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Monday, 15 May 2017

How the free market as ‘panacea for everything’ can work as a poison for the lowest qualified jobs and the people who execute them.

When there is one thing that the neo-liberal/conservative politicians of the last three decades have advocated, it is of course the free market. That has proven to be a genuine panacea for all economical and political diseases.

There is not even the faintest doubt among most national governments in Europe, or among the European Union leadership, that ‘the free market’ is the solution to all problems:
  • When the free market indeed succeeds to improve things in certain economic or social situations or in certain industries, it was obvious, as the 'free market' is THE answer to every economic question.
  • And when the free market fails(!) in certain situations or in certain industries, it was always a question of bad luck, mismanagement or unforeseen circumstances. Or... simply because the market was not free enough and the competition did not play a fair, competitive game.

Well, you know the drill! 

The answer to a failing free market... is administering more free market. Then the symptoms of pending economic and social problems will disappear like snow in the hot sun. It is the 21st Century version of the medieval habit of 'leeching', in case of dangerous illnesses, and virtually everybody believes in its healing force.

There is not the slighest clue among the ‘believers’ that the gospel of the free market could lead to undesirable, totally unfair or straight away absurd situations in the global economy. That’s simply impossible. There is nothing outside the free market and the euro and dollar are its prophets. Amen!

The apostles of the free market believe and defend their gospel with an exasperated energy and an intolerance for contradiction that reminds of the socialist/communist revolutionaries in their finest hours during the early Twentieth Century. Everything that stops, hampers or questions the free market must burn on the holy stakes of the free market evangelists.

The result is that most people ignore the negative side-effects of the free market by simply looking the other way, or consider them as ‘a small price to pay’ for the best economic system there has ever been in the world.

On the electronic highway, a few companies – you definitely know which ones – call nearly all the shots by monopolizing their whole, global line of business and by dredging up nearly all the global advertisement sales with their ubiquitous dragnets, from which nothing and nobody can escape. 

Or by milking their hundreds of millions of customers as ‘information cows’ and by infringing every privacy law in the book, through the application of never-ending and unreadable terms and conditions for usage that – understandably – nobody reads, because normal people don’t even bother to chew through those.

And last, but not least, by hampering their new competitors with takeover threats, useless lawsuits for copyright and patent infringements “because they can”or by hindering their business with useless and complicated conditions for software usage, user certificates and services.

But that’s not all... 

Instead of companies paying the lion share of their taxes in the countries, where most of their customers live and where they earned the majority of their sales revenues, tax avoidance (or evasion) became a global sport for sanctimoneous multinationals with unctuously recorded commercials on TV and the internet. 

Fair tax payment for all (multinational ) companies is replaced by lackluster philantropy and a few odd charity foundations, that seem more in the interest of the executives than in the interest of the people living in the countries were they earn their revenues.

Perhaps the worst thing is that “the free market as we know it today” could turn lower-qualified or even (former) middle-class workers with dignity and a decent future before them, into vassals and serfs-out-of-choice, as there is really no choice for them.

Most well-to-do people are clueless that fair jobs against fair payment could turn into a mirage for people without a fixed contract and with virtually no possibilities to organize themselves, when the free market does its demolishing work.

This weekend I read on two different occasions about the negative side-effects of the free market, with respect to the labour situation.

One ‘letter to the editor’, written by Tamara Ronteltap – an Organizational Purpose Coach – and published by Het Financieele Dagbladcomplained about the now quite common disdain for workers, by seeing them solely as a ‘sustainable means of production’, aka a profit machine:

In the article about the Brexit, Simon Wolfson writes – triggered by the immigration conundrum – that the question at hand is: “Do we see people as an economic asset or as a liability?”

In this vision, the worker is seen as nothing more than an asset for the profit and loss account, irrespective of his alleged positive or negative value.

Also in the article ‘Still ill’, regarding research into continued payment during periods of sickness, the image pops up that the (sick) worker is solely seen as a financial entry in the company’s general ledger, who is – on top of that – incapable of taking his responsibilities in his own hands. The latter is emphasized by the sentence that the ‘ill worker must be actively spurred to resume his work asap’

I definitely get Tamara’s point, as Theory X is having its finest hour in many companies these days, with the mounting distrust of employers in their workers and the resulting urge to control them 24-7. 

Nevertheless, Tamara’s letter was a relatively innocent plea to take better care of companies’ and government workers and don’t treat them as a piece of machinery. Important, but not really shocking or mindboggling.

However, the following must-read article was a shocking example of top-notch investigative journalism by Belgian journalist Michael Dilissen of De Redactie.be, in the best tradition of Günter Wallraf, the famous German writer of ‘Lowest of the Low’:

Dilissen volunteered to work as a day labourer – with one day contracts alone – at what turned out to be international courier DHL, at the Belgian airport Zaventem. He describes how people are treated as vassals (or even serfs) through the usage of an imaginary carrot (i.e. 'a fixed contract) and a very real stick.

I can’t print much more than a few of the most important snippets, but strongly advice you to read the whole article, as it will be worth your while:

They have a lot in common, my new colleagues: an infectuous enthusiasm and an absolute belief in the promised fixed contract, as could be read in the vacancy add.

Before we can walk to our working place, there is a word of the big boss. About the payment and the security rules for temporary workers of DHL.

And then reality bites:

“I want to let you know that what the consultants at the temp agency promised you, is not true. Not everybody will get a fixed contract; this is only for the best of the best. The happy few of the temp workers... So make sure that you get among them by never getting ill, working hard, never complaining, doing extra hours and never being too late!”.

And as if that was not enough: “For the people who are late, we have an efficient method: when you are late once, we’ll keep you at home for one week. This means one week having no job and no income, but all the time in the world for thinking how to get here in time, next time. That is a way of learning a new attitude.”.

[...]

It is cold at night in the warehouse. The boxes become heavier by the day. My temporary co-workers don’t seem to care. They think about their fixed contract. Ahmed and Guido have worked with day contracts for several months, while Abdul and Najib received a week contract after four weeks only. Some have high hopes, while others get more frustrated by the day.

[...]

Friday is D-day. On Friday all interim workers receive an SMS with the planning for next week. It is a token of prove that you survived yet another week and are part of the game for one more week.

Last week there was a lot of panic. There had been three tours with new loads of candidate-temp workers. New candidates mean undoubtedly that others must take a hike. The effect is unmistakenable. Everybody is working even quicker.

[...]

The payments of my interim job are impossible to check. Every time a different amount. Also the others complain of faulty payments. Abdul never received one hour of overtime. Every week Richard and Omar received up to €60 too little in payments. Complaining at the temporary labour agency is virtually impossible. Startpeople calls you with an undisclosed phone number, which makes it impossible to call back. 

The writer Michael Dilissen stated that DHL was just a coincidental example of these opaque and intolerable practices and that probably many more companies use the same tactics of keeping their unorganized, temporary (day)workers on a tight leash, with empty promises and hardly disguised threats.

The sick thing with these kinds of ‘near-slave’ labour is that nobody is really doing something about it, which leaves such a situation festering for years and years. This is the inevitable consequence of the ubiquitously growing disdain and distrust of employers for (fixed contract) workers and the diminishing influence of labour unions, as well as a result of the relentless cutbacks on labour inspection services throughout Europe during the last decades.

One has to realize that in most cases an investigation is only started when one or more people file an official complaint against their temporary employer. However, filing a complaint is the surest way to lose one’s day job and source of income and also the (faint) outlook for a steady job at DHL  or other companies with the same attitude against temporary workers. 

This is a Catch-22 situation, in which abuse of powerless workers by the employers is almost guaranteed.

Things were so different when I was 25 years old and worked at the local ‘Melkunie’ milk factory as a temp worker: payment was great, the atmosphere at the job was great and foremen, bosses and managers were friendly and understanding towards their workers. Some of my fondest memories were created during my working hours at the milk factory.

Workers even enjoyed one paid(!) break during working hours and good meals could be acquired at very reasonable prices. And last, but not least: there was always a warm welcome for temporary workers, who wanted to return to the job after some time away. 

Even physically or mentally handicapped workers with sufficient working capabilities got the ‘Melkunie’ treatment, thus freeing them from a life living on subsidies and welfare payments.

How different are things nowadays in situations, like the one described above. 

Workers are treated like immediately replaceable resources, with virtually no rights and countless obligations, of which infringements are severely punished.
I can only hope that the future government of The Netherlands and the current Belgian goverment – and as a matter of fact all governments and supranational governing bodies within the EU - take such excrescences in today’s labour markets finally serious.

Companies and governments must understand that labour unions, as well as extremely brave individual workers and cautiously united worker groups gave their blood, sweat and tears for a fair treatment of lower and middle class workers by their employers. It would be a disaster when the clock was turned back to the appaling situation of the Middle Ages, in which workers were literally owned by somebody and had no rights at all.

And so: when the free market blatantly fails, administering more market is amplifying the problem, instead of bringing the solution. 

Strong governments must act on behalf of the people who don’t have the power to do so. Protecting the poor and powerless, instead of helping the ones who have it all. It is their one of their most important obligations and a large part of their raison d’etre.

Yet, there are still few signs that the European national governments and the EU all understand that important message.

Monday, 8 May 2017

How will the negotiation game between the United Kingdom and the European Union end? Here could be some answers!

The negotiations between the United Kingdom and the European Union about the British “divorce” from the EU have officially started a month ago with the handover of the Article 50 letter from Theresa May.

And although the prelude to the actual negotiations, featuring the chairman of the European Commission Jean-Claude Juncker and British Prime Minister Theresa May, was very rocky – when both had a dispute-laden official dinner at Downing Street 10 and sources around Juncker leaked some of these undisclosed discussion points to the German newspaper ‘Frankfurter Allgemeine’ – these negotiations will soon start for real.

Head of Service Michel Barnier of the European Commission and his team, as official representatives of the EU, will negotiate with PM Theresa May and assistant-negotiator David Davis, who represent the United Kingdom.

To the initial annoyance of the EU negotiators, PM Theresa May suddenly threw in the bombshell of organizing general British parliamentary elections in June, in order to get a stronger mandate for these tough negotiations with the EU. 

However, when the mandate of Theresa May is reinforced indeed after the parliamentary elections, these Brexit negotiations can take off in full force. And all signals do point in the direction of a stronger mandate indeed for May, as the Labour Party of Jeremy Corbyn  is virtually blown to smithereens in the prelude to these elections and the liberals of Nick Clegg could never take over the role of 'classic' Labour for most left-wing Britons.

Even though the stakes of the negotiations are extremely high for both parties involved, the starting point is relatively simple:

The target of both parties is: 
  • (a.) to come to an orderly divorce regarding the partition of the mutual estate and a justified payment of the pending bills and financial obligations that the UK has with respect to the EU and
  • (b.) to reach a series of trade agreements between the UK and the EU countries for the time after the divorce. 
The United Kingdom would like to start both negotiations at the same time, while the EU is adamantly in favour of finishing (a.) first, before starting with (b.).
Both the EU and the UK will initially try to reach the most favourable results for themselves with these negotiations, while trying to give as little away as possible to their opponents. Therefore these upcoming negotiations between the United Kingdom and the European Union can –and perhaps must – be considered as a (very serious) game. 

It is a game in which there can be clear winners and clear losers and in which both parties could lose dearly at the same time. But it is also a game in which both parties cannot both win clearly at the same time (i.e. at least in my humble opinion) and in which the “best result” for both parties is a compromise that probably all people tolerate, but none of the people really love.
I’ve written this down in the following negotiations schedule:



Chart 1 – wins and losses in the game

The stakes and chances for the negotiations game
Chart created by: Ernst's Economy for You
Click to enlarge
The reason that both parties can win the negotiations, but not both at the same time, is that the goals are simply too contradictory for a mutual win:
  • Extremely favourable separation and trade terms with various opt-ins for the UK (i.e. an EU ‘a la carte’ option) and on top of that an effective end to unhindered immigration of EU citizens into the UK would mean a clear victory for the UK, but a dear loss for the EU;
  • A divorce at such unfavourable terms for the UK that it would cause economic hardship and severe loss of prosperity for the country and would scare the other members of the EU away from only thinking of such a ‘~exit’ would be “great “ for the EU, but a terrible loss for the UK;
So the best outcome would be an outcome in which both parties sacrifice some points from their initial tough stance and give some pork away to their opponents, in order to reach a mutually acceptable result. However, this will probably take quite a long time and there might be some very tough lumps to swallow for both parties.

And last, but not least: the funny and at the same time very awkward thing is that both parties can totally lose this game – at least that is what I think. That would be when both parties get so alienated towards eachother in the negotiation process that they ‘punish’ eachother into a mutually terrible deal or perhaps worse: a huge political-economical (or even military) conflict.

These circumstances make it extremely important to play this game “hard and smart”, but with a keen eye for the opponent’s needs, concepts and visions.

I laid down a few assumptions for this game in the following three schedules, accompanied by my comments:

Chart 2 – greatest gain and most feared loss

The greatest gain and most feared loss in the game
Chart created by: Ernst's Economy for You
Click to enlarge
As I mentioned before, the UK wants an ‘EU a la carte’ with all the opt-ins, like free trade and free traffic of goods and finances between the UK and the European continent, but with an opt-out for the now mandatory free traffic of people. All privileges and no obligations towards the EU. 

The biggest fear of the UK in this game is that they get a very poor (or even no) trade deal with the EU members: a situation that brings the UK's citizens and companies economic hardship and massive loss of prosperity. 

Or, perhaps just as important, that the UK has to swallow an enormous lump with regards to the unhampered immigration of European citizens: that they have to carry the burdens of the EU membership, without having the advantages of it anymore.

Where the EU would like to have a trade deal with the UK that is as poor and hideous as possible, but without setting the whole situation on fire, the EU fears most a deal that feels like the dreaded ‘EU a la carte’ that the Britons want. 
When this would happen indeed, this could lead to other countries abolishing their EU membership, under the right circumstances and peer pressure.

The hardest thing is finding a viable and workable compromise here, that meets both parties’ requirements more or less, without both parties giving in too much.

Chart 3 – possible compromises and important influences for both parties

The possible compromises and important influences for both parties
Chart created by: Ernst's Economy for You
Click to enlarge
A few of the most important industries for the United Kingdom as a whole are the financial and commercial services industries, mainly situated in the greater London area. These industries are for me the cork on which the UK floats and these must be protected at all costs. Although the heavy industry and the manufacturing industry are also very important for the country, the UK is not so competitive in these areas. 

So perhaps the UK are willing to give in with regards to the latter industries, to the advantage of the commercial and financial services industries.

This is the reason that I think that a workable trade and divorce agreement with the UK can be found through the EU ‘protection’ of the greater London area and the financial and commercial companies in this area. When a trade deal can be reached here, the UK might be willing to swallow a few lumps with respect to UK immigration of EU citizens and moderate trade levies on other British industries.

A workable solution for the EU would probably be a trade deal that puts some moderate (but not extremely high) levies on British products and services. And such a deal should always incorporate a warrant for the current and future(?) EU immigrants in the United Kingdom, that they can live there and work there for as long as they want, without being hampered or forced out by the UK government or the British population as a whole.

There is definitely some manoeuvering room there, although negotiations should be held very cautiously.

However, what could negatively influence the circumstances for the negotiations is the British ‘once we were an extremely powerful and great empire’-complex, that makes that the UK feels much more powerful and strong than the country actually is at the moment. 

This complex could force the country to play high stakes poker with the EU, which could lead to the dreaded ‘both lose’ outcome of the game.

Other influences are the risk of a future ScoNIxit – an exit from the UK by Scotland and Northern Ireland as a consequence of an extremely unfavourable British trade deal – or an escalating conflict with Spain about the island of Gibraltar.

What could negatively influence the strenght of the EU negotiators is when countries like f.i. The Netherlands and Ireland act as partypoopers / dealbreakers for the EU, when they start to fear for their formerly prosperous trade deals with the UK.

The EU always had a history of acting like 28 (now 27) frogs in a wheelbarrow and henceforth there is a considerable chance that the UK tries to play the ‘divide and conquer’-card with its favorite trade partners, by covertly promising them slightly better trade deals and slightly lower import levies than the rest of the EU. 

These ‘rogue’ trade partners, with their then hidden agendas, could put fierce pressure on the negotiation process and could act as a fission fungus within the EU itself.

Nevertheless, at this moment the EU seems very much one block in the initial negotiations with the UK, as all countries seem to understand the importance of a tough deal for the UK.

 Chart 4 – The ‘first strike’ and the tipping point

The first strike in the negotiations and
the possible tipping point in the game
Chart created by: Ernst's Economy for You
Click to enlarge
As far as I can see from a distance, the current British stance towards the EU negotiators seems to be: “We are the UK and who are you?!”

The Britons seem overly confident in their aim towards their desired ‘EU a la carte’ condition, with plenty opt-ins and no EU immigrant issues for the distant future anymore. They currently try to get the best for free and don’t seem interested in what their negotiating partners think or want. They therefore utterly ignore the desires and demands of the European Union.

This is not a viable option as it will undoubtedly lead  to anger and alienation among the European negotiators. 

The Dutch journalist Joris Luyendijk, who is a steady columnist for the Guardian, already heaved a sigh, when he pleaded in an Op-Ed that the UK could not be considered a serious country anymore:

And then there is Theresa May herself. Her claim this week that the EU is trying to influence the elections in Britain through a leak to the Frankfurter Allgemeine Zeitung is the latest example of a long list of statements that simply make no sense. Britain is not the centre of the world, and the idea that EU leaders would sit together plotting a victory for Jeremy Corbyn is laughable.

Far more likely is that EU leaders decided to leak the proceedings of their dinner on Sunday with May in order to warn their own public about how irrational Britain has become. How the country believes itself to have the upper hand in a negotiation with a group of nations seven times its own size. How it wants to be part of the single market while refusing to recognise the authority of the European court governing that market. And, most alarmingly, how badly informed May still is about the practical consequences both of Brexit and of a no-deal crash out of the EU.

Joris Luyendijk is always quite critical and rocksteady in his approach towards the English and their habits, but what he says definitely makes sense here. 

However, I believe in a tipping point in this game, when the emotions are finally out of the way and when both parties finally try to avoid getting the scenario that they absolutely not want. 

Then is the time to do business, at last!

The EU on the other hand is akin more to Clint Eastwood currently than Clint Eastwood himself: 

“Do you feel lucky, British punkette?! Do you really think you can get away with a Brexit without being severely punished for it? Well, you’re dead wrong, woman! I’ll make you pay for it!”.

But the EU is no Clint Eastwood (because there is only one Clint Eastwood) and they won't manage to stay this tough for two years in a row! 

So in order to prevent from the divide-and-conquer scenario within the EU itself or from a full-blown trade war with the UK, the EU will leave this ultra-tough stance quite soon after the British elections in June. Nobody wants this British stew to simmer for too long and spoil it all. And that might be the tipping point for the EU.

It is an interesting negotiating game and a tough one... And the stakes of it are very high.

These are my ponderings about the outcome of this game. I am sure that some of these concepts might indeed play out, while others might deviate from reality in the coming months and years.

I would put my money on both parties chosing in the end for the ‘no winners, no losers’ scenario, as they gives the best chance for a workable compromise for both parties for the near future.

However, with emotions running very high during the negotiation process in the coming months and years, the ‘complete loss for both parties’- scenario could also play out.

Then we could be in for a hot spring of 2019!  Place your bets! Rien ne va plus!

Sunday, 23 April 2017

Employees should have the right to be just very good in their job, without having to show further ambitions and they should get a better payment for it too.

My youngest son Roger is a 9-year old powerhouse at chess: he is extremely ambitious, a genuine fighter from the trenches of the game and always hungry for more training and more information about the noble game of chess. And perhaps most important: he somewhat lacks the power of self-relativization.

This capacity for self-relativization is a capacity which would make him a more easy human being to live with, but would probably hamper him in his possibilities to become a professional sportsman in chess. Although a world or even European championship in chess will probably not be achieveable for him, he is nevertheless definitely striving for it and he is very much willing to walk the extra mile for his goals regarding chess. No limits, no boundaries…

His older brother Edmond, a very adorable person who is perhaps somewhat softer and more empathic than his little brother, also likes to play chess and in his own right he is very good at it. However, in comparison with his younger brother his own achievements pale.  

As this is amateur sports and not real life in which both would have to live from their hobby, this is not a very big problem. “As long as they have fun while doing it”, is in our family (and in many other families) the creed guiding us in the way that we look at the sportive achievements of our children.

However, when it comes to common labour and especially the middle-class jobs for higher educated and trained personnel, it seems that this way of thinking is not viable anymore. Many companies in challenging fields of labour, like the financial and commercial services industry or the manufacturing industry and the government demand nothing less than absolutely first class achievements from their personnel: all day every day!

Job vacancy descriptions – even for the simplest jobs – nowadays show lines like:
  • Ample ambition to grow both as a worker and a person;
  • A genuine passion for their work;
  • An agile attitude, enabling applicants to adapt to constant change and to achieve continuous improvement;
  • No ‘nine to five mentality’, but a ‘getting the job done’ attitude: during working time and when the situation requires it beyond;
  • Ambitions for life long learning to stay ahead of the game;
  • To be up or be out; 

And to make things worse for the modern-day workers, there is always Damocles’ sword, represented by at one hand the still enormous influx of cheap labour from Eastern and Southern Europe or India and on the other hand the ubiquitously mounting automation and robotization of their daily work and jobs. These circumstances combined put their job and in fact their sheer future on the line.

If such workers are not good enough or cannot live with the pace of modern businesses, they are doomed to lose their job and sole source of income to either the cheaper workers from abroad or to the computers and robots of modern day life. This circumstance turns a normal daily job in a kind of top sports achievement with fierce competition, a lot of pressure and enormous challenges on a daily basis.

And as professional sports require a “killer” mentality to become the best in the game at the expense of the competition, it goes without saying that for every “winner” there are countless losers who simply aren’t good enough to fix the job and win the medals.

However, in normal jobs it is often much better when people cooperate intensively and when they trust and help each other fully in order to make the company as a whole benefit from the fruits of their labour. Where the topsports mentality leads to successes for a few persons, the rest feels victimized by it and loses confidence in their own abilities and in their mutual goals and dreams that drive the company as a whole. This could be devastating for the success of this company.

And there is more. Where the winners of the company – the executive board and the upper management levels of the company – celebrate their own achievements with extremely high and ever rising remunerations in a so-called remuneration race with other CEO’s and leading managers all around the globe, the salaries and wages of the normal workers remain at a very stable level. As a matter of fact, in many cases their annual payment rises are close to nought [when adjusted for inflation – EL].

For older workers (i.e. well above fifty) there is nowadays even the looming danger of ‘demotion’, in which they get an easier job (i.e. less requiring), but against a lower annual payment. It is not really a pretty prospect when you have three children in high school or at the university, when a substantial part of your paycheck may vanish in thin air, due to a lower remuneration.

The future for lower and middle class workers became more and more uncertain in general, as fixed jobs with lay off-protection became a luxury good, exclusively reserved for the higher echelons within the company. And former ‘lifetime’ jobs have been replaced for the uncertainty of an existence as either freelancer (i.e. ZZP’er in The Netherlands) or as a worker with only temporary contracts or zero hour contracts for a substantial number of  years in a row. The latter is now especially true for younger workers below their mid thirties, but also older workers, who were so unfortunate to lose their fixed job, have to deal with this situation more and more often.

And the labour unions – earlier strongholds of workers’ rights, fair remuneration and labour protection – are standing more and more offside in the labour negotiations as a consequence of the changing mentality among workers and employers. This is mainly caused by the union’s excessive focus on their ageing, 50+ member base and – on top of that – the changing labour contracts leaving less room for union membership. This led to a perfect catch 22-situation in which the youngsters didn’t feel represented by the unions anymore and as a consequence refused to become members of these labour unions.

You could say that the labour unions managed to squander their worker’s confidence and goodwill, as many younger workers now think that they don’t need them anymore and the unions are useless for their own labour situation. These workers are probably wrong, but it is quite understandable why they think so.

The waning popularity of the unions is exploited by the employers’ organizations, who seemingly take their chances to humiliate the unions during the (typical Dutch) general negotiations (i.e. ‘the polderoverleg’), in which the union’s and employers’ demands (including the government as large employer) for the coming years are negotiated.

The following snippets come from the Dutch newspaper Trouw:

The labour unions reacted furiously. That there were a lot of hurt feelings from the past, became clear in the reaction of FNV [i.e. largest Dutch labour union- EL] chairman Han Busker: “Now they do it again. First they continue with shifting all risks to their workers and making uncertain labour the standard modus operandi. After that the attack started against lay off-protection. And now they kick the can down the road with respect to the mutually made agreements from the Social Agreement (i.e. the Dutch society-wide general agreement between employers, workers and the government) of 2015. This is pure unwillingnesss. This is aiming for prolonged uncertainty”.

And CNV [second largest labour union - EL] chairman Maurice Limmen was also enraged: “Employers are busy with demolishing the polder. We had ironclad agreements with these employers that we would repair the unemployment benefit [for older workers – EL]. What are deals with employers worth now?! We had some concrete arrangements to start from. But now the employers are frustrating these deals. This is not how it works. Older employees and workers really deserve this security. When things continue like this, it makes no sense to continue the negotiations regarding the other urgent problems on the Dutch labour market.”

This news message is symptomatic for the waning influence of the labour unions and the abuse of this circumstance by the employer’s organizations, but also for the unhealthy focus of the labour unions on the older workers, as their almost exclusive grassroots. The younger workers feel not represented anymore by the labour unions, but by waving their union membership they make sure that they indeed are not represented by the labour unions anymore.  This is a very unhealthy situation.

Perhaps all these deteriorating circumstances form a good way to activate the top sports mentality and ‘killer approach’ among the workers, but in the end it will prove to be bad for the workers AND the companies themselves: I am actually quite certain about that.

The labour market as ‘survival of the fittest’ seems to be the favorite dream of many ambitious companies and management consultancy firms. The ‘World of LinkedIn, McKinsey, Goldman Sachs, PWC and the Boston Consulting Group’ focuses solely on these “top sporters” and successful company sharks with skyhigh ambitions and no patience for less fortunate workers and in fact stimulates them in their “erratic” behaviour.

According to me, this leads to ubiquitous distrust and envy among workers and it rewards a ‘dog eat dog’ behaviour between people, who should in fact all be fighting for the same just cause, but often fail to do so, as they consider it not to be in their own interests.

I consider that counterproductive...

Not everybody is fit to be a ‘top sporter’ in his labour achievements and nobody should be forced to behave like one, unless it is his ultimate desire to become one. Perhaps in the end those companies are most successful that give their workers the security they need and the chance to be themselves and to improve themselves in a slow evolutionary way that feels natural and safe for them.

These are companies where doing the best you can is good enough, as long as you fit in the team and make the company as a whole better. No sports team can exist without the ‘water carriers’ who simply do their job well and require little attention and only the slightest compliment from their coaches.

And no company can either... For instance rowing on the Thames with only captains, helmsmen and lone rangers in the team and no ordinary rowers and teamplayers is no guarantee for success. To the contrary… And football teams with only stars and primadonna’s bring seldomly the success that their coaches and fans aim at.

I would advocate companies where good workers have the chance to excel in their jobs and just be good (or excellent) at it, without needing to have ambitions to reach higher and higher annually. When these workers want to grow, they should have all the chances, but if they don’t want to and they like their own job most, why should they always feel the obligation to grow?!

Even though that might seem counterproductive and even a catalyst for stagnation and (worse) decline of the company, it might be the contrary: happy and motivated workers will probably produce more and better products than unmotivated and scared workers, who constantly worry about their personal growth and their chances of being fired at the spot.

And there is more: please be so smart to pay workers for the increased productivity that they achieved in their hard hours of labour. In a country as The Netherlands, the wage development is nowhere near the productivity rise during the last fifteen years, as the following table shows. In this table I compared the general productivity increase in The Netherlands with the wage increase during the last 15 years.

Net wage development vs productivity growth 2001-2015
Data courtesy of Statline (powered by the
Central Bureau of Statistics: www.cbs.nl)
Click to enlarge
When one does not take the inflation into consideration, he could think that the wages increased much more than the productivity in The Netherlands. However, when the inflation (i.e. based upon the consumer price index) is taken into consideration, the total net wage increase between 2001 and 2015 was little more than 2.5%, against a productivity increase of 15.5%. This shows the substantial void between what employees produce and for what they are paid nowadays.

Due to wage restraint and job flexibilization, the wages of lower and middle  class workers have virtually stood still during the last fifteen years, while their productivity and thus the profits of their employers grew steady, by in average 1% per year.

Therefore it is time to pay the workers their share of this productivity increase, instead of focusing on shareholder value alone or on new and more modern computer systems and even robots to totally replace these employees within a few years. This should be a reward for their loyalty and for their will to give the best of themselves on a daily basis.

Motivated workers can still work wonders in a company, while computers and robots are very complex and therefore are often extremely hard to implement in an existing working situation. One could say that computers are in fact not always the best solution, in spite of the current state of technology.

And those top sporters among your personnel?! They are always extremely hard to keep within your company and their loyalty lies often with the person that pays the highest paycheck. There is no guarantee that it always will be you and your company...

Sunday, 9 April 2017

Does the Euro survive the ignorance and superficiality of the European populist politicians, but even more the moderate goverment leaders and politicians who increasingly follow in their footsteps?

Suddenly the odds for the survival of the European Union seem considerably higher in 2017 than during the catastrophic year 2016, in which the future for the European Union was very bleak indeed.

2016 was the year of the Syrian and African refugee crisis, in which the usual solidarity and good relations between the European countries came under fierce pressure. Many European countries, not lying in the front line of refugee arrivals like Spain, Greece and Italy do, refused to accept their fair share from the influx of refugees numbers. This left especially Italy and Greece in problems, as they were stuck with large numbers of desperate refugees, with nowhere to go and nowhere to hide.

It was also the year in which the authoritarian voices of Viktor Orbán (Prime Minister of Hungary) and Jarosław Kaczyński (leader Law and Justice Party of Poland) sounded more shrill than ever in their battle against the free press and other vital ingredients of a democratic structure. Already this behaviour led to steadily mounting animosity within the European Union

On top of that, 2016 was the year in which the Dutch referendum about the EU-Ukraine Association Agreement ended in a blatant loss for the pro-agreement government of Dutch PM Mark Rutte. This forced PM Rutte to kick the can down the road with respect to the Association Agreement and play a game of hide and seek with the people from the anti-agreement coalition.

These people demanded an immediate withdrawal from the whole agreement by The Netherlands – including the trade parts of it that were outside the scope of the Dutch government. This was a demand that PM Mark Rutte could never meet, without causing enormous commotion in Europe and everybody and their sister knew that.

And last, but not least, 2016 was the year of the British referendum about their membership of the European Union. A referendum, that had been dreaded and cursed in advance by most continental politicians and that left many British citizens and almost all European leaders in shock and awe, when the British population voted in majority in favour of a Brexit, thus making the British exit from the EU inevitable.

This referendum made an immediate end to the political career of British PM David Cameron – as I accurately predicted a few days before the referendum took place  and it showed that the Brexit camp did not even have the slighest hint of a plan, when they would indeed win the referendum. The ideological leader of the Brexit camp Nigel Farage (UKIP’s ) left the British ravage for others to clean up and PM Theresa May – who was in fact against the Brexit herself – was appointed as ‘volunteer’ to clean up the mess, which she did in a very decisive and even reckless way.

At these very moments it seemed that the European Union was ‘a dead man walking’. The union, of which the raison d’etre and usefulness had never been in doubt in the previous 50-odd years of its existence, came under heavy crossfire from the populist movements everywhere in Europe, as well as from the middle-of-the-road politicians. These moderate politicians closely followed in the populists' footsteps in order to not lose their own grassroots to them, leading to an ubiquitous movement in more populist directions.

Except from the influx of African and Middle-Eastern refugees for which nobody seemed to have compassion, solidarity and understanding anymore, the main targets of these relentless attacks against the European Union by both the right- and leftwing populists and the moderate rightwing politicians were the open borders (i.e. ‘Schengen’) and… the Euro.

The mantras of these politicians were: the borders must be closed again, to stop the dangerous influx of refugees, as this creates havoc in the open and rich societies of Europe.

And especially the euro was “the most dangerous and crazy experiment” in their views, as:
  • It started without a proper financial, economic and monetary union, which all are necessary as a foundation for a sound financial system;
  • There was generally a Europe of two speeds, with the “frugal, conscious and successful” countries in the North of Europe (according to politicians in a.o Germany and The Netherlands) and the “wasteful, inconsiderate and backwarded countries” in the South (according to the same politicians in these two countries);
  • Countries like Greece and Italy should never have been allowed in the Eurozone in the first place, as they were financially and economically unstable and they ‘had lied about their financial and economic situation’ by rigging their national statistics and national, financial reporting;

Summarizing, at the end of 2016 things seemed very dire for the European Union, with populism on the rise – also among moderate politicians – and the EU under general crossfire from right- and leftwing politicians, for the alleged mistakes that it made in past and present.

And with general elections soon to be held in The Netherlands (Party for Freedom (PVV) – Geert Wilders), France (Front National – Marine le Pen) and Germany (AfD – Frauke Petri), it seemed that the situation could only turn more awkward for the EU.

But look now in the first half of 2017: even though Geert Wilders of PVV has gained five more seats in parliament, it wasn’t by far the landslide increase in seats that everybody thought he would gain, according to earlier polls.

And in France, the social-democrat candidate for the presidency Emmanuel Macron seems a trustworthy and undisputed opponent for the anti-EU stance of Marine Le Pen.

Instead of protests against the European Union and the Euro, there is a growing number of protests in favour of the EU and the Euro, as many people now consider what they have and how valuable it is.

On top of that, everybody can nowadays see the ‘ultralarge-scale sociological experiment’ that is the Brexit; everybody can see how the British government is struggling to bring it to a good end. And how clueless the victors of this referendum were, when they had won it.

Perhaps is 2017 indeed the year of the turning point in populism. As many people have seen that he European populists are masters in asking the right (or wrong) questions, but utterly fail in addressing these questions in a structural, legal and acceptable way. And populists are also extremely poor in binding a nation together in a way that everybody can have a decent life in peace and prosperity.

In order for populists to be successful, there must be groups available to suffer for them: the scapegoats, on which anything being wrong in society can be blamed. This blame game is only successful when everybody (i.e. nearly the total lower and middle classes) is suffering from difficult economic circumstances, which can be blamed on these groups under fire. 

Now that the economy is reluctantly, but steadily improving and joblessness is finally dropping, the feeding ground for populism is slowly disappearing. So perhaps, the worst in populism might indeed lie behind us. But that does not automatically apply to the Euro currency yet.

Due to the Eurozone’s inadequate strategy of kicking the can down the road with regards to especially Greece and Italy – temporary taking away the effects of the euro crisis without really solving the causes for the euro crisis itself – the confidence in the Euro, as the currency of choice for the European Union, is still at a low.

The debt level of Greece is nearly infinite until this day and the country is still in a very dire situation, without easy solutions. Instead of taking away the debt itself through a (partial) bail-out, the debt is rolled over to the future with yet again new loans, that will be as always very hard to pay back. In this way, the dire situation can last forever, as the tax collection in Greece, as well as the economic outlook for the country is still close to a disaster. And so the debt level of Greece remains a huge millstone for the future of the Eurozone and real solutions are still very hard to find.

And also Italy has still many rivers to cross before the country will be totally healthy, from a economic and financial point of view. In Italy there is always the difficult North-South situation with the rich and successful Northern provinces, against the poor and backwarded Southern provinces (‘according to many Italians, Africa starts directly under Rome’). On top of that there is the top-heavy political system and the still widespread corruption and extremely powerful organized crime that makes any change for the better very difficult in Italy.

Even though the economic situation in Spain and Portugal, and also in France, is slowly improving, the challenges ahead for the Euro as a unity currency are still enormous.

What does not help at such a moment is when the chairman of the Eurogroup, the rectilinear, ‘Calvinist’ swashbuckler Jeroen Dijsselbloem, states in an interview that the Southern European countries ‘have spent their emergency help money on "drinks and women" and now come begging for more’. This was not only a blatant lie, but leads to enormous anger in the Southern European countries, while diminishing the confidence in the Euro in the Northern European countries.

As this is the biggest danger for the Euro as a unity currency: the ignorance and superficiality (and sometimes sheer stupidity) of not only the populist politicians, but also the formerly moderate politicians, who all seem to do their best to weaken the position of the Euro, instead of reinforcing it.

It is not surprising that every now and then the same story comes around again that ‘Greece and Italy should be kicked out of the Eurozone’. This story is especially popular among more moderate politicians, as the populist politicians state that they and their countries want to leave the Eurozone themselves and return to their classic currencies.

The former, as well as the latter isn’t going to happen… at all! Forget it! Don’t even think about it!

The operation to reintroduce the old currencies in (some of) the Eurozone countries is the same, extremely expensive operation as the introduction of the euro between 1995 and 2002. And it will be equally difficult. 

One could think about all kinds of ‘paper drachmes’ and ‘paper lires’ for Greece and Italy, but the bottomline is that countries leaving the Eurozone would lead to economic havoc and ubiquitous uncertainty everywhere in Europe, with the extremely entangled financial and economic system that we have nowadays. 

There is absolutely no way to prevent that from happening!

We – the united people of Europe, represented by our own elected politicians and representatives – chose to introduce the Euro. Whether we like it or not, the Euro is here to stay and will never go away anymore, unless an economic cataclysm happens, like a war or a widespread and long depression in Europe.

You might ask: "Is the euro flawed?!" Yes, it undoubtedly is!

"Should the euro perhaps have started under different conditions?!" Perhaps, yes!

"But is there a better alternative available?!" No, there is not, in my humble opinion!

Every politician in Europe should accept that the Euro is here to stay and that replacing it for another currency is a nearly impossible challenge and - on top of that - a very dangerous one, from a political and economical point of view.

What politicians should do in order to save the Euro, is just stopping with weakening its position to begin with and instead looking for ways to improve it in its current, flawed, but yet unchangeable form. 

Just like the partners in an average marriage, the Euro is far from perfect, but just like the same partners, the Eurozone countries should try to make the best of it. That is what the European leaders should also try to do: make the best of it and lead it through the current, difficult crisis; hopefully towards a better and more prosperous future. That is in the interest of every European!

And of course the politicians should try to reinforce its foundations, by slowly, but surely working towards the monetary, financial and economic union as the best way to make the euro a more balanced currency. 

However, at this moment it will still be very hard to achieve that, under the still quite anti-EU stance of large groups in European society. Nevertheless, the leading politicians should hold on to this paramount strategy, as the best warranty for a more successful future. 

Like Bryan Ferry of Roxy Music sang in the Seventies: “Let’s stick together!”

Monday, 3 April 2017

Gibraltar and the domestic gains of old-fashioned, post-colonial sabre-rattling against a ‘vicious enemy’

I visited Gibraltar once in my life – in 1996 – during a fortnightly group roundtrip in a minivan in Spain. This roundtrip led us through the magnificent Spanish province of Andalucia and one day we visited indeed the most British part of Europe, located east of Dover.

I remember the beautiful view on the top of the mountain, the funny and energetic berber monkeys, the wonderful weather and the horrible British food – Shepherd’s Pie with overcooked carrots and greenpeas drowned in gravy –  which I suspect until this day gave our whole group a food poisoning that lasted for a minimum of two days for the lucky ones and among others much, much longer. But, to be frank, it could also be a fish dish in Spain itself, that caused our group’s discomfort.

And of course I remember how utterly British Gibraltar was, as a kind of open air museum crafted after the picture-perfect, proverbially British city that didn’t exist in reality. With red telephone booths, pubs, souvenir shops, restaurants featuring British ‘cuisine’ and other typically British paraphernalia for both tourists and anglophiles.

Now, twenty-odd years later, the same peninsula of Gibraltar is the subject of heavy, vocal sabre-rattling by both the Spaniards and the Britons.

Hardly the British government and diplomats delivered their Article 50-letter, effectuating the Brexit as a process, or the Spanish government smuggled a Gibraltar paragraph in the EU draft agreement that was the starting point for the orderly Brexit negotiations. The New York Times described the matter in the following snippets:

After it became clear Friday that the union’s remaining leaders might give Spain an effective veto over whether any deal applied to Gibraltar — a British territory long the subject of an acrimonious sovereignty dispute between London and Madrid — lawmakers in Britain and Gibraltar responded with defiance and concern.

Gibraltar’s chief minister, Fabian Picardo, made his anger clear on Friday, calling Spain’s tactic “disgraceful” and “predatory.” He said in a statement about the insertion of language on Gibraltar into the European Union’s draft guidelines for negotiating a British withdrawal: “This unnecessary, unjustified and unacceptable discriminatory proposed singling out of Gibraltar and its people was the predictable machination of Spain.”

In Gibraltar, which has a clear frontier with Spain, the fear is different. It is that once Britain is outside the European Union, which guarantees free movement of people, Spain could demand concessions or make the border with Gibraltar harder to cross, effectively isolating the territory.

Although the mounting emotions about Gibraltar are perhaps understandable with both the Spain and British views and background in mind, the Spanish action – to make the negotiations with the UK an effective hostage of the future British plans for Gibraltar – was not so sensible from a political point of view. Especially as Spain itself has two exclaves – Ceuta and Melilla – on Moroccon soil; two exclaves which Spain is not likely to abandon soon.

On top of that, the situation around Gibraltar never stopped both the Spaniards and Britons from actively working together for 40 years within the European Union and its predecessors. And it also never stopped the British elderly from spending their finest years in Spanish holiday resorts and second houses, at the same time that their youngsters spent their holiday money in Spanish discotheques and pubs, while drinking (much too much) Spanish beer, wine and cocktails.

So the question is valid “what the fuzz is all about”?!

And while the Spanish action was already quite erratic to these eyes, the British reaction – especially represented by former minister and current Tory official Lord Michael Howard, as well as a few warmongering British newspapers – was straightforwardly bananas, as the following snippets from the Guardian show:

Theresa May would be prepared to go to war to protect Gibraltar as Margaret Thatcher once did for the Falklands, former Conservative leader Michael Howard has suggested, in comments that were immediately criticised as inflammatory.

Lord Howard’s suggestion that the prime minister would be ready to follow in the footsteps of her predecessor 35 years ago came alongside a government pledge to protect the sovereignty of Britain’s overseas territory.

Downing Street said May had called Fabian Picardo, the chief minister of Gibraltar, on Sunday morning to say the UK remained “steadfastly committed to our support for Gibraltar, its people and its economy”.

Sir Michael Fallon, the defence secretary, also used robust language. “We’re going to look after Gibraltar. Gibraltar is going to be protected all the way because the sovereignty cannot be changed without the agreement of the people of Gibraltar ,” he said.

The highly provocative picture of a British aircraft 
carrier at full steam in the British Telegraph newspaper
Picture courtesy of Telegraph.co.uk
Click to enlarge
And the Telegraph put things in overdrive, with a picture of a British war vessel and the following bragging lines about the British military strenght in a possible war with Spain:

Britain's Royal Navy is substantially weaker than it was during the Falklands War but could still "cripple" Spain, military experts have said.

Rear-Adml Chris Parry, a former director of operational capability at the Ministry of Defence,  has called on the Government to "appropriately" invest in Britain's military capacity if it wants to "talk big" over Gibraltar.

It came as a former Tory leader suggested that Theresa May would go to war with Spain to defend the sovereignty of the peninsular just as Margaret Thatcher did with the Falklands.

Prime Minister Theresa May of the United Kingdom quickly downplayed the situation in the media, reputedly by “laughing off the Spain war talk”, but the tone was definitely set.

As this incident shows, a toxic combination of aggrieved pride and an inferiority complex, as well as unhealthy nationalism and an uncertain future under influence of arguably the biggest and most uncertain, economic step in recent British history, could quickly lead to mounting anger and dangerous envy among the British population. And this by itself could lead to irreversible steps on the path towards war: hence the Falklands war, with its massive bloodshed and skyrocketing emotions about a few dry and almost deserted islands in the South Atlantic Ocean.

By focusing on a mutual enemy – Spain in this case – the British officials can distract the attention from the mounting political and economic uncertainty and the quite unfavourable outlook, emerging from the inconsiderate, to these eyes even reckless Brexit that the United Kingdom entered into.

The promise of a war against a ‘vicious enemy’, who threatens a country’s social, economic and political interests, is a catalyst for exploding nationalism and national pride. It will probably lead to a population that stands behind the government as one man, more than willing to chew through a dozen economic, sour apples on behalf of the greater good and the national interests being at stake. That is the reason that I am not absolutely sure that the situation between the United Kingdom and Spain will not escalate further, before coming to a timely end (or not).

Is the current British escalation strategy a dangerous strategy? It is very dangerous!
Is it effective? Oh yes, it is very effective for domestic purposes, as it overcomes political differences within the population and leads to ‘one people united against the enemy’!
And might the British government – perhaps with Lord Howard as a straw man – have deliberately (ab)used this Gibraltar crisis as a powerful weapon of government mass deception and nationalist demagoguery?! 

Well, to answer that question I gladly turn to what Sir Francis Urquhart, the main political vilain from the (far superior) British ‘House of Cards’, would have stated in this situation: “You might very well think that! I could not possibly comment!” 

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