2010s entrepreneurs - your norman macrae futures?

Glasgow's July 4 Interpendence Day and Global Collab Assembly with dr yunus

2010-07-09T08:24:00.000-07:00

Participant script Global Assembly Collab www SOCIAL ACTION DIARY

blog co-editors wanted http://yunuscity.blogspot.com In a world record event staged by the Principal of Glasgow University and coordinated by the extraordinry Zsheem Ahmed to whom a billion thanks are surely due - nearly 30 social business collaborators made 7 minute presentations to Nobel Laureate Muhammad Yunus. In the 5 hour marrathon interaction aka the inaugural microeconomics summit, Dr Yunus graciously summed up by asking everyone to come back next year having first tried one hour social action sessions to develop the seed of taking 10 people off welfare.

On July 5 the news had reached Gordon Brown that Yunus was in town who asked for a 30 mimiute audience at Glasgow Caledonian his first employer. Glasgow Cal launched the extraordinry social business professorship focused on micro health care system designs and micro credit with Cam Donaldson’s Chair and thanks to Principal Pamela Gillies made further headlines as Glasgow become the main European Lab for launching Grameen Style microcredit banking. Glasgow is now way up the premier league of future twin capitals of Dhaka’s sustainability games decade emulated perhaps only by Paris who delegted the strongest of international contingents.

Excerpts from History

Yunus request jan 2008 new york http://www.youtube.com/caplinski#p/u/14/idn4vCtJ0Hs

New York Response from Uni at old UN site April 2008 http://www.youtube.com/watch?v=_9nL_a0K97I

Yunus 69th birthday dialogue hosted by longest running social action team of social business London-Dhaka led by Mostofa Zaman and Sofia Bustamante http://www.youtube.com/results?search_query=yunus69birthday&aq=f

let's do it - the future now - by the people for the people with microentrepreneurial revolution's social interaction networking and social busiess modeling's maps

Changing communications, and what makes people distant, bossy, etc

Changing national politics

Changing economics

Changing employment

GLASGOW MAKES IT OFFICIAL

In search of 2010s as most exciting decade to be alive: Major collaboration platforms launched at GlobalAssembly with Dr Yunus at 7th Decade wishmaking day – 4 July 2010, Glsgow Uni.

1 Yunus Memorandum of agreement in which Principal of Glasgow University signs up to become the first major university to commit to review every course module and add in social business modeling wherever salient. We are optimistic this process will confirm that if Adam Smith had been alive today he would of wished to be Dr Yunus and vice versa.

2 Journal of Social Business to be edited out of glasgow and majority owned as social business by centre for dev scotland –next action we wish to survey through this mail: what would ceos and yunus see as the perfect 7 papers in a showcase first issue

3 Norman Macrae foundation will hub out of Glsgow Uni s home centre: linking in wherever social business or other clubs want to offer small essay prizes on forbidbidden questions (ones conventional mindsets censor). Sinec 1976 (The economist 25 Dec) dad’s 10 green bottle survey has recorded the 10 most urgent conventional mindsets to breakthrough as entrepreneurial revolutionaries unite their social action callings

we thank Glasgow University for offering to be the future’s centre of archives of such competitions and look forward to student social business clubs and hubs nominating potential essay prize titles; we would love to see the essay and the social action prizes yunus youth ambassadors need become one and the same competition -= see the annual MIT ideas model but www.journalistsforhumanity.com www.saintjames.com can only start with the practice competences they know how to host. See thsse webs for editorial instruction that apprentices at economist used 1843-1988

Changing education

2010-06-16T00:58:00.001-07:00

of my dad's reports on the future of net generation which were issued over decade 1983-1993, the Swedish one - The New Vilkings was most uptodate being rewritten for swedish translation 1993 http://normanmacrae2010.blogspot.com/

foreword

The Swedish Employers Confederation asked me to write this naughty little book in 1992-3, because in 1982-1983 my son and I were writing a wider and naughtier one that was first published in Britian 1984 as The 2024 Re4port - a concise history of the future http://www.normanmacrae.com/netfuture.html

In this previous future history there was one main event of the 1980s. Communism disappeared. We forecast the fall of the Berlin Wall as happening Heilige Nacht, Christma Eve, 1989. Since in real life it came down six weeks earlier, I hope that this cheerful future history of Sweden is also six weeeks too pesimistic.

The main event of 1990-2010 in the previous book was that the world's 60 year spasm of big government disappeared. We stopped letting politicians spend the absurd 45% of GNP in countries like Britain, and the even absurder 69% of GNP which you Swedes at one stage in the 1980s allowed. We all came down to more like the 10% of GNP spent through government in America in 1929. In this book I may let you Swedes spend about 15% of your money though ;politicians in 2015, but you will be much wiser no to.

In 2000-2020 the main event in the other book was that braninworkers (which in educated countries came to mean almost all workers) turned into telecomm\uters, with huisband and wife often working through screens in their own home, and even children (as in farming days) having useful chores to do. This led back to a more sturdily individualisty rather than dreamily communal Folkhemmet, to the reversal of what Hans Zetterberg called the post-1968 trend when "being young began to be thought better than being a mature adult - a dangerous situation for any civilisation", to a transfer back of many caring services from socialist state bureaucracies to conservative family love, to the desirable (anyway much more efficient) commercuialisation instead of politiciasation of local government, wonderful choices of worldwide lifestyles, all; sorts of marvellous things like that. I dare to hope you Swedes will be fierecly Viking-like in grasping at this freer post-industrial society, just as you were probaly the wisest and gentlest in creating the most decent and fair industrial society 1870-1970. At any rate, in this future history of 1995-2015 you begin to cope very well.

THE MIDDLE CLASSES (II)
by Charles Handy, Norman Macrae, William Bridges

"Our careers used to be something that happened to us; they were developed for us by the organisation for which we worked. In the future it will be very different. Governments may not want to say it but 'independents'--those outside the organisation in self-employment, part-time work or unemployed--now amount to over 40 per cent in every advanced country, and the proportion is growing."

From an article by Charles Handy, in The World in 1995

"Computers are about to cut a swathe through the protected ranks of professional people. Software will start replacing them. Human skills will still be needed and well paid, but only for such truly skilled occupations such as gardening, the problem is that the professional classes have not begun to understand this."

From an article by Norman Macrae in The Sunday Times, 4 December 1994

"The job as a way of compartmentalising work in a continuous way is going to disappear. Pursuing the concept of job creation is a waste of time and effort. By the year 2020, our job chase will look like fighting over the deck chairs on the Titanic. Before the Industrial Revolution, the word "job" meant doing a task, not a post or position that would keep on lasting forever. We're now returning to the previous meaning of the word. In the post-job society, most company middle managers will go, hierarchies will disappear and many top managers will also go when their particular project target has been realised. They will have to devise new projects and offer them around. One of the reasons I like working for myself is that nobody is going to retire me."

From the book, Jobshift by William Bridges, 1995)

Chapter 1 Retrospect from 2015

In these marvellous years 1995-2015, Sweden has again made itself into the fortunate country. It has held that role before. From 1870 to 1970 this small and cold northern land had a faster increase in real income per head than any country except Japan. As Sweden has civilisedly kept out of war since 1814 while Japan in the single lifetime of any eventually octogenerian Japanese born 1970 has crashed through three agressions into Hiroshima, the greatest increase in material happiness clearly went to the Swedes. By 1945 Sweden was far the richest country in Europe -with twice the income per head of what were to become the first 12 member countries of the European Community.

In the 25 years after 1945, Sweden found it easy to propser because of this happy 1945 start, its can-do capabilities and its neighbours' boom. It no longer outpaced thiose neighbours in economic growth, especially West Germany after 1848, but this seemed not to matter. In 1945-70 Sweden was engaged in a proud experiement that won admiration from progressive people round the world. It became the first countrty to virtually abolish real poverty among any of its folk, to care for the most unfortunate of its citizens in an egalitarian way, with a lack of civil strife at home and peace keeping honours in United Nation missions abroad that made the "Swedish model" the hope of much of the decent majority of mankind. Until 1970, Sweden was quite generally listed the "most admired country" in international opinion polls, usually followed by Canada or Switzerland. Then , in 1970-1990, so much of this went wrong....

Can you help us with a top 10 unexpected views of where dad wished 2010s peoples would go as well as where he came from?

1 Dad seconds Muhammad Yunus view that 2010s is most exciting decade- the 60s only had the race to the moon; the 10s has siustainability of peoples and planet to unite round

2 dad's wife Janet was daughter of Sir Kenneth Kemp - the British Raj Judge who spent quarter of a century opposing Mahatma Gandhi until being asked to write up the legalese of India's Independence

what can #3 be - rsvp chris.macrae @yahoo.co.uk

1982 - we're all intrapreneurial now - The Economist

2010-06-14T21:50:00.000-07:00

surprise, surprise - the service economy will generate different productivity dynamics, value multipliers and potentially open source franchises than the industrial economy of making things to patent and consume up - how can every being enjoy creating services communities need?

do you have a favourite principle for 2010s from we're all intrapreneurial

We're All Intrapreneurial Now - 17th April 1982
In a survey called "The coming entrepreneurial revolution" in The Economist of December 25, 1976, Norman Macrae argued that "methods of operation in business are going to change radically in the next few decades, in a direction opposite to that which most businessmen and nearly all politicians expect". The survey aroused enthusiasm and infuriation in almost equal measure, with invitations to lecture in more than 20 countries. Today Macrae updates his views on management methods that can make even lousy businesses profitable, and those that are driving tighter organizations to the wall.

Big goes bust

The 1976 survey argued that the world was probably drawing to the end of the era of big business corporations, because it would soon be seen to be nonsense to have hierarchical managements sitting in skyscraping offices trying to arrange how brainworkers (who in future would be most workers) could best use their imaginations. The main increases in employment would henceforth come either in small firms or in those bigger firms that managed to split themselves into smaller and smaller profit centres which would need to become more and more entrepreneurial.

As so often with supposedly controversial journalism, this proved to be an exercise in tentatively forecasting something that had already begun to happen a decade before, although it honestly was the opposite of what was being most widely reported at the time. In 1976 the textbooks being most assiduously fed to business courses were still Ken Galbraith's. "The new industrial state" and Jean-Jacques Servan-Schreiber's "Le defin americain", each of which was a bible to the advocates of industrial policies then subsidising British Steels, British Leylands and Projects Concorde into growing inefficiently larger and therefore irretrievably bust. These mergers were procreated on the thesis, explicitly stated by Ken Galbraith, that markets had been replaced by planning in favor of big technostructures so that large organisations like Chrysler or United States Steel did not lose money any more. "By all but the pathologically romantic", cried Ken Galbraith in 1967, "it is now recognised that this is not the age of the small man". He believed that the most economic size for business corporations in the future could be "'very, very large".

Shortly before these two books were -written and, instantly reached the best-selling lists, precisely the opposite trends had remorselessly begun to occur.

By 1965 small workplaces were already out-performing big ones on almost every count. Even in idealistic occupations, British hospitals with under 100 beds had between one half and two thirds the sickness rates among nurses as hospitals with more than 100 beds. I got my saddest quote of the late 1970s from the manager of a huge factory in Manchuria (though he could find echoes at Detroit, London Airport, Kama River): "During the period of disruption by the gang of four many workers came only on pay-days, some carrying placards saying I was a fly on top of putrescent meat. With 10,000 comrades here, it was impossible to check the absenteeism, pilfering and work-dodging that went on".

The biggest world political event since the 1960s is that communist countries have proved less able than free-market ones to escape from inefficient giantism in state factories and farms, so they are all going bust. In free-market countries managers are eventually more willing to lose face than their shareholders are to lose money, but tough problems are arising as even capitalist giants slim.

Since the mid-1960s the thousand biggest firms in the United States have as a group been sensibly reducing their labour forces, and more than the whole of the 15m private-sector jobs created since then have come in smaller firms-the majority of the new extra jobs at any one time being in firms less than five years old, even though more than half of new small American firms disappear out of business in their first five years. Although survey dates are jumbled, the accompanying inadequate charts suggest the same trend is accelerating even in manufacturing across the capitalist world. The present capitalist conjuncture is therefore one where the bigger and more stable firms are running down their employment, while more than the whole of net new employment is provided by small firms which, however, frequently go bust. Ow! And some thought needs to be given to ways of combining the advantages of small firms within big ones.

Make departments minifirms

In my 1976 survey I suggested there would be two trends-in the most conventional of which, greater reliance on subcontracting, I now think I was jejune. Subcontracting works only when the big firm has very tight quality control (as have Marks and Spencer, big Japanese companies towards tiny component makers and the superbly entrepreneurial Italian textile industry, see later). Subcontracting does not work when the big firm cannot measure what quality is, so that many management consultants, public relations firms etc. are about to disappear because they are high-cost ramps.

The second system I suggested in 1976 was that dynamic corporations of the future should simultaneously be trying several alternative ways of doing things in competition within themselves, becoming what have later been called confederations of "intrapreneurs". Two key concepts for efficient businesses here. First, the right size for each profit centre or intrapreneurial group-by which I mean a group of friends working together in daily productivity hunt towards the same objective-is very small, probably not more than 10 or 11 people, however dynamic your top management. Jesus Christ tried 12, and that proved one too many. Second, firms should not pay people for attendance at the workplace but should pay competing groups for modules of work done.

Thus, if you need a typing pool, I have suggested it might be best to set up several competing groups of Typists Intrapreneurial. You would offer an index linked contract to the group for a set period, specifying the services you wanted in return for a lump-sum monthly payment. The typists would apportion the work among themselves, devise their own flexitime, choose their own lifestyles, decide whether to replace a leaver by a full-timer or part-timer or whether to do her work and keep more money per head. They could also decide whether to tender for extra paid work from outside. In offices with tomorrow's equipment, there could, see later, be a lot.

A trivial example? By comparison with the gains that can be made in other fields it is. Yet the EEC court of auditors has recently ruled that the proper output for a typist is around 24 pages a day, and was upset that in some EEC departments the average, was only 12. In The Economist on a print-day Wednesday, when we are feeling rather participatory, a top secretary will type around 60 pages. If some EEC departments went over to that pace through being Typists Intrapreneurial, the stenographers could choose to work only one day a week for the same weekly wage as now, or by slowing recruitment they could work for up to five times their existing wages for the same present attendance at the office, or they could become five times more efficient. In practice, competition would ensure a mixture of the three, and the scope in most other parts of the business and bureaucratic jungle is much vaster.

This survey will explore that wider jungle, starting from the intrapreneurial mechanisms needed to breed new projects and going on through to those needed eventually to kill outdated ones (and make it participatory fun to send them to South Korea).

About 85% of all the industrial R & D expenditure in the United States takes place in 300 large corporations. It is done very wastefully.

Towards inventors intrapreneurial

About 70,000 patents are issued in the United States each year. Of these, maybe 60,000 are never heard of again, because most are horse manure. There will be some hidden pearls among it, and more could be found if patent offices were more intrapreneurial instead of often being inefficient government filing offices, some not even properly computerised. Governments should establish competing intrapreneurial teams in patent offices, compiling competing databases.

Of the perhaps 10,000 new patents a year round the world that are used, only about 10-20 a year are for what the co-inventor of the ubiquitous integrated circuit, Mr. Jack Kilby, calls "major" inventions things that change our lives. A list of the world's major inventions over the past 50 years shows that big organisations claim to have discovered only around a third of them, and some of their claims are fibs. More than two thirds have been discovered by individuals or small businesses.

The individual inventors' list of the past 50 years turns alphabetically from air conditioning, automatic transmissions and ballpoint pens, through jet engines and penicillin, to xerography and the zipper. The big companies' list runs more predictably through crease-resistant fabrics, float glass, synthetic detergents. Note how these fit with corporate objectives; "We are a big textile or soap company, so go for something capital-intensive". "We are Pilkington's Glass, and if we can beat plate glass by developing float glass, then every motor car in the world will eventually pay us a royalty, so it is worth carrying on with research into solving the last three problems in the way of float glass even through 12 consecutive years of negative cash flow."

Nobody should underestimate the tangible and intrapreneurial excitement among a tiny group of researchers when such a big firm's opportunity presents itself. Sir Alastair Pilkington has described how his research group into float glass was kept small enough to maintain total secrecy, so that experiments had been in progress for seven years before competitors knew of them; how several of his team members, after working impossibly long hours, were carried away on stretchers suffering from heat exhaustion; how 100,000 tons of float glass were made and broken before the great day which produced the first bit they could sell. But, to quote Jack Kilby again, each invention presents a profile of opportunities and requirements, while each company has its own profile of what constitutes to it an acceptable product. The probability that these two profile, will coincide in any given case is not very high.

The result is that many big companies' brilliant researchers are, in conditions of great secrecy, in their seventh consecutive year of smashing unusable float glass.

The Pinchot proposals

The most promising set of incentives for R and D departments to stray down interesting byways has been suggested by Mr. Gifford Pinchot III of Mr. Bob Schwartz's Tarrytown School for Entrepreneurs near New York, and they are being tried out by some clients of the new School for Intrapreneurs run by the Foresight Group management consultancy in Sweden. I should have introduced Mr. Pinchot before, because he is the inventor of the word "intrapreneurs", in a paper which paid kindly tribute to my 1976 survey. His description of what is happening in semi-reforming big corporations:

Decentralisation alone is not enough. In a hierarchical organisation, promotions can be won by special graces, loyalty to one's boss and general political skills. Courage, original thought, and ability to observe the obvious do not necessarily lead to success. If we are to get really good problem-solving in our decentralised corporations, we must introduce a system that gives the decision to those who get successful results, not to the inoffensive. Such people will be willing to take moderate risks and will be more concerned with achieving results than gaining influence. These are among the characteristics of the successful entrepreneur. What is needed in the large corporation is not more semi-independent departments run by hard-driving yes men, but something akin to free-market entrepreneurship within the corporate organisation.

His recommendations about intra-capital, see the next two paragraphs, could prove one of the great social inventions.

Under Mr. Pinchot's proposals for R and D departments a researcher wishing to plunge intrapreneurially into some project would initially have to risk something of value to himself; such as 10% of the costs of a project, up to 20% of his salary for the duration of a project and two years thereafter. A committee within the company would then contract to "buy" completed research in an intrapreneurial scheme for both cash bonuses and intra-capital. If a company makes $1m on a project, the intrapreneur's share might be $100,000, of which only $10,000 might come in cash and $90,000 might come in intra-capital which the intrapreneur can invest on the corporation's behalf in future R and D projects of his own choice. If he is successful again, his reward will be another cash bonus (probably larger the second time) plus more intra-capital.

This system, says Mr. Pinchot, motivates creative staff to think practically and frees their individual initiative. It minimises politics and maximises performance as a criterion for advancement. It rapidly puts a portion of the company's R&D budget in the hands of proven winners. It gives any good research staffer a strong reason to stay with the company, since leaving would mean giving up control of his accumulated intra-capital.

My own variant of the Pinchot scheme would put less emphasis on the idea of the company undertaking projects, more on it helping to farm them out, while still rewarding the intrapreneurial inventor in Pinchot's way. To quote Mr. Ralph Landau (founder of Halcon International, and one of America's most successful entrepreneurs), there are two stages in innovation: (a) the conception or invention of a new or improved process, product or system; (b) the commercialisation of it. Stage (b), the commercialisation, will generally cost between two and ten times as much as stage (a). This great expense of commercialisation for products that do not fit a particular firm's "profile"–creates a danger. Intrapreneurialism in R and D will not go fast enough if it becomes a device for regruntling touchy young Boffin by pretending to put his wheeze along the company's existing production and distribution lines that are quite unfitted for it.

Which leads to supermarkets for ideas. A big next vogue should be the sale of ideas telecommunicated between computer terminals. Everybody should have different ideas on how to tie intra-capital into these and how the offering firm can sift for quality; but, once competing mechanisms are established, sales of ideas should be decided intrapreneurialy, as sales of goods already are in firms whose salesmen are virtually independent businessmen working on commission. Franchising extends this concept. The only sales element subject to "tight central control" in such companies is the salesmen's expense account, which is therefore the one element on which the central controller is always swindled.

A steel mill's eels

Mr. Pinchot's group at Tarrytown is soon going to establish in America the world's second school for intrapreneurs. The first started when the Foresight Group (itself originally four intrapreneurial Swedes operating from their homes) in 1980 persuaded some Swedish client companies to announce on their internal notice boards: "any would-be intrapreneur come to a meeting". In most companies 40-60 turned up, about equally upper-blue-collar and middle-management. The school wanted 2-4 from each company for the first course, each with a separate specific intrapreneurial idea. Twelve people lasted through the first Swedish course, which consisted of six meetings-the first of a week, the next five each of three days. The course tried to turn each fuzzy idea into a business concept, then into a business plan.

From those first graduates in 1981 there are now emerging (eg) two use-of waste-heat projects (one man is pumping a steel mill's heat into a pond that breeds eels, another a paper mill's heat and computer knowhow into some computerised greenhouses); a man from a building company is making prefabricated concrete elevator shafts (likely to boom in Sweden because of new environmental rules demanding too many lifts for the handicapped); and an Esso man is converting repair garages behind filling stations (many of which are closing) into places to store and lease out do-it-your-self equipment. Some of these look more like the creation of small new capitalists than intrapreneurial ventures, but Sweden's silly tax law (which is suspicious of the transfer of forgone income to capital) makes intra-capital difficult.

It would be wise for all governments to alter this sort of tax law. Other government policies "in favour of entrepreneurship" make less sense.

Gadarene pearls

Nobody should be in favour of governments granting special credit and other favours to small and innovative firms. If governments are ass enough artificially to increase supply by granting special favours, Silicon Valleys are going to go quickly bust.

As a test case, suppose this is 1946. Here are some accurate market forecasts for the succeeding seven years for a product that alters the living habits of over two thirds of the population of the world. In 1946-53 sales of this product in the United States will increase by over 10,000%. America's production costs in this very high-technology industry are now, in 1946, below anybody else's and the quality of American production is higher. The number of firms in the United States making this eminently exportable product will multiply four times over in 1946-53, and after 1953 the sort of growth in purchases about to be experienced in the United States will eventually spread to countries including more than two thirds of the population of the world. You now have to decide whether to put taxpayers' money into this industry (a) in 1946, (b) in 1953.

The industry concerned, as you may have guessed, is that producing television sets or major television parts in America. Even in the boom years 1946-53 less than half of the American firms sometime operating in this market ever showed a really healthy positive cash flow, and in the five years after 1953 more than three quarters closed down, increasingly on terms equivalent to going bust.

Moreover, this is not an exceptional case-except in so far as it was an exceptionally fortunate one because the product called television actually caught on. This is likely to be the usual experience in today's go-go industries like microprocessors or biological implants or laser technology or whatever new product you will first hear of tomorrow. It has been the usual experience in yesterday's went-went industries like airlines or computer leasing or washing machines or real estate investment trusts-even when there has been an incredible increase in demand for their products. Correct forecasts for 1950-82: passenger miles flown in airlines will increase by 3,200%, and by 1982 all the biggest airlines will be going bust.

The present trendiest policy of governments at the equivalent of television's 1946 stage is to provide cheap loans to small technological firms, thus ensuring that the number in the market multiplies six instead of four times over, so 90% instead of 75% eventually go bust.

At the 1953 stage the problem is not just that the domestic market is going over to replacement demand. The problem is that the industry is now established, so a Taiwan without trade unions and lower wages may take it over. What you do as a taxpayer at the 1953 stage, with far too many firms in the market, is scream because your equivalent of a national enterprise board will be introducing yet another one, since it has just heard that an exciting new technological product called television exists. What you do as a businessman is either (a) make money by switching operations to Taiwan; or (b) stick to quality control and follow the logical intrapreneurial policies for mature (not infant) firms.

Next, some good news for old countries, making old-fashioned things.

Mature intrapreneurial

At the beginning of this century the two largest occupations in America and Britain were agriculture and domestic service, together employing around half the workforce. Today these two employ under 4% in each country, and until the 1960s it seemed probable that manufacturing employment in the world's rich north would drop the same way. Now the success of Japan, and the discovery small is more flexible, are good news for Europe's and America's manufacturers.

When a multimillion-dollar factory with 10,000 men can produce more cheaply in Brazil than in Birmingham, the multimillion Eurodollars will roll to Rio, but probably not the $50,000 for a five -man Brazilian workshop lest the five and the $50,000 disappear to the bush. In my 1976 survey I argued that robots and computer-controlled manufacturing systems should make rich countries' manufactories smaller and more intrapreneurial, dreaming that some might become one-man workshops. This proved to be underdreaming since some Japanese small businessmen now have no-workman garden worksheds, where their unwatched leased secondhand robot system hammers out a component for some big factory, while the small businessman is touting entrepreneurially on the golf course for new orders.

The Japanese have always based their continuing manufacturing miracle on tiny entrepreneurial component-makers (one Japanese worker in six now owns a small business) and on surprisingly small but brotherly profit centres even within huge plants. To quote Harvard University's Professor Ezra Vogel:

The essential building block of a Japanese company is not a man with a particular role assignment and his secretary and assistants, as might be the case in an American company. The essential building block of the Organisation is the section. A section might have perhaps eight or 10 people. Within the section there is not as sharp a division of labour as in an American company. To some extent, each person in the same section shares the same overall responsibility.

If you go into a Japanese assembly-line factory, you first see the components flowing in (maybe from those automated no-workman garden sheds), and subjected to very tight quality check. At each stage along the automated assembly line, most of the regular workers are also just reading dials or otherwise checking for quality, usually in those co-operative sections of about eight men. The section is told at its daily post-breakfast meeting how many subsequent faults were later found in its checked products, compared with the allegedly larger number of faults missed by the equivalent section in a main rival company (loud banzai).

At the end of one Japanese hi-fi-set assembly line near Osaka I once found a rather jolly crew actually doing manual work, packing the awkwardly shaped sets into cardboard boxes. They were not wearing Company uniforms. It had been decided that this measurable manual work, right there on the assembly line, could be contracted out to a separate tiny firm (virtually a workers' co-operative). Question: who decided how many workers should be on this job, and thus their working hours and income per head? Answer: the workers themselves, like my Typists Intrapreneurial.

Mr. Revans's action learning

The Japanese have become the world's best businessmen partly because they do not go to business schools. Indeed, they wisely do not believe in off-the-job government-subsidised training programmes for absolutely anything. One foreign management academic mentioned in Tokyo with real respect is the English Professor Reg Revans of the Manchester College of Science and Technology, of whom I had never previously heard. Since corresponding with Mr. Revans (who teaches that "the sudden decline of the English-speaking economies of Britain, Canada and the United States is partly a consequence of the rise of the academic business schools"), I see why his articles do not frequently appear in business school publications-although his 900-page hardback "The origin and growth of action learning" is about to be published in Sweden with help from Lord Weinstock and others.

Mr. Revans's own system of "action learning" is to put a small (I would call "intrapreneurial") group of four or five people into the field with a mandate like "make the business side of that hospital more efficient", all the time recognising:

that managers learn with and from each other as they work together on real problems (or opportunities) for which no course of action (let alone solutions or policies have yet been agreed; since the problems are real, it is insufficient that the manager should discuss or diagnose them without also taking steps to treat them. An action learning project is thus a sustained and iterative attack, conducted in parallel with three or four others, upon a real problem by a real manager, regularly meeting his three or four colleagues to offer and receive advice, criticism and support about the diagnosis and treatment of the problem....

It is clear that these groups have some times brought real advances-for example, they helped to breed the supposed Japanese idea of "quality circles"-a well as being schoolmasters. A main difficulty is that real reform programme generally require what Mr. Revans calls two dimensions: (a) the recognition that some particular activity needs to be ended, and then (b) a tremendous fight against those to be supplanted who have acquired reputations as experts in the prosecution of what needs to be wound up. We are approaching the problem of making lame ducks fly. Two that did:

Flour and textiles

One of the few top 500 American companies to have grown in the past two, decades was in 1960 the largest flour miller in the world. Pause to ponder whether you would expect this to be an expansive business, and what you would, advise it to do with its flour mills. Answer: not expansive, and this firm prospered mightily by closing half the flour mills in America down. It got out of businesses making 40% of its previous revenue, and split into more than 6 separate companies, some doing very different things.

Next question: would you a expect corporate planner to recommend some thing like that? Answer: no, all of the executives involved in the 40% of existing businesses to be scrapped would be up in arms, and even the Archangel Gabriel could not sensibly suggest today that the company should go forthwith into the following 60 lines of business. So the company did what I think is the first essential thing in corporate planning: it sacked its corporate planner, and set up small "developments department". It decided that its strength was marketing consumer products (it had early been successful in advertising and selling some breakfast goo). Then it invited proposals for small ventures based on this strength.

The new businesses have ranged from fashion goods through toys to restaurants. A spectacular example was that a film buff had heard that a film was being made which needed to find ways of getting more finance but looked as if it might become a cult among kids across the world in the five- to 12-year-old age group. Intrapreneurial question: what do we do? Answer: buy the franchise for toys with the film's name, and advertise in the trade press for small firms to submit particular toys which, if they passed the company's quality test, would carry the insignia. The film was called "Star Wars". Revenue went from nought to $100m in one year.

Cautionary tale. When I last talked to a meeting of this company, it seemed to have developed a matrix Organisation chart (which Reg Revans rightly calls a device for repudiating responsibility), lots of group vice-presidents in charge of different divisions named after products (which is exactly the wrong concept), a habit of buying existing businesses instead of creating ideas (oh dear).

A second rescue story has been in Italian textiles, where one of that country's evanescent governments devised the best possible industrial policy partly by mistake. Previous governments had imposed bureaucratic controls on all companies, so this one said that any firm with fewer than 20 workers would be free from these. Of the 15,000 textile factories in the main textile town of Tuscany, 13,000 have fewer than 10 employees. One minister for industry who helped to spur this system was the professor who had translated my 1976 survey into Italian.

The industry now has just about the highest textile wages in the world, and the frontier between the boss and worker moves all the time, because if the small works of which you are main owner fails you turn into being a friend's worker for a time. And this is not just one freak way of running an adaptive textile industry. In continually changing industries-which in future may mean all industries-it is increasingly going to be the only way, although the relation to the small producing unit of the big-firm-buyer doing the quality checking will vary.

Instant intrapreneurial

Since most readers of this survey are not Italian ministers of industry, let us consider some profitable intrapreneuralism which quite junior businessmen reading this could initiate with one memo now. Since the advent of competitive air fares, there have been -five possible ways for a firm to run its executives' air travel, and most very big companies still choose one of the two craziest. Take your pick:

System A, contract travel arrangements out to a travel agency which is paid on a percentage commission so that it gets most money when executives go by the most expensive way.

System B, set up some underemployed secretary as a profit centre to ferret for cheaper fares. You tell any executive who has to travel on the firm's business whether his entitlement is economy-class fare or first-class fare. Then if he arranges with the secretary who has turned herself into an expert on cheap fares to go a cheaper way, they split the saving-say, one third to the company, one third to the traveler and one third to the secretary as profit centre.

System C, let as many secretaries or hall porters or whatever as want to play this game set themselves up as competing profit centres. Let them either co-operate or compete with each other, as they please, but with the quite simple check the company accountant pays the bucket-shop's air fare for £90, there is a note saying Mr. Smith's entitlement will usually be a fare of £390, the company takes £100 of this £300 saving, and returns £200 for the other two to split among themselves as they like-licences withdrawn if the travellers don't arrive on time.

System D, give the money to the executives, and let them buy their own fares-cheaply, if they wish. .

System E, set up a central department, bullying executives to go to Hongkong by standby Aeroflot flight 'via Iceland and Irkutsk.

The least sensible systems are A (the travel agency) and E (the central travel department), so most very big British companies use one of them. The disadvantage of D ("give them the money") is that executives then travel too much and use the firm's time to hunt bargains. The most competitive system is C (the co competing profit centres), but go via B (the single profit centre) first and try to develop op into selling this service outside?

Obviously I would like such business to develop through lots of groups "secretaries intrapreneurial", trying sell lots of services outside including t use of capital equipment that in many offices lies idle for 150 of the 168 hour week. For example, many firms have "infotech" (in America "rapifax": facsimile transmission by telephone) devices connected with their branch offices abroad, sometimes into foreign countries which don't have Saturday mail deliveries when you won't be using your infotech anyway. Test launching-an advertisement saying contact a recorded message on your ansaphone detailing your services on offer?-could cost virtually nil.

Behind all these prospects lies the present advance of the computer in completely inefficient underuse. Data processing departments are being given the incentive to do as little work possible, and top management over age 50 does not press them because it hates revealing that it does not understand computers anyway. The computer age has therefore started without most big organisations having a daily and imaginative productivity hunt to discover how the computer can best be used.

This mess is worst in the world's biggest information-handling industry, which is government. If you talk to a seminar of (eg) senior British inland revenuemen you find that they are engaged in commissioning meaningless "feasibility studies" on how to computerise pre-computer systems of operation without anybody thinking (let alone testing intrapreneurially) how changing the system to fit the computer age could remove the need for two thirds of the unnecessary labour now being done.

The road to efficiency in all government offices could be paved by the simplest sort of intrapreneurialism. You divide people into groups of under 10; tell them that this is the work to be done by them, and that if (in association with the computer people etc.) they can cut the time spent on it, then they can have the advantages of a "Typists Intrapreneurial" (the flexitime, the self-organisation, the opportunities for outside income). Savings would eventually be huge.

Buy-outs

Doubters say that all this is white-collar stuff, and how could intrapreneurial work in (eg) some heavily trade-unionised British business going bust? Answer: in Britain, and many other countries buy-outs by employees of bust and heavily trade-unionised businesses are now proceeding fast.

When a big company closes a loss-making subsidiary, it often finds that redundancy costs etc. make the net proceeds on liquidation derisory, so the opportunity arises for a small group of workers to buy the firm for a knockdown price. Sometimes a big company will also sell subsidiaries that do not fit its "overall strategy". Since any company which uses that phrase will have been managed absurdly, these can be better buys still. In 1977 an American company sold a large British factory for £350,000 to two top employees who had only £12,000 capital between them. The two borrowed £100,000 from two overseas distributors, plus another £100,000 from a bank; and persuaded the selling company to accept the other £150,000 on deferred terms (and also to retain a 5% equity stake). Efficiency and profits soared.

As was clear from answers to a questionnaire in a recent do-it-yourself booklet on Management Buy-Outs by The Economist Intelligence Unit (EIU Special 115, price £30 or US$60) most big British banks and near-banks are now eager to handle this suddenly booming buy-out business. The recently renamed National Enterprise Board will be losing taxpayers' money on it (it told the questionnaire that its object was to assist "companies in advanced technology and companies in English Assisted Areas whose requirements cannot be met appropriately......", oh dear), but all the other banks fortunately say they are zooming in to make profits. The EIU's sample suggests the failure rate in buy-outs is less than 10%, versus 30% in new start-ups, even though the start-ups are in the ventures deemed most profitable to start and the buy-outs in those which big businesses want to shed.

A familiar difficulty: buy-out teams should preferably be small (the EIU recommends two to five) because more than six new entrepreneurs quarrel. That problem can sometimes be assuaged by halfway devolutions to separate small groups. One example of such intrapreneurialisation under particularly unfavourable conditions in the 1970s was a British film studio which ran one year into a huge loss, because its workers spent most of their days drawing large overtime while waiting around. It was closed, and the workers were given redundancy money, but some were asked if they wished to stay on to operate freelance in what became a film facility studio. A producer who made a film in the studio had thenceforth to negotiate separately with the intrapreneurial cameramen (who were intrapreneurially doing outside jobs in shooting television advertisements), with the plasterers, carpenter's shop, lighting and electrical men (who were also operating outside in the normal neighbourhood ' For example, small teams at any two building trade), the former transport department (now running a minicab service) etc.

Ride out on the rail

End with the British nationalised industries, which were originally created because it was assumed that large private monopolies in them would too easily make excessive profits, but are now all great stranded whales. The railway engine drivers of Britain have some agreement, which no small firm could grant, so cheaply so long ago. that an unnecessary two footplatemen should travel on most trains where there is work for only one to do. A sensible minority sign on to draw their wages but do not actually go to these pointless journeys. They slope off to increase the real national income by running their black-[economy minicab services etc. This winter saw a rolling strike because British Rail was trying to introduce a "productive deal" through flexible rostering which-so long as it was accompanied by promised of no redundancies-would achieve a net cut in the national income by obliging the men to close some moon-lighting services down.

If groups of train drivers were organised like Typists Intrapreneurial they could vote whether to make most money for themselves by sacking their mates, whether to make least money for everybody by retaining the present system, or whether to keep the mates outside the trainings to run more intrapreneurial services (eg, minicabs geared to meeting trains). Similar possibilities for local authority dustmen (many of whom can complete their existing jobs before ll am), turning coal pits into workers cooperatives, right across the state sector. The intrapreneurial improvements in productivity would likely be very large, because the existing productivity of management and workers in this sector is so unbelievably low.

For example, small teams at any two or three partly unnecessary British Rail suburban stations could then decide which stations to close and sell, how and when to run car parks or jitney services at or to those kept open, what best uses to make of each square yard of British Rail's overabundant space (just over a decade ago a survey showed that it owned 6% of the land area of the then borough of Camden). Only a giant organisation could be losing so much money when it owns so much underutilised land bought so cheaply so long ago.

Envoi

In most large British workplaces there are no direct incentives for ordinary workers to speed or improve production and no way in which ordinary folk can have the fun of suggesting (and participating in) constant experiments to improve their group's efficiency. Except when they are frightened lest bankruptcy may bring them the sack, it is therefore natural for most British workers to resist productivity drives that disrupt their habits at no benefit to themselves. The conventional doctrine for running British industry is becoming the daft one that a manager can best get higher productivity by running his firm constantly on the verge of bankruptcy, and that his workforce's main enjoyment of the loveliest human excitement called group togetherness will be when going on strike.

As most firms are less near to terminal illness than (eg) British- Rail, they could often find the way forward to greater profitability and more participatory workplace fun by starting intrapreneurial ventures on a small scale (which is the right scale on which to start them) and letting them spread. If these 1976 and 1982 surveys encourage any pioneers down that road, they will be worth the aggravation that this sort of writing unhappily manages to cause.

macrae on europe's rebirth 1962

2010-02-22T12:46:00.000-08:00

A HUGE thing is happening in Europe.
In a star-shaped modern building
called the Berlaymont in Brussels,
a group of founding fathers is hammering
out — a bit uncertainly, a bit clumsily,
but with rising conviction — what is
likely to be the constitution of the coming
United States of Europe. There are
sober grounds for supposing that this may
have as great an effect on the future
history of the world as did the creation
of the United States of America by those
other founding fathers one hundred and
ninety years ago.
As with all really great events, most
of the participants themselves only dimly
realize what is occurring. The mood in
Europe as we enter the last three decades
of this tumultuous twentieth century is
not euphoric, but it is again confident.
In the first sixty years of this century
many of the countries of Western Europe
were losing an empire. Now they are
rediscovering a role in their own continent. There is every reason for supposing
that in these next thirty years the
United States of Europe will be achieving
a very large increase in material prosperity:
that it will quickly follow the
United States of America in attaining
the most productive use of industrial
resources ever secured by man. It remains
to be seen whether Europe will
repeat some of America's mistakes for
the pattern of life in an affluent society.
The kernel of a West European confederation
already exists in the six
countries now joined in the European
Economic Community: the 190 million
people of Germany, France, Italy,
Belgium, the Netherlands, and Luxembourg.
In the Treaty of Rome, signed
in March, 1957, these countries declared
their intention of moving during the
nineteen sixties to a "common market"
in which they would levy no tariffs
against each other's goods. They
achieved this objective slightly ahead of
schedule, and ,now their objective for
the nineteen seventies and nineteen
eighties is to move toward a full
economic and monetary union. Once
this union is achieved, member countries
will have a common currency, a
common tax system (with some separate
national taxes, like the separate state
taxes in the USA), pooled foreign
exchange reserves, and free movement of
capital and labor across their diminishing
frontier posts. The free movement of
labor — and, indeed, of all inhabitants
of the new European Community — is
likely to be the clinching point for full
political union. Once it becomes the
ordinary thing for people in Germany
and Britain to move to the Mediterranean
when they retire — and for people leaving
school or university in France or Italy
to consider equally job offers from Paris
or Amsterdam or Glasgow or Milan —
then some sort of central government will
have to be set up for Western Europe.
The big question for the next two decades
may be whether it is going to be a central
government with the right powers.
People at present seek three main
things through and partly from their
governmental systems: peace, prosperity,
and what may be called a more cohesively
gracious form of living together. There
now seems little doubt that the move
toward European unity will advance the
causes of peace and prosperity. That,
indeed, is why the European Economic
Community is almost certain to have
considerably more than its present six
members by the early nineteen eighties.
Applications to join the six have already
been filed by four other European
countries with a present combined
population of over 70 million (Britain,
Norway, Denmark, Ireland). The expectation
is that their initial entry will be
in 1973 and that they will become full
members by 1978. Four more countries
with a combined present population of
30 million (Sweden, Switzerland, Austria.
Portugal) have indicated that they will
want to negotiate free trade terms with
the EEC if it swells from six members
to ten; although some such interim terms
will probably be agreed, the men at
Brussels are likely to set a time limit by
which any new half-members will have
to apply for full membership. Two other
countries with a combined population of
45 million (Greece and Turkey) already
are half-members, with a firm intention
of becoming full members in the early
nineteen eighties, once their economic
development has reached a sufficiently
advanced stage; the 32 million people of
Spain also are expected to join this
category.
If all these countries join, the present
community of six will become a community
of seventeen before the end of
the nineteen eighties, with a population
of well over 400 million people. The
average income per head of these 400
million may continue to be just over half
that of the Americans (who are likely to
IPA Review—July-September, 1971
number about 240 million by 1980), but
it will continue to be much higher than
that of the Russians (who will number
about 280 million in 1980). So cold
logic suggests that these much more
numerous and wealthier West Europeans
should surpass the Russians in both power
and influence and become within the next
two decades the second superpower on
earth.
Where in Europe is the hub of this
huge industrial power likely to develop?
People who know Europe today may
guess that it will be West Germany, whose
modern industry has most successsfully
emulated America's managerial revolution
during the last two decades. But
experience in the USA suggests that there
is not likely to be just one centre of
industrial power in a technologically advancing
continent, and it will be surprising
if the United States of Europe
does not rest on three or four centers
also. Rhineland Germany will clearly
be one of these. Britain should have a
good opportunity to become the new
Europe's financial center, and the
Mediterranean will become Europe's
California as those who work in modern
scientific industries seek sunny living
places. The Paris region will struggle
to remain a fourth focus of power, aided
by the city's long tradition as a cultural
and intellectual center. But that raises
another question: can there be a cultural
center — or even a union — inside a
Tower of Babel?
Some forty different languages are
spoken in the continent, if one includes
small languages like Welsh. Pessimists
fear that people will not move to areas
where language differences will impede
their daily life. But there are some
cheerful pointers on the other side.
First, the last two decades have already
seen a far bigger migration of Italian,
Greek, Turkish, and other foreign
workers to the booming factories of
Germany and France than most people
expected. Secondly, Europe is not new
to the task of managing multilingual confederations.
In Switzerland there are
four official languages, and in Belgium
and Finland two. In the Berlaymont,
business is conducted with extraordinary
expedition with everybody using whichever
of four languages he likes. Moreover,
the problem of communication . is
less serious with the new generation than
with the old. In part, this is because
languages are being taught better in the
schools, especially with the spread of
language laboratories. In even greater
part, it is because the young generation
is so mobile in its free time; most young
Europeans will spend a holiday in other
European countries before they are
twenty-one, and many students take vacation
jobs abroad. This carefree mobility
has another useful consequence as friendships
and marriages across international
frontiers become a cohesive force.
Europe's march toward unity has been
a supreme peacemaking achievement and
one that most people would not have
dared to forecast in 1945. The peoples
of the present six member states of the
European Economic Community — particularly
those of France and Germany —
have already so unified their economies
as to make it virtually impossible that
they will ever go to war with one another
again. This is a dramatic reversal of
more than 2,000 years of history, and
it has come in the nick of time. With
nuclear weapons, another major European
war could presumably have destroyed
the planet It was this realization
that drove the passionate advocates of
European unity to forge the Treaty of
Rome in 1957. The men who paved
the way for that treaty were a dynamic
private pressure group of idealists, master-
minded by an extraordinary Frenchman
called Jean Monnet. More than
any other man of our time, Jean Monnet
delivered us.
IPA Review—July-September, 1971
Building the New Europe (continued)
With Western Europe itself no longer
the threatened cockpit, the danger point
is obviously Western Europe's frontier
with the East. One of the reasons for
the drive to West European unity has
been the realization that the United States
of America is unlikely to keep 300,000
troops in West Europe forever, defending
rich nations which ought to be very well
able to defend themselves. This thought
has also been one of the barriers in the
way of some neutralist European countries
(such as Sweden, Switzerland, and Austria)
joining the community; some of
them have been afraid that a new West
European superpower might eventually
be too hawk-like, or at least (from their
viewpoint) insufficiently dove-like, toward
the Communist East.
This fear, felt by Sweden and others,
should have calmed a great deal in the
past year. The one West European
country which must be unhappy with the
frontiers created by World War II is
divided Germany; but the West German
government, mostly with popular approval
in Germany, is set upon trying to
improve trade and other relations with
the East. There is still hope in Europe
that the growth of consumer societies in
the present Communist bloc will help to
melt the Iron Curtain; and that the proved
advantages of the Western economic
system may lead to a gradual fusion within
one community of a Europe from the
Atlantic to the Urals.
The economic prospects before Western
Europe look almost incredibly good.
Although productivity per man in U.S.
industry is almost twice that in West
European industry, Western Europe has
an increasingly well-educated young labor
force; and the crucial point is that knowledge,
which is transferable between
peoples, has become by far the most
important world economic resource. The
task of observing how the Americans
organize their production, and then
copying them, is not immensely difficult.

In the next thirty years there is every
reason to expect that the American
managerial revolution will spread across
Western Europe and will continue to help
to raise productivity in the old continent
at an accelerating pace. What could
prevent this from happening?
One snag would be if Europe's labor
force remained tied to declining and lowproductivity
industries for various social
reasons. The classic example here is
agriculture. Agricultural policy in the
six countries of the existing European
Economic Community still keeps about
12 per cent of their labor force in agriculture,
although everybody knows that they
could feed themselves if they had only
about 6 per cent there. The proportion
has in fact come down from as much as
25 per cent in 1955, and it will certainly
go on falling. As in other declining industries,
a very large number of those still
on the farms in the six countries are
elderly people — more than half of
EEC's farmers are above the age of fiftyseven.
The community has felt obliged,
as a sort of social service, to keep agricultural
prices high enough to give these
inefficient old farmers a decent income
in their remaining years. And the maintenance
of high agricultural prices has
made it necessary to keep out imports of
cheap foreign food.
This creates a special problem for
Great Britain, which has hitherto imported
cheap food from all the world and
has run down the proportion of its own
labor force in agriculture to a bare 3 per
cent. Once in the EEC, British housewives
will find themselves paying more
for high-priced European food. If some
satisfactory compromise is not reached,
the British may stay out of the EEC
until those elderly farmers die off and
bring Europe's farm population down to
only about 6 per cent of the working
population. But I think the British will
be unlikely to break off negotiations on
this point. British farmers will certainly
IPA Review—July-September, 1971
increase their output as soon as they
receive EEC higher prices; simultaneously,
the structural reforms in which
the EEC is engaged will reduce the army
of redundant farmers.
A main feature of Europe's economic
growth in the last decade and a half has
been the spread of investment there by
big American corporations. These corporations
had various managerial, technological,
and other advantages. In
Europe they saw rising prosperity creating
good local markets. They also saw reasonably
well-educated labor forces drawing
wages below the American average.
They therefore came on over, and that is
how the multinational company has
spread.
Some people foresee a possible check
to this American investment in Europe
because of nationalistic reactions from the
European side. But Europe's fears are
likely to diminish as European industry
itself moves to a continent-wide scale.
The nervousness has been greatest in
countries which have felt that, while contained
within their own national boundaries,
they cannot build up big enough
firms to meet American competition.
For example, in the automobile industry
in Britain today there are three firms
owned by Ford, General Motors, and
Chrysler, plus one English firm, British
Leyland. There probably would be
British government resistance if an
American bid were made for this last
British contender, even if British Leyland
seemed too small to meet world competition.
But once Britain gets into the
EEC, it seems highly likely that there
will be a tie-up between the British company
and some continental motor manufacturer.
Large American multinational firms
operating in Europe in the nineteen seventies
will probably find themselves competing
against an increasing number of
large European multinational firms. This
competition will be healthy for all con-
71
cerned. There will probably be a diminution
of European protectionism against
American investment, because laws about
mergers and take-overs will be codified
on a European basis. Such codification
generally moves policy to the more
liberal end of the spectrum.
It is recognized in Germany, Britain,
and other big industrial countries that
the Americans can bring to Europe the
fruits of the best-tested research and the
best modern managerial techniques. It
would be very silly of Europe to lock
them out; and in economic matters
Europe does not seem likely to be very
silly during the nineteen seventies and
nineteen eighties.
There may still be reason to question
whether Europeans will find a cohesively
gracious form of living together. As
West Europeans gradually attain free
movement of labor across each others'
frontiers — aided by the multinational
corporations with their plants in different
countries — there will be a need for
some unification of criminal law and
sociological policies in a united Europe.
In a Europe where people move freely,
great difficulties will arise if there are
important differences between countries
in the way civil liberties are interpreted;
the way police forces and the judiciary
are run; in the interpretations put on
laws controlling gambling, drug use, or
any other morally controversial activity;
in the level of social security benefits;
in the way universities and the affairs
of cities are managed. It can be argued
that the United States of America has
run into difficulties because of differences
in regulations between separate states;
but the USA has had a tolerably strong
federal government from the beginning.
Now the United States of Europe is being
slowly formed, yet many politicians in
the separate states still pretend that it
will have no need for a central federal
government at all.

At present the embryo government of
the European Economic Community is
a tripod, resting on three legs. One leg
consists of the European Commission,
which means the 5,000 European civil
servants who work in the Berlaymont
building in Brussels. The second leg is
the Council of Ministers, made up of
the external affairs ministers of the member
states who meet regularly in Brussels.
The third leg is the European Parliament,
which consists of nominated members of
parliament of the separate countries who
meet once a month at Strasbourg in
France.
The founding fathers of the European
Economic Community — Jean Monnet
and his devoted disciples — deliberately
set out to make the European Commission
the most important of these three
legs. It is the Commission which makes
the policy proposals for the new Europe.
The Council of Ministers then has to
meet to approve or disapprove these
policy proposals. Because the commission
was created as a forcing house for
ideas, it was from the beginning an
exciting place in which to work. Immediately
after the Treaty of Rome was
signed in 1957, there flowed into this
commission possibly the brightest collection
of young public servants to be found
anywhere in the world.
The next democratic advance in
Europe may be the direct election of
members of the European Parliament,
instead of their 'nomination by the national
parliaments as now. These direct
elections may very well happen before the
end of the nineteen seventies. But it is
doubtful if the European Parliament will
ever become the strongest leg of the
tripod.
In successful parliamentary democracies
in Europe, like Britain and West
Germany, the parties stick together
through thick and thin. In a European
Parliament they would tend to be less
cohesive; just as southern Democrats in
the US often vote differently from northem Democrats, so Italian and British
and German members of a European
Parliament would often vote on regional
or national grounds rather than obeying
a party whip.
For this reason it is almost certain
that the eventual United States of Europe
is going to have to be a presidential
democracy like the USA, not a parliamentary
democracy like Britain. Someday
a president of Europe will be elected by
direct popular vote. He would probably
take up office in Brussels, bringing some
personally chosen members of his administration
with him, but also relying
considerably on the permanent civil
service already in the Berlaymont. Unfortunately,
the politicians of Europe are
not yet ready for a president of Western
Europe. Even optimists like myself
think that it will be twenty or more years
before Europe takes this final step to
political union.
In the meantime, economic and
monetary union is going to come; and in
the process this newfound Western Europe
is likely to mark up some extraordinary
economic and industrial advances.
Twenty-two years ago, when Jean
Monnet was beginning to found his
European movement, Winston Churchill
came to a congress at The Hague and
made one of his most memorable
speeches:
"We must proclaim the mission and
design of a United Europe whose moral
conception will win the respect and
gratitude of mankind and whose physical
strength will be such that none will dare
to molest her tranquil way . . . I hope
to see a Europe where men and women
. . . will think as much of being European
as of belonging to their native land, and
wherever they go in this wide domain
will truly feel, 'Here I am at home'."
During the nineteen seventies and
nineteen eighties there is a real prospect
that that sort of Europe may be coming

up through the bud.