” people to be defined by a statistic. Rather than improving long-term prosperity, in the longest period of peace in the continent’s history, the European Union is struggling with sovereign debt, a financial crisis, and a movement of people that is threatening its very survival.
But instead of the refugee crisis calling to the humanity of those who should be reaching out to help, the reaction has been isolation, nationalism, fear, and loathing. Migrants are spat at, abused, and degraded, while the politicians adopt an agenda that places the blame for the failings of the capitalist system onto the shoulders of people who need our help. Our infrastructure is failing, social services are being reduced, and our wages depressed because of “them” instead of because of organizations paying profits to shareholders, fat cat pay, and lack of capital investment in projects, which have a long-term return on investment and benefit the wider society instead of the wealthy elite.
Other inequalities exist. The UK legal system protects property over people. Fraud is a more serious crime than rape, abuse, or murder, and even animals have more rights and protection than children. Our education system continues to fail our children and prevents them from being able to recognize their talent and abilities at an early age. Instead it promotes passive learning in order to pass tests rather than learning to think independently and encourages individuals to opt out because they don’t “fit” what is considered to be important at school but of little use in working life. Most damning is that our society fails to protect the vulnerable. Pension provision is in crisis, prisons are bursting at the seams, homelessness is increasing, mental health patients are abandoned to the community, and the health service runs a postcode lottery.
Parents buy their children’s affection through showering them with material goods, family holidays and leisure time are interrupted because of work commitments, communities have been destroyed because of plant, and office closures and urban areas and cities have become ghost towns in the name of profit and progress
For every CEO and politician that “gets it,” there are many that nod their heads at the need for better government and better business, but fail to learn the lessons from the 2008 credit crunch. They plough on the fact that “more spending” is needed as if continual consumption is the only solution to the world problems. The fact that the pursuit of monetarism policies is the reason why the capitalist system finally imploded seems to have escaped our leaders.
Which Leads Us to Conclude . . .
But what if capitalism and the market economy, in its current form, is the wrong model for the pursuit of fulfilling the needs of human society and organizational performance? What if the current capitalist system and a laissez-faire philosophy, is inadequate to solve the problems in the world economy resulting from the credit crunch, mass migration, global recession, and the emergence of unsustainable sovereign debt?
Society is crumbling, the growing level of civil unrest and rise of populism are a warning of what will happen if change does not occur and yet despite the credit crunch, Brexit, and Trump our political and organizational leaders are still not changing course. More and more evidence is appearing that demonstrates that the course that we have pursued for the last three decades is responsible for the ills in society. Many individuals have raised their concerns and have been treated as if they were being irrational, as if the pursuit of consumerism and material wealth in some way excuses the acceptance of inequality as a necessary evil. Capitalists will argue that the lives of workers in the Western world have improved compared to a hundred years ago, that our standard of living is as a direct result of pursuing market-led policies. But our rise in living standards has not been a result of the pursuit of a market-led agenda by organizations. It wasn’t the market that delivered a universal health service, pursued equality, sought out better working conditions, and secured the minimum wage. These things would not have been achieved if the market had been left unregulated. Even with intervention the statistics are challenging to the “capitalism is good” brigade. Thirty-three percent of the UK population are qualified as living in poverty; the UK is number two in the OECD for wage inequalities, the United States number one; wage growth continues to stagnate and the UKCES 2015 reported that 23 percent of vacancies are hard to fill due to lack of skills. And yet, according to the Institute of Policy Studies, in 2009 “the average CEO of a big company made 411 times the wages of an average worker . . . that’s roughly 10 times the proportion in 1980” (CQ Researcher, 2010). Lancaster University Management School shows that “the median pay for chief executives at Britain’s 350 biggest companies was £1.9m in 2014—a rise of 82% in 11 years . . . However, performance as measured by return on capital invested was less than 1% during that period” (BBC, 2016). With over two billion individuals living on less than $2 per day, the greatest social challenge we face is that of addressing poverty, and it cannot be addressed if government, organizations, and individuals continue to withhold “a reasonable share of their resources, skills and know-how to jointly achieve sustainable solutions” (Leisinger, 2007). In capitalism there will always be losers; the issue that faces us today is that the number of winners is reducing and the losers represent society as a whole.
But organizations are not bad in and of themselves. They are inevitable in human society; they are not merely a social construction but a scientific reality of the human spirit and a universal truth of the human condition. Place groups of humans together and they will form cooperatives and organize themselves, whether in primitive or advanced forms. Brunsson (2015) highlights that “organisations are so dominant that Herbert Simon (1991) suggested the term ‘organizational economy’ should be substituted for the often used ‘market economy.’” Regardless of politics or a public or private agenda, organizations exist and society forms, and therefore organizations have a specific and important role to play in human society, politics, and our economic wellbeing.
But is the pursuit of an economic agenda inevitable too? Return on investment, supply and demand, operational efficiency, profit and loss, shareholder value—are these deliverables the only purposes that organizations can pursue? Are market forces and capitalism inevitable? Or do democracies pursue the wrong agenda because they believe it is the only agenda?