The Best-Laid Policies... and how to make them work

The best-laid policies – and how to make them

workPrabhu Guptara

Distinguished Professor of Global Business, Management & Public Policy,William Carey University, [email protected]

Please note• The intention of my presentation is to provoke you to think!!!

Economic Development of Albania - 1• Widespread social and political transformations during the Communist era,

though at the cost of isolation from the non-Communist world. • In 1947, Albania's first railway line was completed, the second eight months

later. By 1955, illiteracy had been eliminated among Albania's adult population, and there was unprecedented progress in education and health.• New land reform laws were passed granting ownership of the land to those

who actually worked the land. Agriculture became co-operative, with production increasing enough to make Albania agriculturally self-sufficient. • Albania also became industrialized, resulting in rapid economic growth: the

average annual growth rate of Albania's national income was 29% higher than the world average and 56% higher than the European average. • Communist Albania did not allow taxes on individuals; instead, taxes were

imposed on cooperatives and other organizations.

• From 1991, the hallmarks have been Liberalisation, Privatisation and Globalisation, especially in energy and transportation

• Scores high in the Human Development Index – e.g. providing universal health care, and free primary and secondary education

• Now an upper-middle income economy dominated by the service sector (followed by industry and agriculture)

• Member of the United Nations, NATO, OSCE, Council of Europe, WTO, and an official candidate for membership of the EU.

Economic Development of Albania - 2

So, what Challenges for Albania, to reach the next level?

•Beyond “Political Football”?•Substantially remove corruption?•Establish an independent judiciary?•Embed a Culture of Entrepreneurship?

The Economics of Justice (not Capitalist or Socialist, not Islamic, Vedantist or Humanist)

• Rule of Law, not of the Elite• Entrepreneurship, not merely Capital• Merit, not merely Connections• Work rather than handouts (except where those are inescapably necessary)• Responsibility not self-Indulgence

A Culture of Entrepreneurship - 1• Enables the rise of talent from any background, regardless of

beliefs:• Infrastructure• Public education• Freedom of expression, of the press, of assembly…

A Culture of Entrepreneurship - 2• Has free competition within minimum necessary rules: • Environment• Health• Safety• Currency stability• Equal application of the law to all• Care for the physically, emotionally or mentally disadvantaged• Differential expectations and punishments.

Irving L. Janis, Groupthink: Psychological Studies of Policy Decisions and Fiascoes

2nd, rev. ed.(Boston: Houghton Mifflin, 1983)

Self-awareness is uncommon among individuals, and Cultural Self-awareness is uncommon in nations

Best-practice Policy Development takes the specific

national & organizational cultural resistances and distortions

into account

Why move beyond narrow economic criteria?

• Why should the key criterion be the reduction of unit cost? What about the cost of the resulting social and ecological destabilization?• Why should we have a system that produces a nightmare even for

accountants?• Why should economics not strengthen social solidarity by

subordinating the operations of the market to the values of equity, justice, and community? • Instead of having society driven by the economy, could de-globalization

re-embed the economy in society?

Warren Buffet

“Look for three things in a person: intelligence, energy, and integrity. If they don’t have the last one, don’t even bother”

What is the *value* of a leader’s integrity? Can it be quantified?• Dr. Fred Kiel did just that in his book, Return On Character (published

by Harvard Business Review Press in April 2015) • Over a seven-year period, Kiel collected data on 84 CEOs and

compared employee ratings of their behaviour to company performance• Employee engagement was 26% higher in organizations led by high-

integrity CEOs• High-integrity CEOs had a multi-year return of 9.4%, while low

integrity CEOs had a yield of just 1.9%.

Social Challengesto the Global Order

• Demography• Disengaged citizenry• Community deficit• Migration

(c) Relational Research, 2014

The Demographic Challenge in Asia and EuropeData from the CIA, 2014

Singapore Hong Kong Japan Italy Germany Switzerland China Self-sustaining population

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

2.07

Number of children per adult woman (TFR)

The Family Test for all UK public policies

• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/368894/family-test-guidance.pdf

Note that the political gridlock is

a gridlock of interests, NOT one of policies (though that is the face it has to be given!) - see Jeff Faux’s The Global Class War: How America's Bipartisan Elite Lost Our Future)

Politics always trumps Economics

• For economic renewal, political renewal is essential

• But political renewal cannot take place without cultural renewal

• For cultural renewal, Relational Thinking has much to offer everyone – whether people on the Left or Right, or Uncommitted Citizens

The need for a revolution in thinking

Relational Research © 2013

A New FrameworkUnderstanding of:• Personal identity• Work• Poverty• Development• Technology• Business• Government

Relational ThinkingAn Economic Strategy

• From debt to equity• Engaged shareholders• Relational companies• Relational Ratings Agency


Relational Companies

• From debt to equity in corporate finance (through the tax system)

• Measurement of stakeholder relationships• Relational Ratings Agency• Relational Capital Reporting

Relational Finance• Ethical basis of return to capital?• Engaged investors• Effective accountability

A New Slogan

• No investment without involvement • No profit without participation• No reward without responsibility

Responsible Government

•Money supply• Regulation• Foreign Affairs

Relational Welfare• Rootedness• Co-location of relatives• Family Associations

The Coming“Age of Relationships”


Any movement, to be successful, must touch you intellectually, spiritually, and emotionally…

and get you to act!• Comprehensible• Comprehensive• Inspiring• Persuasive (Strategy or overall plan)• “Actionable”: tells you what you can contribute to the

movement today

The Relational Thinking Network: a network of SECTORAL networks!

• Schools• Companies• Consultants• Scientists• Technologists• Politicians• Administrators• Lawyers• ….

The Relational Thinking Network: a network of Regional networks!

• UK• South Africa• Singapore• Hong Kong• Australia• USA• (Switzerland)• …………………….

Some Websites

• http://Relationalthinking.net• www.relationshipsfoundation.org• www.relationalresearch.org• www.relational-analytics.org• www.relationalschools.org

The four most important questions

•What is the purpose for which my life was created by God?•What sort of character ought I to develop – and to encourage in others?•What is a good lifestyle – what should determine my choices?•What is a good society - and how to nurture it?

The best-laid policies – and how to make them

workPrabhu Guptara

Distinguished Professor of Global Business, Management & Public Policy,William Carey University, [email protected]

ADDITIONAL SLIDES

What is “just” is *not* commonsense• Should taxation be progressive or equal?• Should punishments be progressive or equal?• Is VAT or Sales Tax the modern equivalent of a tax on straw and grain,

which is denounced in the Bible?• What about a wealth tax?• Should there be equal payment for the same work done by men and

by women (indeed should women be allowed to work at all?)• Is work something that should be done only by the lower castes?

Vishal Mangalwadi

Article in Social Europe 28oct16 sets out 5 lies of today’s “Rentier

Capitalism” - 1“Global capitalism is based on free markets”: instead, corporations and financiers have used their power to induce governments and supranational finance to construct a global framework of institutions and regulations that enable elites to maximise rental income. Since 1995, with the passage of TRIPS (Trade-Related Aspects of Intellectual Property), which bind all WTO members, intellectual property has become the prime source of rental income: this arises through market power created by trademarks, copyright, design rights, geographical indications, trade secrets and patents. Knowledge-intensive industries, which now account for 30 per cent of global output, are gaining as much from intellectual property (IP) as from the production of goods or services. This represents a political choice to grant monopolies over knowledge to private interests, allowing them to restrict access to knowledge and to raise the price of obtaining it or of products and services embodying it.


Capitalism” - 2“IP rights encourage risk-takers”: instead, many patents are taken out not for use but just to block others using the ideas. Plutocratic corporations are ‘hoovering’ up thousands of patents, thereby turning the monopoly income that would come from applying one or several into a veritable avalanche. Many patented inventions are based on publicly-subsidised research. It is the public that pays, through taxes that finance the research, higher prices for patented products and loss of the intellectual commons. Most innovations that yield large returns through patents etc. are the result of a series of ideas and experiments attributable to many individuals or groups – e.g. “Bill Gates made a pebble of a contribution to a Gibraltar of technological advances. There is no moral reason for him and his ilk to receive the whole Gibraltar of reward”.


Capitalism” - 3“The institutional structure of capitalism built in the globalisation era is ‘good for growth’”: instead, it has hindered growth and made what growth that has occurred less sustainable, with rising ecological costs that are partly the outcome of rentier mechanisms, notably trade and investment accords, of which there are over 3,000. There is no evidence that those promote investment. Most studies have found only weak or non-existent correlations between those treaties and investment flows. Nor is there much correlation between opening up to foreign investment and growth. Instead, the correlation is with financial instability.


Capitalism” - 4“Profits reflect managerial efficiency and returns from risk-taking”: instead, the increased profit has gone to those receiving rental income, much of it linked to financial assets, IP rights and the edifice of subsidies given to capital. Further, the undemocratic ISDS (Investor-State Dispute Settlement) process gives multinationals insurance against changes in government policies deemed to affect their profits. Can you imagine yourself as a citizen or worker having the right to sue governments or employers if we thought changes in policies, strategies or other actions affected our incomes?


Capitalism” - 5“Work is the best route out of poverty”: instead, the army of the precariat in general stand testament to that lie. The principal source of rental income is the emerging “platform capitalism”, exemplified by the Uber and TaskRabbit. This is transforming the labour market, directly, by generating labour for millions of ‘taskers’, and indirectly, through its impact on traditional suppliers of invaded services. Such platforms maximise profits through owning the technological apparatus, protected by patents and other forms of IP rights, and by the exploitation of labour, taking 20% or more of earnings. They are rentiers, earning a lot for doing little, if we accept their claim that they just provide technology to put clients in touch with ‘independent contractors’ of services. The point is that incomes from labour are dropping for the precariat, while rental income is mounting.


Capitalism” - 6“Global capitalism is based on free markets”“IP rights encourage risk-takers”“The institutional structure of capitalism built in the globalisation era is ‘good for growth’”“Profits reflect managerial efficiency and returns from risk-taking”“Work is the best route out of poverty”

IS THE SOLUTION A GLOBAL TAX ON RENTIER INCOME?

Some other System-Solutions• Fight the High Priests of Liquidity (demand Sound Money)• Discourage lending/ borrowing (encourage investment in the real economy)• Discourage High Frequency Trading (support a Financial Transaction Tax)• Fight the culture of Rights (encourage a culture of responsibility)• Fight the culture of Greed (nurture a culture of giving)• Fight the global culture of Fear (nurturing true optimism)• Fight the culture of Speed (encourage a culture of thoughtfulness)• Change Company Law to enable two classes of shares: Long Term & Short Term • Change Company Law to enable responsible behaviour (managements should

not have to struggle against the demands created by current corporate law)

Leadership & Management

The Best-Laid Policies... and how to make them work