Your new book, The New Few, is a kind of sequel, isn’t it, to your book on class and inequality, Mind the Gap?
Yes. It tries to connect the two themes of inequality and oligarchy. As well as suggesting that there is a connection between the two, it argues that power in every field today, whether it’s a retail chain or a university, is centralised. The more the people running an organisation develop a culture of entitlement, the more they think that everything that goes right is their doing. And they take the rewards accordingly.
The irony is that increased centralisation turns out to have been an unintended consequence of the free-market liberalisation of the 1980s.
I think there’s been an illusion that central control is more streamlined, more efficient and professional. So, to get away from business for a moment, imagine you’re running something like a university – the idea is that you need a professional. You don’t just need the senior tutor in Hebrew, you need a professional administrator from New Zealand who will sort it out.
And so the managerial delusion took hold in government, too?
Local government is a good example: once you get in there and start bossing the show and gradually squeezing local sources of income, first by capping and then by the poll tax, you develop this illusion that everything good that happens in local government is your own work and not the work of much-derided local politicians.
We got rid of an elected interest in the running of various services and we didn’t really think carefully enough about what we were replacing it with. In the interest of reducing bureaucracy and improving performance, we actually produced a new bureaucracy and ignored a lot of the lessons of management in business.
“We” meaning the Thatcher government, in which you played a part as head of theNo 10 Policy Unit?
Well, yes, mea minima culpa for my minimal role!
There were similar transformations happening in the City, weren’t there?
There were some processes which had no ideological underpinnings but which were very significant. One of them was the disappearance of individual shareholders and the rise of fund management and of the ownerless corporation. Until recently, fund managers did honestly think that they had no business interfering in the companies they were investing in, except in extremis, when they were going down the tubes or doing something conspicuously crazy. It was a big transformation that seemed, to the innocent, pretty benign: small savers were offered a way of diversifying savings, putting their eggs in a lot of different baskets and confiding them to the brilliance of these wizards. It sounded all right, but didn’t quite work out like that.
Are these changes irreversible?
No, I don’t think they are. I’m not beginning to suggest that all the escape routes I’ve jotted down in the book are anything more than a quick list, but they’re a demonstration of what can be done. Of course you can’t go back to a completely unmanagerial culture, but there are all sorts of ways in which managers can be reintegrated, if you like, into the society in which they are operating.
Sometimes this means regulation; sometimes it means representation of interested parties or stakeholders on boards, supervisory boards. It used to be fashionable to sneer at them because they were slow and German.
No one is sneering at the German model now, are they?
No, although they had some pretty great disasters, too, so it wasn’t flawless. The German model does have drawbacks but it’s worth looking at.
One really needs to get to a rather more modest stance in which you’re prepared to look at other models. This was something that the British civil service used to be very bad at. It’s getting better, but I still think they’re very reluctant to do comparative or historical work to see how or whether this or that model works.
Ferdinand Mount’s “The New Few . . . Or a Very British Oligarchy: Power and Inequality in Britain Now” is published by Simon & Schuster (£18.99)