Managerialism v individualism

Although contemporary society is supposed to champion individualism, it often fails to do so in practice because the desires of the individual frequently clash with the smooth functioning of the managerial state.

A classic example of this is the modern state's attitude to owner-operated small businesses.

Despite the pro-small business rhetoric that we’ve been hearing since the late 70s, most modern liberal governments almost invariably consider small businesses a pain in the ass.

As DIY generalists, owner-operator businessmen and women, violate one of the primary tenants of economic theory, that people should specialise in one task if possible, since according to rational economic thinking, specialisation equals efficiency and small-scale multi-tasking doesn't.

Government bureaucracies also find educated specialists a lot easier to deal with. This is why government and big business get on so well. Both have large bureaucracies staffed by professional employees with specialised skills who can talk to each other in the same jargon-filled language. Subsequently government's in most western countries have been making life more difficult for small business, with increasing regulations, indirect taxes and new or expanding accident compensation levees. Some free business advice is now available, but it tends to be of the generic common-sense kind, which is often of limited use to those in specialised, technical fields.

The recent bailouts of big US and UK corporations in the financial sector, is only likely to add to the already high level of grievance felt by the western small business sector.

Interestingly, while governments in the individualist West have been steadily making life harder for small businesses, governments in communitarian Japan have been trying to make life easier for them, with specialist help for example in research and marketing, and in learning to use the latest technology.

This seems paradoxical from the perspective of western individualism -shouldn't collectivists who believe in tempering economic goals with social ones be anti-small business?

Well it does make sense if you take into account that small business is in many respects a communitarian activity, and that people often go into business for non-rational reasons.

People prefer working for themselves for all sorts of reasons; they don't get on with their co-workers, they want to work in a place of their own choosing rather than sit in traffic for hours, they don't have a great CV, they want to pass on a business to their children, and so on and so on.

Since Japan is more communitarian society than most western countries, it understands that rational managerialism can undermine social cohesion if pushed too far, so the country’s elites try to direct the goals of the bureaucracy towards the needs of society rather than re-mould society to fit the rational logic of the bureaucracy.

No doubt Japanese small business owners still have a lot of hassles with government bureaucracy, but at least they know that the bureaucracy isn't ideologically opposed to them.

Unlike westerners, the Japanese also have a more concrete, producerist mentality when it comes to the economy and they realise that in a post-industrial society, many people will struggle to find productive employment which adds real value to society.

Conversely, western elites seem to assume that laid off manufacturing workers can easily find steady, reasonably well-paid work in the service sector, even though much of what the service sector produces is non-essential distractions that people have to cut back on in a recession.

Another example of managerial opposition to practical individualism is secondary taxation. Since people who hold multiple jobs are an inconvenience to the state, it discourages people form taking on more than one job by overtaxing them and then making wait in hope for a tax rebate.

A similar bureaucracy first mentality exists in welfare departments, where, in New Zealand and Britain for example, those seeking short-term unemployment relief are treated like minor criminals, while long-term welfare recipients like solo parents and sickness beneficiaries are regarded as permanent wards of the state.

Liberalism and organisations

With traditionalist critics of liberalism such as Mark Richardson persistently pointing out that the myth of the autonomous, self-authoring individual is one of keys to understanding liberal individualism, it's worth considering whether the principles of liberalism apply to organisations and societies as well.

In the same way that liberal theory argues that individuals should be free to re-create themselves, according to their own whims and logic, liberal elites see themselves as being justified in continually changing organisations such as businesses, government departments and NGOs, according to rational criteria and liberal principles such as personal autonomy and egalitarianism.

In the 19th Century, radical-liberal theorist Karl Marx noted the "bourgeois obsession with reform," which he attributed to the logical workings of capitalism. More recently, enlightenment critics such as John Ralston Saul have pointed to the obsession western elites have with rational methodology, which they believe gives them the mandate to continually change and disrupt organisations, according to rational criteria, regardless of established customs, experience and common sense.

In Voltaire's Bastards, Saul argued that one result of the hubristic belief in rational methodology, is that managers tend to be rewarded according to adherence to methodology rather than actual results, both in the public and private sectors. Similarly, the word managerialism has entered the English language to identify arrogant psuedo-technocrats, who value generic qualifications and skills over specific expertise and practical experience.

Anti-managerialism has a growing intellectual following in Britain, thanks to the micro-management excesses of Nu Labour. One British blogger who writes quite frequently on managerialism is Chris Dillow, author of the blog Stumbling and Mumbling.

The liberal nature of organisational reform in western countries is clearly apparent when western organisations are compared with those in other developed nations, such as Japan and Korea, which do not share the West's cultural history. Despite the unprecedented economic and technological change which Japan has experienced since 1945, the structure and habits of Japanese corporations have undergone relatively little change in the last 6o odd years.

Highly successful firms such as Toyota and Sony continue to pay their senior managers modest salaries by western standards, and Japanese businesses still make many inexpensive, labour intensive products. By contrast, most western companies have long since shifted such manufacturing to the third world.

Japanese firms are also cautious of egalitarian reforms such as opening-up management positions to women graduates and fast-tracing intelligent and ambitious graduates at the expense of experienced workers. Indeed, whole sectors of the Japanese economy, such as distribution and farming, are still largely run along traditional lines.

Despite placing a high value on education, senior Japanese managers seem to put more emphasis on the importance of practical experience than their western counterparts.

In contrast to the way organisations are conservatively managed in Japan, western organisations are subject to a whirlwind of change, to which many workers are increasingly numb.

Diversity training, down-sizing, team-building exercises, political correctness, counseling, office-layout fads and incessantly changing business jargon are just some of the many questionable changes which today's western workforce is expected to put up with.

Even organisations which are thought of as bastions of tradition, such as long-established churches, are subject to a level of change which would be unheard of in most cultures. The Church of England, for example, has been under considerable pressure to accept gay and female clergy as well as significant changes to its traditional religious services.

The last 150 years have seen an enormous amount of change within western organisations, but the pace of change has intensified dramatically in the last 30-40 years, and an increasingly amount of that change has been of questionable practical benefit - which ties in with the intense degree of ideological social reform which has occurred in western society during this period.

Given that most other cultures are very weary of such intense and rapid organisation change, the western managerial class may well be setting unrealistic expectations about how much anti-traditional change is possible or disirable.

Managerialism in universities

Watching the 2003 film Luther the other day, reminded me of a Quadrant article by Malcolm Saunders on the topic of managerialism in Australia’s universities.

The revenue gathering fixation of today’s universities seems to have some similarities with the 16th Century Catholic Church’s preoccupation with selling indulgences.

According to Saunders, Australian university administrators are more concerned with securing research money and racking in tuition fees than with providing value for money.

The unfashionable researcher who works on the smell of an oily rag can be compared to the rebel priest who focused on serving his parish rather than his Church’s coffers.

Saunders goes on to say, this managerial culture of cynicism, cronyism and blind institutional allegiance is driving many Australian academics into early retirement. If this is true, it sounds pretty worrying (and wasteful) given that western nations are facing a looming shortage of high IQ workers.

Although Saunders appears to be writing from a liberal perspective, his dislike of the current cultural climate of academia should resonant with many conservatives. I particularly like the following comment, which could apply to many workplaces:

"While the physical conditions under which academics work has probably never been better, the cultural climate in which they pursue their disciplines has never been worse."

In response to Saunders article, US legal blogger Terrence Berres summed things up nicely with this pithy comment:

"The seemingly incompatible bed-partners – liberal economics and postmodernism – have joined forces to ensure that Australian universities serve economic rather than academic cum intellectual ends."

Managerialism

Libertarian blogger ‘Stumbling and Mumbling’ points out that there is an important distinction between technocratic management and managerialism.

Managerialism is an ideology that claims management is a profession in its own right that has generic methods and rules that can be applied to all types of organizations (managerial thinking is primarily spread via MBA programmes, a point alluded to by Canadian writer John Ralston Saul in his 1992 best seller 'Voltaire's Bastards').

The reality of course, is that good managers need to have prior experience in the particular field that they are managing. For example, you can’t really manage a manufacturing firm if you don’t know anything about making things. I have been told that managerialism has been one of the reasons for the dramatic decline of British and American manufacturing.

Managerialism is more rampant in English-speaking countries than in East Asia or Continental Europe. This is partly because English-speaking countries have very unstable job markets, so professionals try to make their careers more secure by marketing themselves as adaptable generalists. If organizations believe in generic management then managers can hop from job to job and muddle through without specialist knowledge.

By contrast, East Asian countries lie Japan and Korea emphasis job loyalty rather than professional loyalty so their managers have more specialist knowledge. This is one reason why the Japanese excel at planning complex projects and manufacturing high quality goods.

Admittedly, technocratic management can lead to rigid thinking and this is one of the reasons why narrowly focused economists should be taught history and politics as well as abstract economic theory. This might encourage them to take a longer-term view of economic problems.

In the English-speaking world ideological managers are often positive thinking extroverts who frequently clash with critical thinking introverts. George Bush provides a pretty good example of a positive thinking extrovert.

Ideological managers tend to have shallow educational backgrounds and an aversion to reading. This leaves them vulnerable to fashionable, up beat ideas based on simplified readings of works by established intellectuals. The Landmark Forum is a popular positive thinking course that fleeces managerial extroverts using watered down ideas from existential philosophers.

John Maynard Keynes points to the weakness of managerial thinking in his often quoted remark: "Practical men, who believe themselves to be quite exempt from any intellectual influence are usually the slave of some defunct economist".

The Cult of Managment

Although the cornucopian idea, that technology can solve all the world's problems, seems to be on the wane, a related belief, that management can solve all our problems seems to go largely unquestioned. There are many books and internets sites discussing the down side of technology but few devoted to criticising the excessive claims of modern management (John Ralston Saul's 1992 book 'Voltaires Bastards' being a notable exception) . American economist Thorstein Veblen was one of the first to point out the coming problem with modern management. Veblen argued that as productivity in industrial increases too many people become engaged in unproductive activity- the old problem of too many chiefs and not enough indians.

In the area of environmental conservation fundamentals such as the rate of economic growth, human nature and population levels are treated as secondary to good management. In New Zealand our elites seem to believe that with sufficient managers, lawyers and legislation like the Resource Management Act, problems like supplying enough energy to a rapidly expanding population can be painlessly resolved. Tough choices like forgoing current consumption for future development, spending tax dollars on energy conservation or cutting immigration aren't necessary if we have sufficiently enlightened bureaucracy.

As organisations become more and more management focused they start to erode the 'espirit de corps' that helped make them successful organisations in the first place. Over the past decade the wages of upper management in English speaking countries have increased considerably more than those of workers. Although managers say this is the logical result of a limited supply of good managers in a global market place, they fail to appreciate the effect it is having on worker morale. Productivity levels in most English speaking countries have shown little increase in recent decades and union militancy is beginning to resurface. In contrast wage differentials are much lower in Continental Europe and Japan where productivity levels in corporations are generally quite a lot higher.

The Obssesion with management in English speaking countries is having a bad influence on the developing world. Developing countries need to get the basics right before striving for sophisticated systems of management. This means concentrating on developing law and order, basic education for both sexes, passable roads, reasonable agricultural practices and lower rates of population growth. The fact that many poor countries have very high levels of graduate unemployment yet provide little support for their peasant farmers indicates that the West is still providing the wrong kind of advice and funding through organisations like the World Bank.

According to John Ralston Saul the word 'manager' comes from a French term for someone that does domestic housework. Although management is certainly more demanding than getting out a vacuum cleaner he does have a point- managers maintain existing systems they don't produce or develop anything per se. Actual development requires not so much managers, as 'entreprenuerial technocrats' (for want of a better term) that can generate plans and ideas and get different parties together to produce something new. In New Zealand, such people are conspiciously absent from our current crop of politicans and civil servants. Probably the only conspicious example is Jim Anderton , founder of kiwibank. Not suprisingly, the think tank, The New Zealand Institute describes the frustrating state of the New Zealand economy as the 'tidy management of the status quo'.

The cult of management is in many respects a new version of the old socialist idea, now descredited, of trying to develop a perfect world through politics.