Monday, May 26, 2014

Goebbels in the workplace

Winning the hearts and minds of a critical constituent of our economic wellbeing

Apart from journalists and students of history, there are possibly few who are familiar with the name, Paul Joseph Goebbels. As the architect and captain of Hitler’s mighty propaganda machine in war time Germany, he has become a lasting case study in communications theory.

Two things stand out as lessons for any aspiring dictator or autocrat: repeating something often enough increases its believability, and controlling all sources of information is the ultimate weapon of subjugation. I’m often reminded of the refrain “Goebbels, Goebbels, Goebbels”, when confronted with incessant repeats of adverts on TV. His second rule: that of controlling communication sources, explains our deep devotion to freedom of speech as an absolute of freedom itself and its revered status in democracy.

Few events in South Africa in recent times have illustrated this more powerfully and perhaps tragically than the platinum mine strike. Whatever the outcome of the resumed talks, the extended strike has left in its wake many significant firsts. One was when trade union AMCU went to court after the employer communicated directly by cell phone with Union members (see report here). Irrespective of the merits for and against the content of that message, closely guarded jealousies about who should talk to workers and what they are allowed to say are a serious problem in South African industrial relations.

Against this background, one has to take one’s hat off to AMCU and its President, Joseph Mathunjwa as an activist and champion of worker grievances. The “R12500” slogan has been broadly branded and endlessly repeated. Even the neutral perhaps less aware observer that at first could have baulked at its excessive level, may have begun to think “why don’t they just pay it!” Such sentiment is based less on the affordability of the increase than familiarity with the figure. Employers have conceded the strength of the brand by agreeing at one point to that level of entry pay, albeit spread over three years and inclusive of bonuses and other benefits.

Organised labour has always had a rallying strength far exceeding that of employers through ideological solidarity, chanting, dancing, marches, intimidation, a propensity for violence, and focussing on a specific grievance that can be repeated regularly as a clarion call and easily converted into a hypnotic chant. All of this goes some way to explain the puzzling paradox that workers will fight to the death for their freedom, but are quite willing to subject themselves to the authoritarian rule of a Union.

Organised labour is extremely adept at integrating genuine macro issues with worker grievances as AMCU has shown by linking extreme levels of executive pay to the plight of hard working underground miners. Those who up to now may have scoffed at pay disparities being a real issue need to take note. It is becoming a regular subject in wage negotiations and no doubt will increasingly give fuel to this highly destructive economic fire. Being disdainful about its economic logic will not make it go away.

But organised labour’s greatest triumph has been to virtually monopolise communication. This has been forged more by history than the barriers of language, culture, ethnicity and awareness.

Despite subjective assessments about whether his and his Union’s actions are in the interests of its members and indeed labour as a whole, Mathunjwa is simply a superb example of our war theatre expression of the workplace. That expression is cast firmly in an acceptance of the inevitable conflict between labour and capital; the commodity expression of labour, ideological paradigms of capitalism, communism and socialism; and huge, mostly inexplicable pay differences.

Those stark battle lines were drawn many years ago, going back to the Wiehahn commission in the late seventies, and the absence of broad political franchise. In this vacuum it was simply inevitable that political and ideological drivers that were reaching a crescendo in the Cold War would be strongly transferred to the workplace. Indeed, despite the collapse of the Berlin wall and the demise of communism, these out dated and counterproductive ideological differences are alive and well still today, exacerbated by capitalism’s own crisis.

It was something that I had not fully understood when I decided to leave broadcasting in 1990 to promote economic awareness in the workplace. Having lived through the consequences of Wiehahn and the tumult of inter union and union/management power struggles in the 80s’, I believed the key was simply awareness and communication. I was appalled at the extent to which management had already surrendered much of the communication task to organised labour. In part this was because they had never fully appreciated that it was an important management accountability. As one large store manager told me: “What do they expect me to do; run a store or communicate with staff!”

Direct communication with staff was mostly seen as much less of a priority than engaging organised labour and being part of the war game. For the most part, in- house industrial relations formed part of a strategy to take on the unions, supporting some and neutralising others. Engaging organised labour took priority over directly wooing individual employees to support a common purpose, common values and a sense of common fate.

The barriers I spoke of earlier, especially of language and culture were mostly seen as insurmountable, and the most important medium of all, that of direct communication between supervisor and subordinate was simply side-lined. Management reverted to surrogates such as electronic and print media, or ostentatious gatherings and walk-abouts by a mostly distrusted “sir” or “madam” from head office.

Organised labour did not have to wrest control of communications from management. They were simply given it. Goebbels could not have done better. Still today, as another of Marikana’s enduring lessons, employee communications is largely the Cinderella to the sisters of shareholders and the market.

Few things are more important to the South Africa economy at present than a greater degree of industrial harmony. This cannot be achieved without some balance in communication and improvement in employee awareness. Management simply has to restore full and effective communication with its workers. One essential is that it has to develop first line supervisors as the most credible and best armed source of information.

Above all, employee communication has to have more credibility. This rests on the understanding that its main aim is the development and empowerment of the recipient. It is not about manipulation. This was ultimately the undoing of the man called Paul Joseph Goebbels.

Monday, May 19, 2014

A salute to hypocrisy.

Is democracy failing us in ensuring good governance?

There are a few critical questions one could ask after any election:

· Is it an accurate public assessment of the behaviour and performance of leadership?

· Does it reflect or facilitate greater social cohesion?

· What effect will it have on popular expectations?

It would be interesting to read your comments, because the answers are highly subjective. For my part, and coming from one whose past election experiences outnumber those in future, I was left somewhat disillusioned that our democratic process itself, as laudable as it is even by international standards, can really make a difference in ensuring good governance and nimbly changing the course of our destiny. If democracy does not achieve this, it clearly fails in one of its most important goals. My view may be warped by the impatience of a geriatric who more often than not face their final years with an overwhelming sense of “unfinished” business both in their personal accounts and their view of the world.

Of course, one must acknowledge that much of ANC support rests on the improvement of the lives of many in the past twenty years. But rational thinkers could also be forgiven for having expected a much greater shift in the political landscape than what the 2014 national and provincial elections delivered. The appalling irony and hypocrisy of Nkandla, overt ostentation, levels of corruption and the clear self-gain motives of many leaders both in and on the outskirts of power have made hardly a dent on that landscape.

The fact that these serious blights have a limited impact in an important process that calls behaviour to account only once in five years is alarming. This has often been explained by allegiances to romantic notions of the past, a persistent hangover of imbalances and of course the ever present ethnic biases. Of greater significance is the distinction much of the electorate seem to have made between the ruling party and government itself, leading to a two tier democratic process - one at the polls and one in the streets. We’ve even had some viewing costly, disruptive and sometimes violent public protests as proof of a vibrant democracy.

This is mystifying. Surely the latter is an indication of a failure of the former? At the very least, the elections do not give comfort that these protests will abate. Indeed, we have often seen political parties themselves becoming openly involved in these activities as part of ungovernability campaigns and gaining support. The new unruly kid on the block, the EFF found much sustenance in these protests and were often seen actively taking part in them. It’s a moot point, perhaps even a very doubtful one, whether their new found ability to voice dissent in parliament will lead to a more subdued approach in the streets. Of greater concern is the party’s active involvement in already highly politicised labour disputes and its potential to worsen the labour crisis. Their donning of overalls and worker garb is a clear sign of intent to woo this largely aggrieved constituency which holds the key to our economic destiny.

While some individual parties may celebrate or lament their performance in the elections, there is little evidence to show a strong link between leadership behaviour, performance and support at the polls, and to confirm the power of elections in ensuring good governance.

The second question regarding evidence of greater social cohesion is more ambivalent and perhaps more complex. The DA has made much of the fact that about 70% of its gain of more than one million votes came from the black electorate. On the surface this may appear to be a softening of strong ethnic allegiances to political parties, but one can’t help wondering whether celebrating this fact alone is not a confirmation that it remains a critically counter-productive feature of voter loyalties.

In any event, that is examining only a few threads of the overall tapestry of social cohesion. If one steps back to see the fuller picture, then it shows a deepening of the fractures rather than an erosion of them. Those fractures are essentially economic, and play a far greater role in polarising society than cultural or race alliances do. But when they are linked, the fractures become much deeper and wider. They also encourage counterproductive labelling such as left, right, centrist, socialist, liberal, neo-liberal, communist, and capitalist, in turn creating immovable adherences to out-dated rhetoric and barriers to innovative thinking.

These categorisations are not useful in assessing the economic consequences of the elections. We all know by now that fuelled in part by the desire of some to hang on to or revive “struggle” credentials, most of the discord and discourses are about economics – so-called “economic freedom”. That must impact on things such as the government’s role in the economy, the social wage, fiscal and monetary policies, taxes, foreign capital inflows and quite a few more. I would not go near attempting to quantify these.

It will take some time to play out but one cannot completely ignore the large promise the ruling party made in electioneering or even the nuisance value of a strongly interventionist EFF – albeit a small player at this stage. We may take some solace from the firm commitment to an on balance business friendly National Development plan, but then President Zuma also undertook to ensure a broadening of Black ownership in the economy – whatever that means. The economic nonsense of some aspects of BEE, BBBEE, affirmative action and land reform, will no doubt continue to divert attention away from real issues such as our global competitiveness, labour unrest, and the global nature of wealth disparities.

It’s the third question, rampant expectations, that is of greatest concern. It is the most invidious, unrecognised and unquantifiable. Money, media and large promise are permanent flaws in modern democracies, tolerable only where you have a reasonably informed, rational thinking electorate. All political parties, perhaps inevitably, are guilty of this behaviour, especially in election times. They ramp up expectations way beyond what reality can deliver, and while the ruling party clearly has the bigger impact, opposing parties aggravate the ferment by implying that the impossible is indeed possible.

I always cringe when I hear politicians promise to create millions of jobs, in the full knowledge that all they can really do is to create an environment for sustainable job opportunities and encourage job creation by others; and inspire a willingness to work, self-help, and individual aspirations which are the key drivers behind employment, innovation, competitiveness and national prosperity.

Aspirations are about those things that people are willing to do for themselves. Expectations are about having others do things for you. The gap between expectations and reality can be directly linked to many socio-economic ills, the most dangerous of which is fuelling individual and national discord. The past elections have again widened that gap.

Credit rating agency Moody’s has put a positive spin on the election results (see article here) but has not been prompted to change its negative rating. The outcome of the election itself does not give much hope that for the next 5 years at least, there will be significant changes.

It will most likely simply be more of the same. And that same is becoming less tenable.

Thursday, May 8, 2014

Perilous polarisation.

Is global inequality becoming an economic game changer?

Centuries ago, the British writer Samuel Johnson said: “You cannot spend money in luxury without doing good for the poor. Nay, you do more good to them by spending it in luxury, than by giving it; for by spending it in luxury, you make them exert industry, whereas by giving it, you keep them idle.”

Inequalities or disparities even in wealth and incomes play a significant role in shaping economic outcomes – a role that for a large part of our recent history has been viewed as positive and beneficial. It was not all that long ago that the wealthy and affluent were mostly admired and respected. They were often role models, especially when there was a clear link between their contribution to society and the state of their wealth. They were the exemplification of dreams, evidence of opportunity and what could be achieved through hard work and perseverance.

Despite the rallying cry of the French revolution of “Liberty, Equality, Fraternity” in the late 18th century, equality has for the most part remained undefined and perhaps even scorned especially in modern Western economic theory. Like liberty, or freedom, it clearly cannot be an absolute and even in areas where it is actively cherished such as in politics and legal or social justice, it remains largely unattainable.

What has changed? For it clearly has. Today it is more common to find the affluent being spurned, resented and attacked – unless you know them personally and want something from them! What was once a benign feature of our co-existence, proof of the success of Capitalism, and evidence of the failure of Communism or Marxism, has become a critical issue, perhaps the most critical of our time. It is grabbing the attention of thought leaders across the globe, of august organisations such as the World Economic Forum which has ranked it as the most critical global issue for the past three years and economists, theorists, academics, activists, and journalists. More recently, and an event which inspired this article, it landed on the agenda of the International Monetary Fund – an organisation that for decades has been associated with austerity, prudence and monetary discipline.

Anything that threatens conventional paradigms will attract vehement detraction, as reflected in this Reuters article. While they concede a widening gap, they conclude that it is not a serious social threat as long as there is some improvement in the lot of the poorest. This is a rather shaky hypothesis when it reaches unprecedented levels in a very different social environment and a broadening of democracy.

Whatever else, the inequality debate is starting to reflect an awe inspiring possibility – that in the grappling with it, we may challenge and rewrite economic theories that for centuries have dominated our thinking. In that process, many a fundamentalist married to ideological paradigms will be shaken out of their cosy world of certainty.

Inequality in our time could become an economic game changer of the same magnitude as the industrial revolution or the Great depression. Theories can never have the same lasting effect on economic destiny as events do.

It is not surprising that inequality has become a regular feature of public discourse at all levels. It does provide some fascinating headlines, feeding all kinds of beliefs and emotions like envy, conspiracy theories and cold war rhetoric. One statistic that rattled some cages was the recent Credit Suisse research which showed that 85-people in the world have a combined wealth exceeding that of 3-½ billion others.

Another is the startling fact that almost half of the world’s wealth is now owned by just 1% of the population. The Washing Post recently covered some ten similar “did you know” conversation stoppers, and of course, as the Mail and Guardian has again shown, the obscene levels of executive remuneration here and abroad, running into hundreds of millions, is always good fodder for the journalists’ trough. But this is just one aspect that clearly is fuelling inequality, let alone growing social discord underpinned by envy and resentment. The days are long past that John and Joan Doe could see a clear link between this reward and contribution. This is at best and then even only vaguely and dubiously so, restricted to a handful of incorrigible champions of the pursuit of shareholder value and remuneration committees.

What makes the current inequality crisis so different to demand a rethink of conventional theory is not only the level itself – shown by World Bank research to have nearly doubled since the 1820’s – but also its seemingly unstoppable nature, its focus on returns on assets rather than on tangible wealth creation, technology, nano-second speculative trading, short-termism, lack of restrictions on and regulation of capital, and the latter’s unbridled and cavalier behaviour in the past few decades. Fuelling sentiment is the vastly increased distribution of information via amongst many others, the social media.

Inequality is a complex issue with many facets beyond comprehensive treatment in an article such as this. It cannot be restricted to income or material assets, but has to embrace access to services and amenities such as food, water, shelter, and above all education. This puts a substantial part of the blame on governments, not only in tax structures and their regulatory role, but on the way budgets are designed, efficiencies in spending, corruption and the self-gain motives of bureaucrats.

The most destructive feature of the current inequality crisis is what American academics Joseph Stiglitz and Michael Doyle refer to as inequality of opportunity. This effectively puts paid to Samuel Jonson’s postulate above and challenges one of the greatest tenets of Capitalism – the inevitable trickling down of wealth in a free market society. Or, as one of my regular detractors once implied, the wealth of an executive enables the possession of a cell phone by the poorest of the poor. In the same vein, some joker has adjusted Maslow’s hierarchy to rank access to WiFi as the most basic human need.

Trickle down has become trickle up. While there has been some improvement in the lives of many, it is self-evident that the more wealth is concentrated in the hands of a few, the less chance it has of spreading through “spending on luxury” to the many. This inexorable gearing up of the wealth gap has been conclusively demonstrated in ground breaking research by French economist Thomas Pikkety, who has found that capital, and the money that it produces, accumulates faster than economic growth. Pikkety’s work is increasingly being viewed by many of his peers as the game changer in economic thinking.

Inequality thought leaders agree that it is a crisis that cannot be ignored. Stiglitz insists it must be added to the Millennium Development Goals and he is part of a growing consensus that at the very least equality inducing tax structures and regulation of capital are part of the answer.

Those are perhaps complex policy issues that no doubt will be debated at the highest levels of economic and political institutions. What we cannot ignore are those things more directly in control of some of the grass roots institutions who ultimately may have a bigger effect on defusing the crisis. Here I am thinking of companies themselves, more specifically those things that labour and capital could do jointly. The obvious are the de-commoditisation of labour and the pegging down of shareholder expectations to a cost+ benchmark. These are fundamental principles of common purpose and common fate that automatically address perceptions of inequality. Other obvious “equalisers” are the promotion of small business and discouraging big capital formations.

There is an ominous note for South Africa in the Stiglitz article. While there is no conclusive evidence that inequality automatically leads to social unrest and public violence, these become more likely when there is what he terms “horizontal” inequality, or inequality between definable groups within a society – such as ethnic, cultural, religious or geographic groupings.

This may appear to support current South African coercive policies to address past imbalances. But that is simply treating symptoms and not causes. Our obsession with the past and with ethnicity ignores the reality that it is a global phenomenon. Blindly focussing on one symptom without addressing the underlying global virus could be disastrously counter-productive in a country purported to have the highest inequality in the world.

In a blatant re-saddling of my latest hobby horse, reflection makes me wonder whether the French Revolutionaries had more insight than one may have expected for their time. For their three pillared clarion call included fraternity, a concept completely ignored in economic thinking.

Perhaps it should be re-examined. On a human scale it is, after all, the same as empathy.