Back to the future - the need to learn lessons from the past
It is philosopher George Santayana who provided the maxim that tells us that if we don't learn from the mistakes we made in the past we are destined to repeat them in the future. The current economic situation would certainly suggest we have plenty to learn.
As I will suggest in this blog, what seems fundamentally important to me is that the crisis we are experiencing does not allow some of the more extreme measures being suggested to be implemented. That said, we do need to radical thinking to assist in arresting decline and to underpin future recovery.
Perhaps the most extreme measure that was 'floated' this week was that proposed the idea by Adrian Beecroft who, as well as being worth over £100 million, is a donor to the Conservative party. Clearly he is a man who knows how to make money.
He believes that what would assist business are changes to the legislation to make it easier to dismiss workers.
Business secretary Dr Vince Cable, who increasingly seems to be a lone voice of sanity within the cabinet stated, the idea is "complete nonsense".
Last week's conference of the OECD (Organisation for Economic Cooperation and Development) has identified that growing inequality is an issue that needs to be addressed.
A paper presented by James Galbraith (son of the famous economist), argued that the response of the British and American governments in the 1980s, led by Margaret Thatcher and Ronald Reagan was wrong.
Galbraith believes that their obsession with reducing inflation and deregulation was one that has created greater inequality that still exists. The cheap credit that existed in the last decade, and has caused the current economic crisis, was a way to try and reduce inequality.
So, the argument goes, if our houses are believed to be worth more, we can borrow more; a belief backed up by a paper produced by the National Institute of Economic and Social Research (NIESR) for the Resolution Foundation thinktank.
But making workers feel less secure and paying them less is hardly going to assist in increasing consumption. Indeed, the belief that Britain's recovery is entirely dependent on dealing with 'worker problems' is, I suggest, clichéd.
As has happened before, in times of crisis it is all too easy to see workers as being the impediment to success.
Rather, what we really need is to make workers the key to recovery, not to demonise them.
Dominic Sandbook's recent BBC TV series about the 1970s reminded us of the upheaval and political turmoil that characterised the period. And, as usual, Birmingham got a mention with respect to what seemed to be the interminable industrial problems at British Leyland at Longbridge.
That British Leyland, a car maker, was a nationalised company now seems pretty ridiculous. As we know, many, though not all, members of the government are adamant that there should be no interference in industry. The belief is very much laissez-faire; any state involvement is absolutely minimal.
And there is no doubt that car making is a global industry that can easily be shifted around the world in the constant search for cost reduction; usually through employment costs.
But there are some industries/sectors that are so vital that they cannot be allowed to be subject to the vagaries of the market.
If before the global financial crisis it had been suggested that you should nationalise banks in this country you would probably heard the white flapping coats of psychiatrists coming to 'get you'.
Much has changed since then; especially the government. The previous (Labour) administration believed that they had no alternative but to bail the banks to save the financial system from 'melt-down'.
However, the present coalition government, as part of their 'austerity drive', have made clear their desire to savagely reduce public expenditure.
Therefore, the intimation last week by Nick Clegg that the coalition is prepared to embark on what will be a 'Plan B lite' to deal with what is now officially a double-dip recession is welcome.
The belief is that investment should be used to create jobs in the construction industry through the building of housing and infrastructure projects.
This is potentially good news. The current economic crisis shows no signs of abating. Indeed, should the euro collapse - an ever-likely scenario -things could get an awful lot worse. Clearly, some action is urgently required to stimulate demand through increased investment.
It is for this reason that the government hopes to stimulate investment by offering guarantees to major investors, such as pension funds.
The theory is that this will give them confidence to invest in construction projects such as transport (road and rail), infrastructure (power stations) and housing, would create jobs and, of course, increase overall consumption that would assist in staving off what could become an economic depression.
There are critics. Neal Lawson is director of the pressure group Compass that has consistently called for more investment. He believes that whilst the likely announcement would be good, it will not be sufficient. His view is backed by Rachel Reeves who is Labour's shadow chief secretary to the treasury.
At the risk of being heretical, maybe it is time to be really brave and to put money directly from the government into creating jobs because the dangers of slipping into a prolonged downturn do not bear thinking about.
However, whilst some job creation is required, we certainly don't want them if they are casualised and result in an increasing culture of exploitation and risk to health and safety.
Every strike, including those in the 1970s, is about maximising increased terms and conditions. One such strike was the national building strike of 1972. This dispute now tends to be remembered for the 'footnote' that actor Ricky Tomlinson, who was then a construction worker, was jailed for offences committed during picketing at Shrewsbury; offence he has always vigorously claimed he was not involved in.
Intriguingly, what the national building strike was about was in creating a higher minimum wage and greater regulation in the industry to put a stop to the use of what was known as 'the lump'.
Workers at the time could, because of demand at the time, work tremendously long hours and receive high lump sum from which they had responsibility for pay their own tax and insurance.
Not surprisingly, there were many who took advantage of the system to engage in tax avoidance (both workers and employers) and in using terms and conditions that were exploitative (employers).
One manifestation of this was the fact that in those days if you were up early enough and passed certain meeting places, frequently pubs, in Birmingham, you could see men waiting to be selected by 'gang-masters' who worked on behalf of sub-contractors.
These men were often employed on a daily rate and frequently paid in cash on the day. Many of them have now entered old age and, because they never paid into the social security system, have no entitlement to benefits such as a state pension.
Surely we do not want to go back to such a state of affairs and Vince Cable was absolutely right to reject the notion that reducing regulation of worker's rights will assist us in getting out of recession.
The daily news of strikes at Longbridge gave the impression that there was a worker problem there. Undoubtedly industrial militancy was part of the scene. However, wiser counsel will tell you that the problems at British Leyland were also caused by what was not terribly impressive management.
It took the 1980s to learn that it was possible to create improvement through worker involvement as seen most particularly in Japan (see blogs passim). Workers, if treated in a way that recognised the importance of their dignity and ability to contribute, could most definitely be part any solution.
This is still true and, interestingly we don't need to go to Japan to see this. As Vince Cable has declared after his recent visit to Germany, a country with a very progressive attitude to workers, we have much to learn from their approach:
"I certainly approached my visit [to Germany] with some humility, because they are a very successful country and we have got to learn from them."
In my visits to Germany I have always been utterly impressed by the attention to detail and the pride that workers take in what they do. This is what is required in this country.
The 1980s and 1990s was a period in which jobs in this country were lost in manufacturing at an alarming rate to be replaced by the belief that we could become wealthy through other sectors.
These alternatives to manufacturing, financial services and property, have proved to be a mirage. Indeed, if we consider the problems of the Eurozone, especially Spain and Ireland, we see that there is a glut of property that was intended to be the way for investors to get rich quick. In both countries there are thousands of unemployed workers; especially the young.
For sure, what is required for the UK to survive the downturn is increased investment in construction and infrastructure projects. Anything that can be done to underpin economic development and wealth creation is vital.
Additionally, we need to increase the supply of houses that will enable our children to be able to afford their homes.
One forgotten fact of the 1970s was that in the Labour Party's 1979 election manifesto was an intention to create a 'corporation' to carry out vital construction works to support economic development.
As some argued, it was a de facto nationalisation.
There is no chance that this will happen now but we do need some radical thinking about how to create the economic circumstances that will enable us to emerge successfully from the present crisis.
We, as tax payers, own many major banks. Why says that we cannot have greater control over other 'tools' of economic development; such as construction?
It is vital that we learn from the mistakes of the past and, of course, not to repeat them.
As Dr Cable suggests, we need to learn from Germany; a country that has demonstrated what is possible by creating partnerships between employers and workers.
And if you cannot get to Germany, you can see a really great corporate partnership at work even closer to home in the UK retailer John Lewis, a company that believes in the importance of people who work there.