Pressure of work
Two models of capitalism, Anglo-Saxon and European, are on offer - and we've made the wrong choice
By Madeleine Bunting
Across Europe, a major battle is developing over work. How hard do you need to work? What kind of job security can you expect? How you organise the workplace, the kind of workforce you develop, the impact of those decisions on social capital (the care of children, the vibrancy of communities, the wellbeing of the population) - these are the threads of a debate that has gathered strength across Europe. They will have a significant impact on the next round of the French presidential elections and the German elections in the autumn, and they were dramatically demonstrated in Italy's general strike last week.
The conflict lies between those who argue that the European labour market must be reformed, that greater flexibility is desperately needed if Europe is to close the gap with the US whose GDP is more than 25% above that of the EU, and create the jobs needed to bring unemployment down. The European Central Bank spelled out what it meant by flexibility in a report last month - it urged European governments to make it easier for employers to sack workers, allow higher wage differentials and reform tax and benefit systems to encourage people into work.
On the other side are those who argue that this form of flexible labour market may generate wealth and jobs, but it carries an unacceptable price. The hundreds of thousands of Italians who marched against labour reforms in recent weeks look at America and see a society of huge inequality, job insecurity and a work culture that destroys quality of life. The bulk of the jobs it creates are increasingly low-paid personal services to meet the needs of the overworked; in effect, a workforce underclass emerges in which inequality is entrenched.
Thanks, but no thanks: if that is the price of creating wealth, a significant number of Europeans are stubbornly insisting that they are not interested. They argue that there are characteristics of their quality of life - time for their children, time for pleasure, a degree of social cohesion, security and continuity of communities - that they value more than higher GDP. The French proudly talk of a "right to be lazy" and one of Jospin's most significant achievements was the 35-hour week.
What drives this debate in Europe are American companies, and American-educated managerial elites who argue for the Anglo-Saxon deregulated labour market. But, unlike in Britain, the labour movements in much of Europe are still powerful enough to offer resistance. It is a clash of two forms of capitalism: the Anglo-Saxon model and a European alternative that takes into consideration social as well as economic indicators.
Britain has a bizarre position in this debate. It made the choice two decades ago, and imported US-style management practices. Now it no longer has a trade union movement strong enough to rally the opposition. With extraordinary acquiesence, the British have accepted the longest working hours, the least job security and the biggest pay differentials in Europe. We may occasionally squeal at a particularly egregious pay package for some undeserving corporate executive, but for the most part the British workforce is putting up with more stress and more pressure than ever before. Uncomplainingly, we have swallowed hook, line and sinker the lie that there is no alternative.
So now, as Europe wrestles with its future, Britain is on the touchline with New Labour cheering on the liberalisers in Italy and Spain. Government ministers may enjoy the pavement life of Bologna or Barcelona, but they're quite happy to throw their weight firmly behind those attempting to dismantle the legal and economic infrastructure that underpin a rich social fabric. Nor does New Labour flinch from cosying up to liberalisers who frequently invoke the inspiration of Margaret Thatcher.
Far from New Labour rowing back on the Tories' love affair with the American workplace, as Richard Scase, professor of management points out, it has extended American managerialism to the public sector. Now, public and private sector are wrestling with decentralised management structures, targets, assessments, job insecurity and monitoring. Much of this has been sold to the workforce as "empowerment", whereas it is often the opposite. If a middle manager is given a target and told to ensure it is met, she or he is left with all the risk of whether it is achieved or not, while the implied autonomy is close to fictional. Frequently, the higher risk brings with it longer working hours and stress. Meanwhile the senior management escapes the accountability built into traditional hierarchies, as Scase argues in his new book, Living in the Corporate Zoo.
One of America's proudest exports over the past decade has been its management practices, to which it attributes its technological lead and its leap in productivity during the 90s. After the collapse of the dotcom bubble and Enron, those claims are looking shaky. Increasingly, the conclusion is that the single biggest achievement of American managerialism has been to make people work harder - a month more work a year than 20 years ago, claims US economist Juliet Schor. How has America done it? Quite simple: it is Big Brother transferred to the workplace. Use fear, trust no one. Corporate gurus such as Jack Welch of GE recommended getting rid of 10% of your workforce a year just for its salutary fear-inducing properties; Andrew Grove, chief executive of Intel, titled his book, Only the Paranoid Survive.
Britain's 20-year love affair with US managerialism hasn't worked. It has failed to improve British productivity, which lags way behind European competitors. It may even have proved counterproductive, resulting in a bitter, unhappy workforce. A recent Work Foundation report showed that the morale of the British workforce plunged in the 90s: the British don't like the amount of work they have to do, nor their hours, nor their pay. Stress claims have soared 12-fold in the past year.
So the debate Europe is having on work is one that the British badly need. It is a measure of the bludgeoning of the British trade union movement, that its attempts to provoke the debate are barely heard. That's a loss that managers might now be beginning to recognise; they need strong partners to shape the 21st-century working culture. This is not just about tweaking a few hours for working mums: its about a radical redirection away from the US dependence on long hours and fear as a management tool, towards a European model, such as that of the Netherlands or Finland, where a thriving entrepreneurial culture emerges from the close cooperation of strong trade unions, management and a generous welfare state. It is about substituting a Big Brother template with one that promotes cooperation, trust and equality.
Richard Scase, Living in the Corporate Zoo (Capstone Wiley)
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Carl
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