A global archive of independent reviews of everything happening from the beginning of the millennium
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TOWARDS AN ETHICAL SECOND DECADE?
Reviewed by ANDRE BEAUMONT
In Britain, with election year underway, we are always a little in danger of taking our eye off the ball of events elsewhere that might influence our future.
A new European Commission is in the process of being confirmed.
Provided the key individuals who will be in power in the next five years are not of an aggrandising inclination all will probably be well.
Those of us who had a ringside seat on the development of European politics during the second and third Delors presidencies of the European Commission have seen the mistakes before.
With a leadership giving priority to centralising rhetoric, many officials in the Commission saw advantage in blocking progress on the Single Market because it brought more power to them. Nothing could move without their say-so.
This also had a negative influence on some of the civil service in Britain. If a bureaucracy could have so much power in Brussels, so could the U.K. equivalent with primary responsibility for bringing European legislation into effect. The detail of some Directives found itself over-implemented in Britain whilst paid lip service to on the Continent.
Many of the problems subsequently went away but a poor precedent had been set.
If the Delors Commissions appeared to represent bureaucratic rule without consultation, one of New Labour's imminent epitaphs may well be social engineering without consultation. For whatever has been spelled out in its three election manifestos it was certainly not the social engineering that has had to be brought into effect by public employees.
Another Delors-era mistake were the veiled threats of creating a two-speed Europe. One must be wary of what one wishes for.
Fresh from dividing itself into dominant New Labour faction and old Labour minority, a Labour government gave all the appearance, for a while, of dividing Europe into new Europe and old Europe, too.
Whatever the nature of the treaties that have bound it to the Continent over a millennium, Britain has rarely been two-speed over its essential interests in Europe. There, it cannot be marginalized. It was foolish to attempt to marginalize it.
For fifty years the European train has pursued an integrationist destination, sometimes slowing, but never admitting of branch lines going somewhere else.
The wonder is that it has kept to this track for so long.
The original logic can be understood. Many of those who had seen Continental war believed its recurrence could only be prevented by economic and political integration.
That generation no longer holds political power. Continental war is much less likely.
The accession of new states, the economic downturn experienced since 2007 and the emergence of a Mediterranean policy initiative suggest a more sophisticated infrastructure may emerge.
Europe cannot be a United States. The latter was created of states then of relatively recent birth.
The EU states are of ancient lineage, diverse languages and great cultural richness. There is variety of custom by which life is lived and business conducted. In this wide scope lies some of Europe's strengths.
If Mediterranean states are different then so are Baltic states and island states.
With island states, geography necessarily dictates difference.
Architecture on the Continent has a commonality of constructional techniques. Travel from there to Britain and buildings look different.
Whatever common economic arrangements Asia may arrive at, it is hard to see Japan in a political union with its neighbours.
A wise EU will grant its island states, not just Britain, a fair measure of leeway.
If a nomination for the most successful European Commissioner of the past two decades had to be made, it would be of Neelie Kroes, in charge of the competition portfolio.
Suffice to quote one success by way of example: a year ago the cost of a Briton sending a text from the Continent to Britain using a network's mobile roaming was £0-39. This year it is £0-11, even less than the £0-12 the same network charges to send a text within Britain.
The contrast between her competition policies and those of New Labour in Britain has been striking.
With the metamorphosis of the Monopolies and Mergers Commission into the current Competition Commission one would be forgiven for wondering if anyone were left safeguarding against monopolies at all in Britain.
Monopolies can, of course, co-exist with competition. Indeed, competition is usually the preferred vehicle to build and consolidate monopoly.
If Europe is to have future economic competitive advantage, it needs to think hard where it may lie.
One possibility is to have the most monopoly-free internal market of any major economy or economic grouping.
The U.S. is regarded as the home of the multinational and Korea and Japan probably have the most successful.
Europe has its well-established players but an obsession in the future with large corporate size could be a dead end for Europe.
Straws in the wind already point in this direction.
The Bank of England would rather see smaller, more easily regulated banks. The earlier, headlong expansion of two U.K. banks is being reversed by the European Commission.
Nonetheless, mature multinationals do not appear to be the problem in the European trading space. Rather the next tier down is - large consumer-facing service businesses aspiring to be giants. These often share monopoly with their peers, all doing much the same, all charging much the same prices.
Monopolistic practices have re-grown on Labour's watch and it has run out of legislative time to change the framework. So is there more that the EU might do?
AN ETHICAL DIMENSION?
The case can be made out that the first decade of the millennium has been one of worsening ethical behaviour. The source would appear to be marketing culture which has replaced the gentler art of good selling.
In the past, caveat emptor might have sufficed in dealing with anyone who might be selling you something. You did not have a contract with them when you opened discussions and you did not have to leave with one either.
Today, it is those you have existing contracts with who may seek to deceive or bully you into contractual variations, or taking additional products, that may greatly disadvantage you and benefit them.
Most are large companies in the services sector.
Their unethical behaviour is not primarily directed at their equals, other large companies, but at the consumer.
Practice would seem to be: acquire customers with seemingly attractive deals, then foist much small print upon them with provision for unilateral modification of terms and unattractive exit terms.
When you are up for sale to private equity, telephone all your customers for the first time, ask some nominal questions and give some unimportant information about the product which you take as full consent to vary the terms and to drop, without explanation, any add-on contracts which the new owner will not want to service.
Bully the stragglers saying you want to save them money or have something that benefits them. Make verbal misrepresentations - few will keep a record.
In all events, the new owners may choose to blame the old owners, and vice versa, for any misfeasance of the marketing team and it will be years before the customers can establish loss, if at all.
Standard marketing practice now incorporates so much that is unethical that should alternatives to many services present themselves, a sizeable percentage of customers may already be willing to switch from companies that play tricks on them.
Questions have already been raised as to whether banks would be needed for an efficient micropayment system with operating and cost structures similar to e-mail.
Latent annoyance with the poor business culture is real. Add to this probable further annoyance with public service cuts and increased taxes and the consumer will feel himself continually put upon.
For this reason, and others, ethical considerations will play an increasing role in the politics of the second decade of the millennium - and not ethics of a box-ticking kind.
Already, the choice is not between state and private provision of services but a search for who, if anyone, will not slide out of some of their obligations. Many service businesses do. Outposts of the state are not immune either from taking on the expediencies of the marketing culture.
If law is creating too many private and public rights which impose costs to meet, the practical solution to meeting a budget set from above is not to increasingly surprise the consumer or citizen by sliding out of obligations.
Less rights must be created, or the price of services must go up, or the culture must be changed.
With culture change, the large service industry companies need to be obliged to change first because the private sector is more responsive to small stimuli coming from regulatory and economic frameworks and because large companies have the resources to comply. The lessons learnt can then be applied elsewhere.
Ethical breaches by these companies' marketing teams need to trigger automatic compensation payments similar in kind to automatic payments for delayed cross-border air and rail travel in the EU.
Such payments can be used as a vehicle to discourage monopoly.
Large companies should consciously be treated differently from others to forestall EU-wide monopolies emerging.
Where individual companies' total EU turnover falls below a certain amount - e.g. $5 billion - they would not have to pay this compensation and would also be exempted some other box-ticking red tape to make competing easier. Such companies would, therefore, have lower costs.
If you talk to investment bankers they will tell you that if a small cost of capital advantage emerged in favour of breaking up, they will as readily break up giants as build them up.
Wolves are welcome to live with other wolves.
Customers should have the choice of different size businesses with different business models.
Whether we do more about monopoly in Europe or not, our politics will still need to consider ethical issues and the future of the EU.