According to Martin Jacques of the London School of Economics the underlying cause of the growing economic crisis is permanent and far-reaching — a fundamental shift in power from the developed world to the developing world — above all China and India. It will be the biggest geopolitical shift since the dawn of the industrial era — the economic and political consequences will be of such a scale that they are impossible to comprehend.
We are entering a period of protracted instability as the old order breaks down, the US seeks to resist change and the world embarks on a conflictual and painful passage towards a new global economic order.
One thing is certain, says Jaques: the neo-liberal orthodoxy will be undermined. It could lead to a rise of protectionism in the US and Europe against developing countries such as China, or new regulations designed to prevent sovereign wealth funds from taking over what are deemed key strategic assets.
When the free market and deregulation are the means by which the Western world extends its global economic power over the developing world, then they are deemed highly virtuous. But it is a different matter when they become the instrument by which developing countries can extend their influence over Western economies.
Similarly, during a recession, the state is likely to be called into active service on a far more regular basis as Western governments seek to deal with the mushrooming effects of market failure.
It is not an accident that developing countries — virtually the whole of East Asia, for example — view the role of the state in a far more interventionist way than does the Anglo-Saxon world. Laissez-faire and free markets are the favoured means of the powerful and privileged. The decline of the Western world could well usher in a significant change in this mind-set.
Having had my share of online stoushes with neo-liberal economic fundamentalists I’ve been contemplating lately that the great dream of The Free Market is no less an ideology than Socialism or Communism were in the past, and in reality, no more attainable. All are born of great philosophical ideas which are never fully realised in the real world. Like all ideologies, they are destined to fail because human society is neither purely a common collective nor purely self-interested individuals. Society therefore never quite provides the ideal conditions to allow the great dreams to materialise. Millions suffer in the pursuit of them for the benefit of a prevailing elite.
Also in the Business Section of The Age today Leon Gettler observes that “anyone who has spent time in big organisations knows that expecting them to be restlessly innovative and strategically nimble, on top of being efficient and sticking to the management rule book, is like expecting a cat to tap dance.”
The truth is management techniques have a certain sameness about them. They haven’t really changed that much since the 1960s, whether it’s about setting budgets, supervising teams, setting tasks for subordinates and then reviewing their performances. Buzz words such as benchmarking or quality have lost their fizz.
Organisational DNA makes traditional management programming easy. Corporate DNA allows companies to engage in cost-cutting, continuous improvement, outsourcing and offshoring to make products and services cheaper, better and faster. That’s what companies do, it’s in their DNA, just as it’s in the nature of cats to chase birds and dogs to pee on trees.
According to management thinker Gary Hamel, traditional management principles built around standardisation, specialisation of tasks and functions, goal alignment, hierarchy, planning and control and rewards don’t work in a world where the pace of change is accelerating and more companies find themselves on the wrong side of the change curve.
His book, The Future of Management (Harvard Business School Press, 2007), says present management practices no longer fit. You can’t expect your business to stand out in a crowded market, he says, when you are using outdated techniques.
“There seems to be something in modern organisations that depletes the natural resilience and creativity of human beings, something that literally leaches these qualities out of employees during daylight hours,” Hamel writes. “The culprit? Management principles and processes that foster discipline, punctuality, economy, rationality, and order, yet place little value on artistry, nonconformity, originality, audacity and elan. To put it simply, most companies are only fractionally human because they make room for only a fraction of the qualities and capabilities that make us human.”
What on earth is the world coming to?
Filed under: Big Picture, Economics, Ideology
Founded in 1988 in Ashgrove, Brisbane’s Eddy Groves, now the Global Chief Executive Officer of the company, ABC Learning, with the aid of cheap sub-prime credit and much largess from the Howard Government has acquired around 1000 childcare centres in Australia and another 500 or so in the US and South East Asia. They were even making overtures to state governments to operate for-profit McPrivate Schools in the McBurbs — courtesy of Howard’s funneling of education funding from public schools into the private sector.
Australia is no longer Deputy Sheriff to Dubya’s neo-con dream of global domination by the US empire. The game’s over boys. A more realistic assessment of our air defence capabilities will better serve our security needs and likely have money left over to spend on Indigenous Australia, or public health and education.
Recent Comments