Public ideas
Modernization – America’s grand public idea
In 1941, on the outbreak of the Pacific War, Prime Minister Curtin marked a fundamental shift in Australia’s defence orientation, when he said “Without any inhibitions of any kind, I make it quite clear that Australia looks to America”.
This orientation turned out to be about more than a military alliance: it outlasted the war for at least 20 years.
Looking to America
From 1945 until the mid-1960s, the task of post-war-post-depression reconstruction, was shaped largely by a desire to emulate America. Europe, including the UK, was the Old World. Australians wanted to be part of the New World, and America was the exemplar. America was modern, Europe was backward, hobbled by long-established hostilities and entrenched class barriers.
Australians saw in England an impoverished, miserable, overcrowded and sooty country. America offered a much more appealing model. Our growing suburbs to which war-weary immigrants flocked were replicas of American suburbs. Music, movies, cars, appliances all had an American trademark. If it was American it was modern, and modern was good.
Of course the world was a tad more complicated. American foreign policy was shaped by rivalry with the Soviet Union. America had to demonstrate to the world that it could offer a true workers’ paradise while the Soviet Union languished. That is, if one overlooked the conditions of the descendants of slavery, a blindness that a “White Australia” shared with the US.
If countries like Australia were emulating America that was all to the benefit of US corporations seeking markets and investment opportunities. “Neocolonialism” was the way foreign policy realists described this development. But it is not as if Americanisation was thrust upon Australia. Australians eagerly sought the comfort and convenience of the American model.
That is not to dismiss America’s effort to promote its model: but it did so not only to push capitalism. A great power’s foreign policy is driven not only by self-interest. Idealism, so long as it does not get in the way of self-interest, also has a role. In an essay in Foreign Affairs – The real Washington consensus – Charles King of Georgetown University, reflecting on the influence of National Security Advisor Walt Rostow, describes how the American foreign policy establishment had a missionary zeal to export the idea of modernization. That model had brought peace and prosperity to America, and it could do so for the rest of the yet-to-be-enlightened world.
In a way the modernization model King describes is the antithesis of American exceptionalism, and it was less imperial than neo-colonialism, because in time other countries would replicate America’s success.
Of relevance to Australia, as we recoil from the shock of Dutton’s success in opening up “racial” cleavages in Australia, is the way the idea of modernization related to race. It properly rejected the idea that there were “races” defined by genetic or other inherent differences. Rather, in an echo of the way Christian and Muslim missionaries saw the world, its zealots saw huddled masses of people – war-weary Europeans, aboriginal people, peasant farmers – waiting to be converted to the enlightened wonders of modernization. It was unapologetically assimilationist, not so much to the “American” model, but to the model Americans had the good fortune to have discovered.
The model seems to have had traction in the postwar period. That was before America became embroiled in Vietnam and later military disasters, and before the world saw how America was failing to deal with the long legacy of slavery and was allowing the development of an excluded and unschooled underclass to mobilize against its own democratic institutions.
Fortunately we are not converging towards Huxley’s Brave New World. But public ideas, no matter how dysfunctional, live on well past their use-by date.
Business ideas – questioning productivity and profit maximization
A recent ABC Future Tense program addressed two ideas that underpin organizational behaviour – productivity and profit maximization: Rethinking productivity and the pushback to shareholder capitalism.
In the first 12 minutes Dominic Price of Atlassian looked at the way the idea of productivity is applied in business (and in government).
Productivity is a broad and difficult-to-define concept. It is generally concerned with doing more with less. That is, more output for a given input. But simply producing more output can be meaningless: what counts is the outcome of corporate or individual effort. Cops can become very good at pulling over drivers for speeding – that’s an output – but the outcome they are seeking is road safety. And when we consider the broader economic and social system we may think even more broadly. Could we improve transport safety by making it easier for people to choose safer modes of travel than cars?
This is not radical thinking – it’s all in the textbooks – but Price points out that many companies have invested so much into monitoring and controlling outputs that they have lost sight of the bigger system. Simple output-based indicators of productivity – speeding fines per cop-hour, sales volume per representative – have the attraction of apparent numerical precision. But do they take our mind off the real purpose of our efforts?
In the second 12-minute segment Ed Chambliss of Best Friend Brands and Jessica Lynd of law firm White and Case discuss the idea of profit maximization as a business objective. The almost unquestioned idea in schools of economics and business is that the single objective of a firm is to make a profit for the benefit of its owners, the shareholders. They point out that a focus on profit maximization can have unintended and unwelcome consequences, and that a corporation has many stakeholders other than its shareholders. Employees, suppliers, contractors, customers, communities where business is located and governments all have a stake in the corporation’s operations, and these stakeholders tend to assert their interest. The model they advocate is known as “stakeholder capitalism”. It’s not new, but it’s generally relegated to a sub-section of “alternative models” in business textbooks.
Chambliss notes that the idea of profit maximization as the sole corporate objective has achieved dominance only in the last 50 years or so. He is right: the prominent business professors of the first part of the twentieth century – Adolf Berle, Gardner Means, Chester Barnard, Kawakami Hajime to name a few – taught that the purpose of a corporation was to do something useful. Of course it should make a profit so that it could pay a return to its investors and sustain its assets into the future, but profit was a means to an end, not an end in itself. That view of the corporation became unfashionable with the emergence of neoliberalism as an all-encompassing economic principle.
Both sessions are about how simplified ideas become detached from their original bodies of theory and good practice and develop their own self-reinforcing power.