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
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
7.
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.