Work Futures Daily - The Value Of Everything

Mariana Mazzucato on Value | Julie Sweet on Equality | Co-Determination | Pretax Benefits and Alice | 5 Hiring Trends | We Are Dying for a Paycheck

Beacon NY - 2018-10-17 — I admit to at least one outright superstition. If the cream curdles in my cup when I pour in the coffee, I expect a bad day. And if it's a Monday, I expect a bad week.

Today the cream curdled, so we'll see.

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Best Business Books 2018: Economics | Ryan Avent published his choices for the best business books in economics in 2018. I want to read Mariana Mazzucato's The Value Of Everything. He writes,

Though it can occasionally seem otherwise, the primary aim of government economic policy is to make everyone richer and better off. But achieving that goal, Mazzucato argues, requires a working theory of how economies generate more value. That question is one that has addled economists for centuries. The book provides an intellectual history of the debate covering the French physiocrats, proto-economists who reckoned that all value could be derived from the production of the agricultural sector; classical economists such as Adam Smith and David Ricardo, who sought a theory of value rooted in the productive application of labor; and the fateful innovations of the neoclassical economists of the late 19th century. The contribution of the latter group, including economic luminaries such as Alfred Marshall and Leon Walras, was to establish a model of an economy in which there is nothing intrinsic at all about economic value. Rather, value is best judged by the price the market will bear.

In Mazzucato’s view, the elevation of this line of thinking has proven hugely consequential. It implies, for example, that the high incomes earned by workers in finance reflect those workers’ high contribution to the economy — and, similarly, that low wages are the just reward for workers whose jobs are of incidental import to the rest of us. It also means that activity that is hard to measure or that takes place outside markets is systematically underappreciated. This includes care work in the home, which most governments opt not to include in their national accounts data. It also includes much of the contribution of government to the function of society.

The result is a skewed version of economic reality, which in turn leads to a skewed set of policy priorities. Government is largely seen as a burden to be minimized rather than an active contributor to prosperity through its funding of infrastructure and research, setting the standards and regulations that allow markets to function, and providing a social safety net. The enormous fortunes piled up by tech billionaires are more easily attributed to innovation and risk taking than to the luck, market power, and state support that are often just as important to their success.

I wrote last about Mazzucato in Has Economics Failed? last year.

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Julie Sweet of Accenture Could See Her Future. So She Quit Her Job. | I confess that I generally find the Corner Office stories at the NY Times to be uninteresting, or outright ego-gratifying puff pieces for the executives being interviewed. I will have to revise my thinking after this interview of Julie Sweet of Accenture by David Gelles.

You’re working hard at leveling the playing field for women in the workplace. What tactics have you found to be most effective?

I don’t think it’s rocket science. You first have to decide if diversity is a business priority. If it is, then you need to treat it like a business priority. You set goals, have accountable leaders, you measure progress, and you have an action plan. If you do those four things, you will make progress. We did a recent study and the stats were pretty shocking. Forty percent of companies don’t even have a plan to advance leadership. Less than 40 percent look at attrition between men and women. They’re not collecting data. You can look at that with disappointment, or you can say there’s a huge opportunity here. By putting in place pretty basic things, you should be able to make progress.

How are you approaching this at Accenture?

At Accenture, we set goals. We set our first goal in 2015 to hire 40 percent women. In 2025, our goal is to be at 50/50 gender parity across the organization and then, for the managing director level, it’s 25 percent women. That’s a pretty big shift in 10 years.

A very big shift, and it sounds like it's due to Julie Sweet.

I wonder if she has a corresponding initiative to counter ageism, which is notoriously prevalent in management consulting firms?

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Workers on Corporate Boards? Germany’s Had Them for Decades | Susan Holmberg lays out the rationale for work representation on corporate boards ('co-determination') which has worked well in Europe, especially Germany.

Worker representatives would not win all of these votes, but their presence would disrupt the power dynamics of corporate boards, and workers at all levels of the company would be more aware of what’s happening in the boardroom. This could help to revitalize labor organizing, which could lead to better pay, benefits and job security.

But co-determination was never simply about wages and profits. It is about giving workers more power. “Co-determination is just like democracy,” the political scientist Stephen J. Silvia told me. It isn’t justified on economic terms. “We have a democracy so that people have a voice in public affairs. Co-determination extends that principle so that people have a voice in the workplace as well.”

Contrast this with Elizabeth Anderson's Private Government thesis (see Work Futures Daily - Private Government), which plays up the inherently anti-democratic nature of business.

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This pretax benefits startup is giving hourly workers a raise | Ciara Byrne talks with the founders of Alice, a new service that helps hourly workers and contractors take advantage of pretax spending benefits, which allows users to deduct expenses like commuting, health care, child care, and glasses from their taxable income.

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Watch for these 5 hiring trends in 2019 | I generally avoid listicle articles, but Lindsay Tigar spoke with various smart people who offered up 5 hiring trends in 2019, some that I've already covered:

  1. Using tech to streamline the interview process -- Preloading the process with tests may may cut the process short, swing everyone time.

  2. Social recruiting is on the rise -- We have social connections on the web, so why not use them?

  3. Increased competition -- Tight job market means companies will have step up and offer more.

  4. Tech is increasingly indispensable -- This will push companies to upskill and reskill employees.

  5. Potential, nor degrees -- More candidates are showing up having sidestepped college, altogether.

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I reposted [for sponsors only] a piece from May 2018 On Work Stress, where Dylan Walsh interviewed Jeffrey Pfeffer, the author of Dying for a Paycheck. I was motivated by all the buzz around Anne Helen Petersen’s How Millennials Became The Burnout Generation. One excerpt:

Pfeffer means it when he says, in essence, that companies are two-faced: they say they want to be sustainable but overwork their employees to death, they say they care about their employees but crow when they lay workers off to save money.


Quote of the Day

One of the greatest ills of modern capitalism — financialisation — is ignored and we end up blaming the robots for de-skilling and unemployment, rather than corporate governance structures which have meant a lack of reinvestment of profits into the economy.

| Mariana Mazzucato, cited in Has Economics Failed