No quality jobs, enlargement of inequalities, good news for the privileged


“The best measure of opportunity is access to a good job”, Obama said in his State of the Union address just some hours ago, along with a number of further statements on how inequality, unemployment, the decline of the middle-class, and falling wages are heavily threatening prosperity in the US. Who will take the lead in Spain and Europe to place these concerns at the very top of the political agenda once and for all? Don’t the law makers care about this or is such an agenda just driven by the privileged?

Stiglitz y los mitos sobre los mercados de trabajo flexibles

joseph_stiglitzEncuentro en el (fantástico) último libro de Joseph Stiglitz (Premio Nobel 2001), publicado la semana pasada (El precio de la desigualdad, Ed. Taurus, una reflexión sobre la contribución de los eufemísticamente llamados mercados de trabajos “flexibles” al crecimiento económico que me ha gustado tanto que no he podido esperarme para lanzar un post para volcarla. Estamos en tiempos donde los ultraortodoxos de la austeridad y su programa de medidas de “dolor necesario” (entre ellas, por supuesto, la flexibilización de los mercados de trabajo) están siendo tan poco contestados por los que no piensan como ellos, a mi juicio, por falta de coraje y de autoestima intelectual, que voces en este sentido de la autoridad de Stiglitz se reciben como bote salvavidas (aunque no vaya a servir de mucho en la práctica, me temo…).

Aquí extracto su reflexión:

“Forma parte de las ideas consolidadas en materia de economía durante las tres últimas décadas el que unos mercados de trabajo flexibles contribuyen a la fortaleza económica. Por el contrario, yo argumentaría que una mayor protección de los trabajadores corrige lo que en caso contrario sería un desequilibrio de poder económico. Ese tipo de protección da lugar a una mano de obra de mayor calidad, con unos trabajadores más leales a sus empresas y que están más dispuestos a invertir en sí mismos y en sus empleos. También contribuye a una sociedad más cohesionada y a una mejora en el lugar de trabajo. Que el mercado de trabajo estadounidense tuviera un comportamiento tan deficiente durante la Gran Recesión y que a los trabajadores estadounidenses les haya ido tan mal durante las últimas tres décadas debería suscitar dudas sobre las míticas virtudes de un mercado laboral flexible.”

Does this lead anywhere?

Where is Spain going? Once the new State’s Annual Budget has been put on the table by the Government, one inevitably wonders where we are going. And not only me and an increasing number of people in Spain. The question as to whether we are running in the right direction is also being widely questioned elsewhere. As a sample, I am just quoting the editorial Financial Times devotes today to Spain and this new Budget:

“(…) Spain’s public debt is one of the lowest among developed countries. Too much austerity could reduce growth and augment the risk that Madrid misses its target anyway”.

I would like to copy verbatim a bit more, as it is very revealing of how this issue is being regarded outside Spain, but can not do so in order to comply with FT’s copyright policy (which is just strangling, like Mr. Juncker with our Economy Minister).

Tax the rich? Definitely yes. Now the question is how much.

The new Spanish Government has just enacted a set of tight measurements aimed to keep down the public deficit. Ok, nothing unexpected, this was within the script regardless of wich party won the November 20th’s ellections, which eventually were the Conservatives (as expected, too). However, one of the measurements has raised particular discontent due to not having been announced by the governing party during the ellectoral campagin: the heavy rise applied on the personal income tax. This controversy becomes stronger when the case of progressiveness is discussed, i.e., when it comes to the question of whether or not the taxation rate increases sufficiently or not as the level of income does. Let’s keep aside the debate regarding the effectiveness of increasing the personal taxation due to its detrimental impact on the household consumption (thus on that component of the GDP), which is a tremendous but a separate debate, and let’s focus on the progressiveness issue. To gain a quick insight, formerly the (marginal) taxation rates ranged between 24 and 45% (intermediate rates at 28, 37, 43, 44%) for income levels comprised between 17,000€ and 300,ooo€. Now the new rates range between 24,75 and 52% (30,  40, 47, 49, 51%).  Is the new scheme progressive enough (not in general, but in the context of the current, overwhelming crisis, this is a critical point on the question)? In other words, does it call for additional efforts to people in accordance to their wealth in order to 1) issue a message of social justice in such tough times as those of these days, 2) keep the middle class alive? I personally believe this is not the case. And I am not the only one.

Nobel Prize Paul Krugman recently argued that “super elites” must pay “much more taxes”, as the traditional claim that high taxes for the rich discourage successful and smart people to continue to create innovations which eventually bring wealth to the entire society is essentially propaganda from the same people who try to get rid of high taxes. Likewise other outstanding scholars suchs as Emmanuel Sáez (University of California at Berkeley) or Nobel Prize Peter Diamond (MIT) go even further and dare to quantify on the basis of their research how much the richest should be taxed: 70% (marginal) of their income. This figure can sound astonishing (at first sight, even to me) but it must lead to us questioning our tradional thinking on this topic.

One might be tempted to neglect these views just because they are supported mostly by academics, and stick to the “classical” beliefs that the rich should be taxed smoothly so that they keep the incentive. However, such classical beliefs are not necessarily better grounded than the new ones. As an example, many “wise men” argued just very few years ago that housing prices could never go down by any means (the classical belief), and to a great extent this was the arrogant assumption where this all began…

Curso de Marketing Industrial…ahora disponible en el blog

Hace unos dos meses os  anunciaba que iba a impartir un curso de Marketing Industrial en el Colegio Oficial de Ingenieros Industriales de Madrid a finales de septiembre. Ahora os lo cuelgo en Publicaciones para los que tengáis interés. Obviamente, la descarga es completamente libre y gratuita. Es la mentalidad de las relaciones económicas (y a todos los niveles) en Internet que yo creo debe seguir expandiéndose: en la economía tradicional, las cosas tienen que tener un precio salvo que haya un motivo de peso para ser gratuitas; en Internet, debe ser al contrario: los contenidos deben ser gratuitos salvo que exista un motivo de peso para ponerles un precio. En el caso de este curso, creo que no existe tal motivo (y, por supuesto, lo he valorado desde un punto de vista, entre otros, de marketeer), por lo tanto, aquí lo cuelgo esperando que le sea de utilidad a alguien o, mejor, a muchos. No obstante, el feedback siempre se agradece como única contraprestación. Saludos.

Managers, not MBAs

I am not being any original with this post’s headline, I know, as I think the title of the book I am briefly commenting on below, which I just finished reading, is the best introduction to itself. “Managers, not MBAs” by Prof. Mintzberg is a claim against the traditional MBA-like education or, more precisely, against the extremely harmful mindset whereby the MBA is thought of by some (too many) as a passport to manage. While having doing an MBA 6 years ago, I eagerly second Prof. Mintzberg’s analysis and conclusions, as I never did such a degree with the expectation to gain the right to manage but with the intent of being more capable of understanding certain things and acquiring the appropriate thinking paradigms to undertake business problems more effectively. One of the most concerning problems resulting from this misuse of the MBA, pointed out from different angles by Prof. Mintzberg, is that many people who come out of business schools, especially the so-called “top” ones, are so full of pride and “self-confidence” that lose all their humility, if they ever had any. And what happens then? A myriad of narcissistic and self-serving “managers” out there. I see Humility, my friends, not just a working/managing competency, but as THE competency (experience is always acquired, it is just a matter of time, and technical and managerial competencies are assumed). Humility and, let’s not forget, emotional intelligence (which, among other things, is about empathy, another soft ability normally neglected in business schools), are simply critical. Nothing works well without them, especially when the managers are the ones who lack them.

Well, let me just illustrate the fundamentals of Prof. Mintzberg’s thinking by quoting verbatim some of the statements which got my attention the most. I think they provide a good flavor (although very scarce, due to the richness of the book) of this outstanding piece of work:

“Considered as education for management, conventional MBA programs train the wrong people in the wrong ways with the wrong consequences”.

“If the business schools were really doing their job, were truly creating leaders, their graduates would be known for their humility, not their arrogance”

“(…) setting out to create leaders in a classroom, whether in short programs or full degrees, too often creates hubris”.

“Many MBA graduates are smart people who should never be allowed to manage anything”.

“Traditional management education has favored professors who believe they know better, and that, in turn, has produced managers who believe they know better, too”

Well, nothing else from my side, I already left good food for thinking behind.