Part 1 – Forecasting and crony capitalism
Blogging and forecasting
My new year’s resolution is to blog more. So over the next few weeks, I will unleash a veritable tsunami of Watson wit and wisdom.
To begin with, I am going to do what everyone else is doing at the moment and provide a forecast.
Of course I will then have to blog again at the end of the year explaining why my forecast was wrong, but: a) isn’t that the whole point of forecasting, being proven wrong? (economists, experts, pollsters, analysts, pundits etc. are getting nothing right at the moment so I have good company); and b) at the very least, I will have blogged twice this year.
My forecast is this: in the area of remuneration and reward, 2017 will be the year when the UK government announces new policy initiatives and legislation encouraging the development of employee profit sharing schemes and wider employee share ownership. These announcements won’t be minor either; they will be full-on “wow, that’s a pretty big deal” type stuff. They will also feature a tax break of some sort for the employee or the employer.
Ironically for me, this forecast seemed a lot more ‘out there’ when I first thought about it last week. Since then, Theresa May has chosen to make domestic reform the theme of her new year launch writing an article for the Sunday Telegraph on the ‘shared society’ in which she says her government will move to “a more wide-ranging process of social reform”. Although no express mention of ‘profit-sharing’, it feels like I might be on the track at least with the word ‘sharing’. Time will tell.
I should add that I have no inside knowledge on future policy in this area; no deep-cover mole in Whitehall. My thoughts are my own based on observable fact, government pronouncements and a large dollop of wish fulfilment. Over a series of blogs (starting with this one) I will attempt to intuit the future and explain my thinking.
Wish me luck and a happy new year to you all.
First some context. Call it crony capitalism, call it inequality, call it ‘just about managing’, it all boils down to the same thing. People increasingly believe that the capitalist system is not working for them. The link between capital and labour seems broken.
No matter how hard people work financial security for them and their families seems permanently out of reach. Economic emasculation appears rife. That ability to invest in ourselves, otherwise known as human capital, is constantly and consistently being devalued as the hollowing out of the middle and professional classes continues unabated as globalisation, commoditisation and technological innovation conspire to undermine the old certainties.
Theresa May has been quick to give the impression that her government is alive to these issues and that corporate excess in particular will be legislated for in the interests of the many and not just the privileged few. So far though her administration has been long on rhetoric and short on action (albeit it is still early days of the May administration and they do have a small thing called Brexit to worry about).
The recent Green Paper on Corporate Governance Reform is a good example of soufflé government – looks promising initially, but ultimately likely to be a let down.
But the socio-economic pressures are building and we may be at an inflection point where the old order of neo-liberal ‘winner takes all’ proprietary thinking is giving way to a more collaborative, inclusive, ‘your contribution is important’ approach – the shared society if you will. If so, then the May government will likely respond with a policy agenda that not only chimes with the times but is consistent with conservative political tradition. Indeed, to my mind, Theresa May seems to be a very traditional person with a strong commitment to fairness.
What will this policy agenda look like and why? Tune in to Part 2.