Creating an Ethical space for business - presentation to Asper School panel on the occupy movement
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On December 8, Winnipeg's Asper School of Business organised a symposium on the Occupy movement and its significance for business. The school kindly invited myself and Radhika Desai to take part, and also invited a speaker from Winnipeg's Occupy movement, interestingly enough the only University department to do so. In the event, the Occupy speaker didn't show, but there was a fascinating discussion and a series of multi-faceted seminars in the school that followed it. There is also a web-side, whose location I'll post when I've found it. Especial thanks to Professor Hari Bapuji and his colleagues for their help in facilitating the event and the website
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Creating an Ethical space for business - presentation to Asper School panel on the occupy movement
- 1. Alan Freeman
- 2. To judge the effect of inequality we need a comparator We are going through times of great change The recent past is not the best comparator I focus on the possible future I will judge the consequences of inequality against what we could do if it we didn’t have it But based on present trends. This is an ethical vision, but… It’s a practical one
- 3. The Living Wage policy in London – why is it so popular? The technology of creativity – why is it growing so fast? An ethical space: the capability for a new technological age Investment in human beings yields the greatest marginal increase in productivity. Makes possible a growth-led way out of crisis which is based on human development instead of resource exhaustion. Not an inevitable future. We have to exercise choice. Ethics thus informs governance, conduct, law and contract We have to get out of the ‘age of machines’ and into the ‘age of creation’.
- 4. Financial Times May 2, 2011 The lowest-paid in London should earn 40 per cent more than the poorest wage earners in the rest of the UK, according to Boris Johnson. The city’s mayor has increased the London living wage, the optional minimum pay rate for the capital, to £8.30 ($13.84) an hour, 40 per cent more than the current national minimum of £5.93 an hour. The increase in the London rate of 45p, or more than 5 per cent, is the biggest annual increase since its introduction in 2005 in a sign of the increasing cost of living in the capital, pushed up by the high level of inflation.
- 5. KPMG ‘who we are’, 2010 KPMG was named Living Wage Employer of the Year by London Citizens at their AGM in December 2010. KPMG has paid the Living Wage since 2006 and hosted a major event in November at which Boris Johnson, Mayor of London, urged more London businesses to sign up to pay their cleaning and contract staff at least a Living Wage (currently £7.85 an hour)
- 6. ‘Efficiency gains’ Reduced Absenteeism Loyalty Lower Employee Turnaround Training and skills retention Conventional economic theory ignores these See ‘Myth of Measurement’ and ‘Monopsony in Motion
- 8. Assets: • The combined assets of the six largest content-driven conglomerates is larger than Exxon Consumers • Spending on creative and cultural products overtook that on food in 1994 and is now more than twice as large Business • Businesses now spend more on creative products than on financial services Creativity • The key resource employed by the sunrise creative industries is creative labour
- 9. UK revenue from music Recorded Primary Recorded Secondary Live Primary Live Secondary £million 2,500 2,000 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
- 10. What is creative capacity? The productive paradigm has changed The old idea that machines are replacing people has reversed Design is king The main required resource is people
- 11. An ethical choice is a public choice Individuals can influence it: see The Economists’ Oath, Movements can influence it: the Occupy Movement BUT: the Living Wage was public policy: a Mayor’s decision Not just a moral injunction. It is a procurement policy. A contractual standard: a moral basis for all contracts Economically Rational as well as morally sound Boosts the ‘ethical’ against the ‘bottom-feeding’ sector. These are the industries of the future Because they are investing in the productive resource of the future. Conclusion: morality and practical economics now coincide. Non-ethical contracts are bad both for business and for the people. An ethical space must also be a public space.
- 12. to the Asper School to the Occupy Movement And to the London Citizens Network
- 13. Card, D.E., 1995. Myth and Measurement: The New Economics of the Minimum Wage, Princeton, N.J: Princeton University Press. Manning, A., 2003. Monopsony in Motion. Princeton, N.J.:Princeton University Press. George DeMartino: The Economist's Oath: On the Need for and Content of Professional Economic Ethics. Oxford: Oxford University Press KPMG: www.kpmg.com/uk/en/whoweare/whatmakesusdifferent/ourawardsuccess/pages/default.aspx GLA Living Wage Unit http://www.london.gov.uk/mayor/economic_unit/workstreams/living-wage.jsp Citizens UK (UK national living wage campaign). http://www.citizensuk.org/campaigns/living-wage-campaign/ Freeman, A. Creativity in the Age of the Internet: http://ideas.repec.org/p/pra/mprapa/9007.html
Editor's Notes
- A great talent of artists and designers, is looking at things differently. Economists are not quite so good but we tricks up our sleeves.This shows the death of recorded media. Sales fall every year. But income on Live performance has gone up every year. People didn’t stop spending on music –they’ve saved what they used to spend on recordings, and spend it on performance.In 2006 we were about to close the Hammersmith Apollo, an iconic 1930s dance venue. We were getting agonised petitions to preserve it. We needed a hard economic decision. I took one look at this graph told them no.Two years ago, HMV took it over, and it’s re-opening as the HMV Apollo.
- Long booms, like that of 1893-1914, or 1942-1968 , don’t happen on their own. They come about through conscious action, both public and private, to change, radically, the basis on which society functions, by removing the obstacles to the general introduction of the new technology and the social changes that depend on it.I’m going to introduce two of these only in this talk: the way labour works and the way cities work.I’ll take labour first. According to old thinking, the only thing you need to make a product is a factory – four walls, a roof, a space in between, and some machinery in it. According to the old thinking, production means using machines to make things.Modern ‘soft’ innovation, modern creative production, and even simple, everyday design, don’t work like that. Creative activities are becoming the driving force of production. The artists, musicians, technicians, software geeks, performers, designers – these are the resourcesthat the new technology needs. At present, we don’t know how to invest in people. This is what will have to change.Thirty years ago, we thought that machines would take over the world, and people would be dispensed with. It hasn’t happened like that. Design is a uniquely human capacity. Creation is a uniquely human activity.My definition of creative labour: labour that you can’t replace with a machine.The main resource of the creative industries: people, talent, artistic understanding, aesthetic judgment.That’s what we have to invest in. That means reconstituting social values, which is what people require: education, care, health, and above all environment. Environment, here, refers to both natural and built environment: it refers to what urban planners call place.Place is space, plus what happens in the space: a dance hall, a cinema, a gallery, a city square: these are all Places.