Chris Dillow suggests, quite accurately too, that these days capitalists don’t bear the greatest risk any more.
Capitalism, in its wisdom, has moved from outsourcing water-cooler supplies and maintenance to outsourcing transport infrastructures, communications networks, health and education services, welfare, worker training programmes and – ultimately – its only inarguable value-adding upside (to date, anyway) of taking responsibility for the consequences of ongoing failure.
Yep. Capitalism has reached its final phase: that of passive-aggressive capitalism, where even with respect to corporate wealth itself, the capitalists refuse to take ownership for its occasional stuttering. Whilst they enjoy access to such wealth and its benefits as they continue to exist, above and beyond the workers’ rights to do the same, their privilege is nevertheless also protected from disproportionate loss whenever this might happen. As Chris indicates:
Better Capital’s stake in the firm took the firm of a secured loan, which means they’ll get first dibs on its residual value. Thanks to this, Jon Moulton, Better Capital’s manager claims to stand to lose only £2m – which is a tiny fraction of his £170m wealth.
By contrast, many of City Link’s drivers had to supply capital to the firm in the form of paying for uniforms and van livery, and are unsecured creditors who might not get back what they are owed. Many thus face a bigger loss as a share of their wealth than Mr Moulton. In this sense, it is workers rather than capitalists who are risk-takers.
Of course, it depends a degree to the structure of each company, and City Link’s structure isn’t one which exists across the corporate board. But I’d be inclined to think this outsourcing of risk – as well as other matters – to workforces is a tendency we’ve seen for quite a while now, and not one which will go away soon.
I only have to think about what two of my offspring’s working in fast food means for the rest of the family to give you an idea how this trend to outsourcing has extended – and is, indeed, extensive.
They work part-time; their shifts change from week to week; their place of work is a way from home. They are sometimes phoned the morning of a shift to be asked to come in an hour or two earlier. In one case, they have three changes of clothing. In the other, two. Ten hour shifts are not unheard of. Six hour shifts incur no break.
One now has a motorbike and is mobile enough to get to work by themselves. The other tried using the local bus service at the start: it was a fiver return; more often than not half an hour late; not to be relied upon; and so the parents became taxi-drivers.
Taxis themselves are just really, prohibitively expensive.
If the starting-time changes, that’s a parent’s day which gets interrupted. If a shift is added, that’s a night-time wash which needs to go on; a morning in the drier; an ironing for the clothes; food which needs to be bought and/or prepared at an unexpected time so the worker goes fed to work.
These, and more, are all support services the corps are getting for nothing. No wonder that so many of these companies should now be looking to outsource capitalism’s only clearly remaining raison d’être: that of a final “the buck stops here” inconvenience, traditionally assumed (or so we thought) but – it seems – no longer to be contemplated!
No longer shall this breed of capitalists be able to proudly proclaim their condition as “risk-takers”. Perhaps “risk-makers” would be a good place to start; in the light of City Link, though, and I guess other experiences shortly to make the news, “risk-outsourcers” wouldn’t be the least accurate way of describing them.
So are there any decent capitalists left who still believe in taking the downsides on the chin in order that the extreme nature of their blessed upsides might continue to be morally justifiable?
Or have the workers become so distanced from their masters and mistresses that morality – even Friedman’s shareholder morality – counts for little these passive-aggressive days?