“Being in politics is like being a football coach. You have to be smart enough to understand the game, and dumb enough to think it's important.” This piece by Simon Head on the decline of British business reminds me of these words by Eugene McCarthy.
Simon is, of course, reviving an old theme. Back in the 70s, we were obsessed with Britain’s relative economic decline – a decline summed up by the engineering boss who said: “I don’t understand why we’ve lost so much market share in the last 30 years. I mean, we’re making exactly the same products.”
There were several reasons for that decline which are still present: short-termism, a lack of good vocational training, poor employee engagement and bad management; for example Bloom and Van Reenen show (pdf) that British manufacturing bosses are on average worse than those in some other advanced nations. We might add that the US’s big home market gives it an advantage in businesses that benefit from Metcalfe’s law such as Google, Facebook and Twitter – but this can’t explain why the UK also does relatively badly in businesses faced with diseconomies of scale.
I want to suggest something else. It lies in McCarthy’s line. Successful bosses are like football coaches: they must be smart enough to understand the game but dumb enough to think it matters. Britain has a relative dearth of such people.
It used to be said that one cause of the UK’s relative decline was that our industrialists cleaved to an ideal of being a country gentleman; they aspired to become leisured aristocrats rather than tycoons. Here’s Martin Wiener (though Perry Anderson, Tom Nairn and EP Thompson said similar things):
The consolidation of a “gentrified” bourgeois culture, particularly the rooting of pseudoaristocratic attitudes and values in upper-middle-class educated opinion, shaped an unfavourable context for economic endeavour…Industrialists themselves…gravitated towards what they saw as aristocratic values and styles of life to the detriment, more often than not, of their economic effectiveness (English Culture and the Decline of the Industrial Spirit, p10)
I suspect there’s still a lot in this. Very many of my rough contemporaries jump off the gravy train or get out of the rat race (I mix my metaphors merely to note their pejorativeness). Alienated by corporate imbecilities or the grunt-work of bureaucracy they downshift to comfier jobs, a couple of non-executive directorships or a hobby business. Those of us who are upwardly mobile and so don’t fit into the corporate upper-class are perhaps especially likely to do this.
Most of the people who are smart enough to understand business are also smart enough to get out of it. The tycoon mentality – the desire to keep making millions you can’t spend – is lacking.
Arsene Wenger says of Mesut Ozil and Alexis Sanchez that “they can raise a little bit above the financial aspect of the game because they are not poor and they have to look really on the football side.” He’s hinting at an important fact – that successful people are usually not motivated by money; the idea of “greedy bosses and bankers” is lazy leftist moralizing. Instead, they have internal, not extrinsic motivations. Often, though, these mitigate against building huge businesses: the man who loves solving engineering puzzles and inventing new products often won’t enjoy the very different challenge of expanding production and sales. So he might well sell up when the business is still small. It’s easier to find intrinsic satisfaction in being an engineer or coder or even trader than it is in being a manager.
In saying this, you might think I’m lamenting decline. Not entirely. Just ask: what does motivate a man to want to keep working once he’s made a few million? In some cases, the answer is: vanity: many very rich businessmen have monstrous egos. Perhaps, then, there’s an upside to the UK’s relative lack of successful businessmen. Sure, we have no Steve Jobs or Larry Ellison. But we also have no Donald Trump or Silvio Berlusconi.