Reinventing society

  Veteran management guru Charles Handy has been thinking about curves. He told a packed session at the RSA today that everything moves through curves which go up before declining. 

The tricky thing is that “you have to start the second curve before you reach the top of the one you are on.” As he puts it: “The status quo is the enemy of the second curve.”

He said he had been struck by the observation that so much of what we do today seems to have been designed for a world that has passed. “So I thought I would look at other aspects of society.”

In his book Second Curve he looks at many aspects of modern society through the lens of first and second curves. And sometimes second curves are not an improvement. 

Take business for instance. He says the purpose of a business used to be quite clear – it was to acquire customers. That changed with the arrival of the Chicago School of economists headed by Milton Freedman who challenged this by asserting that the shareholders were key. Subsequently the point of the firm became to make the shareholders rich. In order to do this effectively an incentive in the form of share options was provided. “So managers decided to increase the share price which isn’t too hard to do, by cutting investment for example.”

Capitalism is broken and its Milton Freedman’s fault. 

He points to the current craze for share buybacks as the logical conclusion of this. This, though, bleeds the corporations of investment capital. “Thus was a disastrous second curve.”

Curves don’t hurt apply to corporations. “What is the invidual’s second curve?” He asks. The answer he says is his “portfolio lifestyle” – Redefine what a job is, he urges and work for customers not employers. 

The education system gets a workout, too. “Look at our education system,” he says. “It’s bizarre.”

Emotional intelligence is what we need for the world we are moving into he says, so we should rejig our education system, make the leaving age 14 and then have tailored apprenticeships for the next four years. 

What about the welfare state? Redesign it along Singaporean lines he says. In Singapore all citizens have a Provident Fund which provides for unemployment support, healthcare and retirement. Because both the individual and the company pay in, it is seen as an investment instead of tax, he says. 

What is the second curve for politics someone asked from the floor. 

He didn’t answer directly but did point out a weakness with the current British system. We have developed a political class he says because you have to be an MP to be a minister. Most other countries don’t insist on this and as a result their talent pool for recruitment is much much larger.

In his book he says he is “throwing out ideas to provoke not prescribe.” On that level it seems to work. But in other respects observations on some areas seem dated. Take his thought on education and the welfare state. These are based on the notion that gainful work will be available to all. That notion is now being powerfully questioned

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