MPs interfering again

Iain Wright MP has called the practices of the company Sports Direct “closer to those of a Victorian workhouse”. I looked into what defined a Victorian workhouse and found this helpful  home work guide:

Before 1834, poor people were looked after by buying food and clothing from money collected from land owners and other wealthy people.The Poor Law Amendment Act of 1834, ensured that no able-bodied person could get poor relief unless they went to live in special workhouses. The idea was that the poor were helped to support themselves. They had to work for their food and accommodation.Workhouses were where poor people who had no job or home lived. They earned their keep by doing jobs in the workhouse.

In Helen Cahill’s headline report in City A.M., she summarizes the key messages from the MPs, and I was rather disappointed to read that. The picture on the front page attempts to show Mike Ashley’s face as a devil with smart use of shadow on his face on a black background but you can’t help looking at his somewhat sweet expression…


And what are the reasons mentioned by MPs for calling the practices at this place “appalling”:

– Workers being paid below national minimum wage – this is unfortunately a legal issue due to the existence of a national minimum wage…but maybe this the time to really think about if a national minimum wage is sustainable is this competitive global marketplace. The minimum wage is thought to exclude vulnerable people from work.

– The fact that they are not directly employed by Sports Direct

– Why is that such a problem. It’s Sports Direct decision to outsource this function to a specialist company.

– That Sports Direct pays $50m to the agencies involved – Again, this is between Sports Direct and the agencies. This is what Sports Direct values the work of its agencies at . If this is an incorrect judgement, then surely it’s for Sports Direct, its agencies and its employees to address.

– And finally, Sports Direct charging £10 for a pre-paid debit card issues by one of the agencies to pay the workers who did not have a bank account. – I think that this is a good deal for not having a bank account. At HSBC, it is mandatory for all employees have to open a HSBC bank account to get paid. Given the administration associated with opening the account, maintaining it and then closing it when I left…I do not think what Sports Direct are doing is unreasonable. At least the workers have a choice.

Honestly, this does not sound to me like a Victorian workhouse. Someone has not done their homework!

Media letting down the Private Sector

It’s been less than 24 hours since the death of MP Jo Cox. I didn’t know her at all, but I am very saddened by her death. As a mother, my heart aches for her children. The image of her telling a story about a banana to her children as she tied their shoe laces is still in my mind. This morning I woke up thinking, gosh, how would her little kids be feeling not having seen their mum… it’s sad and I’m still in shock.

But the media has really let me down. For me, they appear to show immense disrespect to the MP. Trying to catch the public’s attention by linking her death and the suspect’s motive to the referendum, a topic that has been very popular in the last few days.

No wonder the private sector is looked down upon by lots of people as they associate it with making money at any cost, and unfortunately the media is proving this right. And for what, a few more page views on their websites, a few more newspaper sales, appearing higher on google search results. That’s how it appears to me and that’s sad. The alterbaive possibility – that they may be trying to change referendum outcome – is barely more dignified.

The FT, the Telegraph, the Guardian are just few of the big names that have really let me down. The facts are still being investigated but their speculation began before the MP had had the time to die, and, all in the name of profit. Earlier in my life I wanted to work for the media as it had a true voice, but this incident has really disappointed me. And unfortunately it’s not the first time the media has acted irresponsibly and insensitively to gain popularity. It’s still hard to forget the awful phone hacking scandals.

The only major fact of this incident so far is that the accused was mentally ill, he spoke openly about that to newspapers in the past, and that is one the fact that has been least talked about. Whatever his motive, the point that he had been mentally ill is probably key to understanding what he did.
But what do the media focus on. The Referendum. And they do it sneakily, pointing out thar Jo Cox was a remain campaigner, drawing the reader into that analysis without even having the guts to say so.

I think, at this point, I have much more respect for the MPs who made a conscious decision to stop their campaigning and pay their respects to Jo. The media on the other hand appear to be focused on making money on someone’s death.

The media is the most visible commercial enterprise people interact with. I hope this doesn’t stain the private sector permanently.

New Sessions at Benevolent Laissez Faire

Just a few days to go to the Benevolent Laissez-Faire conference, and we are very excited to welcome you at De Morgan House (the new venue).

We have a few exciting additions to the event which we delighted to inform you about:

Dr Syed Kamall, MEP will be returning to talk about his views on non state alternatives for the provision of welfare. His talk last year on ‘Poverty Solutions without Politics’ at our Libertarian Home Thursday drinks event inspired a lot of discussion and we are very excited to have him back.

Dr Yaron Brook, our keynote Speaker, will be available to sign his new book ‘Equal is Unfair’ after his talk. Copies of his book will be available at a discounted price of £10. Book signing will start around 5pm.

The revised schedule with the above additions is now available. Please buy your tickets as soon as possible to help in our preparation for the event.

Ed Miliband, please cap gym prices

Thirty-six weeks, a few more to go (I hope) and I’m looking forward to shedding some weight. I feel so out of breadth when I walk up 5 steps at home! It’s been an interesting experience being pregnant with its highs and lows. Traveling on public transport has been particularly interesting as you notice how other people feel a sense of care towards you. It’s quite strange being offered a seat or being smiled at to make sure you are ok. Some women, I observed, were quite willing to grab the opportunity to take a seat whenever offered, some declined if they felt they could genuinely cope without one, and some to my surprise were extremely offended if they were not offered a seat. I strongly belonged to the second category: if I felt I could genuinely stand for 15-20 minutes, I would continue to do so. Also, I really didn’t have the expectation that people would notice my bump and offer me a seat straight away. If I desperately needed one, I would ask. I did think to myself that if I really wanted a seat every day, I would (set off early avoid the rush hour and find a seat in a relatively quieter environment.

The point being that I was more than happy to take my own responsibility. Of course it’s nice to being offered a seat but I wouldn’t be offended if I wasn’t offered one. And what’s wrong with that? It’s not the other people in the train who had any say in me being pregnant. It was me and husband’s decision, so I really can’t justify any expectation from the rest of the society to look after me.

This was however not the case with this other pregnant woman on the train when my Husband and I boarded one morning. I was a few months pregnant but didn’t have an obvious bump. Her bump was faintly visible through her black top. We didn’t notice her or her bump immediately and made our way inside the carriage. After a few stops, I had to get off the train, and a few seats became available, so my husband sat down. As I was getting off, I heard the woman speak sarcastically to someone random on the train, about “those two” not offering her a seat. It took me a while to understand why she was saying all this. After a few seconds as she became louder and clearer, I realised she was directing those sarcastic (somewhat rude) comments against us. This incident had an impact on me, not because I felt bad for not offering her a seat, but because of the extent to which this woman expected us to not only notice her as we entered the carriage but also notice her bump and then look out for an empty seat for her if it became available. Her sense of entitlement to a seat and her expectation to be looked after – actively looked after – by a bunch of strangers really took me by surprise.

This expectation amongst people is somewhat more widespread than I had feared. I have learnt about more stories on the news. First, the protests that happened in San Francisco over tenant’s evictions by landlords. Gentrification which is occurring in a number of San Francisco’s neighbourhoods with the inflow of high-earning tech-industry workers. I understand the argument against this based on property rights and economics, but for me it represents a much deeper issue regarding people’s way of thinking: the renters in the San Francisco are claiming entitlement over a property that they do not own. The landlords invested in a property with a view to making the best return on their investment. The renters rented the property because that’s their choice. It’s not a charity set up and the contract between the 2 parties, one would think, determines their arrangement. What I fail to understand is the basis of any protests or government intervention to force either party to change the terms of the contract. It sounds like mob rule, as it implies entitlement of one of these groups over the property of a smaller group. It’s the landlord’s property and surely they should decide the terms of the contract. The tenants are free to reject the terms but if they accept, that’s their choice and they become legally binding. Learning about these protests made me feel that these tenants feel an additional sense of entitlement over the landlord’s property and expect them to show compassion in a scenario that is not intended to act as charity. It’s a business relationship and I struggle to understand where this expectation comes from.

The more recent news which I’m sure everyone has heard about is the proposal by Ed Miliband to cap private rents. For me, when individuals choose to rent, it’s their decision. It’s not something they are forced to do or have to do to survive. They weigh up their options to see what’s financially feasible given the market conditions – which is simply what the other parties will agree to – and if they can’t afford to rent, then presumably they explore different options. And again that is still no one’s business except theirs.

© Jo Marshal

© Jo Marshal

When I heard the news on the BBC, the journalist reporting this news interviewed two individuals working out in a gym. One of the individuals was complaining about staying at home with his parents. Hmmm….so what’s so wrong with that? He obviously needs to save up more, or change his preferences to meet his budget. But on what basis should he expect other people to look after his lifestyle requirements? Why should he expect the government to help him out? And if Ed Miliband chooses to stick his nose in his business, then why should he stop there? Surely this is favouritism, and simply down to winning votes. A larger section of the population rent compared to the number of private landlords, so perhaps Ed’s calculation is right. In fact, perhaps, the government should interfere when gym membership fees goes up and put a cap on those as well? That would have been really helpful to me in the last few months. I had to move to a gym further away from our house as the closest gym had increased its prices. I know this sounds strange but seriously, where does one stop in preventing people from taking their own responsibility?

Ed Miliband’s policy just shows his disrespect for personal responsibility, for other people’s property, and his ignorance towards what the market is. We all know that such policies will only make landlords less interested in maintaining and improving their rental properties, resulting in a smaller supply of rental units. Yvette Cooper, who appeared on Question Time few days back, sounded extremely odd when she agreed with Ed Miliband’s rent capping policy proposal and at the same time wanted the supply of rental properties to be encouraged. I’m surprised Ed Balls, her husband the Shadow Chanceller, didn’t enlighten her on the basics of supply and demand before this. I hope Yvette tells him off for letting her down. Miliband is not helping anyone apart from himself by appealing to a majority of the British public. Hopefully the public will see through that.

What’s more concerning is that such behaviour and policies really discourage a culture of personal responsibility, and surely that’s not a good outcome for anybody. I regret not telling that woman in the carriage that if she was really uncomfortable, all she had to do was ask for a seat, but more importantly I regret actually apologising to her in a situation when she clearly did not take personal responsibility and expected strangers in that carriage to be in charge of looking after her needs.

How Common Man fights corruption

The political scene in India is not something I am very close to. But during the Christmas holidays, whilst catching up with my parents, I found one particular news coming up in our conversations quite often; news making headlines back in India that’s being referred to as a kind of revolution in Indian politics.

The news was about the appointment of a certain individual as the chief minister of Delhi, who took his oath on 28th December 2013. For me, this news wasn’t really about the chief minister elections nor was it about the overall political scene in Delhi, it was really about this very intriguing story of an individual who made an astonishing journey to becoming a very influential figure in Indian politics, all effectively in a space of 2 years. Arvind Kejriwal, 45, graduated with a degree in mechanical engineering, worked in the private sector Tata Group briefly before he worked in the Indian civil service as an income tax commissioner. He took voluntary retirement in 2006 and set up an NGO – Public Cause Research Foundation – to work full time to promote transparency in government and to create awareness about the Right to Information movement.

In India, what Mr Kejriwal achieved in the Delhi Chief Minister elections is a scenario you don’t really come across every day or even think is possible. In addition to requiring vast amounts of money and resources to campaign and run for elections, corruption and crime dominate the scene. This is not an accessible arena and is broadly perceived as a profession of the corrupt.

For most of the years since independence, the federal government has been led by the Indian National Congress (INC), The two largest political parties have been the INC and the Bharatiya Janata Party (BJP), which have dominated Indian politics. In December 2013, Arvind Kejriwal, leader of the Aam Aadmi Party AAP (also known as the Common Man’s party) captured the national attention with a stunning electoral debut in the election to Delhi’s Legislative Assembly. Formed less than a year ago in October 2012, AAP emerged as the second largest party in the assembly. It relegated the Congress Party, in power for 15 consecutive years, to third place. Finally, AAP decided to accept the “unconditional” support of the Congress Party and formed the state government; Arvind Kejriwal was elected chief minister.

For me, this has been an intriguing story. I don’t think I have come across such a scenario before, let alone it taking place in a country like India. It has been inspirational to watch this individual make this enormous achievement in his electoral debut, and has interested me to look into some of his and his party’s strategies to achieve this.

Identifying the gap in the market

Arvind Kejriwal on photoThe amount of corruption in India is not exactly a secret. Its causes go back by a few decades and can be attributed to the economic model adopted after independence sometimes referred to as Nehruvian Socialism. One has to read no further than Atlas Shrugged to get a good picture of how it all came about. Excessive regulations, complicated taxes and licensing systems, numerous government departments each with opaque bureaucracy and discretionary powers, monopoly by government controlled institutions on certain goods and services, and a lack of transparent laws and processes, are just a few characteristics of the system which provided the perfect breeding ground for corruption. The truth of the matter was that it affected everyone, frustrated everyone but not one did anything about it. Most people with no vested interests helplessly fitted themselves into the system rather than attempting to change or challenge it. None of the political parties attempted to resolve this more so because they themselves were not free of corruption themselves. With the need for an honest party left unfulfilled, AAP entered the system, hitting the nail on its head as far as addressing the one issue that affected everyone was concerned. AAP members started out with the Indian Anti-Corruption movement. For the common man, finally seeing a political party addressing the one issue that everyone talked about but did nothing about, provided a deep sense of hope. Knowing that this party would resolve that one issue that would fundamentally change their lives was sufficient to gain their full support.

Actions before words

Fulfilling the gap in the market was instrumental but not before demonstrating that one was actually capable of bringing about change. Actions speaking louder than words and this was absolutely crucial to the success of AAP. To the general public, this political party was not just another political party merely talking about its policies to tackle an issue like corruption, its members were individuals who had demonstrated genuine activism before they resorted to the political route.

Two years ago, Arvind Kejriwal set up a group called India Against Corruption aimed at putting pressure on the government to bring about tough anti-corruption laws. Mr Kejriwal came to the limelight in 2011 as the backroom organiser of the anti-corruption campaign led by Mr Hazare. They had drafted a Jan Lokpal bill which sought the appointment of an independent body to investigate corruption cases. Public awareness efforts and protest marches were carried out to campaign for the bill, and Mr Kejriwal worked behind the scenes to make the agitation a success. They gained support from millions but the government stalled on drafting an anticorruption law demanded by the activists due to procedural and political issues. Despite the results, Mr Hazare and Mr Kejriwal who still continue to work on the bill, gained the support and faith of millions who witnessed the work they had put in to bring about this change.

Despite his initial hesitance, Mr Kejriwal decided to change his strategy and go political. He said “Politics is muck, but now we have to get ourselves dirty and clean up the muck.” So he parted ways with Mr Hazare and focussed his efforts on forming a political party to change the system from within.

Having a clear strong objective from the start

Another important strategy to highlight is the fact that this party always demonstrated a clear objective from the start. Starting with activism and then as part of political campaigning, Mr Kejriwal and his party were clear on their mission. They focussed on anti-corruption, and continued to concentrate on their core unique selling point which ensured they leveraged what they had started out with and helped them retain the public’s confidence.

Seeking public feedback and support throughout the process

From the very start, this party fully involved the public not just to build its policies, but their decision to stand for elections was also based on an overwhelming response from the public.

Reaching out to ordinary people via public consultations and asking them what should be adopted by the party in its election manifesto was an impressive strategy. It ensured that the public were actually shaping the path the party was taking, and gave them a kind of ownership. This sense of ownership was instrumental in gaining their support and ensuring they were on the inside, fully involved in the party’s strategies to solve their problems.

Some of its strategies included offering the citizens of Delhi the option of going to a set of public meetings that would return a single “yes” or “no” answer by popular vote, or of sending in their answers by text message or by phone. Facebook allowed them to conduct simultaneous rallies in 64 cities. One interesting strategy requested for missed calls from the general public as a mark of solidarity. These cost callers nothing but allowed to party to quickly identify 800 new volunteers.

Fund-raising

Running for elections is an expensive affair. The size and population of India can act to your disadvantage when it comes to the efforts required for campaigning but I think AAP certainly made it work to their advantage, and also their continued focus on reflecting their ideals in their own practices. Core to its strategy of involving the public every step of the way, AAP solicited funds from ordinary citizens and, in a transparency unusual for Indian politics, posted the names of its donors on the party website.

AAP Donors

AAP Donors list

Since they started about a year ago, AAP claim to have received over Rs.12 crores (equivalent to around 1 million GBP) as donations from a cross section of people from rickshaw-pullers, to traders, to Non-Resident Indians (NRIs) and most of them were first-time donors to a political party.

Funds donated from NRIs have been substantial with one Hong Kong-based NRI donating Rs.50 lakhs (around 50,000 GBP). Encouraging and providing NRIs the medium to donate is quite key I believe. What this political party is offering, in a way, strongly resonates the aspirations of NRIs – individuals who frustrated with the system in India chose to work and settle down in other countries. Having fled corruption, they represent a group of people who would find a strong sense of satisfaction with having corruption resolved. This has stood out as a key strategy for me: thinking broadly about your full audience and where the money is.

Learning about the case of Arvind Kejriwal has been a very interesting case study not just because he became the chief minister of the Delhi but because of the road he took to get there. As a struggling entrepreneur, I found some of his strategies extremely smart. But more important than that has been witnessing how some of the strategies has helped this political party achieve something that many perceived as impossible in a country like India. It inspires to me see that he achieved a key milestone. There is still a long way to go to see how this party and Arvind Kejriwal performs in the political scene, but it’s certainly a great start.

 

Customers are not top priority for businesses

The Lloyd’s Risk Index for 2013 shows an interesting view for Europe.

Respondents of the survey, representing 588 C-suite and board level executives, were asked to rate both the overall risk category and a number of specific risks within each of the overall categories for both their corporate risk priorities and for the degree of their business preparedness to manage those risks.

Here are the results for Europe:

20130712-171440.jpg

My key observation for Europe shows that 3 out of the 5 concerns for businesses are influenced by Government actions – High taxation, Changing legislation and Excessively strict legislation. Customers are sadly not their top priority. For businesses, there’s clearly a shift from focussing on customer needs, to spending huge resources on meeting government requirements so they don’t face penalties. Do changes like this present the right incentive for a business? Would these actions result in a better product for the customer? I have my doubts.

My key concern here is that interference by an entity like the Government represents a very artificial influence on organisations, an influence that ultimately translates into a form of control, to achieve objectives that don’t necessarily benefit the business or help them to grow and develop. In the long term, creativity and innovation are at risk. In the short to medium term, there are huge barriers to entry for start-ups, businesses will become very restricted and limited in their scope and approach adversely affecting their fundamental position to trade and improve their offerings to the customer. Lastly, but most importantly the likelihood of fraud / corruption. This is inevitable if politicians who are also individuals have much broader powers over the actions of a business. Not a healthy outlook.

I wonder how Europe got to this position.