Monday, 23 August 2010

Aristotle: The 'evil of ignorance'

For some time the wise and learned have reflected on the use, and misuse of power, and the purpose and values within our society ...

For instance here's just a few of the things Aristotle had to say ...

"Democracy is when the indigent, and not the men of property, are the rulers"

"In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme"

"The trade of the petty usurer is hated with most reason: it makes a profit from currency itself, instead of making it from the process which currency was meant to serve. Their common characteristic is obviously their sordid avarice*"

"Poverty is the parent of revolution and crime"

"No notice is taken of a little evil, but when it increases it strikes the eye"

"It is the mark of an educated mind to be able to entertain a thought without accepting it"

"All persons ought to endeavor to follow what is right, and not what is established"

"The only good is knowledge and the only evil is ignorance"

"You will never do anything in this world without courage. It is the greatest quality of the mind next to honor"

Insights (and challenges) arguably just as, if not more, relevant today ... which capture in simple words the type of Poweromics we still face today, as well as the "evil of ignorance" (or more specifically Ignoromics**) that allows it to continue.

* Avarice - Extreme greed for wealth or material gain.
** Ignoromics - People who are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better.

Friday, 13 August 2010

A 'cultural shift' is required ...

Liam Fox, Defence Secretary, said today that "the Strategic Defence Spending Review alone will not be enough to sort out problems facing Defence". He went on to highlight "the need for a full review of how the MoD is run", and the need for both structural reform and a cultural shift, to ensure efficient provision of defence capability and the generation and sustainment of operations.

The review and reform includes two broad principles that will be followed

1. Structural reform involving re-organising into 3 pillars, policy & strategy, the armed forces and procurement & estates, to make the decision stop the constant over-specification and re-specification of projects, which have resulted in so many cost overruns and programme delays ...

2. A cultural shift, to a 'leaner' and less centralised organisations, combined with devolved processes which carry greater accountability and transparency ... 

Both of these are to driven by a hard-hitting steering group Defence Reform Unit of internal and external experts who will "guide the hard thinking and challenge pre-conceptions" ...

He said "fundamental assumptions" about tour lengths and intervals for armed personnel must be challenged "taking into account the varying pressures on our personnel resulting from widely varying missions".

"We need to review all our current practices to ensure that we are using our greatest asset - our people - to the best of our ability."

He said he was not intending to merge the armed forces but would "consider whether the current senior rank structure across the services is appropriate ... We cannot demand efficiency from the lower ranks while exempting those at the top."

It appears that a little Leanomics may filter in here, challenging the status quo, and ensuring money gets steered to where it should be, and away from 'bureaucracy and failure'.  Let's see if he gets it right, involves front line staff and the right people who really understand '21st Century Lean Management Practice' (both inside and outside of the MoD) and delivers ... or just gives top jobs to his 'mates' and fails to create a real 'Lean' culture.  

Sunday, 8 August 2010

Watch out for the deflecting of blame ...

Following my last post, it was interesting to observe the comments made on Flanders' blog (which resulted in me adding a few myself).  For me the key point arising is the risk of tarring particular generations with the same brush ... and starting to blame one another ... both of which are wrong.

One blogger (Boilerbill) commented ... 

"It is curious how an article pointing out that a certain sector of society has done relatively well, turns into 'the selfish generation'. Being selfish implies that there was something deliberate about what has happened - for the most part there wasn't. If there are villains, they are those who built the economic models - the economists and politicians.
I receive a public sector pension and for most of the time more was being taken in, than was being paid out - in fact we were subsidising general taxation. As early as the mid 70s those who had taken the responsibility for predicting our economic future should have seen that it was a Ponzi scheme and change it to a funded pension. People were complaining about paying too much - that would have been politically and economically right time to introduce a change which would have avoided part of the pensions crisis. In those days people trusted with handling money - especially savings - were held in high regard. Anything to do with pensions was regarded as boring but safe. People bought pensions wanting not be a burden on their children. They were not economic modellers.
This is just one example of where there may have been unease about what was happening and the economic modellers got it wrong. Like any person, you take what is on offer. You may question its viability, but when the experts tell you that it is OK, you go on and take it. The politicians are supposed to tell you how it is. In the past we were told that everything is going to be all right, but a bit too complicated for you to ever understand. It seemed all right so we re-elected them. Now we are told the future is bleak. Politically that is a good message to make - blaming it on Gordon won the election, but blaming it on a declining generation may win future elections.
There is a problem and the government is being over generous to some sections. The balance needs to be changed. The economic model which we were told would work has failed. But ask any of those born between '45 and '60 and they will tell you they were trying to build a future for their children. The fact that it didn't work out may be their fault for failing to understand the limits of the economic model, but there was little intentionality, so to label them as selfish says more about the accusers than about that generation" 

I had to agree, and commented ... 

"I agree. IMHO the key point with this article (and post 229) is that the small minority in power who practice Poweromics* (e.g. Politicians, Bankers) are able to do so (and successfully line their own pockets & flourish) without being challenged in a world surrounded by Ignoromics**. If you want to challenge Poweromics ... you have to reduce Ignoromics (as they are partners in crime).
IMHO there will be no new 'leaders' emerging whilst there are so few people wanting someone new to 'lead' ... and I'm afraid Ignoromics still prevails at this time hence it hasn't happened yet ... IMHO this won't be the case forever ... but things will unfortunately probably have to get much worse before it does ... unless people can find a way to fast-track the removal of Ignoromics, whilst those in power practicing Poweromics (and preparing for this) throw everything they can at them to stop them.
David Clift
'For evil to flourish, all it needs is for good men to do nothing' [Edmund Burke]
* Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed.
** Ignoromics = People are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better (i.e. Type 1 = Ignorance, Type 2 = Apathy).

and followed this up further by saying ...

IMHO the issue is less to age/generation and more to do with type of people we currently have in positions of power (e.g. Government, media, corporations, banks) ... i.e. Egocentric & Ethnocentric instead of more Worldcentric people (for definitions go to ... e.g. take a look at a small extract from this link below:
"Introducing tighter regulations for bankers or politicians does not raise their level of maturity, morality or their ethics, it just limits what they can get away with. No, it is the type of people, the Ethnocentrics themselves, that have to go. Worldcentric people by definition and by their nature would not have abused the old regulations, let alone need new ones. Anyone below Worldcentric on the “chart” should not be selected or elected into positions of leadership in politics or big corporations, not just banks. Fewer people would fit the bill and that would limit our choice, and so it should.
The second of the two issues was the failure of commentators to seriously question the capitalist economic system that has proved to be so fragile and unjust. It has brought wealth to half the world while the rest starve; it thrives on excess consumption and the inevitable emissions, and it seriously retards the evolutionary development of individuals and cultures. Bankers and politicians alike strive to prop up the old failing system which they abused, because they know no better.
It did not occur to them that this was a golden opportunity to start to create a viable, sustainable economic system in line with the requirements of emerging Worldcentric human consciousness stage. Putting off the inevitable only makes the next economic crisis bigger and sooner. Worldcentric observers are amazed, distraught by the primitive ethnocentric thinking of our politicians and bankers, but they are up against the power that they still exercise. 
However there is also a groundswell of more conscious or ‘worldcentric’ people who will no longer tolerate the old order and they will become ever more vociferous until the ethnocentric majority of politicians are discredited, ousted and replaced. Some commentators will reread if not resurrect Karl Marx, but the way is forward not backwards. A new economic order is essential, one that puts people and planet before profit".

Moving forward I think we need to careful not to allow a deflection of blame to occur ... e.g. onto all the older generation, when the 'real people' 'stealing everyone's lunch' (breakfast, dinner, tea and future) are a few egocentric and ethnocentric people who currently have power (and misuse power).  However the issue that can probably be raised at most people's door is either Type 1 or Type 2 Ignoromics, which is the very thing that has allowed (and still allows) the egocentric/ethnocentric leaders currently in power to misuse power (and apply Poweromics).

Friday, 6 August 2010

Burdening future generations ... is this right, is it fair, will it work?

This is a key question we need to ask of ourselves ... as Stephanie Flanders has done today ...

In the national argument over Budget cuts, some voices are louder than others. This week there have been warning voices coming from the public sector unions - you can guarantee that they will turn up the volume in the months to come.
Ministers may not respond, but their voices will certainly be heard. It's usually a lot harder for politicians to hear the voices of people who don't vote. And of course, people who are aren't born yet can't say anything at all.
If you care about fairness between generations - that is a big problem. It suggests that the demands of older people will always attract more money and attention than the demands of the young.
It also means that future generations are likely to get squeezed. The wrangling over spending cuts this summer will greatly affect them too. But so far I haven't heard many people fighting their corner.
In his book The Pinch, the Conservative David Willetts describes in forensic detail how the baby boom generation has prospered from the core trends in Britain's economy and society over the last few decades, usually at future generations' expense.
To take just a few examples: high inflation helped them pay off their mortgages quickly in the 70s and early 80s - then price stability helped them preserve their wealth, just as rocketing house prices gave them another massive windfall.
They also prospered from an influx of cheap foreign labour from the mid 1990s onwards, just when Generations X and Y were coming on to the labour market, and a shrinking labour force might have helped push wages up.
Now David Willetts is in government - presumably defending the rights of tomorrow's workers as minister for universities. We've also got the youngest chancellor sitting at No 11 since 1986. You'd think it was a pretty good time to even the score between the generations.
But when it comes to generational equity, so far his plans for the public finances and the economy get maybe a low B plus.
For the purposes of this discussion I want you to forget about the distribution of Budget cuts by income, or region, or gender (see yesterday's post). Just focus on what it means for different generations.
Then look at the "tough choices" that chancellor made in his Budget - and the ones he ducked. It's not a black and white picture, but more often than not, the tough choices involve cutting services or benefits for young and youngish people, whereas the red lines tend to protect areas that are especially important for older groups.
Consider those benefit cuts: tax credits for families with dependent children are being withdrawn, with supplements for the youngest children removed and child benefit frozen for three years. A number of grants for pregnant women have also been abolished, and so has the Child Trust Fund. Lone parent benefits are also being cut.
By my reckoning, around £3bn of the £11bn in welfare cuts by 2014-15 that Mr Osborne announced in June will directly hit households with young children.
The rest of the benefit cuts come from changing the indexation of benefits from RPI to CPI (to save £5.8bn) and cutting the housing benefit bill by £1.8bn. Those cuts will affect people of all ages, but they are likely to affect older people rather less.
Why? Because the basic state pension was the only benefit to be increased in future years (alone among benefits, from 2012 it will go up in line with earnings, prices, or 2.5%, whichever is highest.)
Also, more than two thirds of people who claim housing benefit are of working age. Indeed, one of the arguments the government uses to justify using the CPI to uprate public sector pensions is that CPI doesn't include housing costs, which account for a much smaller share of pensioners' expenses.
Even more telling is the list of universal benefits that weren't cut. In line with the Conservatives' manifesto commitments, the winter fuel payment, free bus passes and free TV licenses for older people have all been protected, even though most of the £4.2bn a year spent on them goes to people who aren't poor.
The chancellor has said he's in the market for further benefit cuts which could make things easier for departmental spending. As one senior Conservatives said to me shortly after the Budget: "It's almost as if he's daring the cabinet to push to abolish the winter fuel payment."
So yes, this is a work in progress. But on the spending side, too, you'd have to say that older generations were being protected. The school building programme is being axed, and public investment generally is set to fall by half (a decision by the old government which Mr Osborne has not reversed).
By releasing local councils of their obligation to meet housebuilding targets, many experts say the government will help to prop up the value of the baby boomers' houses as well.
Times will be tough for the NHS, but it is the only major department whose Budget will continue to go up in real terms over this Parliament of pain. The figures on this are patchy and out of date, but in 2003/4 nearly 45% of total health spending in England and Wales went to the 16% of the population over 65.
At this point you may think I've completely lost the plot. Of course, you'll say, we protect the elderly, and the NHS. And of course most of its Budget gets spent on people at the very end of their lives. But that's what the welfare state is all about - not one generation stealing from another, but one generation doing for their elders what they hope their children will do for them.
All that is true. But, as Mr Willetts describes, the baby boomers have done rather more than that. They've fixed the system so that they get more money out than they are ever going to put in. He reckons the average member of this lucky generation will get 118% more in public benefits and services over the course of their lives than they have paid in taxes.
The key point is that a lot of the goodies that have been promised to the baby boomers (and the smaller postwar generation before them) will not be around for the generations that come after. So those young people are going to be paying more into the system than they take out. The longer that politicians wait to even the score, the greater the relative burden on the young.
The rise in house prices has tipped the balance even further the baby boomers' way - letting them consume more than other generations during their working lives and after they retire as well. To cap it all, they've presided over many years of government borrowing as well.
As Ray Barrell and Martin Weale from the NIESR point out in a fascinating article for the Oxford Review of Economic Policy, this imposes a double burden on future generations: not only do they have to repay all that debt from their own income (future) income, but that income may itself be lower because by borrowing for current spending, the government used up national savings that could otherwise have been invested.
This isn't about the rights and wrongs or running a deficit in a recession - or when and how quickly to bring it down. It's a much longer term question: whether this government, or any future government, is going to begin to take up the cause of younger generations, many of whom could face a much bleaker future than the generation now starting to retire.
Future generations don't care if we have a bad few years. As long as the Mr Osborne isn't derailed by a weak economy and actually follows through on those deficit plans, they'll give him a B plus for borrowing less than Labour planned.
But for today's under-40s and those to come, you'd have to say the coalition government could do better. 

To answer the initial questions raised ...

Is this right - yes it is. 

Is it fair - no it is not.  

Will it work - for a while it will ... but not for long.  

One needs to remember that the younger generations also have a choice ... i.e. they can choose where they want to live and work ... nb as one blogger immediately commented ... "I'm emigrating at the end of the month ... and to all the young I say, pack your bags, and leave tonight".

With no/fewer young people working there is no prosperous future, and anyone within the UK can move within the EU without restriction now ... with the floodgates now open, we are likely to see more and more hard-working people flood OUT.