<![CDATA[Business]]> <![CDATA[In praise of meaningless work]]> The Business Romantic: Give Everything, Quantify Nothing, and Create Something Greater Than Yourself
Tim Leberecht
HarperBusiness, 320pp

Mindful Work: How Meditation Is Changing Business from the Inside Out
David Gelles 
Profile, 305pp

The world of management has discovered the human soul. Each new dawn brings with it another survey, article, or TED Talk emphasising the need to restore meaning to work. Whether labouring at a bike shop, mounting hostile takeovers, or psychoanalysing house pets, older workers want it, and millennials demand it. No one can seem to clearly define what it is – feeling challenged? helping people? sweat equity? skill-building? – but we know the elusive quality when we see it, and we have registered its near-total absence from our work lives.1

Generations of employees have felt this emptiness, of course, but only recently has it become a matter of pressing concern for management types. This is not necessarily because the purposelessness and futility that defines life in an American office is killing their employees’ souls. It’s more that the malaise may also be keeping those same workers from attaining the utmost productivity. The research backing this abounds, but the most resonant contribution came in the form of Gallup’s much-cited, 2013 State of the American Workplace report, which found that companies whose employees are comparatively more engaged generate 147 percent higher earnings per share2.

Workers who are emotionally invested in their work also tend to be less motivated by earthlier enticements, such as pay, vacations, flextime, and good hours.

More output at next to no cost. And thus did the word ring out: ours will no longer be a future of rote compliance with company objectives, pursued ceaselessly in a deadening, musty cubicle farm. Ours will be jobs bursting with meaning. Meaning and productivity. But especially productivity.

Our forebears didn’t have to look quite so far to find the point of their labour. For primitive man it was easy: you hunted; you ate what you killed; you spent the rest of your time trying not to get eaten by something else. The Puritans saw how hard God worked to create the world, and they toiled with comparable avidity in order to keep him happy. The blacksmith smithed, the farmer farmed, the tanner tanned, the pirate pirated.

It wasn’t until Frederick Winslow Taylor and Henry Ford effectively replaced the artisan economy with assembly lines and so-called scientific management in the early twentieth century that the tug of war between companies who treat workers like numbers and workers who insist on being treated like people began in earnest. Toiling under the stopwatch, workers began to complain of stress. Profits soared and antagonism bloomed. Marx’s theory of alienated labour, in which workers inevitably become commodities themselves, began to bear out.

Since then, it’s been a lopsided tug-of-war between the emotional needs of humanity and the imperatives of corporate profits. Profits generally win, providing fresh reminders of their supremacy every time a thriving company lays off employees to appease colicky shareholders, or installs a monitor on your computer to measure how much time you’ve spent at your desk, or hands its CEO a duffel bag of cash for running a company into the ground. For workers, this has taken a toll. We are all alienated labour now. The soul cries out for relief.

And the soul shall have it, at least according to two new books. Mindful Work: How Meditation Is Changing Business from the Inside Out, by New York Times business reporter David Gelles, looks at corporate America’s increasing interest in meditation to enhance productivity and ameliorate stress. And The Business Romantic: Give Everything, Quantify Nothing, and Create Something Greater Than Yourself, by marketing executive Tim Leberecht, urges ... well, just reread that subtitle.

Leberecht sees a tired, cynical labour force, and lays the blame for it on a working world so obsessed with metrics that it’s become closed off “to the delights, the mysteries, the moments of transcendence, and even the hard-won sorrows of an everyday life in business.” His “Rules of Enchantment” “prioritise joy over optimisation,” and he contends that workplaces that follow these dictums will be abloom with sensitivity, self-discovery, generosity, ambiguity, vulnerability, and “an appreciation for the sublime … and secretive.” In order to “engender an ‘institutionalised’ romance,” he has called on companies to marshal the neglected humanities – poetry, art, music – and establish themselves as “arbiters of meaning” (and also “maintain profit margins”).

But isn’t that asking a bit much from our jobs? Not at all, Leberecht explains. We don’t have an alternative: “Our lives are already so encroached upon by the normative values of capitalism, that our only choice is to reveal our fullest selves within this mainstream market culture.” Moreover, the consequences of disillusionment are dire: “When we disengage [from our jobs], we lock away our most private desires,” he writes. “Every time we disengage, a small part of our love dies.”3

Mindful Work, too, is a bit moony, but somewhat more practical. Gelles cites studies showing that meditation can reduce stress, increase compassion, and foster a healthier state of mind. He speculates that by institutionalising mindfulness, companies will become better, less polluting, less exploitative corporate citizens (a claim undermined somewhat by the fact that “hedge fund managers are using meditation to gain an edge in their training”).

Gelles reports on efforts by older firms, like General Mills, Ford, and Goldman Sachs, to harness the power of mindfulness, but pays special attention to the darlings of Silicon Valley, especially Google, where employees can enroll in a “course in mindfulness” called “Search Inside Yourself.” The man behind Search Inside Yourself is a senior Google executive named Chade-Meng Tan, who gave himself the title “Jolly Good Fellow.” During a seminar on the importance of self sacrifice, humility, and compassion in the workplace, Meng gets right to the heart of the matter: “There’s a false dichotomy between getting shit done and being loved,” he says. “But being loved is good for your career. When you are loved, people will work harder for you.”

And here we were thinking love had no practical applications. Turns out it’s useful after all. All you have to do is lash it to the wheel and make it sing its little heart out.

I don’t know how to make money. If I did, I wouldn’t be writing this essay on a Sunday. I’d be fattening on my capital and disparaging Piketty like the rest of the global elite. But I have held many jobs – from gas station attendant, to hotel clerk, to magazine editor. I’ve managed staffs, and worked under many different bosses. I’ve liked most of the bosses, and loved a few – even the one who cracked my rib in a fight. I’ve liked most of the jobs, and loved some, too. I work hard. I believe that without the strictures of gainful employment, idleness – which I both require and adore – slides into sloth. I also come from a family of proud small business owners who do good by their employees and their customers. And I’ve now quit two fairly plum jobs to try my luck in the wilds of self-employment because I had come to feel off-kilter or uninspired.

All of which is to say: I am a meaningful work guy right down to the ground, and I fully support anyone’s quest to obtain work that matters to them. But when I see management types become giddy over the prospect of “scaling” meaning and purpose and “intervening” in the lives of their employees to foster compassion and improve outcomes, I see whole sweeping vistas of fresh bullshit opening up. I see employees who go to meditation class just because they don’t want the boss to think they’re not trying hard enough. I see job applicants being forced into the humiliating charade of having to pretend they’d do a job gratis, because it means so much, because to not do so would be to not get the job4.

I see the old team-building horrors of mandatory corporate fun morph into exercises of mandatory fulfillment, like when a former boss of mine made us write essays about how our jobs make us happy, or when an acquaintance’s manager had her use Legos to convey her perception of her job. (She made the boat from Apocalypse Now.) I see Leberecht’s advice for people who do not love their jobs, writ large across the land: “Pretend to be a Business Romantic,” he proposes, “fake it until you make it!”5

Is this advice anything more than corporate incentives dressed up in office emo? Will meaning-mongering be the new greenwashing?

Even if these efforts do make us more legitimately engaged, it’ll just serve to treat the symptoms and not the disease that’s inspired so many people to seek significance in their work in the first place. “Our lives are choked with work,” wrote Richard Donkin in his 2001 history of employment, Blood, Sweat and Tears: The Evolution of Work, and it’s only gotten worse since then. Boston College sociologist Juliet Schor argued that, by 2000, we were working five more weeks per year than we did in 1967. Americans work an average of 299 more hours per year than the French, and 400 more than Germans. (Germans? Who knew?) Productivity has grown 65 percent since 1979, according to the Economic Policy Institute, but wages have been stagnant. We’re among the most productive nations on earth, and the strain is showing. Gelles cites a report by Carnegie Mellon which found that stress levels have increased 18 percent for women and 25 percent for men over the past 30 years. According to the Gallup workplace study, some 70 percent of Americans claim to be disengaged in their jobs. The Organization for Economic Co-operation and Development ranked the U.S. twenty-third out of 23 countries for work-life balance. We are spent – and yet we continue to produce.

Uncoincidentally, corporate profits are at record levels.

So maybe it’s this: Maybe the problem isn’t meaningless work. Most modern work, like it or not, is inherently meaningless beyond the paycheck. (Have you seen what people do for a living?) No, the problem is that work has so monopolised our lives that there are ever fewer opportunities to find meaning outside of the office.

In 2011, the philosopher Mark Kingwell wrote, “The workaholic colonises his own despair at the perceived emptiness of life – its non-productivity – by filling it in with work.” It’s not just individuals. The broader culture is hopelessly workaholic – not raging against the emptiness of life, but actively emptying it, and filling the hole with more work dressed up as life. The manic drive to make labour meaningful, at least on the part of management, is an acceleration of that process, ultimately less about unlocking human potential, one suspects, than hydrofracking it.

Perhaps it’s not meaning we want but relief, and we just lack the words to give voice to the dreaded heresy: This is too much work. I don’t want to do this anymore. (Where is our twenty-first-century Bartleby?) We may mock the French – and now, the Germans, apparently – and hold obnoxious dinner-table competitions boasting about how many hours we put in, how little we sleep – but I would kill ten men for a four-day workweek, and I’ll bet most of you would, too.

Yes, we should all hope – demand, even – that the workplace of the future will be governed more by respect and sensitivity than cupidity and the Peter Principle. But until that day comes, we should embrace not the meaningfulness of work, but its meaninglessness. The cold, unromantic transaction. The part that keeps food in our bellies and a roof over our heads. The part that, theoretically, gives us our nights and weekends. Let’s demand that recompense, first and foremost, and deal with the rest later. With unemployment falling to pre-recession levels, employees are hopefully gaining the leverage to say enough. The prayer is that the line will be drawn, and managers will then see that the way forward is actually very simple: Hire good people. Treat them well. Help them succeed. Compensate them fairly. Let them go home. 

 

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1It should be noted that for present purposes, the “we” under discussion are white-collar workers, generally. For the working poor and some members of the workng class, the problem isn’t too many hours, but not enough. The working poor are no more permitted meaning than they are a living wage. But that’s a matter for a different polemic. 

2Gallup’s report says engaged employees – and this dovetails with others’ definition of meaning or purpose – have “well-defined roles in the organisation, make strong contributions, are actively connected to their larger team and organisation, and are continuously progressing.”

3Here I would like to indulge in a bit of light puppy-kicking and point out that Leberecht used to be the CMO of a multinational outsourcing firm. 

4I recently came upon an ad for a part-time customer service job at Verizon that promised to “fuel your passion” and “change the world.” 

5I also recall that Matthew Crawford, in his book Shop Class As Soulcraft (2010), defined authority in the American workplace as “smarmy and passive aggressive, trying to pass itself off as something cooperative and friendly; as volunteerism.” 

Joe Keohane has written for New York magazine, The Boston Globe, and The New York Times.

This article first appeared on newrepublic.com

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<![CDATA[Your petrol bill may fall, but is cheap oil all good news?]]> he past few months have brought a spree of frightening developments in the global economy. There’s been the slow crash of the Chinese property market, the eurozone’s slide into deflation and the relentless strengthening of the US dollar, to start us off. But there is no doubt what the biggest and most baffling development of all has been: the collapse in the price of oil, from more than $100 per barrel as recently as last September to less than $50 per barrel today.

Oil, it goes without saying, is the single most important commodity there is. Quite literally, it greases the wheels of the global economy. It is a commodity that is unequally distributed: a few countries have a lot of it – the Saudi Arabias, Russias and Venezuelas of the world – while most countries have none. Some have about enough for their needs (notably, these days, the US) but most have to import almost everything. It’s no surprise that the price of oil is one of the critical drivers of both the rate of global growth and the way it is shared between nations.

So, why has the oil price collapsed and what does it mean for the world economy? The answer to the first question is easy: nobody really knows. Since the 2008 financial crisis, people have become used to the idea that economists are useless at predictions. The number of analysts who warned that the growth of credit in the mid-2000s was not sustainable can be counted on two hands. The number that got the timing right can be counted on one. But the number of analysts who predicted the collapse in oil is even smaller. As far as I can tell, it was approximately zero.

Of course, after the event, all kinds of plausible explanations have been on offer. The simplest is that this kind of price action is typical of any commodity investment cycle. The capital equipment required to extract oil on a large scale is vast and costly and it takes years to install. When prices are high, as they were until recently, governments and companies compete to plough billions of dollars into rigs and pipes. The result is a glut of investment, followed by a glut of supply when the new kit comes on stream. And so the price collapses, leading to frantic cost-cutting and a dearth of new investment – sowing the seeds for the supply shortage that will kick-start the next cycle.

It’s a neat enough theory in general, and yet its very neatness raises the question of why no one saw the latest price crash coming. Few of the relevant investment plans were secret, after all, and there is a huge and profitable industry devoted to speculation on the price of oil – with every incentive to find them out.

Naturally, there are other explanations: conspiracy theories about the Saudis and Americans conniving to hurt the Russians, or the Saudis going rogue in order to hurt the Iranians – but the speed of the collapse suggests it may have as much to do with a sudden drop in demand as a sudden glut of supply.

What will the collapsed price mean for the global economy? For many, the answer is that oil producers will suffer nasty recessions – but their suffering will be far outweighed by the boost to growth in oil-consuming countries. If, however, the collapsing price reflects weak demand from the eurozone, China and the rest of the emerging markets, the result may not be so palatable.

Certain market prices have an uncanny knack for foretelling economic weakness in the short term. For instance, is it a coincidence that the price of industrial metals such as copper – “Dr Copper”, as it is known on the financial markets, for its supposedly prodigious analytical powers – is also on the slide? Even more ominous is that the oil price drop has been accompanied by a steep decline in the interest rates that the world’s investors demand in order to lend to governments. When the UK government can borrow for five years at 1 per cent and Germany at less than zero (you read that right: investors are currently paying the German government for the privilege of lending to it), it does not suggest great confidence in the future of the economy.

At a conference a few years ago, someone in the audience asked me what would happen when the Bank of England eventually put interest rates up again. Like any economist, I gave a long, rambling and non-committal answer. When I had finished, the excellent compère turned to the crowd and said: “Let me put that a bit more simply: it means your mortgage will get more expensive.”

I know how he would summarise the effect of the current collapse: “It means your petrol bill is going to get cheaper.” Unfortunately, it may mean a lot more than that.

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<![CDATA[How can business reduce poverty?]]> A comparison between modern and pre-industrial civilisation is enough to suggest that business has been instrumental in reducing poverty in the past. Through growing economies, creating jobs and producing the tax receipts necessary for redistributive government policy, the exchange of one person’s labour for another’s is the most sustainable way that poverty can be reduced.

However, this magazine’s founder, Beatrice Webb, had severe reservations about this theory. As she wrote in 1896: “No competent authority would now deny that unfettered bargaining between capitalist and workman inevitably tends to result, not in the highest wage that the industry can afford, but the lowest on which the workman and his family can subsist.”

The essence of her words survives in the progressive tradition to this day: poverty needs to be actively reduced by deliberate initiatives rather than simply to be the by-product of the free market and something so capricious as economic growth.

There are many ways business itself can take such action, from technological innovation to ethical supply chains. But there is one aspect of business’s record that progressives focus on more than any other: realigning spending priorities – usually away from shareholder payouts or owner profits.

Four alternative uses for capital have particular capacity to do this. First, businesses can transfer profits to charitable causes; second, reduce their prices; and third, employ more staff. Finally, businesses can prioritise the human capital of their own staff: paying them more or providing them with training or support. But which is most effective?

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Currently in Britain, the most desirable answer is to prioritise staff development. Donating profits to charity is certainly ­noble, and can be effective when done comprehensively, as in the case of the Bill & Melinda Gates Foundation. However, few ­businesses are the size of Microsoft and, on smaller scales, the approach does little to combat the structural causes of poverty, such as low-quality jobs or unequal career opportunities.

Reducing prices for consumers can make a difference, but, significantly, the part of the economy where costs are most problematic is also the sector that is least professionalised: housing. According to Alex Hilton of the campaign group Generation Rent: “People aren’t queuing up at food banks because of the cost of food, they’re queuing up at food banks because of the cost of housing.” Of the homes left unoccupied in England for longer than six months (currently around 200,000), one suspects most are held by individual property owners rather than limited companies. While business should add its voice to the debate, the issue ultimately requires the changing of minds to accept that more housing is desirable. This is a political task that is perhaps not best suited to business.

Finally, although job creation is vital to reducing poverty, in contemporary Britain it is not necessarily the top priority. This is primarily because the multiple deprivations symptomatic of poverty are not experienced anywhere near exclusively by the unemployed. Deficient diet, inadequate clothing, the torpid crawl of damp across the walls of unheated homes – according to the Poverty and Social Exclusion research project in the UK, children most likely to experience these conditions “live in small families with one or two siblings, live with both parents, have at least one parent who is employed, are white and live in England”. Poverty in modern Britain is caused as much by low-quality, low-paid employment as unemployment. If business is to reduce poverty, it is this that it should focus on.

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The methods for business to relieve in-work poverty are relatively well known. Prevalent proposals in recent years have been the living wage, affordable childcare and more apprenticeships. All are based on a wealth of research and well-argued justifications: but uptake of the living wage has been painfully slow, childcare remains eye-wateringly expensive and official figures show that the number of people in apprenticeships stalled last year. The ways business can reduce poverty are therefore well established in theory but are struggling to be implemented in practice.

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Markets supposedly hate nothing more than uncertainty. The labour market is no exception. Uncertainty is to some degree behind everything from zero-hours contracts (“We don’t know how busy we’ll be, so we don’t know how many hours we’ll need you”) to the gender pay gap (“What if she gets pregnant?”). While, in these cases, risk should reside with the employer not the employee, uncertainty can be reduced in ways that are beneficial for both parties.

Take invoicing. While large companies with 11-figure turnovers may shrug off occasionally being paid late, regular tardy payments can play havoc with small businesses. It should be the responsibility of large companies to ensure they pay on time; they should sign up to the government’s Prompt Payment Code or develop a more stringent industry-standard one.

There are other major causes of uncertainty, too. A key barrier stopping businesses investing in their staff is a concern that the employee will leave soon after the investment is made. Apprenticeships improve the value of a business’s human capital, but businesses appear wary of supplying significant training for young workers when, shortly after it has been completed, many are headhunted by rival firms.

One option might be to offer staff an annual training allowance of around 5 per cent of their salary, which can be used (strictly voluntarily) on relevant courses. If the employee leaves the company, they pay off the training received out of their final pay cheque. If the employee stays, the total amount would reduce by 25 per cent per year, so the entire amount would be “paid off” within four years.

A model based on de-risking in-house training could also be developed. In his contrarian Finance and the Good Society (2012), Robert Shiller, the Yale economics professor and Cassandra of the 2008 financial crash, suggests that, whatever the recent damage inflicted by financial services, innovation in the sector should still be encouraged. With the exception of people’s homes, life expectancy and cars, there are few ways of hedging against bad outcomes happening. Homeowners can insure against their home burning down but not against its value crashing.

Accordingly, business could reduce the risk of investing in people by creating a mechanism for insuring against the risk of newly trained employees leaving. If a company took out “employee insurance” they could be free to train an apprentice or pay for an employee’s childcare knowing that, if the employee left, they would receive a payout to cover at least some of the cost already sunk in. The ensuing search for cheaper premiums and no-claims bonuses would have the knock-on effect of incentivising businesses to reduce staff turnover, in turn encouraging them to improve their employees’ job satisfaction.

Over the long term, rather than putting staff on zero-hours contracts, firms could employ them full-time and take out insurance – if the staff are surplus to requirements, the firm is reimbursed by the insurer. If the staff are needed, the insurer keeps the premium, but the company gains from being able to service increased demand.

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However, some solutions to poverty may not align with business interests so directly. Increasing trade union membership is just one of these. “Collective bargaining”, as first termed by Beatrice Webb, is known to secure better pay and conditions for workers, and businesses could, in theory, reduce poverty by inviting unions into their workplaces. At present, this remains far-fetched.

But it should not be so. There is a common belief that businesses are innately right-wing and subscribe to a neoliberal ideology. That this has been accepted by many on the left has unfortunately been one of the movement’s grave mistakes in recent decades. Antonio Gramsci used the term the “philosophy of praxis” to describe the process of delivering socio-economic change and ultimately socialism. The philosophy of praxis in Britain over the past half-century has often boiled down to little more than securing a left-leaning government.

Of course, having your hands on the levers of education and the welfare state can do a vast amount to reduce poverty. But if the left assumes that the best or only way to drive change is through the state (which controls 40 per cent of GDP), it vacates the other 60 per cent of the economy, which dominates the lived experiences of most people’s everyday lives.

Free-market capitalism and business need to be unchained from each other in the progressive mind. Rather than being considered something bad or in need of regulation, business needs to be considered as a vehicle of change.

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<![CDATA[Robert Skidelsky: The welfare state did not cause the crash. So why is Osborne cutting it?]]> The Institute for Fiscal Studies (IFS) has warned that there will need to be “colossal” cuts in public spending to balance the books by 2018-19 – at least £55bn extra. On 4 December, the day after the Chancellor’s Autumn Statement, the director of the IFS, Paul Johnson, said that it wasn’t for lack of effort that the deficit hasn’t fallen. Rather, it was “because the economy performed so poorly in the first half of the parliament, hitting revenues very hard”.

Very true – but what Johnson omitted to say was that the main reason the economy performed so poorly in the first half of the parliament was because George Osborne was busy cutting the deficit. He should have been expanding it!

This is something that expert commen­tators lack the guts to say because that would brand them as Keynesians. They may admit that fiscal consolidation has made eco­nomic recovery “more challenging”. But they don’t tell us why. This theoretical gap leaves them without a reputable story of why the economy behaved so poorly. They are in familiar “blown-off-course” territory.

Every possible event that might affect growth, however fleetingly, has been summoned in aid of explaining the failure of the economy to grow: the Greek crisis, the rising price of oil, the extra bank holiday on the Queen’s Diamond ­Jubilee and the closure of shops during the London Olympics, snow and floods – everything except the real reason, which is that a deficiency of ­private ­demand was not being offset by public-­sector investment.

The latest explanation of why the Chancellor has failed to meet his deficit targets concentrates on the nature of the labour market recovery. The government has congratulated itself on the fall in unemployment. We would expect falling unemployment to increase tax revenues and reduce public spending. However, this will not happen if government policy has created lots of new, mostly low-wage jobs whose holders pay no direct taxes and that must be propped up with benefits.

The catastrophic fall in productivity that we are now seeing was planted in the two and a half years of stagnation that followed the creation of the coalition in 2010. In October 2012, the Office for Budget Responsibility found that the economy had grown by only 0.9 per cent between Q1 of 2010 and Q2 of 2012, while its June 2010 forecast was 5.7 per cent growth over the same period. Subsequent upward revision has made these figures less dire but there is no doubt that Osborne and his advisers seriously underestimated the adverse effects of austerity on investment.

As is now increasingly recognised, this extended period of stagnation reduced the long-term growth rate of the economy through the destruction of both human skills and physical capital.

Despite his warning about the size of the cuts to come, Paul Johnson said that they could be achieved. He added, however, that they would require a “reimagining” (or, put another way, shrinking) of the state. Two questions arise. First, what effect will shrinking the state have on the economy? Second, what effect will it have on the polity?

On the first, Johnson seems to assume that the economy will go on growing at about 2.5 per cent a year, even as the deficit is being cut to zero. This is highly optimistic because the cutting is simultaneously reducing private incomes. It may be possible, by sufficiently heroic austerity, for a government to keep revenues for a time running ahead of cuts but at what level of GDP will the budget eventually be balanced? Certainly lower than it would have been without the cuts.

The cuts not only change the level of GDP but also its composition and, therefore, the relations between the state and its citizens. This point is recognised by Labour, which promises “fairer” cuts. If a government has to cut its spending, it is much better to tax the rich than starve the poor. However, this is alien to the spirit of cutting. The barely subliminal message of all austerity programmes is that the deficit has been caused by spiralling welfare payments to the poor, with the object of austerity ­being to “get them on their bikes” – like in the 1930s, when unemployment was consistently around or above 10 per cent.

We urgently need to have a proper debate about the role and size of the state. Prosperity does not demand that the state should spend 40 per cent-plus of national income as it does now, though justice may.

In the old days, people used to talk of a “trade-off” between efficiency and justice and some of those arguments may still be valid, though I am less and less persuaded that the private sector scores heavily over the public sector in efficiency. A financial system that allocates capital to itself and whose crash in 2008 left the population 15 per cent poorer than it would have been is hardly an advertisement for private-sector efficiency.

What is really indefensible is to cut the state for reasons of financial dogmatism, as though the size of the state – and especially the welfare state – were the cause of the slump. We need a cool discussion on the role of the state as owner and regulator in a market economy and in the light of the civic purposes that people set for themselves. It needs to be pointed out that these huge cuts imply serious losses to the quality of government services and the strength of the defence and police services.

I’m not sure which is worse: to bleed the economy with small cuts stretching many years ahead or to cut deeply now and hope for the best. What does seem clear is that politics will not allow the second and only a ­Labour government can avert the first.

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<![CDATA[The party is over for Amazon]]> At Business Insider’s annual Ignition conference Tuesday, CEO Jeff Bezos explained why Amazon’s stock price keeps rising despite almost zero profits: the company continues to invest in new businesses, and Amazon’s investors are OK with that. “If you’re going to take bold bets, they’re going to be experiments,” he said. “And if they’re experiments, you don't know ahead of time if they're going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work.”

But Amazon hit a road bump in 2014: its stock is down 18 per cent, and investors are no longer optimistic about the company’s outlook. This year has exposed the limitations of Bezos’s business strategy.

For most of Amazon’s existence, the company has been barely profitable. From 2007 through 2013, its revenues quintupled from $14.8bn to $74.45bn, but profits dropped from $436m to $273m. Note: that's billions in revenue, and just hundreds of millions in profits. Meanwhile, Amazon’s stock has consistently risen because investors didn't care about the dwindling profit margins. Bezos’s strategy worked: Amazon is now the US leader in online retail. It’s so big that the editor of the New Republic, Franklin Foer, wrote a cover story declaring the company a monopoly.

Then 2014 hit, and investors turned on the company. When Amazon announced on Monday that it would issue new unsecured debt, Moody’s downgraded the company’s outlook to negative. There are two reasons for this change in investor sentiment.

1. Revenue growth has slowed from 40 per cent in 2010 and 2011, to 27 per cent in 2012, to 22 per cent in 2013. This year it is projected to be between 16 and 20 per cent.

2. Amazon’s newest investments aren’t paying off. The most notable failure has been the Fire phone, which has received terrible reviews. In October, the firm took a $170m write-down loss as its inventory piled up and the company cut the cost of the phone from $200 to 99 cents. The Fire’s failure, at least so far, does not necessarily reveal a flaw in Bezos’s strategy. After all, if you make big bets, you’re going to have some major failures as well. “What really matters is that companies that don’t continue to experiment – companies that don’t embrace failurethey eventually get in a desperate position, where the only thing they can do is make a ‘Hail Mary’ bet at the very end,” Bezos said on Tuesday. Of course, not all of Amazon’s recent investments have failed. Fire TV, for instance, has been a success. But investors get nervous when those bets fail to pay off at the same time the core business’ growth slows. And the Fire phone was a big bet that has not worked.

Matt Yglesias, then writing for Slate, predicted this in January. “Amazon gets away with relentlessly investing in the future only because, for now, investors have faith in Bezos and his strategy,” he wrote. “But that faith has been tested in the past, and it’s likely that some future convulsion in markets will cause it to wane again.” Yglesias didn’t see any reason for this strategy to fail soon, much less this year. “For the foreseeable future, the party can – and willgo on, crushing everything in its path and generating mighty gains for consumers.”

On that point, Yglesias was wrong: investors have turned the lights on. The party is over. And yet, if his comments on Tuesday are any indication, Bezos isn’t planning to change his strategy anytime soon. That’s good news for Amazon’s penny-pinching customers, but could mean a rocky 2015 for the retail giant.

This article first appeared on newrepublic.com

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<![CDATA[Apple’s egg-freezing plan is simply a way of telling women to be more like men]]> Why would a healthy young woman want to have her eggs frozen? There may be several reasons and, as those are her eggs, it’s none of my business. But why would it be her employer’s business? When I read of the employee egg freezing schemes of Apple and Facebook, that’s the thing I can’t understand.

Or rather, I can but I wish I didn’t. Employers want female employees to function in the same way as male ones. They don’t want them to mess things up by getting pregnant. They’d rather give women the false hope that, years down the line, those frozen eggs might yet produce the child who would have “ruined” things back in the day. Employers want to give women choice but not the choice that comes from living in a world which doesn’t see your failure to be male as an inconvenience.

You can argue that this is about work and reproduction, and partly that’s true, but it’s also about how women are valued. To even approach the worth of men, we’re always in need of some intervention or other.

In The Beauty Myth Naomi Wolf argued that the cosmetic surgery industry grew “by manipulating ideas of health and sickness”:

Women have long been defined as sick as a means of subjecting them to social control. […]The surgical industry has taken over for its own profit motives the ancient medical attitude […] which defines normal, healthy female physiology, drives, and desires as pathological.

With egg freezing schemes, this pathologisation of femaleness itself is being extended into the realm of reproduction. We are dealing with a problem which – in the case of the standard Apple employee’s predicament as opposed to medically defined infertility – is socially constructed, yet the solution is seen to lie in operating on the female body rather than critiquing the society that ignores this body’s lived experience and needs.

Apple’s egg freezing plan doesn’t just tell us about the lengths employers will go to in order avoid treating employees as diverse human beings. It can be placed within the wider context of female bodies routinely being positioned weak and inadequate. Women might find life under patriarchy wanting but patriarchy simply tells us “it’s not me, it’s you”. We’re meant to believe the female body has been tried and found wanting. Need to be treated as a person? Sorry, but you just aren’t built for it. We’re not acceptable as we are and thus an endless succession of “treatments” seems the only option.

We experience physical growth and sexual development as something to be feared, keeping ourselves in check with “health kicks” and “detoxes”.  We experience our reproductive capacities as an intrusion; there’s never enough time and it’s never the right time, so we submit to extreme interventions rather than asking for structural change. We think of ageing as something shameful, a disease to be treated with botox, magic serums and the surgeon’s knife. Even when our bodies and minds could be called healthy, still we remain patients, undergoing therapy for the sickness that is not having been born male.   

Long before she has started to look for grey hairs and wrinkles, before she has even hit puberty, a girl knows that her eyes are too small and need lining in kohl, and that her stomach is too large and needs holding in, and that no hair must ever be known to grow beneath her armpits or on her chin and upper lip. Visit Boots and Superdrug and you will see that most of the shelves are lined, not with treatments for headaches or flu, but with products to deal with the inadequacies of the female form: crash diets, hair removal for bodies, hair dye for scalps, make-up, anti-ageing lotions, face masks, special washes to disguise the smell of your own genitals. Some of these things will even be named and packaged as though they are medical products: Prescriptives, BlissLabs, Dr Ceuticals, Skin Doctors, DERMAdoctor, Remedy Serum.

Buying these treatments, you know the objective is to convince people that you have been “cured”. You’re someone whose armpits never sprout hair, whose vulva never smelled, whose skin never creased and whose hair colour never faded. The expectations become so normalised you can start to believe that most other women are naturally like this; it’s only failures like you who need to the extra support. It becomes shaming. We might discuss whether botox is really necessary or whether a Hollywood is perhaps a step too far beyond a Brazilian, but female facial hair? Shhh! You’re the only one! God forbid that we ever accept this as just what some female faces are like.

And gods forbid that we accept that for some women, having babies in their teens, or their twenties, or their thirties, or their forties ought to be just fine. We’re meant to accept the lie that both inside and out the female body is not performing as it is meant to. We’re taught that male bodies “fit” whereas female bodies get in the way. Yet having and making use of a female reproductive system should not be incompatible with getting an education, earning money or being socially integrated. It should not be incompatible with independence; the unspoken requirement that all mothers either depend on a male partner or suffer financial deprivation is inhumane.

We are forced into a situation where we all have to pretend that so-called family planning is in our control. If you mess up, sorry, that’s just biology. Should’ve got on with that egg freezing. But how can we make the right choices when we’re working within a structure that positions male bodies and male reproductive capacities as the norm? There’s nothing wrong with women, nothing at all. We’re human beings, too. If the world is only recognising the embodied reality of half the human race, then we don’t just have the capacity to change this – it’s our moral obligation to do so.  

In 1970’s The Dialectic of Sex, Shulamith Firestone argued that “though the sex class system may have originated in fundamental biological conditions, this does not guarantee once the biological basis of their oppression has been swept away that women and children will be freed”:

On the contrary, the new technology, especially fertility control, may be used against them to reinforce the entrenched system of exploitation.

44 years later, I can’t help thinking that there is some truth in this. Biology is not, in and of itself, our problem. We’re fine, we women. It’s the perception that we’re not that we have to challenge. I don’t want parts of us needlessly frozen, whether it’s our frown lines or our eggs. I just want a world into which women’s bodies are permitted to fit.

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<![CDATA[Welcome to The Apprentice blog: series 10, episode 1]]> WARNING: This blog is for people watching The Apprentice. Contains spoilers!

It’s the 10th year of The Apprentice. And all through that sweaty, starchy, 110 per cent-executive-decision-making decade, it’s clear the producers have judged its loyal fans correctly. Hardly anything about the format has changed. “You’re tired!” will be the judgment of many snarky viewers as they switch over with a sigh to something more rewarding and less brimming with hollow pastiches of turgid Foxtons estate agents, but for those who love it regardless, there are 12 weeks ahead of pure, idiotic bliss.

The phrase “one hundred per cent” is heard after just nine minutes of watching the first episode, closely followed by “skill-set” at a competitive 17 minutes. “Dog-eat-dog” comes in at a disappointing 58 minutes, but we can forgive the programme makers, because everything else comfortingly follows exactly the premise of all previous series.

Except one thing.

That wicked grizzly business bear Alan Sugar has played a wildcard this year. We now have 20 candidates to mock and despair of, rather than 16 – so there could be more than one firing in each episode.

Dedicated viewers will have witnessed the gibbering drama of a double firing before, of course, but this new factor is intended to spice up the next 12 weeks of the 10th series. As if the show needs it, with the first episode hurtling head-on into classic Apprentice pathos with lines like, “There’s no ‘I’ in ‘team’, but there’s five in ‘individual brilliance’” and “I’m going to make a fundamental decision here – we’re going to the balloon shop.”

Meat and greet. Photo: BBC/The Apprentice

As with every opening episode of an Apprentice series, the men and women are separated into teams, welcomed into a lovely London townhouse where they will stay for the duration, woken up the next morning at 4am by a shrill telephone hurriedly answered by someone unconvincingly semi-clothed clearly with a pair of buffed brogues on out of shot, given 15 minutes to shriek playfully and deploy barbed teambuilding-related asides at each other, and then herded into power-taxis to somewhere gleaming in central London.

There’s a lot of gleaming going on in this episode. Every shot panning London is a series of the capital’s most glistening, vaguely phallic edifices, until the camera reluctantly lands on the Bridge Café ­– the losers’ suburban haunt, which gives away what everyone knows anyway: real business is executed in a hangar in West Acton.

This episode’s task is to do what is apparently “10 years of selling” – I think this is a nod to the sales tasks of the past decade on the Apprentice but I was too excited at this stage to be concentrating in one day.

But first, the girls and boys have to choose a project manager and a team name – a pair of tasks equal in their controversy and hilarity.

When Apprentice candidates choose team names, it’s a bit like watching a circle of intensely competitive apes in tailored suits playing Articulate. They just say words. Wrong words. With conviction. The boys go for “Summit”. “It’s never been done!” cries the man who came up with it. I didn’t note down his name, as I’m pretty sure he’s likely to be tumbling off the summit soon.

Then the girls seem to inadvertently invent the branding for a pre-crash Tory online dating site by going for “Decadence”. “Playing on the word ‘decade’”, says one, hopefully. In an unprecedented intervention, Lord Sugar tells them to come up with another name for the next episode.

This follows Nick Hewer – who spends the episode looking like a quiet voice in his head is asking him what he’s doing with his life and why he hasn’t found a mild, steady slot on Radio 4 to bed into until retirement – telling the girls “decadence” smacks of “decay, decline, moral turpitude and self-indulgence”. Surely an Apprentice hopeful’s ultimate pitch for appearing on the show, amiright?

Bitter lemons. Photo: BBC/The Apprentice

The boys’ team leader is Felipe – a former lawyer at a magic circle firm, hapless but well-meaning. It’s much worse for the girls, who opt for Sarah, who has depressingly offensive ideas about women in the workplace and chopping up citrus fruit for profit.

There follows a frenzy of suits scampering up and down the nonplussed markets of London, attempting to sell potatoes, spruce up sausages (some ill-conceived Planet Organic guacamole-purchasing occurs, pioneered by the candidate Robert who whacks out some sock-free business loafers and a boating blazer on day one), and print slogan t-shirts (“but ‘Positive Impact’ doesn’t mean anything to people!”).

The girls make a disastrous mistake by forgetting to send their sub-team (ie. group of side-lined and potentially mutinous women) off with the seed capital (ie. some cash) to the t-shirt printers. But the boys do one worse and leave their t-shirts at the printers altogether, throwing £500 away.

There is also a harrowing image, accompanied by the uniquely ominous minor chords reserved on this programme for inadequate entrepreneurs, of a solitary sponge the boys accidentally drop in the road. This doesn’t come up in the boardroom later but it still gave me chills. The girls, in contrast, inexplicably try to sell their sponges, a bucket and some toilet brushes for £250 to some hassled penguin minders at London Zoo.

Felipe’s team loses, but only by about £50. This leads to much soul-searching among the boys, with the perpetually outraged Stephen scapegoated for being a disruptive character. He’s the one who tries to sell spuds with the pitch: “It’s not going to be just a potato, it’s going to be an experience”, and is therefore inevitably saved from the boardroom, probably at the behest of some ratings-racked producers.

In the end, Chiles – the sub-team leader who left the t-shirts behind – is given Lord Sugar’s pointy finger of doom. It was a close one though, with Robert nearly getting the chop for his “arty farty” ideas about dressing up frankfurters. But he was saved too, probably because of the endless material Lord Sugar’s incessant iteration of the word “hotdog” is sure to provide Cassetteboy.

Chiles (right) is the first to be sacrificed on the altar of show-business. Photo: BBC/The Apprentice

The girls, in turn, got to spend half an hour slowly rotating in a claustrophobic pod full of 20 strangers who hate one another, as a treat for winning. Yes, Sir Al in characteristic munificence had “laid on” the London Eye’s VIP capsule for them.

With just the right cocktail of the obnoxious and talentless, and a frantic, meaningless task for them to attempt, this first episode is a reassuringly ridiculous sign of things to come. Let’s just thank Lord Sugar, poor old Nick and top TV Tory Karren Brady for laying on another series for us.

 

Candidates to watch:

Stephen

“If we went to Mars right now, I’d find a way to be excellent”.

He’s an “irritant”, according to Lord Sugar, who saved him. He was also rather unfairly scapegoated by his team. He’s sure to provide further drama, and perhaps even more florid pitches than his potato plea, in weeks to come.

Sarah

She can, inevitably, sell “ice to an eskimo”.

The girls didn’t like her leadership, possibly because she kept telling them to put make-up on and hike their skirts up for the sales task, but she’s likely to cling on for a while because of the morbid fascination factor.

Scott

Who?

 

I'll be blogging The Apprentice each week. Click here to follow it. The next episode is tomorrow evening, so check back on Thursday morning for the next instalment.

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<![CDATA[Female professionals earn 35% less than male colleagues]]> Senior female managers earn 35 per cent less than their male counterparts, according to new figures. Women are now hit hardest by the gender pay gap in the second half of their careers.

Female professionals would have to work until they were almost 80 - that is, 14 extra years - in order to equal the lifetime earnings of a male equivalent in the same role.

The current gender pay gap stands at £9,069, according to the data, but the chasm widens between older men and women.

A mid-life pay crisis has emerged for professionals aged between 46 and 60, where the gender pay gap is at its widest at £16,680.

The gender pay gap is narrower, but still significant, for younger and more junior women, standing at 6 per cent for 20 to 25 year olds, and 8 per cent for 26 to 35 years olds.

The National Management Salary Survey, published by the Chartered Management Institute (CMI) and salary specialists XpertHR, surveyed more than 68,000 professional UK workers.

It revealed that a “bonus gap” has also grown between female and male bosses. The average bonus for a female director stands at £41,956, while for male directors the average pay-out is £53,010.

The differential between average male and female annual salary increases is also affected by age and seniority. Across all levels, the average salary increase stands at 2.3 per cent, but inequality increases at senior levels.

Female directors enjoy, on average, a basic salary increase of just 1.9 per cent, compared to 2.7 per cent for male directors. Including bonuses, on average a male director took home £204,373, while a female director was awarded £171,945.

Gender discrimination in pay packets was outlawed 44 years ago under the Equal Pay Act, but inequalities still persist.

Younger women edge ahead of men in salary terms under one metric. In three of the five most junior job levels, female annual pay awards are an average of 2.4 per cent, compared to 2.3 per cent for men’s.

Ann Francke, Chief Executive of CMI, said: Lower levels of pay for women managers cannot be justified, yet our extensive data shows the pay gap persists…

It’s not right that women would have to work until almost 80 for the same pay rewards as men. We have to stamp out cultures that excuse this as the result of time out for motherhood and tackle gender bias in pay policies that put too much emphasis on time served.”

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<![CDATA[We don't really understand empathy, but we know business could do with a little more]]> Business buzzwords are changing. Pervasive gibberish like “mission-critical optimisation” and “blue-skies thinking” is in decline; instead we’re witnessing the rise – sorry, “phase-in” – of terms like social innovation and sustainability. Corporations now want to show you not just that they care, but that they really care. Empathy is the latest addition to the management dictionary.

There’s a huge profit motive galvanising this change. Belinda Parmar, author of The Empathy Era, thinks we’re on the cusp of a corporate revolution. “Empathy is the key to profit,” she says. “It is a natural social resource that has, for years, been left untapped by an outdated corporate model, hampered and trussed up by its systemising protocol. The corporate world is in need of rehabilitation. It needs to redress its empathy deficit.”

But what actually is it? Derived from the Greek words em (in) and pathos (feeling), empathy was first introduced to English in 1909 by psychologist Edward Titchener in an attempt to translate the rather more aggressive-sounding German equivalent, Einfühlungsvermögen. The idea of “feeling-in” means the ability to understand and share other people’s emotions.

How this works is another question. The neuroscience behind emotions is notoriously complex but one idea that Parmar – who was recently knighted for services to women in technology – cites is the “Empathising-Systemising (E-S) Theory”, proposed by psychologist and autism expert Simon Baron-Cohen. He suggests the male brain is naturally more inclined to systemising – looking for underlying sets of rules and patterns – than to empathising, a trait more common in women.

Based on a questionnaire designed to gauge your “Emotional Quotient”, people with Autism Spectrum Disorders are categorised to represent the “extreme male brain” – sometimes possessing huge talents in maths and physics but struggling with social interaction. The gendered terms represent the frequency with which the characteristics are present in men and women, but Baron-Cohen suggests both genders can have the ‘other’ brain.

It’s still very much a theory – we haven’t, for instance, found any neurological differences using MRI scans to support the idea of empathising or systemising brains, which means much of the behaviour may be down to social conditioning. But it does go some way to explaining other anomalies, like the higher prevalence of autism in boys than girls. Separately, the E-S theory is also a better predictor than gender of who goes on to study STEM subjects.

It sounds a bit pseudo-sciencey but there aren't many better theories out there: empathy research still has a long way to go. Despite this, even these preliminary findings have important ramifications for businesses. Parmar claims systemisers tend to be rewarded for their ability to optimise, particularly in male-dominated sectors like science and technology which are infamous for their lack of empathy. This leads to a culture with little time for feelings, "restricting imagination and creativity in the workplace". You can see why the management is getting worried.

And it isn’t just business which lacks the ability to empathise. Before becoming president, Barack Obama described the great need for compassion in times of economic crisis. "There's a lot of talk in this country about the federal deficit,” he said. “But I think we should talk more about our empathy deficit - the ability to put ourselves in someone else's shoes; to see the world through those who are different from us – the child who's hungry, the laid-off steelworker, the immigrant woman cleaning your dorm room.”

He’s not alone. Even our politicians are beginning to realise the need to – at the very least – appear empathic. Ed Miliband referred to empathy seven times in a recent speech at the Royal Institute of British Architects as he claimed it was one of the “most underrated virtues” in politics. According to the Sunday Times the Labour leader has been meeting up with Baron-Cohen in an attempt to better connect with the public. Political stunt it may be – but if it works, then empathy might be more than just a buzzword.

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<![CDATA[Ed Smith: Megabucks executive pay isn’t a reward for excellence – it’s a corporate contagion]]> Take a bow, Burberry shareholders. Their rejection of the £28m pay package offered to the company’s chief executive, Christopher Bailey, is a rare example of common sense pricking the bubble of executive pay. The shareholders’ wishes may yet be ignored but they will remain right.

Three issues should make us doubt that an employee, however talented, is worth almost £30m (the package included an “annual allowance” of £440,000 on top of a £1.1m basic salary and shares worth millions of pounds). First, we overestimate our capacity to distinguish between luck and skill. Second, in a competitive industry, the gap between executive pay and average salaries is far from logical. It is a relatively new invention, designed by and for the managerial class. Third, exorbitant salaries, routinely justified as inevitable due to “competition”, are better explained in terms of contagion. A few absurd salaries become the justification for ludicrous pay across a whole industry.

In pointing out that it is hard to disentangle luck from skill, I am not arguing that Bailey is merely lucky. Yet precisely identifying causality in business is difficult. As Phil Rosenzweig describes in The Halo Effect, we tend to rush to anoint superheroes, even on shaky evidence. The truth is that the origins of success often pre-date the people who get all the credit. Conversely, some executives get fired before their legacy has come to light. The film executive Mark Canton was reportedly sacked by Columbia Pictures in 1996 for being “incapable of distinguishing the winners from the losers”. In reality, five huge hits (with combined box-office revenues of over $1.5bn) were in the pipeline. The assumption that success is inevitably caused by current senior management is misleading. Personally, when I am sceptical, I am more inclined to withhold a £30m cheque.

The American banker J P Morgan argued that a company’s top brass should never earn more than 20 times what those at the bottom do. Such a ratio now sounds laughably idealistic. In the first decade of this century, the average pay ratio of CEO to employee climbed from 47 to 128. This was not because they were doing a brilliant job. Even in downturns, top earners have continued to streak away from the field. Between 2000 and 2008, when the FTSE fell by 30 per cent, cash payments to executives increased by 80 per cent. It is not inevitable progress: it is fashion. At other moments in the history of business, the pie has been cut up differently. Between 1930 and 1960, the real income of top US managers fell. It is possible – as well as desirable – that inequality of income, now at an all-time high, could come back to more sensible levels.

As Ferdinand Mount pointed out in The New Few, his study of inequality, the galloping strides of today’s executive pay cannot be explained by supply and demand. Talent is always competing, whatever the era or arena. It is culture, not competition, that explains why pay gets out of hand. Recent studies of high pay explored how excessive rewards create a contagion effect. Boards of directors usually look at what other com­panies are paying, then set their own remuneration accordingly (Burberry’s outgoing chief executive, Angela Ahrendts, was poached by Apple for a £35m package). The researchers demonstrated that if 10 per cent of companies initially pay CEOs twice as much as competitors, compensation eventually doubles for all CEOs.

Those defending Bailey’s proposed pay have typically used sporting analogies. Why shouldn’t business stars get paid the same as sports heroes? They argue that Bailey, who will remain chief creative officer as well as being chief executive, is both the CEO and the star player. What’s fair in sport, his apologists say, should be fair in fashion.

There are several problems with this argument. Even as an ex-sportsman, I’m far from convinced that top athletes deserve – or need – such outlandish rewards. I am also quite certain that if top footballers were paid half as much, the level of their game would not deteriorate at all. Beyond a certain level, money is a very weak source of inspiration. What motivates players to squeeze yet more cash out of their employers is pride or ego: it gives them a certain strut in the changing room. The money is just a number.

And there are more central problems with the sport-business analogy. If you are interested in the ways that sport is like life, then you must also be vigilant about the ways in which it isn’t. The level of transparency about how good you are is a perfect example of the latter. There can be no doubt about the achievements of a great athlete, especially in an individual sport. His or her career is revealed in its entirety on television for us to scrutinise and judge. How good is Novak Djokovic at tennis? There is no element of guesswork about the answer. We can be certain – more certain, surely, than we can be about the value added to a company by a business executive.

If Djokovic’s performances deteriorate, we will know about it as quickly as the Serb himself. Nor can he gain directly from any unearned and invisible inheritance from the previous Wimbledon champion. He has to win the prize money by explicitly defeating the competition – there are no cosy stock options that, in good economic times, will float upwards on a rising tide that raises all ships. Djokovic’s situation is different from that of a CEO who may benefit from opaque factors influencing his “track record”. This total transparency sustains sport’s ruthlessness. There is no soft landing in sport: you lose, pack your bags and go home.

Christopher Bailey is probably very good at his job. That doesn’t mean he must therefore deserve £30m. 

Ed Smith’s latest book is “Luck: a Fresh Look at Fortune” (Bloomsbury, £8.99)

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<![CDATA[New perceptions]]> Transport Secretary Patrick McLoughlin must be thanking his lucky stars that he took up office at such a promising time for British infrastructure. Back in the depths of the financial downturn, just a few short years ago, his predecessors could scarcely have dreamt of presiding over such a potential upturn in the nation’s transport system.

Today, plans for HS2 are steaming ahead and the coalition government is putting together an Infrastructure Act to kickstart major projects amounting to £36bn. Innovative forms of project finance are expected, which should attract significant funding from overseas investors.

While I share Mr McLoughlin’s general optimism, there are, however, some big questions that may be easily overlooked in the broader public debate about Britain’s hoped-for transport renaissance.

First, how committed is the government to taking a more long-term approach to infrastructure planning? Can it escape the understandable short-term demands of party politics? We will hopefully hear more about the government’s broader approach in the forthcoming Infrastructure Act, or indeed in the 2014 Autumn Statement, expected in early December.

Second, and of equal importance, where are we going to find the army of highly qualified British engineers needed to build all these ambitious projects? The challenges of long-term infrastructure development go far beyond transport policy. Both phases of HS2 are unlikely to be completed before the early 2030s, for example, and if ministers are looking at projects with outcomes measured in decades, it is critical that we address an education system that is apparently failing to interest young people in engineering.

The UK faces a growing shortage of suitably qualified graduates. And the skills shortfall will continue to deteriorate, with an estimated 2.2 million entrants to the industry needed nationally over the next five to ten years. That is what it will take to satisfy a projected 40 per cent growth rate in a sector that already makes up nearly a fifth of the total UK workforce.

Slim chance, however, that our schools are well positioned to meet this demand when, according to industry surveys, only half of 11 to 14-year-olds would consider engineering as a career, and only around 7 per cent aspire to join the profession.

Efforts, admittedly, are being made, through initiatives such as Tomorrow’s Engineers, which seeks to incorporate engineering into school curricula. Yet the challenge goes, perhaps, far deeper than education policy. It touches the entire way in which the profession is viewed by the general public. Astonishingly, around 60 per cent of Britain’s engineers believe that the term “engineer” is not properly understood in the wider world. It is hard to imagine doctors or lawyers feeling the same level of misunderstanding.

Changing such deep-rooted perceptions will be no easy task. But such an important issue surely merits a reappraisal of our approach to education if Britain is to fully exploit the job-creating potential of long-term infrastructure projects. And that needs to start in the classroom. Initiatives to promote engineering ought to be considered as a core plank of curriculum planning, backed up by a campaign of mentoring and special financial incentives to promote interest in degrees.

As a first step, I’d call for a dedicated steering group of industry figures, education leaders and relevant government figures to tackle this important challenge.

Perhaps such a proposal could be integrated into the kind of independent commission on infrastructure proposed by Sir John Armitt, the chairman of the Olympic Delivery Authority and former chief executive of Network Rail? In many respects, Sir John’s thinking helps address my concern about Britain’s ability to benefit from all the advantages of a growing transport infrastructure. I support his proposals to focus our strategic thinking on transport requirements over the next 25 to 30 years, in a way which transcends party political boundaries.

As things stand, there is a risk of investment priorities being chopped and changed with every new government. Hence, how then can the big engineering employers plan for the future? How can the dependent supply chains look for any sustainable long-term revenue growth, recruiting to their fullest with real confidence that the demand for new jobs will be maintained?

With these uncertainties, one begins to see why engineering is struggling to win over potential recruits.

Unless steps are taken to shore up the long-term sustainability of the industry, the nation’s talented youngsters will continue to choose more reliable careers.

I have no doubt that our Transport Secretary can contribute much to this debate. But cross-party consensus is vital if we are to build a deep-rooted infrastructure policy that is truly fit for the future.

Tom Bishop is executive chairman for Europe, Middle East and India at URS

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<![CDATA[The site of the world’s tallest skyscraper is currently a melon patch]]> Sky City, a skyscraper in Changsha, China, was meant to be the tallest building in the world by now. Construction began on 20 July last year; it was originally meant to be finished by April.

In a startling display of optimism, its builders, Broad Group, claimed it could construct all 838m of the skyscraper’s frame in just 90 days, using a technique whereby steel parts are made individually and then stacked together. This is not quite as crazy as it sounds: the firm has successfully used the same technique to construct at 30-storey hotel in just 15 days.

Needless to say, 90 days has come and gone, and SkyCity has yet to reach the heavens. In fact, National Business Daily, a Shanghai newspaper, reported this week that the 20-30 per cent of the 100 acre site is now covered in water; the rest has been planted with watermelons and corn. That’s hard to visualise, so here’s a breakdown:

Construction on the site actually halted less than a month after it started. At the time Zhang Yue, the Broad Group’s chairman, told the New York Times that, despite the hiccup, he expected to finish the building in June or July 2014. He did, however, hint that all was not well, saying: "Ordinary people do not know the challenges and issues I face every single day. There are so many issues. 24 hours in a day are not enough for me to deal with all of them." 

One of these challenges must be keeping him up at night even now. The National Business Daily also quoted officials from a “local communal administrative committee”, who said that, a year on, Broad Group still lacks the permits it needs to continue building.

If Sky City is ever completed, it will stand 8.2m higher than Dubai’s Burj Khalifa, which is currently the tallest skyscraper in the world. The Kingdom Tower in Saudi Arabia is expected to stretch to 1000m, but that won’t be completed until 2019.

So Broad Group could still snatch the “world’s tallest” crown. Just give them 90 days. 

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

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<![CDATA[A 3D printer is building a canalhouse in Amsterdam ]]> Building a house is quite the production. There’s the time, the expense, the dust, and the leftover building materials that hang around in the garden for years after the builders clear off.

Unless, that is, you print it. From its home in a Dutch shipping container, a giant 3D printer, the KamerMaker (“room builder”), is currently spurting out globs of molten bioplastic to form walls. The honeycomb-esque design leaves room for pipes and wiring to be installed later.

KamerMaker is the brainchild of Amsterdam-based DUS Architects, which is using it to build a 15m high, 6m wide house on the banks of a canal in the city. The house’s 13 rooms will be printed individually and slotted together to form each floor; the floors will then be stacked on top of each other to create the final building. The whole thing’s a bit like giant, inhabitable lego. Construction kicked off on 1 March, and the house should be finished in, er, three years’ time. You can see their rendering of the finished building above – just don't ask us what the weird ghost buildings on either side are about. 

So, if the process is still so slow, what exactly are the advantages of printing a house? For a start, there’s no waste, as the printer uses raw materials and only prints what’s needed; plastic waste from other industries can be recycled as “ink”. As long as a house can be printed near its final location, transport costs are low. And this prototype has no foundation, so that’ll cut down on costs, too. (Although a team is currently on the problem of how to stop it toppling into the canal once it’s constructed; the current plan is to fix it in place with long metal poles.) When it’s no longer needed, the building can be shredded and its materials reused.

Hans Vemeulen, the project’s co-founder, told UrbanLand magazine that he was inspired by our need for ever-faster building strategies: “We need a rapid building technique to keep pace with the growth of megacities.” This seems a little improbable given that this first project will take three years to complete, but Vemeulen claims rooms could be printed on the printer and installed in the space of 24 hours. The project’s website also claims that we’ll soon be downloading and personalising designs for our dream house, then sending them to a KarmerMaker contractor to print and construct.

DUS aren’t the first company to print out properties. Win Sun, a Chinese firm, claimed back in April to have printed 10 buildings in one day using concrete and waste materials, although local building regulations prohibit printing structures of more than one storey. Technologies like this could certainly be of use in constructing shelters after natural disasters, or during refugee crises. Whether the rest of us will ever be happy to live in a plastic house, however good the view of the canal, remains to be seen.

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

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<![CDATA[Biz Stone: the Californian who flew the Twitter nest]]> The Google buses that circle San Francisco usually pick up employees to take to their Silicon Valley HQ, but in December they were held up in a series of protests by citizens disgruntled at the elite separatism they embodied. Naturally, the Google employees tweeted about their desperation. This, I imagine, was a problem for Biz Stone.

One of Twitter’s co-founders, Stone makes a strong case in his recent book, Things a Little Bird Told Me, for a “new definition of capitalism”, one in which money is made and consumers pleased but that also has “a positive impact on the world”. For Twitter to be used as the medium of the oppressor, even a Google-bound techie one, must have made his conscience prickle.

When I talk to him on the phone about the rise of social inequality, he seems resigned to it: the split “seems to be happening in a concentrated form around here [San Francisco] and then in a more diluted form across the US and potentially the world, and that may just be systemic, the way that we pursue our lives, the way that business works now”. Stone has played his own small role in this trend. Just before he left Twitter in 2011 he moved the company into a rundown part of San Francisco; the regeneration has been good for the area, but expensive, too – rents have flown up and Twitter got a $56m local tax break to do it.

Stone’s attitude doesn’t quite chime with the optimism of his book, in which he talks about how he learned from all his childhood knocks to become the bold innovator he portrays today. Growing up in shabby-genteel poverty in Massachusetts – he recalls the government-issued cheese his mother gave him – his first strike against the system was his no homework policy, which to him was productively rebellious but was no doubt tiresome to both classmates and teachers. The book moves on like this: seen in another light, what Stone thinks of as assertive could be coloured obnoxious.

After joining Evan Williams at Google, the pair left for the company that would eventually produce Twitter. Stone’s concrete contribution to Twitter beyond the “Follow” button and the site’s initial designs is unclear. The idea and technology were Jack Dorsey’s and the money Williams’s; Stone seems to have been a frontman-cum-guru, infusing the project with West Coast vibes, hence the book’s reach-for-the-stars tone.

Yet Stone clearly left some libertarian coding in Twitter’s DNA. Following Edward Snowden’s revelations about the National Security Agency’s Prism surveillance programme, a comprehensive trawl for personal data and communications, Twitter could proudly say that it had not co-operated. Stone clearly prized this response. “It’s very important,” he says, “that companies like Twitter continue to make it difficult for any government to request something that doesn’t belong to them.” Yet when he talks about how the rules of the internet are still being formed – “all of us are pushing on it and pulling on it and tying to figure out where it breaks and where it bends” – he seems to concede that we should expect more government interference.

As Stone is rushed off the call, I slip in a final question about whether we need to be worried about the diminution of freedom in the name of security. “Some of us should be. I’m just saying that I don’t worry about it every day because I focus on different things, but some of us should be, yes.” For someone whose book makes such play of his love of liberty, his equivocation seems #lame.

Josh Spero is the editor of Spear’s magazine

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<![CDATA[Get the frack off my land: reform of trespass laws explained]]> The government gave fracking companies the green light in the Queen’s speech this week, crucially removing the requirement for firms to gain permission from home-owners to drill under their land.

Although ministers claimed a final decision would depend on the outcome of a recently-launched public consultation, they signalled their firm intention to smooth the path for firms to exploit Britain’s shale gas reserve.

Much has been made of this permission waiver, which was first floated by the government in January, and which is likely to be included in an Infrastructure Bill during this Parliament.

The trespass exemption for fracking firms sits uncomfortably with most people’s intuitive interpretation of land ownership, but also their legal understanding of the matter too.

After all, the most common definition of land rights and a central principle of property law, states: “cuius est solum, eius est usque ad coelum et ad inferos”. 

Or, for non-Latinists, this translates roughly* as: “he who owns soil does so up to the heavens and down to the centre of the earth”.

Well, up to a point. Admittedly, the legal principle, which entered common law during the reign of Edward I, is still accepted in limited form today in modern law.

But there are many exceptions, including airspace, water, trees, plants and flowers, wild animals, and, crucially, mines and minerals.

So the implication, frequently appealed to in the current furore over fracking, that horizontal drilling under a private owner’s land is a unique exception to, or transgression against, the owner’s legal land rights is misleading.

That said, it is true that up until now, current laws of trespass have required fracking firms to gain permission from land owners to drill under their land. Drilling can extend up to 3km horizontally underground from a central well pad.

This has held true for all historical landward oil and gas exploration in the UK. Companies seeking conventional energy sources on land require a license from the Department of Business, Innovation and Skills, which grants exclusive rights to explore for and exploit onshore oil and gas.

The license has never included any rights of access, however, nor does it waive the need for the company to gain planning permission and any other consent needed under current legislation.

Further complications arise if a company wants to drill through a coal seam in search of gas – they need the permission of the Coal Authority, which has been the rights holder of all British coal since the valuable sedimentary rock was nationalised in 1994.

Which brings us to the other question of ownership of minerals in the UK. Firstly, to define minerals. According to the Town and Country Planning legislation, minerals are “all substances in or under land of a kind ordinarily worked for removal by underground or surface working, except that it does not include peat cut for purposes other than for sale.”

Essentially, a home- or land-owner holds the rights (which should be registered in the Land Registry along with details of surface land rights) to all the minerals in their land, with the important exceptions of gold, silver, coal, oil and gas.

Land-owners would still require planning permission, however, from a mineral planning authority to extract any of these minerals that they technically own from their land.

As for the ownership of oil and gas, the Petroleum (Production) Act 1934 granted all onshore rights to the Crown. A different act presides over rights in the UK Continental Shelf outside UK territorial waters, but again these are vested in the Crown.

So, the fact that the state owns any shale gas that might under your land is not out of keeping with rights to conventional fuels.  And while the proposed reform of trespass laws charts new territory for land-owners' legal rights, there are many other exemptions to these rights as they stand.

The nub of it is that fracking firms can already drill under your land without your permission. The new legislation will only make the process easier.

As Energy Minister Michael Fallon pointed out this week: “At the moment, a developer can apply to the courts for permission to drill a horizontal pipe a mile down underneath your house and needs to go to the Secretary of State to get that permission. We've got a solution that we think simplifies that."

 

 

* Four years reading for a classics degree well spent then

 

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