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Bums in the Butter

Still, as we watch the 2016 political scene unfold and seek to understand the rationale for the many puzzling things which we will see about us, we should bear in mind that the question of who is sitting in the butter is as relevant to understanding public life as it is to understanding commerce.

The lull following the New Year gives time for thought and, rather than wasting it on the minutiae which normally concern us - will the public go for Brexit? Which shadow minister will be sacked next? Who will win Big Brother? Etc -, it is worth taking the opportunity to look at the dynamics which lie behind some of the more contentious areas of public life. What are the forces which take the British, a relatively easy-going race, and subject them to the topsy-turvy world of political discord?

Years ago I was taught about the dynamics of City transactions by a distinguished lawyer who had been born in Yorkshire and retained the bluntness and sense for which that county is famous.

"If you want to understand the reasons behind a transaction," he would say, "just look for the men with their bums in the butter".

As a way of identifying the forces which drive commercial transactions, that is hard to beat. Suppose there is a company takeover, for example, and it is heralded by much talk about improved services for customers and reduced costs for shareholders. All very nice and worthwhile no doubt, but go on to ask the second question. Will the creation of a large conglomerate result in a more important role for the executives who make the decision to proceed with it, with the larger remuneration packages appropriate to their new responsibilities? No doubt it will. You would expect that. Yes, but now suppose that the gains for the shareholders and the public are there but the deal will bring no advantages in money or prestige to the executives. Would the deal still go ahead or would equivalent gains be sought more slowly and surely by growing the business?

The answer to that might be "yes" or "no", but I am afraid that there is a further question. Suppose there is an advantage for the executives but nothing for the public or the shareholders? Will the deal go ahead then? Sometimes "yes", sometimes "no", again. It all depends on the circumstances and the quality of the people involved but at least you can see how butter for the executives can be a major driver for a deal. Then take the churning of pension fund investments. Who benefits from that? The pensioners, or the managers and advisers whose fee and the brokerage income increases with the number of transactions? In many cases the latter. Do they make or influence the decisions to change investments? Certainly they do. Does that mean that they are putting their own butter before the interests of those who they are supposed to serve? Again, sometimes.

We all know that there are conflicts of interest in the commercial world. Even those with no great interest in the financial pages will be aware that one cause of the banking debacle of 2008 was bonus schemes which put the interests of individual bankers into conflict with the health of the organisations for which they worked. That resulted in bad lending decisions, in dangerous bets and ultimately in bank insolvency. Commerce is inevitably shot through with conflicts, and regulators, activist shareholders and the ever vigilant press spend much time trying to see that those conflicts are identified and do not get out of hand. It is odd then that little is said about the almost identical conflicts which arise elsewhere.

Take the politicians themselves as an example. No opposition would make an impact if it presented itself as merely disagreeing with the government on a series of relatively minor technical issues. They need differences of principle, causes they can challenge, standards behind which their supporters can rally. Who cares if on occasion that means misrepresenting the dispute a little or they end up opposing measures which should go forward? They have their own careers to think of and the public interest in quality decision-making often comes a poor second.

Then look at the champions of the various causes, those who fight racism, feminism, discrimination against the aged. Some of them have picked up their lances to right a wrong which offends them. Often they will be those who are directly affected or who have done nonpolitical work in the area. Others, however, take up the championship of causes as a career path or perhaps something to give them status in their communities. The worst thing that could happen to them is that the wrong against which they strive rights itself for reasons unconnected with their efforts. Then their careers and status would disappear. What should they do if this seems likely to happen? Why, take more and more bizarre positions so that they can claim to stand for something. That is why the race relations industry, faced by generally improving standards of public tolerance, has found refuge in ever more fatuous complaints about cultural appropriation and calls for "safe spaces". Are these calls in the interest of the communities who need to be integrated? Probably not, but who cares if they provide a rationale for the continuing activity of the campaigners?

Something similar will inevitably happen to the feminists as the effect of the current preponderance of women undergraduate students works its way through the system. The change in educational balance will lead to more women in positions of authority, not because of any form of lobbying or championing but because they will be better represented in the talent pool. Whatever the shortcomings of the capitalist system, it is addicted to profit and the days when sex trumps ability in the appointment of new executives are clearly numbered.

What a disaster that will be for those who have built careers or reputations around the feminist cause. No wonder that they chunter on about quotas and affirmative action. They may not be able to stop the trend which will make them redundant but, if they work at it, they may be able to keep the area contentious for a little longer than would otherwise be the case. Is that in the interests of the women that they say they are helping or is it just a case of turkeys trying to postpone Christmas, if you will forgive the seasonal analogy?

Just as it would be quite wrong to think that everyone who works for a cause does so to satisfy personal ambition, so it would be wrong to denigrate all the efforts of those who are driven by their own status or gain. Such motives drive many of us to perform at our best and it is only when they come into conflict with the wider objective that a difficulty arises. Still, as we watch the 2016 political scene unfold and seek to understand the rationale for the many puzzling things which we will see about us, we should bear in mind that the question of who is sitting in the butter is as relevant to understanding public life as it is to understanding commerce.

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