Sunday, 12 July 2009

Footloose Capitalism

(An article by Ian Bell in the Sunday Herald. )

Capitalism? I can’t drink to that
If the board of Diageo knows much about Kilmarnock, Glasgow, or Leven, it would come as a surprise. Names and numbers on a spreadsheet reveal little. Real lives and real history have no existence on the bottom line. They bear no weight when your business has neither roots you wish to acknowledge, nor loyalties you care to name.
If costs are to be rationalised - because a trans-national is ever rational - you cannot afford distractions. If those famously tough decisions are to be made, it is your job - because you have such a thing - to make them. So you think: 900 workers or £120 million in "savings"? What contest?
Walker's Kilmarnock, the Johnnie Walker brand, has been striding out of Ayrshire for the best part of two centuries. These days they distil the whisky at Port Dundas, in Glasgow, and it is known the world over as one of the quintessential products of the home of "Scotch". Diageo would probably call that a heritage thing. Employees have reason to regard their jobs and families in much the same way.
No-one says that they are bad workers. No-one calls them disloyal, disruptive, or overly demanding. It is not even the case that their efforts fail to turn a profit, supposedly the point of the exercise. After two centuries, it is safe to say that they have shown a certain commitment. So what do they get in return, when times are hard?
Seven hundred lives in Kilmarnock, with 200 more in Glasgow, are crammed into a box to be ticked: savings. Gusting hot air sweeps away quaint notions of social contracts and corporate responsibility. No politician mounts a serious argument when capitalism elects to be footloose, when it dives to the bottom, bullies elected politicians, and exercises naked power. The argument that the right of ownership carries any sort of duty is discarded or derided. And we can all, in a free market, drink to that.
Kilmarnock and Glasgow are not unique. They are unusual, perhaps, only in the number of industrial injuries they have suffered in the post-war years, and in the number of "cyclical recessions" they have endured. How often can you kick a city or a town or a class? We are finding out, all over again. Recession is providing an excuse for abuses that are not, in any serious democratic fashion, being challenged.
You will have noticed the banks. There is, reportedly, a new cliche being brayed in the grog shops and designer canteens of the City: BAB; "Bonuses are Back". We can all do the outrage, we civilians. How can the taxpayer own 70% of Royal Bank of Scotland, we ask one another, gobs well smacked, while an arm of government accedes to a £9.7m "package" for a chief executive whose only task is to make a bank fit for market consumption?
Stephen Hester, the lucky banker in question, will achieve singular personal wealth only if he sacks a great number of people. Lloyds TSB will absorb the defecated mess of HBOS by the same means. Northern Rock is also returning to health and happiness having made lots of blameless individuals miserable. The strain imposed on taxpayers by a preposterous financial crisis is one thing. Ordinary bank employees - hard-working, loyal, underpaid and innocent - are the ones who have been left hanging on the wire.
BT too has its share of those. Because the suits screwed up their global corporate IT ambitions , foot soldiers are being asked to pay the price. British Airways, stuck with a £400m loss, has been quick to follow. Themes are emerging: short pay, short hours, or "holidays" in exchange for a job of any description. Recession is becoming a scam by which the corporates roll back employment rights while chopping "labour costs". The profits earned by cheap and loyal workers in better times - Yes, Karl, I heard you - are forgotten. We could mention ironies. Desperation has become an excuse for exploitation.
All the while those same ordinary workers are invited to contribute to the rescue of the banks, £125 billion in "quantitive easing", and the rising cost of a Jobseekers' Allowance that would not, skull for skull, pay for lunch in one of those City restaurants. Then they are told, by all political parties, to live in terror of inevitable spending cuts because people who will never be poor have managed to excrete all the money. Your turn now, I think, Herr Marx.
Diageo says that it might have to quit Scotland entirely if the home of whisky ceases to be competitive in the whisky-flogging business. Quite how we managed to lose the industry to such people is another dismal story. What matters is the absence, here and around the globalised planet, of any legal, political, social or intellectual deterrent to assumed power. The company says that 900 jobs in Kilmarnock and Glasgow might be offset by 400 posts at a "packaging" plant intended for Leven. So where does that leave Ayrshire?
The myth runs that a profitable company self-evidently benefits all, and that the pain of a downturn must be absorbed by all. In the great scheme of economic voodoo, in the version Adam Smith would never have countenanced, this is held to be the only plausible route to the good society. The fact that no-one ever got rich on a whisky bottling line is ignored. The fact that downturns are not acts of God, or that wealth is never distributed as freely as joblessness, tends not to be discussed.
Society depends on the idea of social obligations. Laws exist to stress the point. We impose sanctions, to put it crudely, on the minority who elect to screw things up for the majority. Yet economics and the behaviour that flows from this week's hot theory are regarded as exempt from that version of morality. Even the bravest of politicians has hesitated to say that Diageo has a duty, like it or not, to Kilmarnock and Port Dundas. The rush to "understand" the plight of a poor, suffering multinational has taken precedence.
The company might go elsewhere, it is said. So it might. But wouldn't that be good news for some Third World elsewhere? Alternatively, wouldn't we take their jobs if given half a chance, without a second thought? And doesn't Diageo, doubtless open to "incentives", understand the point perfectly well? The people elsewhere are people too. You can't blame them, or they us, each encouraged to destroy the other, to devastate a Kilmarnock, while a multinational treats lives, communities and two centuries of work as mere poker chips. Spotted a culprit yet?
I don't understand economics, of course. The spotty acolytes of free market ideologues, the think-tankers, researchers and prospective candidates, have been telling me as much for a third of a century. I did, and still attempt to do, a bit of philosophy instead: ethics and such. I am sceptical of what is meant by wealth, and more sceptical still of how it is created or acquired. It seems to me that if social relations are to count for anything there needs to be certain universal obligations. The alternative is a pack, a marked deck, of lies.
If Diageo can walk away from Kilmarnock without a backward glance after two centuries, Diageo will have no moral standing. I doubt, of course, that the company's executives will lose much sleep over that. Those who advertise the virtues of hard-headed capitalism ought to think twice, however. When an economic system becomes entirely detached from the society it occupies the system, I suggest, is in trouble. And the crisis, in the proper sense, will not be resolved by conning the suckers into providing another few billions for another bail-out.
Loss of faith; loss of trust; loss of belief: that's not how you keep the customer satisfied. A global economic calamity leads to questions, some shallow, some deep. How is Diageo regarded in Kilmarnock this morning? With gratitude, with respect? Or has anyone really stopped to wonder why footloose capitalism is held in growing contempt in every corner of the planet?
I leave the predictions to Herr Marx. I can sense an impending irony, however. Imagine if a glorious free-market revolution succeeded only in radicalising a new, angry generation?

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