[Futurework] Will Hutton Part II

[Ray Evans Harrell]

IV   Will Hutton: Great business organisations are that, they are great organisations. And if you’re going to run an organisation, you understand very quickly that there’s enormous tension between sweating the assets hard and paying your workforce brutally and making them unemployed whenever the economic conditions look poor.   And actually trying to build an organisation which has a social view of itself at its core, what I call an organisational reason to be.   Great organisations in Europe and America have that organisational reason to be.     One of the things I look at in the book is Boeing, a great company that was founded by a great engineer and a great American, William Boeing.   And in the 1960s bet the entire value of that company in conferring on the world the jumbo jet.  It nearly made that company bankrupt, it was a technological, breathtaking thing to do at that time, and very nearly it did make Boeing bankrupt,  but no-one in Boeing thought a thing about it, except it must be done, because it was the "Boeing"  way. Of course Boeing - as a company - committed to building the best planes that flew furthest, fastest, most safely, must do this. That’s what you got out of bed in the morning to do, that was its organisational reason to be. Spool the clock forward 30 years to now, and think about Boeing, and think about Airbus.   Boeing has been asked to be - by the rise of the American Right - the new view in Wall Street - that actually all that counts is maximising shares value - and maximising profits for the shareholders.   It’s ceased to be a company dedicated to engineering excellence, building brilliant planes.   The new A3-80, the 750-passenger strong workhorse that will fly from capital city to capital city, is going to be built by Airbus. In fact all of the innovative new planes are going to be built by Airbus.   Airbus has now got a longer order book in every category of aircraft manufacture than Boeing, and it has a much lower subsidy than Boeing.    It doesn’t get the fat defence contracts, and the free cheques to fund R&D that Boeing gets, but people who work for Airbus - like they used to do at Boeing - believe they’re doing something fantastic, they’re building great planes to serve an idea of aviation, to serve an idea of travel, to serve an idea of mobility, to serve an idea of what it means to be in the 21st century.     They’re not just profit maximisers. Look around the world at great organisations,  I’m always struck by Unilever, which I think is a great British organisation - a Dutch-British organisation.   When they founded Unilever in the 1880s, they put at its core its purpose - not to maximise profits - Unilever’s purpose was to build the best everyday things for everyday folk.  You talk to directors of Unilever and executives of Unilever, and they all know that still.   Some of its factories are committed to diversity,  committed to promoting anyone who’s able.   The most productive factories anywhere in the world, even here in Britain.   Great organisations have that at their core, because they’re not just about buying cheap, selling dear, sweating the assets, maximising shareholder value.         And I contend that the great story of the last 35 years - and here’s another surprise for you all:   ·        in the mid-1960s productivity measured as output for every hour that was worked, across the EEC of the six, as it was then, was about two-thirds of America. ·        A generation later, and the EEC, now the EU, has overtaken America. o       France has higher output per man hour, o       so does Holland, o       so does Belgium, o       so does North Italy, o       so does Germany, except there are bits of East Germany that have just recently joined; o        Scandinavia, level pegging. o       Even Ireland’s output per man hour has now jumped to match that with America.   And do you know the one country in Europe where the gap remains as big as it was 35 years ago, and which is under Mrs Thatcher and to a degree under Mr Blair, following the American way, do you know what that country is?  You know, it’s us.   We’ve not set about building great business organisations that want to marshal people, that want to invest in the future, that want to be here tomorrow, to think about what it is to be a great organisation, in the same way the old best of American corporations used to do and the best of the European corporations still do.   We’ve chased this nation, so that all that matters is to create a ‘hire and fire’ culture.   A culture in which directors can make themselves enormously rich,  as if that is all we need to do to create productivity and enterprise.      It’s a much more sophisticated and subtle nation and in my new role as chief executive of the Work Foundation I spend a lot of time now with directors and chief executives of other companies.    When we sit down for lunch or supper or meet, their preoccupation is exactly the one I’ve described.   They say how the Cities (CEOs? REH)  are breathing down their necks to insist they raise their profits every quarter,  making it all the harder to run an organisation rather than easier.   They are all questing for a way of actually imparting to the people who work in the organisation that this is a great thing to do, that these are great organisations, and they want to do that.      That’s what’s on their mind. What’s not on their mind, and it’s surprising, you’d be astonished, all of you, that what’s not on their mind is the agenda that you get from the right-wing economists, that all they want to do is to break trade unions and pay as little as they can.  That’s not what’s on their mind. They want to build great organisations that are here tomorrow and have a purpose.   "With the pricking of that bubble, it becomes more obvious that that American hare had profound defects in the way it organises economy." They understand that that’s the key to getting this productivity growth.   And that productivity - by the way -  went on during the 1990s.   Over the 1990s productivity measured,  properly measured,  grew by 1.8% every year on average in the EU,  against 1.5% in America.        So: even with that enormous stock exchange bubble, even with all that growth that took place in the last four or five years, even with the IT miracle, even with the dotcom alleged miracle, even with all those jobs that were generated in America,   still the European - the tortoise - steadily investing,  steadily looking after people, steadily having a social view of what enterprise is all about, outstripped that hare.    And that hare - that American hare - with the bubble imploding,  yes bubbles can implode; can bubbles implode?   I think bubbles deflate.  Bubbles can be pricked and deflated, I think we’ll leave implosion aside. And with the pricking of that bubble, it becomes more obvious that that American hare had profound defects in the way it organises economy.     V   And what about the last value system that actually I think connects all Europeans?        Which we in Britain in many respects are more European than almost the Europeans.      That’s a belief in what I call public-ness.   The idea of the public realm, public-ness.    Now public-ness is not just about democracy and politics and political debate, although that’s part of it.      Public-ness is the great nation that emerged in the Enlightenment.   We can argue, we can debate what the great philosophers of the 1760s, and 1780s discovered,  we don’t have to take what the Catholic church says,  we don’t have to take what the King says - we can argue -  we can experiment -  we can attempt to construct arguments which may or may not be wrong, we can test them against reality; testing them against reality has to take place in a public place.   Public-ness.     Public-ness is the quality in a public footpath;  Public-ness is the quality of the BBC; Public-ness is the nation in a human genome project that that fantastic information that we in Europe - in partnership with America - mapped the Book of Life, as it’s called,   We in Europe wanted that information to be free to humanity.  Public to humanity.    The Americans argued it should be privatised and patented and given to giant corporations so they could exploit it.   Public-ness against private. This notion of public-ness is deeply embedded in my view in the West’s view of itself. It’s the great notion in Aristotelian writing between the private, the household, the public realm, the polis, where you argue and debate.   None of us are only private beings. We need public-ness in order to complete, to connect, to express our interdependence. Now that’s a value which is absolutely at the core of  Europe, and it’s in the States - that is - within the liberal tradition, a powerful commitment to public-ness too.      But the conservative tradition argues that public is coercive, that any expression of the public apart from political exchange in a political democracy -  and of course you must have that - but to go beyond that, to say the States should do this, or the committee should do that, that’s to get in the way of individualism and liberty, and that those are the values that any civilisation must hold at its heart. One of the great American philosophers of the Right, Leo Strauss, argues precisely this point. By the way Paul Wolfowitz one of the hawks on Iraq, John Ashcroft, the Attorney-General, some of the closer advisors to George Bush, are Straussians. Strauss argues that the just society is not about redistribution, or about the rule of law, it’s about you, sir, and you, madam, being a moral being, and the way you demonstrate your morality is that: ·        you work hard and ·        you worship God and ·        you have no truck with the State, ·        you accept no welfare cheque,   and any society constructed around that (public) model is amoral and incorrect.      We in Europe don’t take that view. These three great classes of values: the social contract, an idea of enterprise and the notions of obligations of rich to poor, an idea of public-ness of the public realm,   underpin what we in Europe do, and I submit that the core value that links all those three things is interdependence, either expressing it or doing it.           Kirsten Garrett: At this point in his talk, Will Hutton addressed one of the points made by his critics, a point about unemployment in Europe as compared to America. Hutton points out that 7 of the 15 European countries have lower unemployment than America, but he concedes that in the other 8 there are problems, and there have to be changes to policies so as to create more jobs and encourage more people into the workforce. The full arguments can be found in his book, ‘The World We’re In’. Moving on to other criticisms, Will Hutton. VI   Will Hutton: Next criticism about Europe, made by the American Right in the wake of September 11th. Europe is the dark continent, the Holocaust and anti-Semitism and racism hangs over us. That our attitude that France’s vote for Le Pen, that Holland’s vote for Pym Fortuna that Denmark’s vote for the People’s Party are all part of a dark side of Europe, and that the temptation to reproduce what was done in the 1930s and 1940s is ever-present in this dark continent. Well I think that’s a misunderstanding of some of the things that have gone on, and the pot should not call the kettle black. And we’ve got to do better in Europe. We’ve got to find a new rhetoric about asylum seekers, we’ve got to find a way of actually coexisting with the Islamic community, and we have to recognise our weaknesses, and they’re there.      But there were 200 years of slavery in the States, the treatment of American blacks even now is still appalling.   There’s 4.3-million people in American jails, 2% of the adult population, and most of them are black. Of the 3,000 a year being on death row, the vast majority are black. When you go to an American prison, those 4.3-million, you become a felon, and most states in the union, once you’ve been to prison in America, you don’t get your civil rights back, and there’s an enormous population of felons in America, both in jail, you’ve left jail, you don’t have the vote, and the vast bulk of those felons are guess what the colour of their skin is. We in the West have got to be very careful indeed throwing around these insults at each other. We have to recognise that neither America nor Europe have got much to boast about in this quarter. Then the last two criticisms, and I’ll bring my comments to an end. The European Union is undemocratic, non-transparent, the institutions that Europe is building to incorporate these great values, are an offence to any idea of democracy. To which I have two replies:   First of all that’s hyperbole to the nth degree. The European Commission has really only two competencies, trade, competition. Everything else is done by the nation state, substantively. Tax, defence, health, education, criminal justice, culture policy, sport policy, you name it, that’s done by the member state. And trade and competition policy are very dull, and most people don’t take much interest in them, even when they’re done at national level.   The only way however that the European Commission can get any of the things it wants done, it can’t tax, is to regulate, and any regulation on trade, any injunction or directive it gives on competition can only be implemented through the National Parliament and National Government of a member state.    So within the European Commission system - that’s transparent -  it can be tested by the European Court if you don’t like it.   It has the European Parliament as a watchdog,  there’s all that process, and on top of all that, it has to go through each member State in order to happen. Actually it’s unbelievably transparent, and very democratic. It is just hyperbole from the Right, that we are  "enemies of the nation"   that we must express interdependence.   They are  name-calling things that are much more better run than anyone acknowledges.  Is it perfect? No, it’s not.  Should it be reformed?  Yes it should.  Should it be more transparency, democracy and accountability still? Yes, there should. But, question: Do you engage with it to pull those reforms off, or do you walk away from it and say ‘A plague on it, I won’t go near it’ like The Daily Telegraph or The Daily Mail? I insist that in an era of globalisation if you believe most of what I’ve said and you believe in this notion of interdependence being a value that we must express, and which we in Europe hold at the core of our civilisation, then constructing institutions at European level, that attempt to express that interdependence, and champion nations of multilateralism abroad, is an essential thing to do. So far from walking away from it, our obligation is to engage with it and to act upon those criticisms when they’re valid and change and reform.     VII "Anybody we nominate is going to be seen to be an American Anglo puppet and have zero legitimacy, not just with their own people, but with the Arab world around. We’re going to be stuck there for years and years and years..." Last it’s said that Europe is feeble. We’re the herbivore. Who do you call in Europe when you want something done? Says Mr Kissinger.     We don’t spend as much on defence, and in this argument with Iraq we’ve been worried about being seen to be legitimate, seen to behave multilaterally, and here my reply is unambiguous.   It is true the European Union, because it believes in interdependence, because it believes in multilateralism,   is hesitant about war; believes in legitimacy. And I think that we are right to make that argument.   Think about Iraq. Suppose we go into Iraq without a UN resolution. Suppose the British government, the American government send 20,000 men into Iraq and we’ll win actually because we’ve got the weapon systems that will overwhelm Saddam. We could win actually in very quick time, we could win in six weeks.   What happens next? Who’s going to succeed Saddam?   We’ve acted unilaterally and pre-emptively, we’ve got to put someone in place, a regime in place. Anybody we nominate is going to be seen to be an American Anglo puppet and have zero legitimacy, not just with their own people, but with the Arab world around. We’re going to be stuck there for years and years and years, defending the indefensible rather like we tried to do in South Vietnam in the 1950s and 1960s, until finally we’ll pull out.   Legitimacy, respecting the rule of law is not just a moral obligation, it’s a matter of self-interest. Interdependence abroad, interdependence at home.   Those must be the values with which we seek to act in the 21st century, because if we don’t, then it’s an open door to the creeds, the loyalties of race, blood, tribe, nation, winner take all, survival of the fittest, the strong rules. That can’t be the framework for the 21st century, and we in Britain have to stand up and say so. We have to stand up and say that interdependence underpins the way we’re going to run our hospitals and schools and transport and pensions. Interdependence is going to underpin the way we run our great organisations in the public and private sector alike.   Public-ness is something we’re going to hold dear, we’re not going to privatise every damn thing that moves. We’re going to insist on working with other Europeans who share our values, to build great institutions that incorporate those values, and we’re going to champion them in the way that globalisation which is enormous opportunity, is governed and regulated in the years ahead. That must be what we stand for. Must be what we stand for.   It’s what we believe in, it’s what we are, it’s what our civilisation is about, and as I said at the very beginning, it’s under threat. It’s under threat from the new orthodoxies that have come from the very particular and eccentric philosophy of the United States, and that means that we Europeans have to engage with and argue with America and we do it better if we do it by acting - together - so that we sing from the same damn hymn sheet. So that’s my view. We should understand our European-ness and we should work with other Europeans to construct a society and economy at home and abroad which we really believe. Thank you very much indeed. Applause   Kirsten Garrett: You’re listening to an edited talk given by Will Hutton at the Cheltenham Literary Festival in October. At this point, Will Hutton asked for questions from the audience. The first person said that he did not share Will Hutton’s optimism that Europe could retain its kind of society in the face of the energy and power of the large global corporations. At the core of Will Hutton’s argument is the idea that capitalism can be reined in, but the questioner suggested that free markets will insist on no government constraints at all. Will Hutton: On this first point, that very good point. I may talk to the CEOs and they may profess this good behaviour intent, but actually capitalism has iron laws which compel corporations to play the game in a very capitalist way. And you all have to make up your minds about this, because there’s a very purist view about capitalism on both the left and the right, which takes that view.   I’ve got myself in a lot of trouble over the last ten years - both in this book I’ve just written - in arguing that ·        you can have the profit motive, ·        you can have the market principle, ·        you can make very distinct economic and social choices within it, and that   capitalism isn’t just "to comply to a kind of Marxist iron laws"  but actually, you can shape it and contour it. Now that’s my view and in a sense actually, everything you’ve heard about the economic and social model is predicated upon that.   If you don’t buy it, then a significant part of my argument falls. And the reason why I try to argue that I’m right on this.   First of all - Marxist predictions went wrong, - there hasn’t been a kind of millenarian moment of revolution where capitalism is right at a point of crisis because capitalism has demonstrated its enormous adaptability, and one of its adaptabilities is conforming to the social mores and moral principles of the societies in which it operates. That I think is a truth about capitalism which means that you can configure it. I also think anyone who’s worked for an American corporation or an American investment bank or some European enterprises run along those lines, or actually also - worked for a European company or corporation - people who work for Boeing and Airbus will tell you they’re very different cultures and very different corporations.    So that’s my answer to you.   But I recognise that the contrary view is passionately held, and we’re talking first principles here and it takes longer than two or three minutes. But thank you for that question. One more question perhaps and then we’d better stop because I know people have got to go.   Woman: You said that globalisation gave massive opportunities. I can’t see what they are. Can you give us some idea? "Globalisation is the handmaiden of ferocious inequality ... Inequality is the sleeping dog in British politics." Will Hutton: Yes, we in Britain have been a huge beneficiary of globalisation. It’s obvious in the south east of England, I mean it’s not just the financial markets, it’s our role with media, it’s our role at airports, our auction rooms, the foreign students that come to our universities and go to our teaching hospitals. I would say that the reason why the country’s done quite well economically the last seven or eight years, is because we have done so well at globalisation.   Now the dark side of globalisation is twofold: one, it’s not governed and it’s very unjust and unfair in the way it throws its benefits about, and which lead me to the second unfairness: globalisation is the handmaiden of ferocious inequality.   And I’ll finish off on this note. I think that inequality is the sleeping dog in British politics. I don’t believe that whether it’s our children who can’t buy a house or a flat in a place like Cheltenham until they’re in their 30s, whether it’s people in their 40s and 50s worrying themselves sick about what they’re going to live on on retirement, because pensions are so insecure. Whether it’s the competition. As state schools get better, the competition by state school students for the limited number of high quality places at universities is going to lead to a huge shout from people who’ve been paying for private schools, but it all being unfair and a huge shout from those who have been working hard at state schools how unfair it is that so few of them get to these top universities still.   Inequality, and how to deal with it is going to become the real hot issue in British politics, and we’re going to be reminded again that in our approach to inequality our attitude is fundamentally European, and the prizes will fall to those politicians, those institutions that can manage the emerging crisis best but it will be managed best I believe, if the kinds of things I’ve been saying today are really taken to heart. And that’s it. Thank you enormously all of you. I really enjoyed it. Applause Kirsten Garrett: That was Will Hutton, writer, columnist, and editor, and Chief Executive of The Work Foundation. His most recent book is called The World We’re In. Co-ordinating Producer is Linda McGinnis. Technical operator, David Bates. I’m Kirsten Garrett and you’re listening to ABC Radio National.    Australia © ABC 2002