Coming to Terms
by Roger Warren Evans
March 1993, Institute of Public Policy Research
Part
II
Managing Partners
The task facing Labour is to
learn the rules of this new dealing process, and to get a socialist deal.
Because a socialist deal is achievable.
Corporate managers are, for the most
part, hard-working professionals. As global megacorporations and
global networks evolve, they are characterised by a high degree of
professionalism in their day-to-day organisation.
There are of course exceptions to that rule - powerful self-made entrepreneurs
can still rise within the corporate sector, and families can still form
dynasties of wealth. But for the most part, senior corporate managers are
professionally trained traders, sales executives, scientists, engineers, lawyer,
accountants, all of whom have risen by the deployment of their professional
skills, without the springboard of inherited or family wealth or
position.
They
are open to the view that each individual should be given, as a
birthright, an effective education for earning a living. They
are intuitively opposed to arbitrary discrimination at work, knowing
that the success of their corporations depends crucially on
cultivating talent without regard to colour, creed, sex or religion.
These attitudes are not traditional "Tory" attitudes,
because they do not predicate the ownership of property - indeed,
properly understood they can form the foundations of a socialist
deal. The corporate sector can be relied up to favour the use
of tax-income to improve educational standards, for its managers know
that the future success of their firms relies upon it.
There
is also a streak of egalitarianism among businessmen, with which
Labour can make common cause. It is pragmatic in origin, rather
than ethical: just as Henry Ford I strove to build a car which his
own workers could afford to buy, the business community instinctively
favours a "flat" pyramid, for the distribution of
wealth. Consumer-led trading systems work best when spending
power is widely distributed, and when savings ratios are low.
Nor
do corporate managers harbour the same antagonism to trade unions
as does the Right of the Conservative Party. True, in the UK
they resented the more extreme politicisation of union functions,
which had been a distinctive feature of the British TU movement, and
they therefore supported the TU law reforms of the 1980s. They also
feared the power of the unions to prevent downward wage adjustments,
when they were required by trading conditions - managers
instinctively opt for flexibility, in all pricing systems. But
to many corporate managers, trade unions are a necessary element in
the management of large firms, affording valuable structures of
communication and legitimacy.
As
global megacorporations proliferate, international trade unions
offer one of the few means of creating the new checks-and-balances.that
these systems require. The employer-worker relationship is
destined to become more, rather than less important, and union
representation is an integral part of that process. This is
fertile territory for Labour, in which socialist deals can be struck.
Corporate
managers also understand the need for public investment in
long-term research and development. They work in a stock-market
environment which is short-term, and likely to become more so, given
the growing influence of pension and insurance funds. The
managers of trading corporations are increasingly judged on their
short-term dividend performance, by fund managers whose own personal
survival depends on their ability to generate strong
income-flows. The style of UK & US capitalism is inimical
to long-term investment in R&D. The rapid growth of pension
and insurance funds, from the mid-1970s onwards, has curtailed the
trading horizons of trading corporations and their managers.
That trend is irreversible, and it will be for Governments to find
ways of countering this development.
The
enterprise of the trading corporations is constrained by the
conservatism of the funding corporations, and only Government can
keep the flame of long-term research alive. This is one of the
many paradoxes of modern capitalism, for it is a fragile
institutional system which can survive only with strong governmental
support. Labour should both acknowledge this fragility and seek
to take advantage of it, in building new socialist systems.
There
is a further factor working in Labour's favour. Most
corporate managers have confidence in man's ability to manage a
way out of difficulty. Management, after all, is their
business. The Thatcher and Major Governments have alienated UK
management by their refusal to manage the nation's resources,
and to plan long-term strategic investment. That abdication
constitutes an abiding weakness of both Thatcherism and Reaganomics,
from which their Parties cannot in the short-term credibly
recover. The corporate sector spontaneously favours Keynes and
counter-cyclical public investment - managers are impatient with the
oft-repeated assertion that "nothing can be done".
This is the most fertile ground of all, for striking a new political
deal with the corporate sector. And it is accessible to Labour,
as well as to the Conservatives.
Finally,
corporate managers are politically passive. They are
content with their well-heeled lot, enjoying the stimulation of
running a business, seeking the adrenalin of success among their
peers, content with material rewards. Unlike the military
cadres found in some other parts of the world, they do not vie for
political power. They look to Governments to provide the right
institutional framework for business, but it is rare for corporate
managers to covet political office. Business management is far
simpler than politics, with limited horizons and many comforting
certainties.
This
passivity can be problematical, for many corporate managers are as a
consequence politically ill-informed and naive, to the point where
they may even make incompetent players, in the dealing process; part of
Labour's new agenda must be the cultivation of greater political
understanding among the corporate cadres. But the passivity
also generates a certain neutrality, and that favours a socialist deal. The corporations are ready to leave
governing to Governments, within the framework of a concordat that
gives them the freedom to trade, and to enjoy the fruits of trading
success.
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Part III >
the socialist deal
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