Inverting the rhetoric of inequality

It's not often that Sir Tom Jones provides evidence to support Mariana Mazzucato, but he's done just this.

Here's the FT's John Thornhill:  

As Mazzucato explains it, the traditional way of framing the debate about wealth creation is to picture the private sector as a magnificent lion caged by the public sector. Remove the bars, and the lion roams and roars. In fact, she argues, private sector companies are rarely lions; far more often they are kittens. Managers tend to be more concerned with cutting costs, buying back their shares and maximising their share prices (and stock options) than they are in investing in research and development and boosting long-term growth.
“As soon as I started looking at these issues, I started realising how much language matters" [she says].

Coincidentally, Sir Tom complains that he was sacked from The Voice with "no conversation of any kind" - implying that BBC bosses lacked the courage to tell him to his face.

In their different ways Sir Tom and Mariana are challenging the dominant image of bosses. Far from being the swashbuckling risk-taking entrepreneurial dragons they pretend to be, bosses are often cowards who lack the courage to defend their decisions or to invest and innovate.

In fact the biggest risk-bearers are often not bosses at all, but workers. It is they who invest all or most of their biggest asset (their human capital) into a single venture. And as we saw with the collapse of City Link, small sub-contractors who are unsecured creditors can lose more than bosses do.

By contrast, bosses are often mere bureaucrats. We have long passed the point which Schumpeter described in 1942, in which the entrepreneur "is becoming just another office worker."

Now, in itself this is not necessarily a bad thing. What looks like cowardice might in fact be a rational, prudent realization that investment and innovation don't pay. And a lot of entrepreneurship is in fact a spunking away of redundancy money on doomed ventures.

What I am saying, though, is that the rhetoric of capitalism should be inverted. Bosses are not heroic risk-takers, but mere pen-pushers.

In fact, that rhetoric must also be inverted in two other ways.

First, although the right likes to paint Marxists as Stalinists and central planners, the opposite is in fact that case. It is bosses who still believe in the out-dated and discredited dogma of central planning whilst many of us leftists believe in the virtues of decentralized decision-making.

Secondly, there's a tendency to see the dichotomy between the centre and the left as synonymous with that between technocrats and idealistic dreamers. But I would argue that the opposite is the case. It is centrists who are utopians, in that they grossly over-estimate the ability of the state to improve well-being in a capitalist society. And as we heard in that notorious Jack Straw interview, centrists can be far too stupid to be technocrats.

My point here is a simple one. Inequalities are legitimated in part by an ideology which presents bosses as heroic, forward-looking wealth-creators  and their opponents as dreamers and ideologues. This turns the truth on its head.The left should make more effort to reframe our language accordingly*.

You might think that, in saying this, I'm making a Marxian point. Maybe. But it was Adam Smith who complained that "We frequently the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous"**. I'm just suggesting we lean against this bias.

* Trades unions often exacerbate the problem. The rhetoric of "demands" presents workers as people who want to take something out of the system when the truth is the exact opposite - that workers are essential suppliers.

** Theory of Moral Sentiments, I.III.29

Comments

[Roy Lonergan]

Chris
Thanks for the link to that Jonathan Jones article. It is unusual to find something by him that makes some sense - normally he comes over a complete fuckwit.
Roy

[Bob]

You should read some Dilbert cartoons Chris :)

[Bob]

"It is centrists who are utopians, in that they grossly over-estimate the ability of the state to improve well-being in a capitalist society."
I'm sorry but I very strongly disagree with this.
The government could end poverty tommorow by offering a guarantee job offer at the living wage.
Tell that to anyone who has used the NHs, education system, or who is only alive now due to state benefits.
I guess it depends on the meaning of "centrist."
I would say the biggest problem is libertarianist defeatism and hatred of the State.

[Luis Enrique]

Regarding over estimating ability to improve things , if you think that the Tories are really bad, then you think there is a large magnitude improvement on offer by not being Tories. Or are you saying the Tories aren't so bad?

[Roy Lonergan]

@Bob
Just because the state could do a good thing doesn't mean that a state is a good thing itself.
Roy

[Tophattingson]

"It is bosses who still believe in the out-dated and discredited dogma of central planning"

You should take a look at transfer pricing and internal markets. It aims to remove some of the central planning within a business. There's an article from 2004 that describes these techniques.

https://hbr.org/2004/04/bringing-the-market-inside

[Bob]

Roy, yes it does. Ought implies can implies should. I know you have an irrational ideological axe to grind.
How else can you compare neutrally?

[Roy Lonergan]

@Bob
Which irrational ideological axe do you mean? (I have so many).
Roy

[Sam]

"In fact the biggest risk-bearers are often not bosses at all, but workers. It is they who invest all or most of their biggest asset (their human capital) into a single venture."

I don't think this can be true at all. Workers do not "invest" their human capital in their employer's business, they lease it to him, and are paid their rental fee on a weekly or monthly basis. For sure, a worker who contributes to the success of his employer stands to gain human capital as well as his rental fee, and a worker who causes his employer's downfall will see his stock plummet, but in general, the only skin the worker has in the game is a pay period or so's income, plus the lack of income for the time it takes him to find alternative employment.

A worker whose employer goes under doesn't lose his human capital (at least, not quickly. If he spends a prolonged period out of work, he will see it dwindle.)

[An Alien Visitor]

A very good article.

Sam - have you actually read the link above that explains why the bosses were taking less risks than the workers? This answers a few of your questions. It seems to me you have a rather midsomer murders view of what an employer is. Wake up, this is the 21st century.

[Sam]

I may have a "midsomer murders" view of what an employer is, but I'm pretty sure that I know that a self-employed owner-driver isn't an employee.

[Churm Rincewind]

I'm not at all sure how Tom Jones' departure from The Voice provides any evidence for anything.

Whatever reasons the BBC had for not renewing his contract, it would seem odd to suggest that this decision should have been discussed with him, or that it's not "innovative" .

Let's suppose that audience research provided evidence that he was unpopular with viewers (which is more than likely, given broadcasters' slavish commitment to ratings).

What is, then, the "conversation"?

BBC producer: "Hi Tom, just ringing to say that the viewers think you're a boring old fart, so we're not renewing your contract."

Tom Jones: "Fair enough. I just hope you're going to announce that publicly."

BBC producer: "Well actually we weren't going to defend our decision in the press because our reasons might damage your future career."

[An Alien Visitor]

"I know that a self-employed owner-driver isn't an employee."

And if you would read the article about risk you would understand that it talks about larger sized businesses and not the self employed model. And therefore states that the biggest risk is *often* not borne by the owners but the workers and small investors.

***Note the word often in the above sentence and the above article***