Karl Marx argued that the Capitalist theory was a dictatorship of the bourgeoisie. Believing it to be run by the wealthy classes for their own benefit and he predicted that like previous systems, capitalism produced internal tensions which would lead to self-destruction and replacement system was socialism.
It is uncanny how this German philosopher had foresight in which in one end he can be so wrong on the other almost perfectly right. The shocked leaders working in immediate solutions behind the scenes of the 2008 financial meltdown facing our stunned nations, may tell you that Karl Marx was probably right, in his above theory. The capitalist system was in meltdown and we almost reverted to a socialist system just like that, over night. Thankfully we avoided this, as fearful memories of the last century were not so distant away. But the consequences of this crisis today are devastating of almost biblical in proportion. We must learn to change our attitudes and our mentality in certain sectors of our economy.
In the business media headlines there is very little reported on change except the usual on how our economic war is progressing, law suits, tax avoidance, business fighting for market, cross cultural and cross country takeovers, and so on. Statements are coming out of financial institutions as ‘business as usual and banks reverting to profits. There is more negative news on the German state banks in crisis. and bankers on trial for fraud and the whale traders scandal. Time MCG is not against wealth per se nor is it against profit but Time MCG is against abuse of wealth, the pursuit of wealth as a be all and end all to the detriment of others, and abuse of the system. Part of the solution is simply a question of transparency in a business or individuals in how the money is made, used or served for the added value or benefit of the other amongst our intermediaries within the economic and financial system.
Banking has brought on the most criticism but in all fairness to them, Time MCG regularly argues that it has opened up a wider endemic cultural problem in business, trade and commerce everywhere that has already existed. A professor of finance made an interesting analogy and informed us that much of the guilt and shame stands mainly in the world of intermediaries where what one has to distinguish between the real economy (goods/services) and the financial economy, which merely intermediates. Any business which merely intermediates doesn't provide real value; they only take a cut of the real value at both ends. Sometimes there's a need for intermediation only if there's a proper market failure where supply and demand don't meet, but that's not always the case.
The reality today is that intermediaries are taking a far too great % cut to make supply and demand meet, and sometimes they deliberately manipulate the market to their advantage, using their influence, power, and the size of their balance sheets or any other means at their disposal (perhaps false rumours, lies and deceit,). Intermediaries are not just in the financial community, they are middle men, agents, wealthy individuals, brokers, football agents, executive search head hunters and so on in the world of finance, commerce and trade. They are so often people or institutions seeking opportunities and after the quick buck in which some only require a phone and a computer.
One can logically deduce therefore that paying oneself more or the same percentage wise by taking a bigger cut out of the real economy, whilst supply and demand is weak in the real economy serves no purpose except ones own. It puts us quickly into the category of greed, even as potential thieves and impedes our true advancement.
The business secretary Vince Cable in the UK government says that the UK is now 5% poorer after having bailed out the banks. Belgium, Holland, Spain and France are a lot poorer too.
One thing we have learned from the economic crisis is that we must try to correct things in order for this not to happen again and if it requires changing the system then so be it but this must be done in a peaceful and intelligent manner. To change a mind-set is the most challenging thing that can ever be done because arguably people do not change over-night; it can instil greater fear and insecurity even revolutions. We know throughout history that once you create wealth, it is very hard to let go. It is only when we do silly things or easily become blind for the sake of profit then things start to go wrong. When businesses which operate in money then unprepared if the music stops, sentiment of the general public can sway. Here we must not underestimate the general public who do not take themselves as fools. History has taught us plenty of stories where greed can get to be eradicated through force or even through violence particularly when people's livelihoods are affected. We hope it will not come to this.
The biggest sadness in our current societies is the result of a breakdown in trust as a consequence of this abuse. Sadly now even an MBA graduate in business from Harvard or Oxford, has proven to not necessarily have the developed intelligence in business inciting weak judgement and poor conduct. Henk Poulson, the former White House economic advisor had an MBA from Harvard and is widely criticised for this crisis. Fred Goodwin ex RBS was a Chartered Accountant. Dick Fuld of Lehman brothers has taught us, that a ruthless commercial individual, or a ‘shark’ (as we used to commonly describe these types) who has grown from the bottom to the top of the food chain through poor methods. They cannot be trusted. We have also learnt that wealth does not necessarily make us more intelligent nor possess sound judgement in our choices or decision making.
There are firms who hire PR and lobby firms creating smokescreens and mirrors on how the firms do business. Can they be trusted? We also know too that the biggest is not necessarily the best. Then there are those leaders in business flying too close to the sun deemed to have lost their sense of reality. Are they to be trusted?
Economists and monetarist have gone quiet as if they have lost the argument of reason. Not to mention the other end of the spectrum, of high level white collar and experienced professionals that have been made redundant who have shown loyalty to a firm but the firm has not retuned that loyalty. There are those who are trapped in the system, who feel insecure with their jobs, or unhappy and feel enslaved, victimised, stressed or exploited.
Then we have the higher authorities who are at a cross roads and lacking the courage to make the real decisions in case of civil unrest often at the mercy of those business institutions with power and money. They appear to be forced to give in to the short term solutions, as we live in a short term world, too fast for our own good easily swayed that high incomes and therefore consumption is the only solution. In all honesty the Capitalist system has had the stuffing kicked out of us in Europe and the entire West.
How has it possible that it has all fallen down to this level? Is it due to our liberal, ‘laisser faire’ and tolerant attitudes resulting in unending conflicting individual self-interests, lack of leadership and authority? Is it our lack of vision and identity? Or is it simply a lack of education and guidance? Are we too spoilt and therefore uncaring? Is it our misconception of freedom in that we are allowed to make whatever choice we want and without thinking? Or is it simply a case of a moral breakdown in family values, conduct, and behaviour? My mother pointed out on the phone the other day. ‘What is happening in this world, there seems to be such a lack of quality in people everywhere!’
We must listen to the common sense of our mothers sometimes and we must act. I know as an interviewer, business consultant and coach there are plenty of responsible, sincere, fun loving quality, honest and people with integrity out there and even plenty of honourable bankers and plenty of great businesses offering real solutions in needs for the real economy. Plenty of people who strive for a better world or for the common good. Perhaps it is just a case of these types simply waking up their careers, finding their courage and rallying. You just know and feel it through instinct when you meet someone of quality. He or she tends to be true to his or her own self, with a strong sense of right and wrong, a high level of logic and reason, perfectly in tune with his or her own identity. If they have a passion and conviction in their work for all the right reasons that is great. If they have a vision well that is even a greater attribute. This is called education and good upbringing. It is these people I believe that have a duty to be all conquering for the sake of humanity, our children and our children’s children to get us all out of this mess. It is these people that must help the others even in the upper chains to think coherently.
How do we do it? Well, first of all we have to change the money culture which is simply not healthy for anybody’s identity. A culture I had experienced myself. As right now it is some tyrannical obsession, to rule over others, object of power, success, often corrupt, secretive, status, individualistic and all conquering. This serves no benefit for anybody except ones own and worse we seem to forget who we are and why we are here and what we are here to do. These people need to be sifted out, reasoned with, challenged or coached. The media play a great part in not helping us over this who takes the assumption that if some individual is wealthy or a firm has strong profits, they must be amazing. This is not helped by many of us who have a kind of short sighted view in business, a kind of what is in it for me mentality regardless of conscience. Or a takers mentality in that I am going to go out there and take as much as I can so that there is enough for me and for my life. Even an attitude of high margins for as little work as possible or as quickly as possible so that I can do something useful with it later on. This mentality is fruitless; it is an attitude of fear and serves no long term higher purpose. Neither does one take, nor does one take to give.
It is also this Wild West culture amongst our intermediaries with its relentless pursuit of revenue that requires gentle reform, and if necessary with an iron fist. This is a culture I have lived, experienced and witnessed myself. I remember too once in the mid-90’s in my 20’s in London, a banker friend of mine came to me making very good money and asked with his full conscience speaking ‘how is it they entrusted me with so much money to trade with when I lead such a debauched life in my spare time?’ Many of my generation including myself were all like this, often hedonistic with loose morals. I feel ashamed of this and I had to change. Is there a link? I dare say this conduct was contrary to my upbringing or family values. It was just the way society was (or still is...)
Today more and more honest or guilty people have come out to speak about the misconduct inside our firms and corporate culture for the outside world to hear. This is a good thing and an opportunity for change so that this culture is dealt with once and for all. But the change also requires ingenuity, quality people and courage and not an opportunity for the lynch mob to make their mark. We are living a time of historical proportion with debts equivalent to the last days of the Weimer Republic.
The European banks are in such difficulty themselves brought on by serious internal problems such as their vastness, conflicts of interest all over the place. Acting in their own interest, shareholder interest, at the mercy of hedge fund managers, investors, their customers, debts with governments, regulation, mistrust with other banks and the list goes on. Not to mention remuneration, fees and cultural issues, people leaving etc. and god knows what else. Bank of America is now being sued by their very own US government. Is this what we want? Would it not be better for simply the culprits to come forward so that we learn? Bearing in mind that history has also taught us that in time the truth will always bear fruit.
At personal level we must ultimately learn to give or offer our expertise if there is a real need, based on our true unique talent, values, knowledge, training and experience. The product or service that you work in would need to serve a purpose that identifies with you. This is how you anchor your identity and how businesses are built. In an ideal world when the receiver or counterpart feels it has been benefited, he/she will recognise you for it and pay you for your services and hard work. The result is you feel your value added is rewarded. This is how you treat money. This is how you measure success. The rest takes its course. This is how it works at individual, corporate and society level. To some people this part is not rocket science and it never was. Although sadly I know from my own experience that this part is hard to figure out. For those of you who have read the fairy tales, or the brothers Grimm to their children. These writers were geniuses and I believe we need to revert to this kind of belief. My grandmother once told me that there is only room for the few that reach the top of the mountain. One wonders where does that mountain end?
In brief what we must learn not to take, or become opportunists for our own benefit beyond our expertise creating conflicting interests and in the end working for our own interest which not only results in a loss of pride and integrity in our work but it can so easily create resentment and mistrust from the counterpart or from the outside. It is uncanny when you think of Roman methodology; there was the God of Mercury, or Mercurius. He is the patron god of trade and commerce. Today it could be considered as financial gain, commerce and trade, eloquence, messages/communication (including divination), travelers and boundaries, luck and the internet. He is also the God of trickery, thieves and the guide of souls to the underworld...
Soul searching is clearly required within our economic and financial system amongst our differing societies in Europe and the West. Who are we, why we are here and what we are here to do which may explain our lack of advancement. As the banks and the other intermediaries are the main cause of this crisis to the detriment of the other due to their self-service culture, it implies they may have lost their sense of service and identity. What made them stand out were the drastic negative repercussions on the wider part of our society in Europe that we see today reflecting their greater sense of responsibility which was in part something that slipped by them nor fully grasped. It must have shocked a number of them to the core.
Now if they employ the best people and brains in our societies and carry great responsibility in our communities and our world, it would be nice to see them putting their ingenuity back into our real economy, our communities and our societies on our very own door steps here in Europe. Let’s all come back down to earth in Europe and understand the needs of this continent and change. Believe me there are plenty of needs out there. The banks ultimate challenge is to discover the real need in an ethical and the right way and then it is for them to serve in the interest of this need, and this way they may be able re-create trust to help us all into a new era. We need you and you need us. What is no good is serving the interests of each other, running away, globetrotting and seeking opportunities elsewhere with the same practices as before together with that quick buck risk taking mentality that we have all learnt will create the opposite effect causing more problems than actually necessary .
Of course their initial challenge is getting their own houses in order and redefining their vision, sense of purpose, principles and business models as I am sure they will. The finance community and the real economy (goods and services) have to meet. Right now they are worlds apart as seen in the stock market. Stocks are at their highest levels and the real economy has hardly budged one bit. This has a danger of creating an ‘us versus them’ mentality. If they took a cut of 5% out of the UK real economy well they could for example put 5% back plus interest. This part is going to require brains of the best calibre and I would say great courage, wisdom, leadership, humility and sacrifice. Right now there are few signs of people coming forward and time for us in this respect is not exactly our most valuable commodity…..
With mistrust the solution stares