“Imagining Other”
CSR in Context Chapter 8:
INEQUALITIES OF WEALTH AND POWER
Links.
Chapter 9: Remedies and Conclusion
Note: this page was originally written in the 1980s, and
updated from time to time until the mid noughties ...
I have since compiled a new page of updates: Updates on inequality. This was uploaded
in 2012, and reflects the rise of the Occupy movement, which has brought out
into the open - especially since the ‘credit crunch’ of 2008 - the vast
inequalities between the 99% and the 1%.
Inequality is a central issue for socialists, so this
page is also relevant in connection with my notes on:
Marx, and
For more recent points on ‘alternatives’ such as worker
co-operatives, see: Imagining Other: Alternatives.
Topics/bookmarks for this page:
charity (worker) co-operatives
Galbraith (JK) gender discrimination
Halliburton happiness
happiness (update) Hayek (F) health and safety health inequality (including mental health/happiness) HSBC
LETS (Local Exchange Trading Schemes) (and local economies) lobbying
Lukes (Stephen)
managers' power (“internal”) managerial
class (“external” power) Michels (Robert)
ownership and control (separation of)
power (introduction to ‘managers’
power – see above) private equity
Sampson (Anthony)
social enterprise social mobility
time banks "trickle down" theory (wealth) unions wealth inequalities
Aims and Learning outcomes:
To
examine the extent and implications of inequality, outlining different
viewpoints as to the seriousness, likely causes, and solutions to the
phenomenon, with special reference to the role (if any) of business. Students
should understand the nature of inequality and the different views on it.
Students should be able to come to their own view on what (if anything)
business can contribute to lessening inequalities.
Summary:
1. Why is inequality important to business?
(i) success of a business
depends on well-being of its local and national community
(ii) poverty as a threat to
economic and social stability, costs to state (of unemployment, low pay, poor
health etc)
(iii) unfairness (wealth or poverty affects opportunities and power...)
2. The extent of inequality and
its "mutually reinforcing" dimensions (definitions):
(i) Inequality of condition: (a)
definitions (b) income (c) wealth (d) relative poverty etc (e) health, (f)
security
(ii) Inequality of opportunity (social mobility) – issues of class and
underclass
(iii) as a result of discrimination (a) gender (b) race (c) age (d) other,
e.g. geography
3. Inequality and Business?
What business activity may determine:
(i) wage levels &
variations, also redundancy, boardroom pay, …
(ii) prices
(iii) communities’ well-being, (through location decisions)
(iv) employment opportunities
(through recruitment policies)
4. Power: definitions,
dimensions, “structural power”.
(i) definitions
(ii) “Internal” power (i.e. within the firm), of managers and directors
(covered already: work process and alienation)
(a) civil liberties and privacy
(b) bullying and sexual harassment:
(c) whistle blowing:
(d) personnel policies and procedures:
(e) discrimination:
(f) unions:
(g) health and safety:
(iii) Managers’ “external” power. (Large corporations’ other kinds of power covered under “environment”
and “third world”)
(a) managers' and directors - a "propertied class"? (i) for, (ii) against
(b) lobbying and influence, revolving door..
(5) What is to be done about social inequality?
(i) (Rely on business) free
market and the 'trickle down effect'
(ii) (Reform business)
enlightened self-interest
(iii) (Regulate business) it is up to government to deal with
inequality
(iv) (Replace business) radical approaches: “time banks”, Local Exchange
Trading Systems, Workers' co-operatives
Appendix: a few illustrative statistics.
Chapter 8 Inequalities of wealth, condition and
power.
Introduction:
We will deal with two kinds of inequality: of standard of living
(income and wealth etc), and also of power. Needless to say these are
“mutually reinforcing”! Note also that I
assume that the main concern when it comes to inequality is with those at the
bottom of the pile, so I will often talk of poverty and powerlessness as the
main issue.
1. Why is inequality important to business?
1(i) From the point of view of “enlightened
self-interest” a business should surely recognise that its success
depends on the well-being of its local and national community. By enlightened self-interest is meant
self-interest that considers the interests of others at the same time: doing
good for others can be good for you! The
saying “good business is good for business” typifies this outlook. (The expression
is analogous to the usage in politics: an enlightened despot is a ruler with
absolute power who uses it for the good of the people). A business will not
have customers if everyone around is out of work and too poor!
1(ii) Another reason for business to be concerned about poverty, is that extremes
of poverty can become a threat to economic and social stability. In this
country (Toxteth, Brixton) as in others there have been riots whose cause is at
least partly anger on the part of the very poor and excluded. Often there has
been a racial aspect, since as I note below, race is a factor that can result
in poverty or powerlessness.
Apart from the direct physical and economic damage that rioting (e.g.
looting) can cause, widespread poverty puts costs on to the state,
through unemployment pay, loss of wealth generated if too many are unemployed
etc. These costs will be passed on in some way, through higher taxes for
example. Since poverty can often result in poor health, there are also hidden
costs in extra demands on the health service.
As an example of how serious such costs can be, the Guardian noted (
1(iii) Whilst both the above points appeal to business’s self-interest, there
is also the argument that too much inequality is simply unfair. We like
to think (as Tony Blair puts it) that we have equality of opportunity –
however, poverty affects opportunities and power... (see below).
It seems that at the end of
the ‘90s the British people on the whole believed that levels of inequality
were too high – a British Social Attitudes Survey in 1996 found that 85% of the
population thought that the income gap was too large in this country. Given
that the gap has not decreased very much, this should mean that the concern is still
there – though public opinion is changeable. Since the Lottery has created more
millionaires, attitudes to extreme wealth may have changed, and I personally
would not be surprised if less people now think that extremes of wealth are
unfair!
2. The extent of inequality and its "mutually reinforcing"
dimensions (definitions, theoretical perspectives/models, and statistics):
2(i) Inequality of Condition:
(a) definitions.
Note: what I want to stress here is that poverty does not mean simply a shortage
of money: the poor tend to have worse health, a shorter life expectancy, poorer
education, less of a “voice” in society and politics, less security, less
mobility, etc. There are many dimensions to poverty, and each
of these “dimensions” reinforces the others:
- with less money people tend to buy cheaper less nutritious food, with
consequences for their health;
- low-paid jobs are often more dangerous and hazardous – and may be more
stressful (recent research [source lost] shows that it is lack of control over
one’s life and work that creates stress – contrary to “common knowledge” it is not
managers who suffer most illness from stress);
- with poor health one’s ability to work becomes affected: for low-paid
workers, time off means loss of income;
- when a child’s parents are unskilled workers on a low income there is
not only a lack of expectation that they will get a “good” education, but there
may be pressure for the children to start work as soon as possible in order to
supplement the family income;
- the less educated someone is, the less they participate in social and
political affairs – typical “activists” are white, middle-class and
middle-aged, and male! - and the less a
social group is able to participate, the less likely it is that they will be
able to rectify poor living conditions;
- inadequate education may affect health: lack of medical knowledge,
coupled with the need to avoid taking time off work, may mean that someone who
is ill buys an over-the-counter (OTC) medicine (see the section on the
consumer), rather than consulting a doctor – OTC medicine is often
inappropriate and doesn’t help cure the illness;
- less mobility exacerbates poverty: a social exclusion unit report in
2002, “Making the Connections” (www.socialexclusionunit.gov.uk)
pointed out that richer people travel for longer journeys, mainly by car and
train, whilst poorer people make fewer journeys, mostly by foot and bus. Poor
transport can restrict access to jobs, education, shops and services, social
and cultural life. Transport noise and pollution also has a disproportionate
effect on the poor. (Tony Grayling, The Guardian
-
finally, again contrary to what many believe, you are more likely to be burgled
or mugged if you live in a poor area than if you live in a middle-class area;
you are yet more likely to be attacked if you are black and poor (source lost,
sorry).
There are two ways of
defining poverty: absolute and relative
poverty: when someone does not have the means to provide for their basic
needs (food, shelter, clothing) they are “absolutely” poor (of course, the
amount one needs to provide for basic needs differs from society to society).
On the other hand, if there is a large gap between the richest and the
poorest in a society, we speak of “relative”
poverty. The latter is more controversial as a definition, and some social
scientists would say it is not useful, since someone who is relatively poor in
the
I have put together some statistics in the notes that follow. These are just a
rather un-organised set of figures, gleaned from the press and from books, but
not systematically analysed. Were this a social science course, this would not
do! However, for our purposes I hope that it gives a picture of the extent and
nature of inequality in the
See also Hills
(2004) for up-to-date arguments.
2(i) Inequality of Condition:
(b) Income
There is a high degree of income
inequality in
As an illustration of how far government policy can affect distribution
of income and wealth, an OECD report in 1996 (when John Major was the
Conservative Prime Minister) showed that the UK was third behind the US and
Canada among industrialised countries in the proportion of its workers who are
low-paid. Moreover, earnings inequality was growing faster in the
If we take into account earnings of top
executives, the difference can be extraordinary, with people on the (only
recently implemented) minimum wage (around £5 a week) earning a fraction of the
millions that these “fat cats” earn. John Pilger, (loc cit) also says that top
executives’ pay has risen by 500% under New labour, whilst the average rise in
earnings is 45%.
There has, I am pleased to say, been
some scandal over these payments, particularly when they are “golden farewells”
to executives who have done nothing to help the business they are leaving! To
give just one example: Rentokil Initial has just dismissed an executive
director with a £1.1 million compensation package, and appointed a new one on
with a salary of £800,000, shares worth £1.6 million, and bonus arrangements
that could add up to £800,000 on top! (Guardian,
It is also worth stressing (especially
given the common belief that welfare fraud is a serious problem), that tax
avoidance costs £1 billion. Gordon Brown has said that he will find
more than a third of the £2 Billion he needs for extra spending pledged in the
budget from tightening the rules on tax avoidance (Paul Murphy, Guardian
25/4/05). Needless to say, proposed legislation to stamp out “deferred
subscription agreements, or defeasance structures” has met with opposition from
the company executives, who claim that the wording will lead to confusion!
(Murphy, loc cit).
Some
figures:
In 2004 the top 10% of the population
took home more than the whole of the bottom 50% (John Hills 2004 - reviewed by
Heather Stewart, Observer 7/1//04) – though the poorest have been helped by the
current government, still inequality is at its greatest since the 1940s
1.5 million in
23% of population earn less than half
national average i.e. 14 million people.
Low
pay:
Number of employees with gross weekly
earnings below Council of Europe's "decency threshold" (£5.75 per
hour or £215.50 per week):
1979:
7.8 million = 38.1%
1993:
9.81 mln = 48.2%
Executive
pay
In 2001:
the head of Logica took home £27
million,
the head of Telewest £5.8 million,
the head of Reckitt Bensicker’s salary
was £756,000, with bonuses of £2,534,000, and options of £5,772,000: Total
£9,062,000
(Jill
Treanor, Julia Finch, The Independent,
Polly Toynbee, (Guardian
Incomes Data Services report on top 350
companies:
For every £100 directors received in
1998 they now get £213
For every £100 a manager got in 1998
they now get £127
Child
poverty rates:
% of children
in households with incomes below 60% of median:
Update:
The extraordinary level of directors’ pay is causing much comment.
Guardian figures suggest that City bonuses are likely to reach £14bn this
year, and bonuses and directors’ pay will reach £26bn. New Statesman (
NS continues: the bottom 20% are what the Joseph Rowntree Foundation
calls the “breadline poor”: it includes one in four children, many
single-parent families and a disproportionate number of women and black
workers.
In the City, where 3,000 workers will pick up bonuses of £1m each later
this year, cleaners earn the minimum wage of £5.35 an hour (it would take such
a cleaner 90 years, working 40 hours a week with no holidays to earn £1
million).
Remedies, for the NS, are obvious: higher inflation-linked minimum wage
and enforcement of it, transparency so that more people realise the wages paid
to different groups, obliging employers not to discriminate on basis of gender
(women’s pay is still 17% behind men), and finally: tax… after all, 73% of the
population think the gap between high and low earners is too great.
See also below, on executive
pay and lobbying.
2(i) Inequality of Condition
(c) Wealth
Wealth, or capital, earns money for those who own it. The very wealthy
need do no paid work at all. Wealth can be in land, or other forms of property
(housing, buildings, jewellery etc), or in shares, investments etc, or in the
ownership of a business.
It is worth noting that the gap between those who own most wealth and
the poor is far greater than the income gap. The Dutch
economist Jan Pen once pointed out that if you were to represent the people of
Britain with their height in proportion to their wealth, many would be of
negative height (because in debt), and a very few would be over a mile high!
(see Donaldson 1975)
Housing is one of
the most accessible forms of wealth, and in the
It has been the case “since records began” that there are a few wealthy
people at the top of the pile who share out far more than the large number of
people at the bottom. According to Yvette Cooper, minister in the Office of the
Deputy PM, (The Guardian [date lost!]) the bottom half of the population owns
only 6% of the nation’s wealth.
Some figures:
From
The Guardian ,Oct 2003:
2003: bottom 50% owned 1% of wealth
1987:
Top 1% of population own 18% of wealth
top 10% own 50%
top 50% own 93%
bottom 50% own 7%
1976 bottom 10% owned 12%
Joseph Lewis, currency dealer, £3
billion.
Hans Rausing owner of Tetra, £2.95 bn
Sainsbury, £2.5 bn
Duke of Westminster, £1.7 bn. (land)
Note that 69% of the
land is owned by 0.6% of the population,
i.e. 158,000
families live on 41 million acres, and
24 milion on
live 4 million acres. (New Statesman
Mittals, steel, 1.5
Rothermere 1.2 (newspapers)
2(i) Inequality of Condition
(d) relative poverty etc
Income ratio of richest to poorest per
head in the richest countries: (Freedom
1800: 3:1 1900: 10:1 2000:
60:1
Family Expenditure Survey 2002: (Guardian
The richest 10% spent 7 x poorest 10%
i.e. £849 per week vs. £126.70 – including £187 on leisure
% who pay top rate tax: 10%, % of
children at private school: 6%
2(i)
Inequality of Condition
(e)
Health
Infant
Mortality Rates, by Social Class:
(deaths per legitimate live births)
1930 - 2: 1978: 1980: 1982:
I: 32 12 10 8.3 fall
of a third (Observer. July 1984)
II: 46 11
III: 59 12
IV: 63 15
V: 80 20 17 15.6 fall
of less than a quarter
Regional variations (according to wealth of
area) in life expectancy:
Belsize Park/Hampstead (male): 79.6
Kilburn/Holborn: 69.7
(Sir Michael Marmot, Prof. at
Update
Inequality and happiness:
Oliver James in his new book Affluenza: How to
be Successful and Stay Sane (Vermillion 2007) points out that people are more
depressed in countries where inequality is highest: people are less depressed
in countries like Denmark (even with high taxation!) and are becoming more
depressed in Russia, where inequalities are now increasing (e.g. all women used
to enjoy dressing to look good: now only those who can afford it are
fashion-conscious).
Review by William Leith Guardian 27.01.07
See also below: happiness
update!
Update
Inequality and Health: “The Impact of
inequality: How to Make Sick Societies Healthier” by Richard G Wilkinson,
Routledge.
Notes on a Book Review by Polly Toynbee in the Guardian,
This very important book spells out
exactly why social inequality is harmful. The author (says Toynbee) is a
professor of social epidemiology and an expert in public health. Here are some extracts from Toynbee’s review:
“However rich a country is, it will be
more dysfunctional, violent, sick, and sad if the gap between social classes
grows too wide. Poorer countries with fairer wealth distribution are healthier
and happier than richer, more unequal nations.
Social status and respect matter beyond
anything, and the psychological damage done by being at the bottom is
crippling. A survey of
Homicide rates (and other crimes) track
a country’s level of inequality, not its overall wealth.
Infant mortality is mainly a result of
low-birth weight babies. … these days
small babies are not caused by a bad diet…. It is stress that does it… and
poorer mothers are more depressed, with less social support.”
Finally, Toynbee points out that for
most people pay is a measure of their social status, and those suffering low
wages know that “their labour and themselves [my italics] are worth
little.”
2(i) Inequality of Condition:
(f) security } see the Appendix
2(ii) Inequality of
Social mobility is the when people are able to move out of the social
class into which they were born. For most people, social mobility is a good
thing, in that without it the poor always remain poor, and the rich remain
rich, regardless of how hard they work. These days there is much talk of the
importance of “equal opportunity” – though different politicians may mean
different things by it!
Social scientists argue extensively about how far it is possible to
increase social mobility, and their views on this depend on how they define
class, and in particular whether they believe that
someone’s environment and upbringing (“nurture”) or their genetic inheritance
(“nature”) makes them intelligent. If we are all born with a certain amount of
intelligence, some with a lot, and some with little, it is argued, then there
will not be much social mobility, and there is no point in trying to change
this.
On the whole, the political “right wing” tends to emphasis “nature”,
whilst the “left” emphasis “nurture” – so those on the left will have more
faith than the right in our ability to change the existing order. In
Of course, even if you do accept that we can do something about the rate
of social mobility, there is the question of “what?” – to which the most
feasible answer is education. However, given the interaction of the
“dimensions” noted above, it would seem to me that – as with so many things –
there needs to be a multi-track approach, with health, physical mobility
(access to transport – the poor are the main users of buses, the really rich
use planes!), housing, crime etc all tackled along with education – and
especially nursery care which prepares children for education. (see Polly
Toynbee, quoted in the Appendix).
We will deal with what (if anything) business can do below, but this
list makes it obvious that one would expect government to be the main body to
deal with the issue. Labour governments, in this country, have been the ones
that have argued the case for better opportunities for the poor (as against the
Conservative’s “equal opportunities”) – however, it is remarkable that
under the current government, after seven years in office, there is actually
less social mobility (as admitted by Alan Milburn, Cabinet Minister, in a
speech given last year, according to the Observer 14/11/2004). In April 2005,
the findings of research carried out at the LSE on behalf of the Sutton Trust
showed that Britain had one of the worst records for social mobility in the
developed world, and that Britons were less likely to break free of their
social background than in the past (Matthew Taylor, The Guardian 25/4/05).
Social
mobility – children: (Polly Toynbee Guardian
In
2(iii) Inequality
as a result of discrimination
There are many ways in which
discrimination can affect people:
Links:
Political
philosophy of feminism
Women’s
liberation movement (not completed yet…)
Women’s
pay,
despite equal opportunities legislation, continues to be behind that of men:
Update (20.09.07):
Average weekly pay of male apprentices:
£153, of female apprentices: £113 = a 26% gap according to DfES survey 2005
(Education Guardian 18.09.07)
Most women apprentices are in such areas
as: Early years/education; hairdressing; health and social care. These areas
pay least (education etc £78, hairdressing £86, best is health and social care
at £124).
Least women (3% down to zero!) are found
in: engineering, construction, automotive and electro-technical. These areas
pay more: up to £160. All bar automotive, at £116, pay more than the trades
where women are mainly found.
Update (27.01.07):
A full-time woman worker’s hourly rate
of pay is 12.6% less than a full-time male
A part-time woman worker earns 40.2%
less (Vicky Frost, Guardian Work p 1, 27.01.07).
Next week, following recommendations
from the Women and Work Commission, the government will take various measures
(scheme to improve quality of part-time jobs, money to advise employers, etc)
to try to improve the situation. Katherine Rake, Director of the Fawcett
Society asks why all jobs cannot be offered on a flexible basis. Paternity
leave is helpful, but raising a family is still seen as a woman’s task.
****
In 1965 the figures were:
Women 18% behind that of men (for
full-time workers),
In part-time work, where more women are
to be found, the gap is 41%.
Women who took time out from their
careers (mainly to raise children) can lose out on pension contributions, and
those who divorce lose their share of their husbands pension: less than 50% of
women can claim the full state pension, as against 92% of men, (figures from
Malcolm Dean, The Guardian 6/4/05, quoting Equal Opportunities Commission
reports, and the Fawcett Commission).
Only 12% of the top wage earners are women (and no change over 4
yrs): i.e. over £100K
(Guardian
Pensions
for women: average retirement income for women is just over half
that of men
One in four
single women at retirement live in poverty
(From EOC seminar): 18% pay gap between
FT male and female workers, (34 years after Equal Pay Act) – for PT is 41%
gap!!
- women graduates within 5 years of
graduation are getting 15% less than men in same jobs
- only 9% of executive and non-executive
directors of top 100
2(iii)
Discrimination:
(b)
Race:
Ethnic minorities are still
discriminated against in employment – as a report from the Ethnic Minorities
task Force found (as reported by Gaby Hinsliff, The Observer 21/11/04): while
£19,552 was the average wage for white employees, it was £18,044 on average for
all ethnic minority workers, £12,220 for Bangladeshis and not much more for
African and Caribbean workers with similar qualifications. Poverty rates are
highest among some of our ethnic minorities, and as noted above, you are more
likely to be a victim of mugging or burglary if you are black.
Race Update:
Social anthropologist Gillian Evans, in
Educational failure and Working Class White Children in
2(iii)
Discrimination
(c)
Age
Age is another factor: the elderly need
better heating, at a time in their lives when they can no longer afford it – as
many as 30,000 elderly people die each year because of cold weather, according
to Friends of the Earth, citing the Acheson inquiry (1998). On a less extreme
note, there is a growing “digital divide” between young and old: use of
computers is more widespread among the better-off (incomes over £37,000 a year)
and the young (over 50s are much less likely to use a computer) (figures from
Maggie Brown, The Guardian
(d)
other factors:
Even geography – where you happen
to be born – can affect your life chances: Hackney, Newham and Tower Hamlets
are all among the most deprived boroughs in the country. In the 10 Thames
Gateway boroughs, 20% of housing is below minimum standards, and in five of
these boroughs the figure is 60%.
In Northern Ireland, Government research
found that around 38% of children were living in poverty, and wage rates are
25% less than the rest of Europe according to the northern Ireland Anti-Poverty
Network (Mary O’Hara, Guardian 24/11/04).
3. Inequality and Business?
3(i) Although, as stated, much of the responsibility for dealing with
social inequality lies with government, and much social inequality is
perpetuated from generation to generation, we need to remember that business
does play a part in reinforcing inequalities, and may even create some.
Thus, although businesses will claim that they have to obey whatever the
market pressures are, there is surely some room for discretion and manoeuvre
over wage levels, for example, and
the pay of top executives is generally agreed (outside of the boardrooms, and
even sometimes inside!) to be excessive.
The role of trades unions is often forgotten here: were there no contact
between workers doing the same job in different companies, or different parts
of the country, there would be much more variation than there is. Trades unions
have always stood for parity – the same rate of pay for the same job.
It is at the top of the firm that most discretion lies, and I have
already referred to the scandal of “fat cats” – directors and others whose pay
is many times that of their employees. Senior management must also take
responsibility for those occasions when firms go out of business. I am not
ignoring macro-level economic factors, of course, but to the workers it too
often seems that not enough initiative or imagination was shown by their
managers when things started going less well. At times, managements have been
guilty of incompetence and malpractice that has resulted in the closure of
businesses and the loss of jobs.
3(ii) Again, in theory it is the market, and the laws of supply and
demand, that determine prices – and yet we know that businesses collude to set
price levels: the law cannot prevent all cartels or all artificial price rises.
3(iii) Perhaps the most obvious way in which businesses may affect the
social and economic well-being of the public is through decisions over
location. It is only too tempting, when an area gets into a state of decline
(say through closure of a major local employer, or the end of a whole type of
work, as in the docks) for employers to shift their operations elsewhere. Unfortunately
these moves only exacerbate the decline.
The government will assist in regeneration projects – as in Docklands –
but the danger is that these projects will attract better-off outsiders to
replace the locals – as in Docklands!
Nevertheless, difficult though it might be, a business that really cares
about its social responsibility must try to find ways of helping to raise the
level of an area rather than contributing to its decline.
3(iv) Finally, given what we have noted about discrimination, it is
clearly essential that businesses do not discriminate in any way in their
recruitment and employment policies. In the past, especially in
(i) Definitions of terms.
The basic definition of power
is “the ability to get something done”. (So, for example, an engine has power,
and it is measured by how much “work” it can do – how fast it will drive your
car etc). In human affairs, we usually mean “the ability to get others to do
what you want”.
However, there are different
ways of getting people to do as you want – for example if an expert (say a
doctor) tells you that you should do something (take some medicine, have an
operation) you will usually do it without much questioning, and without saying
that the expert has power over you. This ability we call “authority” – it is a
kind of legitimate power, accepted by those over whom it is exercised, for
thought-out reasons. Authority may also be exercised as a result of reasoned
persuasion.
We might argue that to make a
better distinction between power and authority we should say that power is “the
ability to get something done even if there is resistance” – or that it is “the
ability to overcome resistance”. To overcome resistance usually requires either
some kind of coercion or force, or some kind of manipulation. When people are
manipulated they are either not conscious of how they have been persuaded, or
they have been given false or misleading information as a basis for their
decision. The result is that they do something that the other person wants,
even though they would not have done so had they been fully aware and informed
– and what they are persuaded to do is almost certainly not in their interests.
There is here a controversial
idea, as to whether someone can know what is in someone else’s best interest.
The idea is controversial because if we say we can know someone else’s interest
(even when they disagree), then are we not putting ourselves in the same
position as the person who manipulates others? The answer to this has to be
that we must be able to show the person concerned that they have a false idea
of their interests, and we have to be able to do this in a reasoned way.
This last point is a
variation on what a social scientist, Stephen Lukes, wrote,
about the different “dimensions” of power (1974). He used this idea to suggest
that people have “objective” interests – which may be quite different from
their “subjective” interests (what they think their interests are), and this
aspect created much controversy, partly for the reason given.
However, Lukes made another
point which is widely accepted now: power can be exercised without people being
aware of it, simply by not “putting it on the agenda”. This might be quite
literally the case, when in a meeting some important item is excluded by the
organisers without the rest of the meeting knowing about it. (This is a clear
form of manipulation). Or it might occur in a more subtle, and wider form, in
society: I have mentioned the “invisibility” of the third world – and to give
another example, for a long time the question of the inclusion of women in
politics was never even talked about, even by the most thoughtful political
philosophers – since it was simply assumed (“common sense”) that women had no
part to play in politics.
Finally, and of particular
relevance to business, we need to note that power can be exercised by
institutions, laws, customs, and other “impersonal” forces. I would call this
“structural power”. When people are caught up in a particular kind of social
structure – for example a social class – they behave (usually!) in a largely
predictable way (certain accent, dress, manners, interests). They do this
because of the power the structure has over them. (Incidentally it is not
because they have a certain accent that they belong to a certain class – that
is putting it the wrong way round!). The recent discussion about “institutional
racism” goes along similar lines: a policeman may behave in a racist manner not
because anyone has told him/her to – or because he/she thinks it is right – but
because the organisation for which he works is permeated by unspoken racism –
racism of which the people in the organisation may not be aware.
The discussion in management
literature about “corporate culture” also deals with this phenomenon – and in
business ethics this has been an important issue: a worker or manager may often
do something unethical, or irresponsible, simply because it is expected in the
organisation that things are done this way (for references see my chapter The
Social Politics of Business Ethics).
We have already dealt with issues concerning the work
process, and alienation (see the worker topic). We also noted that there were
issues to do with internal policies that could lead to excessive use of power
by managers – such as:
(a) Civil liberties and privacy: how much information about an employee does
an employer or manager have a right to get? There have been cases of management
insisting on knowing about the health of their employees, and then employees
finding they were shunned because they were HIV positive. (see Shaw and Barry,
2004, ch 7; chapters 8 & 9 deal with the next few issues). Managers need to
be able to distinguish between knowledge that is essential for carrying out the
business, and the employee’s right to a private life.
(b) Bullying and sexual harassment: this can
occur either amongst
workers or between managers and employees. Clear policy guidelines are needed,
and the trades unions can play an important part if they are involved.
Sometimes guidelines on dealing with bullying and harassment are included in
statements of disciplinary policy and procedures.
(c) Whistle blowing: (see the brief overview in
a more thorough discussion by
(d) Personnel policies and procedures: to avoid reinforcing the kind of inequalities
described above, businesses should ensure they have fair policies and
procedures in place for: promotion, disciplinary and grievance procedures,
wages etc.
(e) Discrimination: Business should ensure, in its recruitment
policies, that they do not discriminate on grounds of race, sex, disability
etc. Discussion in
There are several issues facing employers and
managers with regard to trades unions. There is the question as to whether they
should be recognised, and involved in working towards better working conditions
etc, or whether they are nothing but trouble! There is even a danger that trade
unionists will face discrimination because of their activities (though this is
against the law).
In order fully to understand the role of
unions it would be necessary to look into the history of their growth and their
struggles. Here I will simply say that workers have had to fight for the right
to organise into unions (at one stage in British history, the Combination Acts
made it illegal for workers even to talk to each other about their conditions
and wages!). The law has for some time recognised the right to strike, and
unions have been immune to prosecution (e.g. for loss of earnings by a company
in the event of a strike). This seems to me to result from the recognition that
the employer/worker relationship is not balanced in terms of power, or in terms
of control over resources. The ability to employ others gives someone a certain
kind of power, which those who can only offer themselves to be employed do not
have. Moreover, as we have seen, it is frequently the case that, when a
business fails, the workers find that they have nothing, but the
owners/employers can walk away with capital and start up again when the
circumstances allow.
This historical recognition of the necessity
for unions as a counter-balance to the employers’ power, was undermined by Mrs
Thatcher’s government, when, after a period of severe industrial disputes in
the late ‘60s and early ‘70s, it had become widely believed (in the press and
in Conservative circles) that unions had “too much power”. Of course, from the
unions’ point of view this was ludicrous: they were being restricted, by the
government, to making limited wage demands - £6 per week at one stage - and
this was as a result of conditions imposed by the IMF, when the government went
to them for a loan! Also, it seemed wrong to be accused of having too much
power when, even though many unions wanted to do something about social
conditions, such as poverty and the plight of pensioners, there was nothing
beyond campaigning that they could do. In fact the unions felt powerless!
Since that time, legislation has not abolished
the right to strike, but it has restricted it with conditions (ballots, lists
of members, notice of intention to ballot etc); it is no longer legal to go on
strike for other than your own concerns (i.e. not in solidarity with other
workers); picketing can only involve restricted numbers of people; the closed
shop is only allowed if management agree to it, etc. Union membership has
declined – partly as a result of changing patterns of work, but also in part
because workers feel unions do not serve the defensive purpose they used to.
What is not often appreciated is that many
managers find trades unions to be useful to them: they have a channel of
communication with the workers collectively, they can deal with elected officials
and not an uncontrollable mass of workers – in fact they can even use union
leaders to cool down more militant workers!
In brief, there is, as I see it, an ongoing
power struggle between unions and employers (with the government intervening
from time to time, usually on the side of the employers). Some (neo-liberals)
would argue that unions are a barrier to bringing about more equality (since
they represent a “distortion” of market forces). Others feel that this struggle
is part of a wider conflict aimed at bringing about more social equality.
See also: Chapter
4
This is another area where the
law now recognises the rights and responsibilities of both sides
(employers/managers and workers) and gives both powers to oversee health and
safety issues. The 1974 HASAWA. (Health and Safety At Work Act) defines these
responsibilities, and outlines broad procedures (which include health and
safety committees with trade union involvement). Before the Act it was only too
easy for managers and employers to avoid responsibility – and yet industrial
accidents and deaths are a major cause for concern.
Some would say
that the law has not gone far enough in constraining management, since there is
still no offence of “corporate manslaughter”. George Monbiot (www.monbiot.com) points out that eight years
have passed since the government said it would introduce an offence of
corporate killing – during which time there have been 5,000 workplace deaths
(at least 2 per day!). A bill has now been introduced, but it is too late for
it to be passed during this parliament. Moreover, as Monbiot sees it, the bill
has been “gutted”: directors themselves will not be prosecuted (only “companies”
can be found guilty!), and “no new burdens [will] be placed on companies which
already comply with health and safety legislation.” Thus, still, no one will be
prosecuted for the Piper Alpha explosion, the sinking of the Herald of free
Enterprise or the Southall rail crash.
4(iii) Managers’ “external” power:
I have discussed the power of large companies in relation
to the third world. Here I would like to touch on the vexed question of the
social and political power of managers and directors of companies.
Managers' and directors - a "ruling class"?
4(iii) (a) The case for
there being such power:
Many writers (e.g. Anthony Sampson
1992) have commented on the restricted social background of British managers.
For many individuals from well-to-do backgrounds, a public school education and
an Oxbridge degree – often in “Classics” (Latin, Greek, Ancient History) has
been a good route to a senior managerial position in industry.
In the UK we do not have the same respect for
technical or managerial knowledge that there is in, say France (where the Ecole
Normale Superieure prepares managers), and we have an exaggerated respect for
the “old”, traditional forms of education. There are also of course personal
links between those who study (or teach) at these schools and those already
managing industry, together with the leading political figures – since the
latter came up by the same route! We still speak of the “old school tie” that
brings powerful people together. Sampson calls this select group of people with
social, political and cultural power the “establishment”. He also notes (though
he does not make as much of it as some) that these people have in common their
comparatively wealthy status.
Others such as Galbraith
(1966) have written of a powerful “technostructure”, that is, groups of
managers with different skills and knowledge (legal, financial, HR, marketing)
who come together to direct large companies and who consequently have an
influence over the economy and perhaps over politics
lobbying and influence, also movement of personnel between business and
politics – the “revolving door..”
It has long been maintained (Mills 1956) that there are connections, in
developed countries, between those who hold power in business or commerce, and
those who hold political or even military power.
What is remarkable about the present day (early 21st century)
is the extent to which this picture is being reinforced, for example by “New
Labour” - and especially in America since the invasion of Iraq. See below, on Halliburton.
Update: 7/11/2005:
Managers’ and Executives’ lifestyles, compared to those of Government
Ministers:
a new twist to Robert Michels’s
“iron law of oligarchy?
Nick
Cohen
in The Observer 6/11/05 discusses “New Labour’s
love of all things rich and metropolitan”. He argues that we need to understand
the distribution of wealth and income in modern
However, Cohen points out, ministers in
this government consult and are lobbied by executives who are not only
fantastically rich, but whose income has been rising far more rapidly than that
of their employees. Whilst the average worker’s pay in the 350 largest
companies in
“Nearly half of all senior executives
made more than £1 million, with eight directors on packages of £5
million-plus.”
In comparison, the Prime Minister
received £183,932, for a job which in theory is surely more important than any
single business executive… Cabinet Ministers earn less than media personalities
and presenters such as Andrew Marr and John Humphries (£150,000 each), Huw
Edwards (£250,000) and Fiona Bruce (£400,000)!!
Robert Michels
pointed out (in the 1930s) how social democratic politicians and trade union
leaders who were in negotiation with “captains of industry” tended to move
closer towards their points of view and ways of thinking (leaving behind the
views of the workers they were supposed to be representing).
Now it seems we have not only a
rapprochement of ideas, but an attempt to ape lifestyles as well!!
Mind you, as Cohen points out, Blair,
Blunkett and Co. have some way to go before they catch up with the Quinns,
(Kimberley publishes the Spectator, her husband Stephen publishes Vogue) who
live in a £2m Mayfair house. Stephen Quinn apparently resents being called
rich… And I note in a recent edition of Essex Magazine (that I browsed through
in my osteopath’s waiting room) that there are at least 50 millionaires living
in
As Cohen notes, finally, where has the
healthy suspicion of the rich, that used to be typical of Labour stalwarts,
gone?
Update:
As Alex Brummer points out (NS
03/09/07), new PM Brown is on friendly terms with Sir Ronald Cohen, a big
Labour donor, who happens to be the founder of the private
equity “industry” in Britain. More seriously, Brown has recruited to his
Business Council one Damon Buffini (also noted as a good role model for blacks)
who played a part in the private equity takeover of the AA, with its attendant
losses of jobs and services.
Update:
Seamus Milne has an excellent article on
the ‘revolving door colonisation of public life’:
4(iii) (b) the case against:
Against the argument that those who own industry form a privileged
group, it is said that there has been a “separation
of ownership and control” (Berle and Means first formulated this idea in 1932), and more
recently that with wider
share ownership (9.2 million owners in 1992) there is more democratic control
over business.
On the other hand, the proportion of shares owned by individuals is not
large - only 20% - so this, together with the dispersal of shares amongst them,
means that they can hardly exercise much power or control. In fact most shares
are now owned by financial institutions – which suggests that those in control
of these are likely to have most power.
It is also pointed out that managers and directors often own substantial
numbers of shares – as we saw with the discussion of “fat cats” above. In
addition, when we look at who owns which blocks of shares, and who sits on
which boards, we find a series of “interlocking directorships”, whereby power
is concentrated in the hands of a relatively small number of individuals.
****************************
Further comment:
The evidence for promoting less
inequality seems, to me, irrefutable, and the main implication here is that government
needs to address the issue of low pay and excessive inequality.
However, as I argue in the CRS course,
businesses play an important part when they decide on pay levels, when they
move away from poorer areas, when they reward their executives with obscene
sums of money, and simply by promoting the market competitive philosophy.
Some would argue that since money does
not necessarily promote happiness, income and wealth inequality do not matter.
This is similar to the old argument that “The rich man in his castle, the poor
man at the gate” are all created by God, as the now out-of-favour Christian
hymn put it. Or, as Adam Smith said, the beggar sitting in the sun by the
highway has a sense of security that a rich and powerful monarch lacks….
But my view is that this argument is
mainly a sophisticated (in the worst sense of the word!) way for the better off
to avoid actually doing anything to redress the balance. It is usually
accompanied (as we saw in chapter 3 with Adam Smith) by arguments in favour of
the market and competition. No surprise – see the update on the third world –
that in Niger there is plenty of food in the markets, but the hungry cannot
afford it. Those who have food to sell would rather export it where they can
get a better price!
I would argue that, clearly it is not
money as such, but how much you get in relation to those around you, and the sense
of recognition that you get, that causes happiness or - more likely, of
course, - unhappiness (since, in any society, only a few can ever be significantly
richer than others). Putting it another
way, as the study of (presumably all reasonably well-paid) civil servants above
shows, money is not likely bring you happiness so long as someone else has more
than you. What is important is status
and respect.
The story of Halliburton in
A very quick check, via Google reveals the following:
In 2001 a UPI story, published in the
Washington Post, reveals that whilst Dick Cheney (now US Vice-President) was
chair and chief executive officer of Halliburton, and before the invasion of
Iraq (March 2003), it had two contracts (under the oil-for-food programme) with
Iraq, worth $73 million. These are bound to have led to funds reaching Saddam
Hussein. (Cheney resigned from Halliburton in August of 2000, retaining
millions in shares, but promising to donate any profits from these to charity).
Cheney denied any such deals at first, saying that they had deals with
By May 2003 the company was actually operating oil fields. (BBC news).
The contract was at the time said to be worth $7 billion over two years. In May
2004 it is revealed that the contract was negotiated with the Vice President’s
assistance.
(Meanwhile, in February of the same year, Halliburton had been criticised
for over-charging the
By February 2005, again in the
Links on Halliburton: see also: Chapter 6 the environment, and Chapter 7 the third world.
5. What is to be done about social inequality?
(i) (Rely on business)
The right wing, especially the neo-liberal, viewpoint is that we must
leave the market alone. From this viewpoint, (mostly nowadays described as neo-liberalism, but “Thatcherism” also
subscribed to these views) interfering with the market causes problems:
- giving more power to government to direct the economy results in a
lack of freedom (Hayek1944); thus, this viewpoint is strongly
opposed to state-directed socialism, which it regards as tantamount to slavery
- also government spending leads to inflation (according to the
monetarist view)
- another reason why any “distortions” of the market are a bad thing is
that those who can influence government will get their way, and the powerless
will be left out.
“Liberalism” has argued, ever since Adam Smith (see the earlier
lectures), that when wealth is generated it cannot be consumed by the rich
alone, but will 'trickle
down’ to the rest of society (e.g. through the creation of jobs, the
production of more goods to be consumed, and as a result of investment). Modern
proponents of this view call themselves neo-liberals.
Government, then, in neo-liberal theory, should have only a negative or
minimal role in the economy. What a government should do is to encourage growth
and innovation, reduce taxation as an incentive to the rich, and remove
barriers to the free movement of labour.
Critics of this point of view say that:
- inequalities have increased the more “free” the market;
experiments in countries like Chile, and the former USSR, have demonstrated
this (Chile’s President Pinochet – the man who tortured and threw his opponents
out of planes over the sea – was economically guided by monetarist Milton
Friedman – you will remember him as the man who said that social responsibility
is a subversive doctrine, and the only business of business is to make profits
for shareholders…)
- it is not possible to make labour as freely mobile as capital
(especially across national boundaries)
- workers can only have better mobility if their standard of living is
raised
- in practice, government protects state interests, and that means
usually the interests of the most powerful and wealthy in society
- and of course there is the traditional socialist view that some
services such as health and education can only be effectively provided by the
state (incidentally, Adam Smith agreed with this!), and that when market forces
are introduced you get a two-tier service.
Other (perhaps more rhetorical!) arguments might be:
- if more money through tax cuts is an incentive to the rich, why is
more money through better pay not an incentive to the poor?
- the wealthy in fact are less generous than the poor, (source lost,
sorry) so the “trickle down” theory is false.
(ii) (Reform business)
(a) ‘Ethical business’
Much of the discussion of Social Responsibility of Business operates
from this viewpoint. The practical steps proposed vary from measures that are
easy for a business (such as donating to charity), to creating new forms of
capitalist enterprise (such as Body Shop). All would suggest that they are
doing something to help the poor and least well off. What many of these
positions amount to is what I have called enlightened self-interest, since they
argue that less inequality helps business.
I have noted some of the questions surrounding the Body Shop and other
“ethical businesses” in earlier lectures. Whilst not doubting their good
intentions (see Anita Roddick’s 1991 book), it is clear that their impact is
not huge. The public is much more aware now of social responsibility issues,
and “ethical consumption” has increased. However, the question is: how much
does this amount to in relation to the scale of the problems that have been
described in these notes?
Other examples of what I call the “reformist” approach include the much
milder activities of Business in the
Community, which primarily amount to corporate giving.
Business in the Community (BIC), together with The Guardian, publishes
an annual survey of what businesses in the FTSE 100 give to charity
– in money and in kind. Giving in kind includes managers’ and employees’
voluntary donation of time, to help voluntary organisations to run more
effectively, and to help improve the local environment.
This survey also helps to examine “how far the idea and the practice of
CSR has developed”. The report for 2004 points out the following:
- the average donation to good causes of the FTSE top 100 in 2003 – 4 was
0.97% of their pre-tax profits (BIC aim is 1% minimum)
- the value of
donations was £872 million, which was 7% up on the previous year (cash was £643
million)
- 34 companies gave 1%
or more – 14 gave 0.1% or less
- charities (the
voluntary sector) receive 4.3% of their income from business (i.e. the private
sector), 36.6% from the
general
public, 37% from government contracts.
- total voluntary
sector income : £20.8 billion
- total government
spending: £450 billion (which is almost half the value of the whole
billion)
- the public thinks
that charities get 24% of their income from business (5 - 6 times the real
amount)
- 43% of the public think
that only a few large companies are doing all they can to be more responsible
- 82% said that most
companies try to get away with as much as they can!
It is often difficult to distinguish such “giving” from commercial
opportunism: GSK is noted in the above report as having given its products away
(in America) – in a context that sounds very much like marketing, and was not
counted as philanthropy by the compliers of the report. A similar example of
self-interested corporate care arose with General Electric (again in the
(b) Workers on the boards: see csr3 history
part 2
(iii) (Regulate business)
I do not need to say much here, since this position (held by socialists
and social democrats, and some in business!) argues that it is primarily up to government
to deal with inequality. This can be done through redistributive taxation, and
government assistance to the poor.
Where government interacts with business to help deal with poverty and
inequality, this would take the form of tax credits as incentives to help
business to set up in a poor area. Alternatively, government works in
partnership with private enterprise through such bodies as the LDDC (London
Docklands Development Committee) and other development agencies. The key
question for critics here is: who is running the show? When business is
involved, development may go in directions that firstly help the business and
only secondly, if at all, help the poor local community. This was the problem
with the LDDC: the kind of businesses that wanted to move into the area (IT,
media) were not suitable for local people, the housing was far too expensive,
and local people were not helped.
In 2003 an interesting confrontation took place (as reported by Nick
Cohen, The observer 19/10/2003 – see www.observer.co.uk/comment):
a cleaner employed by OCS, to whom HSBC (“your local bank”)
had contracted out the cleaning, spoke at HSBC’s annual meeting at Canary Wharf
on 30th May. He asked the executive chairman, Sir John Bond, to
review the cleaners’ contract, under which he was paid £5 an hour. The trade
unions, and a group of local churchmen who support the cleaners in an alliance
of east end charities called Telco, believe that to live in London the minimum
wage should be supplemented, and made up to £6.50 an hour. The chairman – whose
salary is a mere £1.88 million – expressed surprise that his bank – profits
$6.88 billion - was being criticised for not being socially responsible: after
all it had a good reputation for giving to charities and deserving causes. Sir
John explained that he could not improve the cleaners’ pay, as if he did, all
the banks low-paid workers (such as call centre staff in
I have also mentioned the sheer cost of trying to provide jobs and
support in area where a large firm (MG Rover) or a whole trade or industry
(printing, the docks, shipbuilding, steel!!) has collapsed. Given these kind of
difficulties, some have proposed that workers’ co-operatives (see below) are
the best solution – however, when a co-operative is set up as a result of a
business becoming unviable it starts off with an enormous disadvantage!
More recently the government has operated Private Finance Initiatives,
arguing that a mix of private capital and public management can avoid the
problems of either pure private enterprise or pure state ownership. However,
this has proved very controversial, and critics say that the result is usually
two-tier services (in education and health especially).
(iv) (Replace business)
“Revolution”
This viewpoint again includes a spectrum of positions. At one end of the
spectrum are views such as revolutionary socialism, or anarchism, where it is
argued that the whole society must be changed. This view would argue
that “islands” of alternative practices cannot exist for long in the midst of
an unchanged (capitalist) economy.
The most common view, it seems to me, is at the other end of the
spectrum, where new kinds of business are set up which, as it were,
“build the new society in the shell of the old” (this saying comes form the
radical American workers who formed the Industrial Workers of the World – IWW,
or “Wobblies” – in order for the workers to take over industry from the inside). I have written about workers' co-operatives in lecture 1, section 5 (d). The crucial point about them, as regards the
issue of inequality, is their (near) egalitarianism: co-operatives work on the
basis of a very small ratio of highest to lowest salaries; and their structure
means shared responsibility and shared power. Of course, they do have to
compete, but since their objective is usually a social one, and not simply
growth and increased profits for shareholders, then they are happy to remain steady
at a given size and level of economic activity.
“Social
In some ways this new kind of business is
similar to co-operatives, since profits are put back into the business – and,
by definition, their purpose is “social” – for the good of the community or to
meet a particular social need (e.g. for a deprived section of society). For
example, Hackney Community Transport claims that it is one of the most
effective bus services in
Other social enterprise companies provide fostering
services, run wind farms, provide energy-efficient heating and
insulation, or in the case of Cafedirect sell fair trade coffee. As
there is little experience of overseeing or co-ordinating these businesses it
is difficult, says Jonathan Bland, originator of the concept, and chief
executive of the Social Enterprise Coalition, to tell how many there are
in existence, but on estimate is that there are around 5,000 (in
Britain) – and it is possible that 6% of the working population is in
businesses that plough their profits back into the community (Heather Connon,
Observer, loc cit).
Update 11th April 2018. See
Aditya Chakrabortty’s series on alternatives.
https://www.theguardian.com/commentisfree/2018/apr/11/post-industrial-plymouth-business-social-enterprise - boosting the local eceonomy without help
from the state or big business.
Update
2: December 2006:
From: Passion in Action, by Mira
Katbamna, EducationGuardian Higher, 12/12/06.
The School
of Social Enterprise saw 20 of its students graduate last week. SSE is the brainchild of Michael Young (who also helped to set up the Open University, and
Which? Magazine) – he believed that the challenge facing social entrepreneurs
was not a “deficit … in hard skills, like business planning or financial
management, but in terms of people’s confidence and behaviours.”
The businesses coached by the school
have an 85% success rate – they provide employment for 4/5 people each.
Examples:
-
Progress
Community Gardening Projects, with three schools in Lambeth, gets
children growing organic produce, to help them deal with their emotions and
improve their educational outcomes
-
A
parents’ group at a primary school
in south London, run by Girda Niles, who as a lone parent in a difficult
economic position wanted to do something that would provide her with employment
but also sustainably to help her community, and to make best use of
regeneration money – what the New Economics Foundation calls “plugging the
leaks”.
From report by Nick Mathiason, Observer
Business,
Nurses have joined doctors and dentists
in forming employee-owned companies, which could sell services to the NHS.
In
In Hanwell,
However, two difficulties face these
approaches:
- there seems to be a bias towards
giving such work to mainstream businesses, and the government needs to back
social enterprise more strongly
- the new organisation Central Surrey
Health is concerned that it must be able to NHS pension rights.
For further updates on social enterprises,
see: inequality: updates (not completed
yet…).
“Time Banks and Local Exchange Trading Schemes” (see websites in references)
There are some other very interesting
initiatives that I would like to finish this section with, and these are aimed
especially at those who are the most deprived: they include “Time Banks” and “Local Exchange Trading Systems”. These organisations
start from the premise that ways must be found of using the skills of the least
well-off, and doing so in a way that will not perpetuate the inequalities of
society, where such skills are not valued. The main problem, then, is the role
of money – since some goods and skills are given a high money value, and others
have little or no value.
In a Time Bank, or LETS, the “currency” is time (though some LETS
schemes have invented an alternative currency): and the most important feature
is that one hour of anyone’s time is worth the same amount of anyone else’s.
On this basis a “banking” and exchange system is set up, with a data base,
listing the many different services available.
Members are prepared to donate their time and to be entitled to payment
in the form of someone else’s time. This way, skills such as child-minding,
housework, visiting the elderly or the sick, etc, which are not highly valued
in our society get full recognition. It is not a coincidence that these are
mainly tasks traditionally carried out by women – their lack of value is a good
indication of the lack of status given to women generally.
Local economies:
Ecologist Jan 2009 Take Action section has pieces on John Bird’s ‘Wedge
Card’ – a loyalty card which supports local shops and helps the local community
to cohere. Other ideas include: Community Supported Agriculture: communities
actively support local growers, of which there are approx. 30 in the country,
see www.cuco.org.uk. Also alternative currencies,
e.g. the Lewes pound – some 125 traders are signed up – working with NEF on a
second phase to introduce higher denomination notes, see www.thelewespound.org
Totnes also has local money, based on money from the previous era.
Stroud has an Exchange, converted by Stroud Common Wealth for social
enterprises and is working on plans for a local economy. (The LETS scheme that
had been set up failed, because the Treasury wouldn’t allow tax exemption, and
the DHSS cut benefits.) The new economy is likely to follow the model of
Chiemgau (Bavaria, 2003) Stroud Community Assets is also being set up so people
can borrow small amounts of money regularly.
In Argentina, after the financial crisis/collapse of 2001, people in
Buenos Aires used a local currency called the arbol (tree), which soon became a significant means of exchange.
See also Ecologist Nov 2008: Molly Scott Cato and Martin Large write on
‘the common wealth’: Robert Owen, 150 years ago, experimented with money that
reflected his labour theory of value ((value of goods should be equivalent to
the labour invested in their manufacture). He did this before his work on
co-operatives. In 1830 he set up an Equitable labour Exchange, where the medium
of exchange was ‘labour notes’ – denominated in four hours, and goods were
exchanged for the number of hours they took to make. Perhaps a thousand
artisans were involved in the Exchange.
The Robert Owen Credit Union in Powys follows his ideas. A small
community is involved, building a trust that is not possible in global
financial institutions.
See also (copied to): Imagining Other - Alternatives and: Social Movements Today.
(End)
Inequalities - indicative
reading (see also: Booklist on CSR):
Cautes, D.: Running the Country, Hodder & Stoughton/OU 1995 – who
are the most powerful people in Britain?
Crompton, R.:
Class and Stratification - an introduction to current debates, Polity
Press,
Davies, ed. Peter W.F. (1997): Current Issues in Business Ethics,
Routledge – has an excellent chapter on whistle-blowing
Donaldson, P (1975) Economics of the Real World, Penguin – the book
that launched my interest in social responsibility of
business!!
Ethical Performance, Dunstans Publishing,
The Giving List – The Guardian www.SocietyGuardian.co.uk
and Directory of Social Change www.dsc.org.uk
Galbraith, J.K. (1966?) The New Industrial State, Pelican
Goldthorpe, J, and Erikson, R (1997) The Constant Flux: a study of
social mobility in industrial societies, Clarendon,
Haralambos, M: Sociology - Themes and Perspectives (1985) - ch. 3 gives
clear summaries of the different theoretical
perspectives on power
(pluralism, elitism, class theory) ch. 4 is on poverty
Hayek, F von (1944) The Road to Serfdom – a classic anti-socialist,
pro-free market text, republished:
Hills, J (ed) (2004, A More Equal Society? New labour, Poverty (etc), Policy Press
Lister, R (2004), Poverty, Polity Press – Lister is Prof. of Social
Policy at
Lukes, S (1974), Power, a Radical View,
Mills, C. Wright, (1956), The Power Elite,
Moran, M.: Politics and Society in
7679)
Reid,
Roddick, A (1991) Body and Soul – a personal account of the establishment
of the Body Shop, seems honest, but might be
biased!
Sampson A.: The Essential Anatomy of Britain (1992) - dated, but
readable account of power and inequality in
point of view that
there exists a dominant British "establishment"
Saunders, P (1990), Social Class and Stratification, Routledge
Schumacher E.F.: Small is Beautiful (1973) - an account of economics
"as if people matter", advocating smaller industrial
units so that workers
can exercise control
Shaw & Barry, (2004), Moral Issues in Business, Wadsworth/Thomson
Townsend, P.: Poverty in the
exists
Westergaard, J. & Resler, H.: Class in a Capitalist Society,
Pelican 1975 – a Marxist view: poverty, poor health/education,
powerlessness are all
linked
Whitehead, M.: Inequalities in Health
[the Black Report], Penguin 1992 – specifically deals with the failure
of the health
Service to benefit all
(the
"middle class" gains most).
Websites:
www.ethicalperformance.com - Dunstans Publishing,
The Giving List, see The Guardian www.SocietyGuardian.co.uk
Links.
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