Tuesday, 10 August 2021

Do the Tories understand capitalism?


It might appear a silly question, given that the Tories are generally regarded as being the party of capitalism, but some of the things they have said and done recently give rise to more than a vague doubt about the answer. And that’s not just a question about Brexit, legion though the examples might be in that regard.

One of the key features, allegedly, about market capitalism is that it promotes innovation. Sometimes that innovation is purely the result of intense competition, but at other times it’s a response to changing market conditions or external shock. In any event, according to the theory, the most innovative businesses will thrive as a result whereas those adhering to outdated business models will go to the wall. The idea that those working for those failing companies should be left to their fate is an uncomfortable one for many of those of us opposed to unregulated capitalism, but for the enthusiasts, it’s a necessary and indeed desirable feature.

One recent such external shock has been the Covid-19 pandemic. It forced many businesses to experiment with different working patterns and to employ already available technology to facilitate more flexibility. The best employers have seen the benefits of this for both themselves and their employees and are already looking to embed the new working practices in their future business models. Admittedly, it hasn’t been so easy for those employers who start from an assumption that they need to measure and rigidly control hours worked by their staff, none of whom can, apparently, be trusted further than they can be thrown, rather than consider productivity or output, but such companies are capitalism’s natural victims of innovation. However, it isn’t just the businesses adopting (or failing to adopt) new practices which have been impacted – as capitalist theory would suggest, there’s also been an impact on other companies in the wider economy. In this case, that includes businesses such as city centre shops, restaurants etc, all of which have seen a fall-off in footfall, and which are now facing the probability that they will never be able to fully recover. Market conditions have changed, and their scope for adaptation is limited.

The response from some Tories has been to demand that people must be forced to return to their offices in the city centres, as we saw from former Tory leader, Ian Duncan Smith earlier this week, in his case talking about civil servants. But to return to my opening question – does he understand the market capitalism he claims to espouse? Demanding that organisations return to working methods and practices which have been superseded by events in order to protect some old businesses which will otherwise be unable to survive in the new world seems to owe more to the thinking of Ned Ludd than modern market capitalism. The question for thinking capitalists (to say nothing of those of us who consider the system to be flawed anyway) ought to be about how we support people during the transition to a different type of economy, not how we resist changes which will benefit many as well as reducing carbon-expensive travel.


Jonathan said...

Just closed our office (4 staff) and gone virtual. IT innovation suits the law, and lots of lawyers can innovate. I just have the feeling that, at some point, the need will re-emerge for and office for core activities, and we'll be doing 2 days in and 3 days at home (though it might just be 24/7!).

John Dixon said...

You're right of course that this particular example of innovation (using technology to work remotely) suits some professions more than others. And I'd tend to agree that it's likely that an office location will sometimes be necessary for some activities, but the idea that all office staff will naturally and voluntarily return to a daily commute looks like the stuff of fantasy to me. Still, given the takeover of the Tory Party by fantasists, it seems entirely probable that they wll continue to try and force people to comply with their fantasy. In the meantime, the smarter organisations will adapt quickly (and probably get the pick of the staff they need as a result), whilst the dinosaurs find themselves innovated out of business.

dafis said...

Tory Party remain highly dependent on handouts from wealthy donors. They get votes from landlords and others in the property sector. Remote working undermines the long term viability of the sector inhibiting growth as some space may become surplus and redundant. It follows therefore that it's best to herd people back into offices so that interests of donors and cronies are protected.

Spirit of BME said...

A good crisis always produces a mass of opportunities.
There has been an opportunity to develop working from home, but the jury is still out as to whether the quality of decision making is enhanced or depleted by this practice. I suspect companies will make their decision on this issue based on quality of outcomes.
There is another aspect. in that companies will now identify what worked well on off-site work and it will be an easy step for them to send this work overseas and save up to 70% on operating costs.
So, my advice is, turn up in the office and prove your worth, as I hear from friends ‘on the street’ that companies from Bangladesh are already contacting companies and offering their services.
In the public sector, I think the crosshairs of ‘opportunity’ will fall on the NHS, Education and possibly the Police.