Bourdieu snippet

A bit more on language... 

[D]ominant individuals, the absence of being able to restore the silence of doxa, strive to produce, through a purely reactionary discourse, a substitute for everything that is threatened by the very existence of heretical discourse. Finding nothing for which to reproach the social world as it stands, they endeavour to impose universally, through a discourse permeated by the simplicity and transparency of common sense, the feeling of obviousness and necessity which this world imposes on them; having an interest in leaving things as they are, they attempt to undermine politics in a depoliticised political discourse, produced through a process of neutralisation or, even better, of negation, which seeks to restore the doxa to its original state of innocence and which, being oriented towards the naturalisation of the social order, always borrows the language of nature. 

The Labour debate on corporate governance

More signs that a tilt towards employees is on the cards? This from the Labourlist One Nation pamphlet:

First, we need to rethink the British approach to corporate governance, which gives a formal governance role only to shareholders. Shareholdings are too fragmented and share ownership too diverse in most companies for shareholders to be able to properly oversee how companies are run. The legitimate role of employee representatives and works councils in company decision-making in many European countries stems from the formal role afforded to employees, alongside other interest groups like consumers and local communities, in corporate governance. A requirement to take decisions in the long-term interest of the company rather than the sole interests of shareholders or directors (or even workers) means that diverse interests have to be balanced and comprises struck.

Similarly there is a whole chapter on corporate governance written by Maurice Glasman in the Fabian pamphlet The Great Re-balancing. Here's a chunk -

Corporate governance reform asks a lot of capital. It relinquishes its ultimate sovereignty and recognises the workforce, and a skilled and powerful workforce at that, as a necessary part of the generation of value. It recognises the inability to hold itself accountable and recognises its common interest with labour in disciplining its tendency to be too generous to itself. It also asks a lot of labour, and of the unions. The German and British trade unions took different pathways in 1945. The British trade unions went for the Keynesian state model in which nationalisation, the welfare state, statutory wage settlements and collective bargaining were the mainstay. In West Germany, in contrast, they went for a worker representation model within the economy within a decentralised political system in which labour market entry was regulated by vocational qualification and the financial system was far more decentralised, with regional and sectoral banks playing a far more significant role. While the British model was faster out of the blocks in 1945 it turned out that the German model won the race. They retained far higher trade union membership, lower wage differentials, fewer job losses and a vocational status for labour within the economy. One of the consequences of corporate governance reform is the requirement for trade unions to seek the common good and that is a conversation that has barely begun.

Glasman goes on to argue that we basically need co-determination in the UK.

So, quite a few signals that wonk-ish types in Labour think corp gov reform is big issue, and what they are setting out is break with shareholder primacy. I guess the big unanswered question is what the frontbench makes of all this.

Language, legitimacy and Louise Mensch

One of the issues that comes across when reading about the practical use of language, or its use in social settings, is how much relies on the legitimacy of the speaker, compared to the actual words spoken (or written, tweeted etc). The idea of performativity, which I've written about before, has some of its roots in Austin's How To Do Things With Words. Austin was interested in the way that some speech act achieve something through their being spoken. For example saying "I'll promise I'll be there at 6.00pm" achieves the act of making a promise.

He explored the question of when speech acts like this were successful and when they were not. Austin gave the example of naming a ship. I could smash a bottle of champagne on the side of a ship and say "I name this ship the Queen Elizabeth" but because I don't meet some of the 'rules of the game' for ship-naming (I'm not a member of the royal family or whatever) the act would not be performed. This is even though, on the surface of it, I have met the requirements of performing the act.

As I understand it, Bourdieu, whose book I am reading currently, says that Austin gets things wrong by looking for what allows words to perform actions in language itself (and its use). Instead he argues that the words only work because we have bought into the institutions that allow Act X to be performed by Representative Y, and thus make the ship-naming, or whatever, a successful act. (He also writes a lot of good about how the rules of the game in different types of speaking as undertaken by people from different social classes work, and how this leads people from one group to be silent or clumsy when speaking in a situation governed by the rules of another group. But that's for another day).

I find Bourdieu's take on things pretty convincing, which leads me on, obviously, to Louise Mensch on Twitter. There's something a bit jarring about her tweeting about UK politics, and I think that this is bound up with the issue of legitimacy. A UK MP tweeting about UK politics is entirely normal. Because they are the specialist in that particular field their tweets are entirely legitimate, and what's more they are invested with more power because we consider that they know the rules of their game better than we do. (Note that a lot of political commentary is concerned with what a particular form of words really means, or what impact it will really have, and this is divined by those who 'know the rules'.) 

Of course politics is also participative. Sometimes an ordinary punter can say/tweet something that transcends the rules of the game in the political field, and appears very powerful through doing so. We are reminded, briefly, that politics isn't all about who's up/who's down and 'what does X mean for Y', it's also about politicians taking our views into account and shaping policy accordingly.

But what about Louise Mensch? She has been an MP, but for a very brief period. She did not have a political career before, and may not have one in future, and she no longer resides in the country about which she makes her political commentary. I think these factors combine to corrode her legitimacy to speak as a political expert. Yet equally she is not an ordinary member of the public. She cannot, as it were, 'speak truth to power' as only recently she has been one of the faces of power. What's more, as an employee of News International she has a public voice in our media which is not available to ordinary citizens who reside in the UK. So it what capacity does she now speak?

I think that we must consider that whatever legitimacy she has now comes from celebrity, rather than politics. She was quite well known as an author before becoming an MP (and spent more time in that field), and her public recognition increased once she was elected and, in particular, sat on the DCMS committee investigating phone-hacking undertaken by the company which now pays her as a columnist. So, in a way, she has benefited from the circular nature of modern celebrity whereby one can be famous, and feature in the media, by nature of having been in the media previously and therefore considered famous. In addition, her husband is well-known in the music industry. In combination, then, I wonder if the legitimacy she now has to speak is comparable to someone like, say, Sharon Osborne? And perhaps we should assess her contributions to UK politics taking account of this.


NB. I am taking the p***           

Whose money is it anyway?

Another Mark Kleinman story caught my eye last night. This time it's about anonymous (as always) investors encouraging RBS to a) make a big share award to Stephen Hester and b) defend its head of investment banking. The language used is interesting:

"If Hourican goes, there is little chance of getting a capable replacement. RBS’s investment bank is still very substantial, and he has done an excellent job. We would be furious if the RBS board doesn't stand up to pressure from the FSA and the Government," one shareholder said. "This is nothing more than a random witch-hunt."

Before I set out what bothers me about this let's consider the context. First, the state's stake in RBS is so large that this intervention doesn't matter that much. No doubt non-UKFI investor intervention can be used by the RBS board as a bargaining chip, but ultimately UKFI rules the roost. In addition this intervention takes place in the wider environment that I've described before where shareholders in the banking sector have, in my opinion, dropped down the pecking order, with regulators a more important force now.

So what do I want to moan about (this time)? Firstly, I just don't share the sentiment expressed. RBS is largely state-owned because its board failed to do its job properly, and therefore the taxpayer had to rescue it. No doubt in part the regulatory environment played a part too. As such most punters - people who have a financial interest in RBS remember - would consider it entirely right that the Government and the FSA take a very close interest in what the bank does before we even consider the Libor scandal.

But the fact the Libor issue deomstrated that the banking sector really had lost it way in terms of standards of behaviour surely requires that a clean break with the past is demonstrated. Our anonymous shareholders say "random witch hunt". I say make an example. Trust in the sector is very low in part because of the sense that very rich people in the City have been unaccountable. This may be rough justice (if it happens) but thems the breaks when we've been through a financial crash and the exposure of illegal activity at institutions we trust with our capital.

What really bothers me is who do these shareholders speak for? In the quote above, remember, they are sending a bank a message that they must "stand up to" the Government and the regulator. That's fine if you have the economic interest in the investment in RBS, but what if these are asset managers? They don't manage their own money, they manage our money. So it's not impossible that someone who manages your pension is telling RBS to give its chief executive a big share award and to stick two fingers up to the Government and the FSA.

What's more, I bet you they haven't told you that they are doing this, and they won't report back to you that they have done it. In the world of shareholder engagement it is taken as a good thing that this stuff is kept confidential, so chances are no-one outside the closed circle will ever know who has given RBS this message - even though it's other people's money that gives them the power to say it.

These issues are in particularly sharp relief in the banking sector because a) the state's role is much more direct and b) it's pretty clear what the public think of the sector. The potential disconnect between the views of those with the economic interest and those of the intermediary exercising delegated power are particularly large. But the point applies more generally. If shareholder engagement is going to be portrayed as having kind of 'progressive' element to it then there must be accountability in the system, back to the beneficial owner. Otherwise we can end up faciltating assset managers telling bankers they must have more money and defy the state.

Unrealised expectations of unintended consequences

As is obvious, I'm a big fan of Albert Hirschman (who sadly died just before xmas) and one of my favourite books is the Rhetoric of Reaction, as this is short & punchy take down of 'small c' conservative arguments against reform. One of the points Hirschman made when discussing 'unintended consequences' was that the fixation on them tends to obscure the equally important question of 'unrealised expectations' - things that we expect to happen as a result of a given reform but don't.

As I have bored on in the past, in corporate governance policy debates the threat of unintended consequences (always, by the way, assumed to be negative) is never knowingly undersold. So I thought I would start compiling a list of predicted 'unintended consequences' of a reform that was actually introduced which subsequently never occurred (hence my 'hilarious' title for this blogpost).

Here are three my initial starters -

Reform - July 2000 Amendment to the Pensions Act requiring disclosure of pension fund policy on social and environmental issues.
Predicted unintended consequences - would make trustees the target of single issue campaign groups, would lead to pension funds screening out various types of stocks with a negative impact on the UK economy.
Actual consequences - a few more SRI mandates, though no noticeable increase in screening, more asset managers add corp gov/SRI staff (a positive unintended consequence?), no evidence (none that I am aware of) of funds being targeted because of disclosure of policy

Reform - public disclosure of shareholder voting records (ok, not an out and out 'win' yet, but there's much more data available now)
Predicted unintended consequences - would make asset managers... er... the target of single issue campaign groups, would be a major cost for asset managers
Actual consequences - some media coverage of and trustee interest in actual voting decisions (ie more accountability), negligible impact on costs (based on feedback I have received), more analysis of investor behaviour (ie various surveys)

Reform - annual election of directors
Predicted unintended consequences - would increase short-termism, could lead to entire boards being voted out
Actual consequences - too early to tell? But no examples of whole boards being voted out, and is there any evidence of increased short-termism? 


Any other good ones out there?

A bit of Bourdieu

Up there with socks and slippers amongst my best xmas presents was Language and Symbolic Power, which my mum got me (and which must have an interesting effect on her future Amazon recommendations). I realise that lately I've been reading quite a bit of stuff about the political aspects of language (this book on politicians' use of metaphors is worth a read - Blair v keen on 'journeys'). I think this probably reflects my view that a lot of territory is currently up for grabs, and as such there is a corresponding linguistic struggle going on.

Anyway, back to my current book - although Bourdieu is making a serious point, this bit actually made me smile (apols for any typos).

There is every reason to think that the factors which are most influential of the habitus are transmitted without passing through language and consciousness, but through suggestions inscribed in the most apparently insignificant aspects of things, situations and practices of everyday life. Thus the modalities of practices, the ways of looking, sitting, standing, keeping silent, or even of speaking ('reproachful looks' or 'tones', 'disapproving glances' and so on) are full of injunctions that are powerful and hard to resist precisely because they are silent and insidious, insistent and insinuating. (It is this secret code which is explicitly denounced in the crises characteristic of the domestic unit, such as marital or teenage crisis: the apparent disproportion between the violence of the revolt and the causes which provoke it stems from the fact that the most anodyne actions or word are now seen for what they are - as injunctions, intimidations, warnings, threats - and denounced as such, all the more violently because they continue to act below the level of consciousness and beneath the very revolt that they provoke.) The power of suggestion which is exerted through things and persons which, instead of telling the child what he must do, tells him what he is, and thus leads him to become durably what he had to be, is the condition for the effectiveness of all kinds of symbolic power that will subsequently be able to operate on a habitus predisposed to respond to them. The relation between two people may be such that one of them has only to appear in order to impose on the other, without even having to want to, let alone formulate any command, a definition of the situation and of himself (as intimidated, for example), which is all the more absolute and undisputed for not having to be stated. 

Regulatory turn - more evidence

Mark Kleinman seems to get quite a few stories like this. The big point to me is that this kind of thing is now going on all the time. It's an interesting to note that the Stewardship Code was developed specifically in response to the failure of shareholders to engage effectively with the banks, yet it's precisely in the banking sector where shareholder primacy is being squeezed out by more active regulatory intervention.

The City regulator is leaning on Britain's newest high street bank to strengthen its boardroom line-up following a tussle over the appointment of its billionaire co-founder as its next chairman.

I understand that Metro Bank plans to reshuffle its line-up of directors to assuage concerns expressed by Financial Services Authority (FSA) officials about the elevation of Vernon Hill to become its chairman, which was announced on new year's day.
Insiders say that Ben Gunn, an existing non-executive director of Metro Bank and a City veteran who has run Friends Provident, the life and pensions group, is likely to become the lender's new vice-chairman.
Lord Flight, the senior independent director at the fledgling bank, will relinquish that title but remain on the board as a non-executive director, according to people familiar with the plans being discussed by directors. The proposals are still subject to change, insiders said.
FSA staff are understood to have told Metro Bank that they wanted a more established banking and financial services figure, such as Mr Gunn, to occupy a more senior role on the board.