Some random thoughts about Stephen Hester (in a couple of years, we'll all be saying "who?"):
David Cameron & co have claimed that their hands are tied due to contracts signed by the previous government. This is peculiar. I don't recall Andrew Lansley saying that he couldn't reform/gut the NHS because Nye Bevan had committed all subsequent governments to cherish it. Indeed, what would be the point of electing anyone if they are powerless to change previous policy and reverse decisions?
To be fair, the Blair/Brown government were guilty of a similar canard, specifically in the form of PFI contracts. I'd like to believe this is simple weaseliness, but I'm worried it shows that the modern political class consider a commercial contract to be paramount, sacrosanct even. That's fundamentally anti-democratic.
RBS was bailed out by the state because its collapse might have led to a general financial panic and, according to Alistair Darling, cashpoints shutting down. Given that it presented such a threat to the nation, you might see the task of putting it back on an even keel as a national emergency.
So, why didn't the government simply ask for a volunteer from the banking community to take the helm as a civic duty, with no expectation of reward beyond a grateful nation's thanks (and probably a life peerage). Given that he was already a multi-millionaire, you'd have thought Hester would not have needed financial inducement. Perhaps patriotism is not a currency in which The City deals.
A major plank of the defence of Hester's bonus (and, by extension, CEO bonuses elsewhere) has been the claim that RBS is a complex organisation that only a handful of highly specialised (and highly paid) businessmen would be capable of managing.
One could point out that UK banks were only made truly complex in recent times, starting in the 90s with the "big is better" mergers (to ensure global scope), deregulation (allowing combos of investment, commercial banking and stockbroking), increased dependence on technology and automated trading (quants etc), and the diffusion of risk through derivatives.
Not only was much of this increase in complexity self-interested, but it served to increase the internal opacity of the banks to the point where senior management were incapable of properly managing risk. Fred Goodwin proved that he didn't really know what was going on. Why should we believe that Stephen Hester knows better? He may now be focusing on areas that Goodwin neglected, but that could simply mean he is ignoring other, newer issues. The one is no more omniscient than the other.
The truth is that complexity (in the sense used here) is just a factor of business organisation and is mitigated through management. The higher up the management tree you are, the greater the structural mitigation. Complexity itself is not an adequate reason for a bonus. Implementing better management to further mitigate complexity would be grounds for a bonus.
In other words, "Stephen Hester deserves a bonus because he has made RBS less complex" has more merit than "Stephen Hester deserves a bonus because RBS is complex".
Tuesday, 31 January 2012
Monday, 30 January 2012
I nose it, Alex, I nose it
At half-time yesterday, I said to the missus: "Don't worry, we'll win 3-2 and Thierry will score the winner". Two out of three right is pretty good going, even if I do say so myself (and proceed to pat myself on the back, buy myself a drink, and plant a big sloppy kiss on the nearest bit of exposed flesh).
Every football match is a game of two halves (well, except for the Situationist three-sided game, which naturally has three halves), but this was an example of why the phrase, "It's a game of two periods of 45 minutes or slightly longer each", was first coined.
Words must have been said at half-time. As Arsene is notorious for rarely losing his rag (peeved and withering are more his style), there are suggestions that RVP may have let rip, however I suspect the motivational fireworks may have been limited to Pat Rice noting: "You do know their manager is Alex McLeish, don't you?"
I saw McLeish in a pub just off Oxford Street a while back, a few months before the Wembley Carling Cup debacle. You don't get the impression that he is physically imposing when viewed on TV or on the touchline, but in the confines of a low-ceilinged pub it's clear why he was known as a player as Big Eck. He's not Peter Crouch tall, but he does stand out. Mind you, that may be partly down to his beacon-like head.
Naturally, he has decided to deflect attention from Villa's failings on the day ("Two nil, and you fucked it up", was the accurate view of the Emirates crowd) by demanding that RVP be arraigned for an elbow to nose collision. I didn't notice it live (Cuellar didn't go down), and the TV replay was inconclusive in terms of intent. What was priceless was McLeish's comments: "Look at my nose, it is a result of elbows all my career", followed by "I don't like to point the finger at players".
Having seen him in the pub, I can confidently confirm that his red nose, like his mentor Ferguson's, has more than one cause. I am happy to point that finger.
Every football match is a game of two halves (well, except for the Situationist three-sided game, which naturally has three halves), but this was an example of why the phrase, "It's a game of two periods of 45 minutes or slightly longer each", was first coined.
Words must have been said at half-time. As Arsene is notorious for rarely losing his rag (peeved and withering are more his style), there are suggestions that RVP may have let rip, however I suspect the motivational fireworks may have been limited to Pat Rice noting: "You do know their manager is Alex McLeish, don't you?"
I saw McLeish in a pub just off Oxford Street a while back, a few months before the Wembley Carling Cup debacle. You don't get the impression that he is physically imposing when viewed on TV or on the touchline, but in the confines of a low-ceilinged pub it's clear why he was known as a player as Big Eck. He's not Peter Crouch tall, but he does stand out. Mind you, that may be partly down to his beacon-like head.
Naturally, he has decided to deflect attention from Villa's failings on the day ("Two nil, and you fucked it up", was the accurate view of the Emirates crowd) by demanding that RVP be arraigned for an elbow to nose collision. I didn't notice it live (Cuellar didn't go down), and the TV replay was inconclusive in terms of intent. What was priceless was McLeish's comments: "Look at my nose, it is a result of elbows all my career", followed by "I don't like to point the finger at players".
Having seen him in the pub, I can confidently confirm that his red nose, like his mentor Ferguson's, has more than one cause. I am happy to point that finger.
Saturday, 28 January 2012
Work less for a better pension
Yesterday's post was too big. I ended up combining three days worth of musings on different topics, linked by the lump of labour fallacy. The common thread was the future of work: who should work and how long should they work for?
Today I came across a paper that points out that the lump of labour fallacy is itself a "counterfeit", being a straw man that is usually wheeled out to invalidate claims that reductions in working hours or work-sharing are beneficial for labour, even when such claims are not being made.
Marginally reducing hours, but not increasing headcount, seems to lead to improvements in productivity so that output levels are maintained. This makes intuitive sense. No one works at a constant rate, even on a production line. Small, probably unconscious, adjustments in work speed and the frequency and duration of breaks can easily accommodate a marginal variation in total hours.
Work-sharing also appears to boost productivity, to a degree that more than covers increased overheads due to fixed (per employee) costs. However, there is a timing problem with the introduction of work-sharing, namely that the higher fixed costs are incurred immediately while the boost to productivity takes a few weeks or months to arrive, due to reorganisation, training and other lag factors.
One way of avoiding this is to recycle productivity gains into reduced hours, i.e. by gradually reducing the working week in line with improved productivity. This would be on a results basis, i.e. the reduction would follow the gain.
In reality, such gains are dissolved into profit, which is then divided up in the usual way. As we know, employees have tended to lose out relative to company managers and owners. In other words, the current working week represents a subsidy to capital, which is why it hasn't fundamentally changed for a century despite technological improvements.
Correction. For many professions, the length of the working week has actually increased. Ironically, much of this is the result of technological improvement, e.g. remote access and BlackBerrys, combined with a cultural norm that values presenteeism and macho striving (lunch is for wimps). The sociological gulf between the work poor and the time poor is a popular trope, particularly among the latter.
The remorseless logic of capitalism is to reduce labour costs to zero, as this maximises profit. The externality of impoverished consumers (i.e. no one to buy your products) is trumped by the short-term gain for those businesses that are ahead of the curve.
A productivity remittance does not necessarily have to be made in shorter working hours. If the difference between increases in productivity and actual wage increases had been remitted to employees in mandatory pension contributions over the last 30 years, then we wouldn't have a pensions crisis today. We might even have avoided raising the state pension age.
Today I came across a paper that points out that the lump of labour fallacy is itself a "counterfeit", being a straw man that is usually wheeled out to invalidate claims that reductions in working hours or work-sharing are beneficial for labour, even when such claims are not being made.
Marginally reducing hours, but not increasing headcount, seems to lead to improvements in productivity so that output levels are maintained. This makes intuitive sense. No one works at a constant rate, even on a production line. Small, probably unconscious, adjustments in work speed and the frequency and duration of breaks can easily accommodate a marginal variation in total hours.
Work-sharing also appears to boost productivity, to a degree that more than covers increased overheads due to fixed (per employee) costs. However, there is a timing problem with the introduction of work-sharing, namely that the higher fixed costs are incurred immediately while the boost to productivity takes a few weeks or months to arrive, due to reorganisation, training and other lag factors.
One way of avoiding this is to recycle productivity gains into reduced hours, i.e. by gradually reducing the working week in line with improved productivity. This would be on a results basis, i.e. the reduction would follow the gain.
In reality, such gains are dissolved into profit, which is then divided up in the usual way. As we know, employees have tended to lose out relative to company managers and owners. In other words, the current working week represents a subsidy to capital, which is why it hasn't fundamentally changed for a century despite technological improvements.
Correction. For many professions, the length of the working week has actually increased. Ironically, much of this is the result of technological improvement, e.g. remote access and BlackBerrys, combined with a cultural norm that values presenteeism and macho striving (lunch is for wimps). The sociological gulf between the work poor and the time poor is a popular trope, particularly among the latter.
The remorseless logic of capitalism is to reduce labour costs to zero, as this maximises profit. The externality of impoverished consumers (i.e. no one to buy your products) is trumped by the short-term gain for those businesses that are ahead of the curve.
A productivity remittance does not necessarily have to be made in shorter working hours. If the difference between increases in productivity and actual wage increases had been remitted to employees in mandatory pension contributions over the last 30 years, then we wouldn't have a pensions crisis today. We might even have avoided raising the state pension age.
Friday, 27 January 2012
Checking for lumps
The 'lump of labour fallacy' is the erroneous belief that there is a fixed amount of work in the economy. This leads to a variety of claims: that a reduction in hours worked will free up more jobs; that if immigrants take jobs this must mean an equivalent number of natives lose them; and that automation means a reduction in labour (aka the Luddite fallacy).
This is believed to be a fallacy because the amount of work is not fixed. The economy is not a closed system (or "box economy"), so the specific change in hours, workers or automation may trigger other, countervailing changes, not to mention the simultaneous impact of other factors.
The specific claims made are dismissed on the grounds that: reduced hours often leads to increased productivity (same output in less time), which negates the need to increase labour capacity; immigration means more customers as well as workers, i.e. the size of the economy expands leading to more jobs overall; and technological substitution leads to workers moving to higher skill roles.
So the lump of labour is a fallacy. Or is it? Consider ...
1) The gender distribution of jobs
Over the last 50 years, more and more women have entered the jobs market. In parallel with this, there has been a slow but steady increase in the percentage of men who are economically inactive (i.e. neither employed nor seeking work).
In theory, an increase in women in jobs has meant an expansion in the economy and therefore greater demand overall, which should have led to a higher percentage of the economically active, however this has been offset by a tendency for male inactivity to increase. The loss of jobs by men is partly explained by the disproportionate impact of structural unemployment in the 80s (i.e. the collapse of heavy industry) and job polarisation in the 90s (see #3 below), though it's worth noting that the census data shows a steady decline since 1931 (they skipped the anomalous year of 1941 for obvious reasons).
The inference is that the relative decline in male employment and the increase in female employment is merely coincidental. The implication of the long-term data is that there may be a natural limit to the rate of economic activity.
There is also evidence that stagnation in median male earnings may have compensated for the increase in female participation, hence limiting growth. In other words, more working women may have served merely to maintain existing levels of consumption.
One oddity of the recent discussion about median wage stagnation is the finding that this started in the US in the 70s but didn't appear in the UK until the last decade. In fact, it looks like the better performance of female wages in the UK (relative to per capita GDP) from the 70s masked a comparable slowdown in UK male wage growth over the period, which then began to flatline after 2000. (See the graphs on page 19 of the Resolution Foundation's 2011 study Growth Without Gain?)
2) The impact on jobs of retirement
The increase in the UK state pension age has largely been discussed in terms of the imposition on the individual, i.e. working longer for the same. What has occasioned less comment is the impact that this, and the expectation of more people working beyond the state pension age, will have on employment.
The consensus view is that "there is no evidence that reducing the employment of older persons provides more job opportunities for younger persons" (see a 2011 UK government paper and an earlier 2009 US study.) However, most studies have focused on correlations in employment rates between young and old in the context of early retirement, i.e. would encouraging older employees to "free up slots" reduce youth unemployment.
There are fewer studies that look at the reverse, i.e. whether delaying retirement reduces hiring opportunities, largely because increasing the retirement age has only come onto the agenda recently. A study of the impact of a raised retirement age for women in Portugal in 1993, looking at specific firms, came to the conclusion that: "the new law had the effect of decreasing hirings by about one worker for each older worker retained in the firm."
There's an element of "no shit, Sherlock" to this. If an older worker defers retirement by 1 year, that means the resulting vacancy (let's assume the role is still needed) will be deferred by a year as well. During the period of transition to the new retirement age there must be a large number of such deferrals. As many of these would otherwise have created vacancies, there must therefore be a reduction in the total number of potential vacancies, adjusted for other factors, created during the transition.
The lump of labour fallacy, i.e. the explanation as to why it is wrong, would suggest that pushing the retirement age out creates a cohort who add further consumption to the economy and thus increase labour, but this assumes that people in their early 60s spend at a relatively high rate and then severely reduce their expenditure immediately upon retirement. Anecdotal evidence (I can't find anything better) suggests this isn't so. People reduce their expenditure well in advance of retirement, driven as much by lower need (kids gone) as by the looming carriage clock. It would be interesting to find some real data on this.
What this implies is that the change in the state pension age will result in a relative drop in vacancies during the transition years. These are absolute losses, i.e. there is no compensating above-trend increase in vacancies after the transition, so all other things being equal, this represents a net increase in unemployment.
Will this be significant? About 800,000 people turn 65 in 2012, which reflects the post-war baby boom in the late 1940s. Let's assume about 50% are in employment. People who retire early will probably still retire early, and it is expected that the abolition of the default retirement age will result in many extending their working life, so let's discount it by a further 50%. This still leaves us with a potential addition of 200,000 to unemployment, ceteris paribus.
The average retirement age is now increasing, partly due to poorer pensions and partly due to people electing to work beyond the state pension age. This will increase the working population, however it will probably be offset by fewer school leavers due to the falling birthrate since the 90s. In fact, while the working population may increase in absolute terms, it may decline as a percentage of the total population due to increasing longevity.
I suspect that much of this increase isn't actually in high-skilled creative and technical roles, but is actually more "management". The ratio of managers to managed in business is roughly 1:10. I think this is understated as it doesn't include part-time managers (e.g. team leaders) plus "management support" staff who are effectively extensions of the formal management tier.
The ratio of officers to other ranks in the military is about 1:6. I suspect the true management ratio in business is not far off that, perhaps 1:8. While they're not run in quite the same way, (most) businesses employ the same basic command and control paradigm as the military.
It can be argued that today we have many more people who manage "things" rather than people, hence we need more managers, but that is often just a matter of job title status. A database manager is really just a skilled machine operative.
My personal experience of IT is that many so-called IT professionals know little or nothing about the subject. They have either mastered some arcane knowledge (i.e. they are an advanced user of a specific software package) or they are a business generalist (project managers, business analysts etc.) It was interesting to note how many refugees from banking in 2008 admitted they had never fully understood what they were doing (I'm currently reading David Kynaston's City of London: The History, which reveals that this attitude has been common among younger employees for almost two centuries).
Disciplines with professional qualifications, like accountancy, are no better. Most accountants don't do accountancy (it's not really that complicated and software does most of it for you). The qualification is usually a passport to a more general business role, i.e. a species of "management".
Professional qualifications, and the payment necessary to secure them, have always been an entry fee for access to high-pay jobs, as much as they have been about engineered scarcity or maintaining standards.
As wage inequality has grown, we have seen an increase in both the entry fee and entrant desperation for high-end careers. The minor furore over internships is an example of this: high-value roles being auctioned at charity events for £000s, and the well-off subsidising their kids to work a year or more for no pay.
What I think the increase in management, professional and technical staff is hiding is not grade inflation but "outdoor relief" for the middle classes (the phrase originates with John Bright, condemning the use of the Foreign Office to create jobs for aristocrats in the 19th century).
Conclusion
It looks to me as if there is a natural (or preferred) rate of economic activity and that we will adapt organisations and roles to maintain it. In other words, we act as if there is a fixed lump of labour.
Structural unemployment (wrong skills, wrong place, wrong time) is less a failure to adapt productive labour and more a failure to adopt pseudo-productive work. Not every ex-miner can become a CSR administrator.
This is believed to be a fallacy because the amount of work is not fixed. The economy is not a closed system (or "box economy"), so the specific change in hours, workers or automation may trigger other, countervailing changes, not to mention the simultaneous impact of other factors.
The specific claims made are dismissed on the grounds that: reduced hours often leads to increased productivity (same output in less time), which negates the need to increase labour capacity; immigration means more customers as well as workers, i.e. the size of the economy expands leading to more jobs overall; and technological substitution leads to workers moving to higher skill roles.
However, at a certain point, the lump of labour fallacy will turn out to be true. For example, marginal reductions in hours worked may not impact on job numbers, but larger reductions surely do, e.g. a job-share produces 2 jobs from 1.
So the lump of labour is a fallacy. Or is it? Consider ...
1) The gender distribution of jobs
Over the last 50 years, more and more women have entered the jobs market. In parallel with this, there has been a slow but steady increase in the percentage of men who are economically inactive (i.e. neither employed nor seeking work).
The numbers will be muddied by the impact of changes in work patterns (part-time and temporary) and the fluctuation in the rate of structural unemployment (between 1 and 3 million since the 1980s), but there appears to be a clear thread through the last 90 years: the number of people economically active, as a proportion of the population, has stayed broadly the same (just over 60%, according to England & Wales Census data), but it has become more evenly distributed by gender.
On the face of it, this would appear to support the lump of labour fallacy in relative terms, if not in absolute terms - i.e. the total economically active population has increased with general population growth, but as a proportion it has stayed pretty constant.
On the face of it, this would appear to support the lump of labour fallacy in relative terms, if not in absolute terms - i.e. the total economically active population has increased with general population growth, but as a proportion it has stayed pretty constant.
In theory, an increase in women in jobs has meant an expansion in the economy and therefore greater demand overall, which should have led to a higher percentage of the economically active, however this has been offset by a tendency for male inactivity to increase. The loss of jobs by men is partly explained by the disproportionate impact of structural unemployment in the 80s (i.e. the collapse of heavy industry) and job polarisation in the 90s (see #3 below), though it's worth noting that the census data shows a steady decline since 1931 (they skipped the anomalous year of 1941 for obvious reasons).
The inference is that the relative decline in male employment and the increase in female employment is merely coincidental. The implication of the long-term data is that there may be a natural limit to the rate of economic activity.
There is also evidence that stagnation in median male earnings may have compensated for the increase in female participation, hence limiting growth. In other words, more working women may have served merely to maintain existing levels of consumption.
One oddity of the recent discussion about median wage stagnation is the finding that this started in the US in the 70s but didn't appear in the UK until the last decade. In fact, it looks like the better performance of female wages in the UK (relative to per capita GDP) from the 70s masked a comparable slowdown in UK male wage growth over the period, which then began to flatline after 2000. (See the graphs on page 19 of the Resolution Foundation's 2011 study Growth Without Gain?)
2) The impact on jobs of retirement
The consensus view is that "there is no evidence that reducing the employment of older persons provides more job opportunities for younger persons" (see a 2011 UK government paper and an earlier 2009 US study.) However, most studies have focused on correlations in employment rates between young and old in the context of early retirement, i.e. would encouraging older employees to "free up slots" reduce youth unemployment.
There are fewer studies that look at the reverse, i.e. whether delaying retirement reduces hiring opportunities, largely because increasing the retirement age has only come onto the agenda recently. A study of the impact of a raised retirement age for women in Portugal in 1993, looking at specific firms, came to the conclusion that: "the new law had the effect of decreasing hirings by about one worker for each older worker retained in the firm."
There's an element of "no shit, Sherlock" to this. If an older worker defers retirement by 1 year, that means the resulting vacancy (let's assume the role is still needed) will be deferred by a year as well. During the period of transition to the new retirement age there must be a large number of such deferrals. As many of these would otherwise have created vacancies, there must therefore be a reduction in the total number of potential vacancies, adjusted for other factors, created during the transition.
The lump of labour fallacy, i.e. the explanation as to why it is wrong, would suggest that pushing the retirement age out creates a cohort who add further consumption to the economy and thus increase labour, but this assumes that people in their early 60s spend at a relatively high rate and then severely reduce their expenditure immediately upon retirement. Anecdotal evidence (I can't find anything better) suggests this isn't so. People reduce their expenditure well in advance of retirement, driven as much by lower need (kids gone) as by the looming carriage clock. It would be interesting to find some real data on this.
What this implies is that the change in the state pension age will result in a relative drop in vacancies during the transition years. These are absolute losses, i.e. there is no compensating above-trend increase in vacancies after the transition, so all other things being equal, this represents a net increase in unemployment.
Will this be significant? About 800,000 people turn 65 in 2012, which reflects the post-war baby boom in the late 1940s. Let's assume about 50% are in employment. People who retire early will probably still retire early, and it is expected that the abolition of the default retirement age will result in many extending their working life, so let's discount it by a further 50%. This still leaves us with a potential addition of 200,000 to unemployment, ceteris paribus.
The average retirement age is now increasing, partly due to poorer pensions and partly due to people electing to work beyond the state pension age. This will increase the working population, however it will probably be offset by fewer school leavers due to the falling birthrate since the 90s. In fact, while the working population may increase in absolute terms, it may decline as a percentage of the total population due to increasing longevity.
3) The change in the type of work
Technological changes since the 1970s have led to "polarisation", reducing the number of jobs in the middle income range (i.e. median pay). High skill jobs have grown, as have low skill jobs. The former implies a greater emphasis on creative and technical roles, the latter on personal services that can't easily be automated or offshored (e.g. care).
The increase in high skill jobs has been held up as a good thing, on the assumption that we are gradually upskilling as a nation and doing more technical/professional jobs in the "knowledge economy." This has been offered as an upside in tandem with the downside of the export of productive roles (particularly in heavy industry and manufacturing) as a consequence of globalisation.
The increase in high skill jobs has been held up as a good thing, on the assumption that we are gradually upskilling as a nation and doing more technical/professional jobs in the "knowledge economy." This has been offered as an upside in tandem with the downside of the export of productive roles (particularly in heavy industry and manufacturing) as a consequence of globalisation.
I suspect that much of this increase isn't actually in high-skilled creative and technical roles, but is actually more "management". The ratio of managers to managed in business is roughly 1:10. I think this is understated as it doesn't include part-time managers (e.g. team leaders) plus "management support" staff who are effectively extensions of the formal management tier.
The ratio of officers to other ranks in the military is about 1:6. I suspect the true management ratio in business is not far off that, perhaps 1:8. While they're not run in quite the same way, (most) businesses employ the same basic command and control paradigm as the military.
It can be argued that today we have many more people who manage "things" rather than people, hence we need more managers, but that is often just a matter of job title status. A database manager is really just a skilled machine operative.
My personal experience of IT is that many so-called IT professionals know little or nothing about the subject. They have either mastered some arcane knowledge (i.e. they are an advanced user of a specific software package) or they are a business generalist (project managers, business analysts etc.) It was interesting to note how many refugees from banking in 2008 admitted they had never fully understood what they were doing (I'm currently reading David Kynaston's City of London: The History, which reveals that this attitude has been common among younger employees for almost two centuries).
Disciplines with professional qualifications, like accountancy, are no better. Most accountants don't do accountancy (it's not really that complicated and software does most of it for you). The qualification is usually a passport to a more general business role, i.e. a species of "management".
Professional qualifications, and the payment necessary to secure them, have always been an entry fee for access to high-pay jobs, as much as they have been about engineered scarcity or maintaining standards.
As wage inequality has grown, we have seen an increase in both the entry fee and entrant desperation for high-end careers. The minor furore over internships is an example of this: high-value roles being auctioned at charity events for £000s, and the well-off subsidising their kids to work a year or more for no pay.
What I think the increase in management, professional and technical staff is hiding is not grade inflation but "outdoor relief" for the middle classes (the phrase originates with John Bright, condemning the use of the Foreign Office to create jobs for aristocrats in the 19th century).
Conclusion
We are surrounded by robots, they just don't look like Robby from Forbidden Planet. That said, there are still plenty of jobs that could be automated. In other words, we are in the middle of a transition.
We seem to be managing this transition by creating more overhead roles - i.e. the productivity gains of automation are subsidising management and professional jobs that we had hitherto not felt the need for.
You don't have to believe we will reach a post-scarcity state to foresee a situation in which the majority of genuine production in the economy is automated. Most of us will then either be doing pseudo-productive jobs (i.e. disguised consumption), or we will have become artists who rarely sell a work.
It might be argued that modern capitalism would not stand for such a degree of inefficiency and waste, however another way of viewing it is that there is plenty of loot for all and we do need to circulate wealth to consumers in order to keep the show on the road. This is as good a way as any.
It was a popular trope last year to compare corporate looters with the rioters in London and elsewhere. This focus on the extremes conveniently ignored the degree of institutional looting undertaken by the silent majority in management.
We seem to be managing this transition by creating more overhead roles - i.e. the productivity gains of automation are subsidising management and professional jobs that we had hitherto not felt the need for.
You don't have to believe we will reach a post-scarcity state to foresee a situation in which the majority of genuine production in the economy is automated. Most of us will then either be doing pseudo-productive jobs (i.e. disguised consumption), or we will have become artists who rarely sell a work.
It might be argued that modern capitalism would not stand for such a degree of inefficiency and waste, however another way of viewing it is that there is plenty of loot for all and we do need to circulate wealth to consumers in order to keep the show on the road. This is as good a way as any.
It was a popular trope last year to compare corporate looters with the rioters in London and elsewhere. This focus on the extremes conveniently ignored the degree of institutional looting undertaken by the silent majority in management.
It looks to me as if there is a natural (or preferred) rate of economic activity and that we will adapt organisations and roles to maintain it. In other words, we act as if there is a fixed lump of labour.
Structural unemployment (wrong skills, wrong place, wrong time) is less a failure to adapt productive labour and more a failure to adopt pseudo-productive work. Not every ex-miner can become a CSR administrator.
Monday, 23 January 2012
Sub Par Mea Culpa
I would normally leave the Emirates after a 2-1 defeat to Manure feeling mighty depressed. That I didn't on this occasion is probably due to my more realistic expectations for the season: we're not going to win the league.
After a first half in which we were very nervous (poor passing, tentative tackling, hoofed clearances), I thought we were lucky to reach half-time only 1 goal down. The Mancs had played well enough to be 2 or 3 up, damn them.
Of course, all teams miss chances, which we proceeded to prove in spectacular fashion when first van Persie and then Rosicky passed up near open goals early in the second half. We deserved the equaliser for our spririted fightback, but we were obviously flying on a wing and prayer.
Both our full-backs were having poor games, in part because Carrick was allowed enough time in the middle of the park to launch long balls to their wingers. Ramsey and Rosicky weren't closing him down quickly enough. Arguably, van Persie should have dropped deeper and compressed their lines.
Wenger has come in for much criticism for his substitution of The Ox, both at the time and subsequently, but it seemed a reasonable call to me. The youngster was great in attack but he left Djourou (and then Yennaris) badly exposed, and it's likely he was running out of gas. Theo was left on, I think, because he offered his full-back more cover.
I'd personally have gambled in leaving the The Ox on, at least for another 10 minutes, perhaps bringing Benayoun on into the middle and pushing Rosicky out wide.
It looked like Wenger was going to make a double sub of Park and Arshavin just before the equaliser. Presumably the idea was to chase the game by getting Park to push on Carrick, which is largely what he did when he finally got on the pitch.
Putting the Russian on instead of Benayoun or Miquel looked ambitious. We should perhaps have tried to hold out for a draw. I'd have been happy with that in the circumstances. Few fans seem to have noticed that Wenger subbed one attacker with another, or that he pushed Mertesacker up for the last 10 minutes. He was trying to win the game, not lose it.
Arshavin was adjudged to be responsible by many for Manure's winner, but the real error was Vermaelen drifting into the centre instead of coming out to double-up on Valencia. An echo of his error for their first goal. He instinctively positions himself as a centre-back, and why not.
Our fundamental problem remains a lack of full-backs due to injury. This makes us vulnerable down the flanks, but it also limits our ability to create 2-on-1 situations in attack, a key feature when playing 4-5-1.
One thing that did occur to me while watching the TV highlights later is the unfairness of asking a manager to justify a substitution. If he gets it right, particularly if the sub scores an 89th minute winner, he is congratulated for his tactical masterstroke. This ignores the fact that what the substitution achieved may not have been what the manager intended, i.e. he may have benefited from luck more than judgement.
Conversely, if the sub concedes a goal, the accusation thrown at the manager is essentially "you did that!" Both attitudes assume far more control on the part of the manager than is credible. Given that stress is the result of expectation exceeding control of outcome, you can see why managers react peevishly when asked to justify their action.
The response among Arsenal fans has been over the top. As usual, all you can hear is the shouting. The Gooner even suggests this is evidence of "the onset of senility." If he had tried to send on Pat Rice, maybe.
After a first half in which we were very nervous (poor passing, tentative tackling, hoofed clearances), I thought we were lucky to reach half-time only 1 goal down. The Mancs had played well enough to be 2 or 3 up, damn them.
Of course, all teams miss chances, which we proceeded to prove in spectacular fashion when first van Persie and then Rosicky passed up near open goals early in the second half. We deserved the equaliser for our spririted fightback, but we were obviously flying on a wing and prayer.
Both our full-backs were having poor games, in part because Carrick was allowed enough time in the middle of the park to launch long balls to their wingers. Ramsey and Rosicky weren't closing him down quickly enough. Arguably, van Persie should have dropped deeper and compressed their lines.
Wenger has come in for much criticism for his substitution of The Ox, both at the time and subsequently, but it seemed a reasonable call to me. The youngster was great in attack but he left Djourou (and then Yennaris) badly exposed, and it's likely he was running out of gas. Theo was left on, I think, because he offered his full-back more cover.
I'd personally have gambled in leaving the The Ox on, at least for another 10 minutes, perhaps bringing Benayoun on into the middle and pushing Rosicky out wide.
It looked like Wenger was going to make a double sub of Park and Arshavin just before the equaliser. Presumably the idea was to chase the game by getting Park to push on Carrick, which is largely what he did when he finally got on the pitch.
Putting the Russian on instead of Benayoun or Miquel looked ambitious. We should perhaps have tried to hold out for a draw. I'd have been happy with that in the circumstances. Few fans seem to have noticed that Wenger subbed one attacker with another, or that he pushed Mertesacker up for the last 10 minutes. He was trying to win the game, not lose it.
Arshavin was adjudged to be responsible by many for Manure's winner, but the real error was Vermaelen drifting into the centre instead of coming out to double-up on Valencia. An echo of his error for their first goal. He instinctively positions himself as a centre-back, and why not.
Our fundamental problem remains a lack of full-backs due to injury. This makes us vulnerable down the flanks, but it also limits our ability to create 2-on-1 situations in attack, a key feature when playing 4-5-1.
One thing that did occur to me while watching the TV highlights later is the unfairness of asking a manager to justify a substitution. If he gets it right, particularly if the sub scores an 89th minute winner, he is congratulated for his tactical masterstroke. This ignores the fact that what the substitution achieved may not have been what the manager intended, i.e. he may have benefited from luck more than judgement.
Conversely, if the sub concedes a goal, the accusation thrown at the manager is essentially "you did that!" Both attitudes assume far more control on the part of the manager than is credible. Given that stress is the result of expectation exceeding control of outcome, you can see why managers react peevishly when asked to justify their action.
The response among Arsenal fans has been over the top. As usual, all you can hear is the shouting. The Gooner even suggests this is evidence of "the onset of senility." If he had tried to send on Pat Rice, maybe.
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