Monday, 3 August 2015

The European Project; Is it 'Game Over'?

The ideal governance structure is said to be separate but co-dependent institutions of legislature, executive (civil service) and judiciary. To prevent one or the other becoming too dominant and taking over the state or organisation in their own sectarian interest..

Two major institutions have all three functions inside themselves. The Chinese Communist Party and the European Commission. We know the CCP is above and outside the law but so, it appears, is the EC.

Despite decades long struggles, the European Parliament has been unable to wrest significant legislative authority from the executive of the EC. 

Legal disputes can take 15+ years to wind their way through the European Court of Justice. A challenge (on the grounds of illegal state aid) by private business representatives to a government coop support programme in Italy in the early 1990s was not resolved until 15 years later. In the meantime local and national governments took the position that favouring cooperative specific development support was probably illegal. 

While everyone was ignoring the tax billions being paid as 'in work benefits' to low paid employees of corporations because their wages were too low to exist on. Thus inflating those corporations profits. This is clearly illegal state aid to those corporations. In short the European Union legal system doesn't work. 

The powers of commissioners are quite extraordinary. They are 'little gods' acting outside any democratic control whatsoever. Handing down their decisions to us mortals. A Greek playwright should write a satire comparing them to the squabbling deities atop Mt. Olympus.

Records show that the commission has been largely captured by corporate capital lobbyists. They outnumber other lobbyists many times over in terms of numbers and contacts. So we get the probably illegal 'in secret' negotiations on the TTIP for example. Largely in the interest of corporate capital. Other interests, i.e. 'us', cannot win this battle. Corporate capital will have its way, one way or another. Because they have the resources to fight for as long as is necessary, and we do not. We may derail TTIP only to find the commission has agreed similar rules by another route.

Originally the European project was not meant to be like this. It was designed as a three legged stool with three social partners. Organised Business (as Employers), Organised Labour and Elected Governments. The original architects hoped that like the ideal governance structure ( They were European governance scholars) , these three social partners would be sufficiently independent but co-dependent to keep the stool upright. Of course this all depended on each partner playing the social democratic game i.e. not playing to win ( the UK/USA ideal) but playing to keep the game going for all (the European ideal).

Organised Business got its act together quickly and set up industrial scale lobbying, especially the members representing corporate interests ( small businesses and public sector employers got left behind).

ETUC the European Trades Union Confederation seems to have given up the fight. They act as if the social democratic model were still the bedrock of Europe. After the 1980s and 90s when basic employee rights were harmonised across the community, ETUC has not progressed. They have no more answer to the predation of corporate financial capital across Europe than Arthur Scargill had to the death of the British coal industry. Glorious flag waving defeat or dereliction of duty in the face of the enemy?

And elected government representatives across Europe have been taken over by (neo liberal) corporate interest lobbying. Or bullied into submission to those interests like Syriza.

So one leg has withered and the other two have effectively become one. How is this stool still upright?

The power of the Commission, made up of government ( neo liberals mainly) representatives is growing not declining. They no longer feel the need to abide by agreed treaties, whether negotiating trade treaties in secret (TTIP) or negotiating with member states.

Yanis Varoufakis says he questioned the legality of the Eurogroup which was officially negotiating with Greece but in reality was dictating terms at the whim of the chairman. Officials agreed with him. It was an informal gathering of various European bureaucrats and government representatives, with no legal basis nor any formal authority to dictate terms to a member state. Because it had no constitutional status, no minutes are taken, there are no rights to know what is discussed or who is present.  

They can act in defiance of European treaties or national constitutions, as they did in relation to Greece. And because most EU states (except perhaps Germany) are as, or even more indebted, than Greece (the total UK debt - private, business, government and financial is a greater % of GDP than Greece's equivalent), they can do it to any of the eurozone states at will.

As Varoufakis says, this Eurogroup holds the power to make life hell for millions of European citizens who have no comeback whatsoever, except to escape to an alternative economic space. Which is what many Greeks are busy doing.

Now that the neo-liberal and corporate capital capture of the EU has become so clear, the question is should we still support it? Have we lost the game? Should we, like the Greeks, be building escape routes from this fiscal and legal prison being prepared for us.

Sunday, 2 August 2015

Debt; The New Universal Weapon

Went to a very interesting talk by Spyros Marchetos a Greek professor today at Bradford's 1 in 12 club (30 years of anarchism and going strong, a brilliant institution).

The amount of debt in the world vastly exceeds the amount of real value ( as produced by the global GDP) by a huge factor.  This debt which exists as electronic information in between banks and other financial institutions can be used as a weapon against any country that steps out of line.   Because elected governments are now allowed to convert private debt ( especially losses made by banks) into public debt (which we the public have to repay).  How was this slight of hand allowed to become 'normal' practice?

Because every country is 'in debt' this can happen at any time anywhere.  The total UK debt if you total private domestic, business, financial services and government debt is far higher than Greece's debt. It could be 'called in' at any time eg when Jeremy Corbyn is elected as Prime Minister (I started watching A Very British Coup (1988) which hypothesises a Left Wing labour government winning an election in the 1990s, recently and couldn't continue, too raw to take.)

In Greece the constitution is clear that the loans imposed by the IMF are illegal and should not be repaid.  Much like Wonga were forced to write off their more irresponsible lending.  The UK has no constitution, there wouldn't even be a constitutional objection here.

Marchetos said the EU is now totally in the grip of the bankers and German bankers specifically who wield the debt weapon without any democratic control whatever.

Almost none of the 'loans' made to Greece by the IMF or Eurozone actually went to Greece. Most effectively never left Germany but Greeks are being told to pay them back.

I asked if the rise of alternative currencies and economies in Greece will be an effective defence against this debt/money weapon and he said they weren't significant. They might enable people to keep themselves alive but will not present an effective national alternative. On this I disagree because internet enabled economies are embryonic but showing great potential.

We cannot play in this capital debt game. The cards, the odds, the field is stacked against us. We have to play a different guerilla game where the B52s of the IMF and ECB cannot find us to bomb us back into submission.

Monday, 30 March 2015

The Future of HR: Human Relations not Human Resources

Those who know me know I have been saying for years that we have to get away from systems models of businesses and cooperatives and instead stress relationship building between the people that make up the cooperative.

In hierarchical society, systems make complete sense. businesses are machines (or biological or ICT equivalents) into which human resources are slotted and controlled by an elite of executives.  Who justify their privilege by the use of management practices that treat people like cogs or organs or algorithms.

Open any management textbook from Ansoff to Senge and you can see this model, sometimes naked as in Michael Porter's 'work' (Value Chain Analysis). Sometimes covered up by metaphysical  such as Pete Senge and his learning organisation ideas.  In all, the telling sign is that the organisation comes first and the people are slotted into preconceived roles. The boss is in total control (in theory).

Even the modern fad of 'engaged employees' assumes they should be engaged with their employer and not with each other. (as one cynical employee was quoted as saying "In the old days they only tried to control my body. Now they want my heart and soul as well!")

None of this works in a worker cooperative run as a flat hierarchy, equal status collective. Such as my coop Suma, Superbly successful as a business and pretty good as a democratic cooperative too. Without the authority of the hierarchy none of these systems based methods are suitable.

Having struggled to use them and gone looking for something else I discovered the alternative model of the firm. That organisations are merely the sum of all the communication relationships going on in them. This thinking goes by the cumbersome name of Complex Responsive Processes of Relating.

I sometimes simplify this to say that an organisation is merely a big conversation. A complex ever changing web of communications by speech, gesture, email, data, exchange, working arrangements etc.  It's a big intentional family in other words.

This model fits worker coops to a 'T'.  Because it says the better we communicate (relate) with each other the better our businesses will perform. Immediately all manner of improvements spring to mind, how to remove blocks to communication and how to improve our ability to communicate and relate to each other. One of the most powerful blocks is the ability of the powerful to block communication by the less powerful, of course.  An ability that is crumbling day by day as personal social media devices become more powerful and more discrete.

Blocking, restricting and controlling communication is exactly how the Coop Group executive elite operated.

So what does this Relationship model mean for HR? Simple - we replace the Resource with Relations. HRM becomes Human Relations Management. Because groups of people do need to be coordinated and facilitated to communicate otherwise a free for all ensues.  But this is not management leadership. It is facilitation of the wishes of the people who make up the group.

Interestingly some of the senior gurus of HR seem to be waking up to this revolution even if they don't necessarily understand the political significance of it.

Prof. Dave Ulrich has long been considered the foremost global HR theorist. He invented many of the concepts of modern HRM, all systems thinking. How to tinker to make the machine operate better. Recently he has been talking about Relations Management and referring to concepts from personal relationship studies particularly the work of John Gottman

1 Share a common purpose 
Partners in a relationship have different roles to play, but they succeed when they realise that they are stronger together than apart because they have binding goals such as raising children. In a business the challenge is to find a unifying purpose that brings together these different parts into a greater whole.
2 Respect differences
In couples therapy, each partner is encouraged to identify and appreciate the strengths of their partner. Couples succeed when they communicate more positively than negatively. Gottman found a 5:1 ratio of positive to negative comments in successful couples.  Couples succeed when they know and respond to what matters to their partner. 
3 Govern, accept, connect
A large part of relationship success comes from managing expectations. Researchers have found that 65-70 per cent of relationship problems are never “solved” but “managed”.  Most of the early problems in a relationship are worked around (for example, spending habits, raising children, doing household chores). It is important to solve the solvable problems and not obsess about those that seem to persist. 
Care for the other
In relationship therapy, the most important questions that solidify a relationship are: Can I rely on you? Are you safe? Will you be there for me when I need you? Without positive answers to these questions, relationships will crumble under pressure. With positive answers, partners build trust and celebrate others’ success. 
5 Share experiences together
In any relationship, things go wrong. Personal or professional disappointments or stresses that pull them apart. To build stronger personal relationships, partners are encouraged to turn to each other in times of difficulty, to yield to the influence of their partner, and to be emotionally vulnerable to share deeper feelings with each other. Spending time together and investing emotionally in each other strengthens relationships.
6 Grow together
Anyone in a successful relationship over five or 10 years can look back to see progress.   Relationships morph and each partner learns and grows. Some of this growth comes from constantly learning, from focusing on the future and what can be, from letting go of grievances, recognising vicious cycles and breaking them. Couples with positive relationships recognise growth and change.
1 Share a common purpose
2 Respect differences
3 Govern, accept, connect
4 Care for the other
5 Share experiences together
6 Grow together
These sound like pretty good guidelines for Human Relations Management to me!

Monday, 26 August 2013

Information Pollution in Financial Capitalism

Reading John Lanchester's book 'Whoops' about the international financial crisis whilst on holiday (its a laugh out loud read, not many books about financial capitalism you can say that about). He writes about how banksters invented derivatives to outwit the financial regulators and create the impression of low risk for loans based on junk mortgages which they sold to all and sundry.

A brilliant metaphor he makes,  comparing the regulators to lifeguards who weren't asleep but trying to cope with swimmers who were pouring blood into the water because they thought a few sharks would make it more exciting!

All the Collatoralised Debt Obligations and Credit Default Swaps and even CDOs 'squared' (read the book for an explanation and to realise how we were all conned by these legalised crooks) created such a fog and confusion,  the whole banking system blocked up.  Money ceased to be reliable.

It made me think, In the 19th century the same process happened with industrial capitalism. Mills and factories created such pollution that they could not operate.  Water was too dirty to be used to wash wool in Bradford for example.  The already rich industrialists had to bang factory owners' heads together to impose the first environmental protection laws to control pollution.

The same happened with public health because they were running out of labour due to the high death and disability rates caused to the working class. Free laissez faire enterprise had to be controlled to prevent a clogging up of free enterprise.

They used physical resources.  21st century financial capitalism uses information as a resource.  CDOs and CDSs pollute the pool of information.  But whereas all industrial capitalists wanted a low pollution environment,  financial capitalists actively try to pollute the information environment. It's the way they create the tiny differences between buying and selling prices they exploit to make their profits in huge computerised purchases and sales many times a second.

So the financial regulators have a much tougher job than the 19th century equivalents.

What's this to do with coops? Lanchester speculates about business that exists to serve need rather than just to make money by any means. He suggests those days are over.  He also says financial capitalism is a near dead duck. It is irrecoverably polluted.  But he doesn't mention coops once.  Coops exist and survive only so long as they serve their member's needs.  And can survive when capitalism is so polluted by financial dodgy dealings it is having another in its series of heart attacks.

People laugh at Marx's belief that capitalism is its own grave digger. He didnt just think this would happen when labour organised, as people commonly believe.  He also predicted the suicidal dynamics of financier capitalism. He may still be proved right.

But capitalism is a master at cliff edge thrillers so what will they do next to protect their right to our wealth? Are the shocks coming so hard and fast that the financial doctors cannot keep the raddled body alive?

A few years ago (before the financial crash) I was at a reception in the House of Lords and heard the Tory MP for the City of London, Mark Field, say the party was over. The 150 year reign of the joint stock company (the corporate legal person) was coming to an end. It was no longer fit for purpose in an age of international computerised finance. (No one was listening in his own party.)  His solution?  Mutuals and Cooperatives which exist to serve and provide needs directly and not as a by product of uncontrollable corporations.

Wednesday, 19 June 2013

Financial Management for Worker Co-operatives - We Can Do Better Than This

My experience of talking to finance people in worker co-ops is that a fair bit of the orthodox methods of internal financial management and reporting are not right for worker co-ops where the priority is communicating with internal members, many of whom don’t understand these normal methods. 

Much financial management is designed to report financial performance and results to financially able senior managers and external funders and investors who can also call on expertise (or at least have a vested personal interest in learning how to read a balance sheet and P&L). 

There are accountants who say that normal financial management is actually a tool for control by higher management with vested interests in keeping control, rather than freeing up entrepreneurial behaviour; see BB seems more suitable for collectives to me than the normal methods.

We may have to abide by certain conventions in our external reporting but internally we can do whatever we think is appropriate. Even externally, conventional reporting underplays the financial and non-financial output benefits of worker co-ops. (Return On Capital Employed (ROCE) does not take into account profits distributed in premium wages and therefore under reports the financial performance of our better managed worker co-ops. Some of which are outperforming Apple in terms of the total financial outputs they are achieving.)

The American employee ownership literature is full of articles about how to engender an ‘ownership culture’ and much of that is 'How do you report financial results and forward plans in a way that ordinary employee owners can understand?'. So that is why this topic is of such interest to me. Money is the only undisputed common language inside our co-ops (much as I dislike that) but only some members can speak it with all the consequences that flow from that. 

The worst of which is that the finance people do their jobs and aren’t understood and other members blunder around in their financial ignorance, not aligned behind one understanding, not able to intelligently argue a common case. Result - too many co-ops which are just surviving against the odds with inadequate business and financial performance.

So, if we had forward planning or coordination of finances which all member could understand (the reason for) and could commit to and reporting of financial performance ditto, then we can have more collective understanding of the business and what members have to do to make it a success ( or just to survive).

It would help enormously with collective performance management ( because members would have their fingers on the pulse) and emergent business development ( where groups of members identify and develop good new business development without a CEO master plan) and contingency planning ( members would spot risks and react quicker if they had easy to understand financial metrics).

There's a project here for a radical accountant. Volunteers?

Sunday, 8 January 2012

The Problem with Co-ops - No Boss

Britan 'does' big co-ops, like the Cooperative Group with its strong corporate culture and executive hierarchies. But Britain's record for small co-ops is poor, especially egalitarian collectives. In the 1970s and 80s thousands of worker co-ops were started by young people as a response to the last major recession, a decade of mass de-industrialisation when the normal jobs for young graduates in middle management disappeared. Where are the Mondragons and Emilia Romagnas that should have resulted.

My co-op, Suma, was started in the mid 70s. In 25 years Suma created 100 good cooperative jobs. In the same time Mondragon created 10,000.

Why don’t co-ops start and grow in Britain? Because British people don’t know how to behave and work together cooperatively? They only know hierarchical behaviour. They like the idea of cooperative behaviour but baulk at actually doing it. If they do start coops they mostly still don’t take advantage of the model because they ‘do their old jobs’ in the coop, behave as controllers or controlled, executives or operatives, because that is the way they know and it is safe. So coops in the UK operate like badly run ordinary businesses, ones which have ineffective bosses, instead of well functioning active democracies.

Giving such organisations hard business tools and opening up access to finance is inefficient, they can’t use them or it properly. Like giving someone a toolbox but not teaching them how to use the tools. It’s a typically British disease to under prioritise competency. The cult of the amateur is a very British delusion. We want to just have a go and learn by muddling through.

I would say that British cooperative development assistance has contributed to this by sticking to hard skills delivery and hoping someone else does the soft skills. In effect we assume there is a ‘hidden boss’ who will make people cooperate and make things happen once we go away. Many of our recommended procedures rely on 'committees' to plug this gap. In philosophical terms this is known as 'infinite regression'. We never actually pin down who we expect to be in charge with this systemic model of governance. In practice no-one is unless a boss arises or some form of collective governance is discovered.

Those co-ops which have found a way to resolve the lack of competency in cooperative behaviour skills out perform everything else. They can take and adapt other hard skills, recognising where they fit and where they don’t fit a cooperative business environment.We see this all over the world where cultures are less hierarchical and more egalitarian. The ideology of class runs deep in Britain.

>Essentially it's process versus system. Most management theory is based on the idea that organisations exist and are controllable systems, therefore executives can focus on the hard skills, planning, control, organisation, development, marketing, and the operatives service the systemic processes.

The new kind of post–systems process theory says the organisation does not exist as a 'reified' thing. Organisational reality is the (web of) relationships between the people and specifically the interplay of responsive communications between them. This merely gives the illusion of a system. (A web of) relationships cannot be controlled but it can be coordinated and facilitated. (The concept of a web is also a reified systemic concept, a social object which has no independant reality outside of our ideology, use with care)

Hierarchical organisations (including large corporate co-ops) can force people to fit the illusion. Collective cooperatives cannot. So systemic tools, hard skills, don’t work by themselves in egalitarian cooperatives.

Much cooperative development support is like generic business support and fails to address the soft skills, the relating skills ( communications. decisionmaking, collective working etc) without which small coops struggle to action the tools and plans. Because British people do not know how to relate to each other cooperatively. Its not in our culture unless it is oppositional, reactive and defensive, eg trades unions or football fandom.

Consequently we help people set up co-ops to struggle in a swamp of dysfunctional interpersonal relationships. No wonder they fail to grow as businesses or abandon cooperative principles in order to grow ( by instituting hierarchy and it's attendant alienation).

Thankfully new form of organisation arising from the activist movement are addressing these issues, group facilitation, concensus decisionmaking, non violent communication, emergent strategy are not alien concepts to the post systems generation even though they remain so to ours.
Maybe they will see the need for a priori soft skills training.

Monday, 30 May 2011

All Watched Over by Machines of Loving Grace BBC2

This thought provoking series by Adam Curtis on the BBC (watch it on iplayer) sets out to dismantle 'the great myths of our time'. Namely that self-organising human systems always end up as repressive, whether 70s communes or 2010s ukuncut networks. ( Google 'The Tyranny of Structurelessness' for a classic view of what goes wrong)

Curtis' mistake is trying to apply systems based organisational thinking to organisations which are not even quasi-systems but complex networks of relationships. You need to use complex responsive process thinking to understand them (see previous posts).

Using the term 'self-organising systems' to describe human organisation is a category error. You can use it with ants or bees or other non-sentient creatures but not humans with free will.

Many organisations looked like systems because hierarchical power forced the people in them to behave like automatons in a predictable and controllable system for the purpose of extracting value for the owners. So Curtis talks about feedback loops and cybernetics. And the first ideas about ecosystems which were systems based thinking.

Let's go back to thinkers who were,nt tainted by our prejudices and assumptions. Kant said that it was ok to view assemblages of things in the world 'as if' they were systems (ie that the 'whole' governs the constituent parts) but you could not prove they were. And you could never assume that human organisations were systems because humans have free will and can choose at any time to not obey rules. Therefore human organisations cannot be systems because systems require rules. No rules=no system.

All this old cybernetic stuff is now failed and discredited in relation to human organisation. It was those ideas which led to the horrors of soviet communism and fascist communes. Individuals didn’t matter, only the whole. Using systems based logic these 'systematic' organisations MUST result in repression, it's the only way they can work, logically, within systems theory. You have to have a 'controller' even if it is an elected dictatorship. And then the system tends towards autocracy.

The first computers permitted much more complicated systems management and hence more complicated systematic oppression of humans into limited choices. That was a quantitative change permitting multi-national capitalism to emerge. web2 is a qualitative change because it enables complex communication relationships not merely complicated broadcast and response communication relationships like web1.

The modern network 'connectives' as these new organisations are being called, are not based on systems thinking at all. They are based on communication and processes of relating.

We can now have this type of organisation because communications technology permits real time relating for large numbers of people, at a distance from each other and asynchronous (ie not present at the same time) for the first time in human history. So we don’t have to simplify human relationships to that of master and slaves, boss and employees or even executive leadership team and associates, anymore. In our work and political relationships, we can be as human as we are within our smaller family and friendship groups .

Which is why this is the age of cooperation and not capitalism (at least as we have known it).

Unfortunately while people are acting increasingly as complex relating humans in their public lives, they are still thinking like systems theory restricted automatons. The error made by Adam Curtis. But it's still a fascinating series. The film of Ayn Rand being medic wife said 'that woman is clearly psychotic' and she was Alan Greenspan's guru.