Economic management

I heard this morning that the British government plans to subsidise the purchase of electric cars, which cost far more than the petrol driven kind. This is simply the latest example of the state’s role in economic and technological development, a role denied by those who call for minimal government interference in the economy. Though this action may be anathema to believers in free-market capitalism, history shows us that it has been the norm in all the major economies. In truth, market forces only play a part, and often a bit part, in technological development. However, market forces play a major part in the West in losing the technological capacity once developed. American companies in particular have been guilty of outsourcing their core competencies on cost grounds, to the extent that the American military is now dependent on foreign producers for important systems.

Allow me to provide a simple case study of the process.

A government decides that it requires the development of X high-tech system. The contract to develop X is given to company A.

Company A approaches research establishment B, which is publicly funded, in part at least. The company and research establishment jointly come up with the answers, and company A produces the required system.

Company A then gains government agreement to the commercial application of the technology, and develops a product based on the technology. That technological capacity has now become a core competency, or part of one, for company A, and a range of products may emerge from it.

Some way down the road, company A decides that domestic production is expensive, and production is outsourced abroad.

A little further down the road, company A decided that continuing research and development associated with these products is better done alongside their production, and that R&D becomes outsourced.

The end of the road approaches.

This has happened in America. It is a process that post-war Japan rejected and became the world’s second biggest economy as a result. Pursue Thatcherite economics if you must, but don’t whinge about the outcome.

Madness!

A friend who is staying with us for a couple of nights has told me a tale that I find incredible. Some time ago he decided to apply for a credit card, his first ever. He eventually received a rejection, and telephoned the company to ask why he had been refused. He was told that they had checked his credit rating and found he didn’t have one, so he was classified as a ‘bad risk’. He explained that he wouldn’t have a rating because he never went into debt. Like me, John believes that if he hasn’t got the money, don’t buy.

The company persisted in seeing him as a bad risk, even when he told them that he owned two houses, a hotel and doesn’t owe anyone a penny. Eventually, he was offered a solution. Go out and buy something on credit, pay it off, and obtain a credit rating. He declined to accept their advice.

French lessons

The juxtaposition of two items in my English language French newspaper suggests there are some things that the Brits can learn from France.

The first item is about immigrants parked on the French coast on their way, they hope, to England. The item cites an Afghan couple, he 25 she 18, who have a small baby living with them in an unofficial camp nicknamed The Jungle. The husband tells us that there is nothing for them in France, while the wife speaks of her dream of having a nice, warm apartment in London. They clearly know that if they manage to enter England they will be given money and accommodation. Meanwhile, in France, their camp was raided by the CRS and cleared of occupants. The only concession to this couple was they were allowed to stay where they are, because of the baby. In France they are supported entirely by volunteers and have no claim on the French state.

The second item was a letter from an Englishman warning anyone planning a return to the UK to think twice. He has several reasons for saying this, but the one that struck me most forcefully concerned prices charged by public utilities, those parts of the infrastructure that were once publicly owned, but were sold off to the private sector. He specifies electricity, pointing out that whereas EDF is allowed only modest increases in France, its price increases in the UK are far in excess of these limits. This corresponds with the tales I read of gas prices, rail fares and so on. Privatisation appears to have been no more than a licence to rip people off.

The Interview

It is fairly common now to see criticism of poor grammar in the media, and particularly in the BBC. I agree with those critics, but what irritates me, as someone who used to train managers in negotiating and interviewing skills, is the very low standard of interviewing one hears on the radio. I listen daily to The Today Programme and despair when I hear the interviews, or confrontations as many are more properly called.

Quite apart from the frequent, unnecessary interruptions, the style of questioning is entirely wrong. This morning, Justin (?) asked an interviewee ‘Does it depress you when….’ Has he not been told to avoid asking ‘leading’ questions? A leading question is one that indicates the answer the interviewer expects or seeks. It steers the interviewee, so making the answer worthless as an indication of their real opinion. Leading questions are now common on The Today Programme.

Equally worthless is the ‘piggyback’ form of questioning. With this form, the interviewer asks a question, but before the interviewee can reply, a rider, qualification or explanation is offered in the form of a second question which is slightly different from the first. This allows the interviewee an option: which to answer. On countless occasions I have heard politicians use the piggyback as a means of escaping the original question.

Please, BBC, train your interviewers to use ‘open’ questions, those that give no hint of the interviewer’s opinion or wish, but hang there, demanding a response in the interviewees own words. They are far more effective.

Help!

I don’t usually have difficulty with the English language, but I am at a loss to understand a word now. A report in the DT today mentions that David Beckham was ‘mulleted’. Does that mean that he wore spurs, had a fish in his mouth, or what?

Reality

Two issues of corruption being exposed, and the consequences of exposure, are presently exercising the British. One case is old, and one very much in the present. They coincide in today’s discussion because we have learned that Prince Andrew spoke scathingly of those investigating the Saudi case some years ago, while the BBC yesterday broadcast revelations about bribery in FIFA. In common with the target of the noble prince’s ire, the BBC team have been criticised for their exposure.

Any attempt to counter this criticism is met with the exhortation to ‘get real’, to come into the ‘real world’, and so on. Well, as someone with long and varied experience of the real world I understand such a response, but can we be clear on the nature of the reality to which we are urged to genuflect? It is a reality that proclaims it wrong to confront dishonesty, corruption and untrammelled greed because the cost of doing so is too high. In short, the adherence to a moral line has a price higher than we are prepared to pay.

As a realist, I understand that position. All I ask is that we hear no more of the superiority of ‘British values’. The reality is that the British are as ready as any other peoples to stick their snouts in the trough and to collaborate in corruption.

Retail Banking

Whatever happened to the retail banks in which the manager was available to the customer, and in which staff knew the rules and were able to advise people about their accounts? For some years now, my local branch has resembled a shop selling a variety of financial ‘products’. Staff are called advisers or counsellors, but haven’t a clue beyond the blurb in their package.

This weekend, I found the remains of a ten euro note that my young dog had somehow got his teeth on. The serial number was clear, so my wife telephoned the bank, not our branch, we don’t have the telephone number for that, but the regional offices. She explained the situation and asked if the damaged note could be exchanged for one that had not been chewed. ‘I don’t think so.’ came the reply. My wife is not one to be fobbed off. ‘Is that what you think so, or what you know?’ she asked. The ‘counsellor’ then asked my wife to hold on while she consulted a colleague. After several minutes of waiting she was told to consult the branch.

Oh, for the old bank manager.

The Rule of Law

A little while ago someone on MyT wrote in defence of ‘the rule of law’, arguing that the law must be respected even when we disagree with it. The plea was made because of growing disrespect for the courts and the police. Nowhere in the piece did he mention the need for the offices of the law to respect the will of the people. He argued that anarchy was the only alternative to the rule of law. While that may be correct, one must distinguish between the principle and the practice. What should be done when specific laws, or legal interpretations, disregard the will of the people, and themselves threaten to bring anarchy to the streets? What is to be done when the courts release people like the man on the right, the murderer of Schoolmaster Phillip Lawrence, a man whose lawyer told us, had ‘learned his lesson’. His release was ‘contrevorsial’, but the protests were ignored (As usual). Within months, this creature has been rearrested for a violent crime. The rule of law in specifics seems to be flawed.