Time is running out to save capitalism from the capitalists
27 September 2013 3:25am
CORPORATE Britain has a big problem. It has lost the PR wars. Even though firms create wealth and jobs and the tax revenues that pay for the public sector, as well as invent and produce products and medicines that improve our lives, they are, as a group, held in low regard.
I write this with deep regret. Capitalism and free markets are the only way forward, and business and the profit motive a huge force for good – but making that case has been made more difficult by the incompetence and stupidity of many leading firms. Capitalists have become capitalism’s worst enemy. It is a disastrous state of affairs which the companies themselves need to tackle urgently.
The business world has been rocked by fraud, dishonesty and scandal. Some bosses paid themselves rewards for failure. But such factors are not the fundamental driver of UK Plc’s reputational crisis. The explanation is much more mundane.
Think of your own relationship with the large companies you deal with as a consumer. Do you like your energy company? Your retail bank? Your mobile phone company? Your train operator? At best, you will probably have a neutral attitude towards these companies; at worst, you will hate one or more. There are, of course, exceptions. But we all know people who have had a nightmare trying to get a big energy firm to fix their boiler, or who have ended up without a telephone for a month, or have spent months battling the system to get a refund on a cancelled holiday. Dealing with big consumer companies is the bane of most people’s lives. Call centres specialise in wasting time and being useless, unhelpful or incomprehensible. Even changing car insurance can be a nightmare if one isn’t used to all the procedures.
This not a case of big business, bad, small business, good. Giant supermarkets are perceived positively by ordinary customers – outside, that is, of the chattering classes. Estate agents or MOT test centres are rarely the most loved of small businesses.
The truth, of course, is that the public sector is far worse. But that’s not the point. People have higher expectations of the profit-making private sector, and are more lenient towards “free” state provided services. Voters don’t realise just how much horrendously worse it would be if they had to deal with nationalised monopolies.
They often fail to see that greater competition could do wonders for the price and quality of the service they receive – rail commuters, for example, are at the mercy of a highly regulated monopolist.
In many cases, firms have been able to get away with treating customers shoddily because they operate in uncompetitive markets rigged by government-imposed barriers to entry. As to the energy companies, they are partly to blame for their own mauling. They jumped into bed with politicians, agreeing to embrace expensive green energy, rather than fighting for their customers’ interests; they are now paying the price for their own high prices. In other cases, however, the problem is a broader cultural one.
Whatever the reason, angry consumers are in the mood for punitive policies against an increasingly wide range of businesses, as well as against the people who run them; these taxes and regulations will backfire and cripple economic growth, investment and jobs. A case in point is Miliband’s preposterous energy price cap.
So what should be done to save capitalism from incompetent capitalists? First, the coalition needs to remove barriers to competition. Second, big companies need a cultural revolution. They need to eliminate errors, provide a much better service and put their customers first. If the supermarkets can do it, so can banks, insurers, broadband providers, airlines, energy companies and everybody else. The stakes are high; if they cannot change, we are all in trouble.
In other news
BARCLAYS, the international London-based bank led by Antony Jenkins, has decided to put its broking mandate up [Read more]
BUSINESS groups largely welcomed yesterday’s Queen’s Speech, but many nevertheless identified concerns with [Read more]
Former Thomas Cook boss Harriet Green has said she'll donate a third of her forthcoming share award to a charity [Read more]
Update: Firefighters have put out a blaze at a Berkeley Homes building site on Arsenal Way, Woolwich this afternoon. [Read more]
Greece's creditors have poured cold water on the cash-strapped country's claim that the parties were nearing a [Read more]
The EU and Switzerland have signed a deal to stop EU residents holding undeclared income in Swiss bank accounts. [Read more]
A random combination of words and characters are automatically shutting down iPhone users' devices. [Read more]
London will play host to a record number of cyclists in August as the Prudential Ride London Freecycle event expands [Read more]
Commuters using London's Fenchurch Street could face a travel headache going home tonight, with operators confirming [Read more]
Eight candidates are vying for the role of deputy Labour leader in a crowded race alongside the high-profile leadership [Read more]
Between 1997 and 2013, people living in just four regions in the UK saw their disposable income increase when [Read more]
Prime Minister David Cameron has had work done. Five years in Coalition has taken its toll on the youthful fresh-face [Read more]
Swiss police are questioning 10 Fifa officials over the controversial award of the 2018 and 2022 World Cups to [Read more]
Dutch banking giant ING last night cut its stake in NN, an insurance and investment management company.
Update: Nearly 150 flights have been cancelled and 32 diverted to other European cities after a power outage shut [Read more]
A fresh investigation into migrant worker conditions in Qatar landed BBC reporters in prison recently. It is another [Read more]
The Bank of England will not back down on tough regulation, top official and ex-Barclays boss Martin Taylor said [Read more]
Perhaps the most enjoyable outcome of the General Election is the abuse now being heaped on the metropolitan liberal [Read more]
Private company SpaceX has received certified approval from the US to send military and spy satellites into space. [Read more]
Essex commuters will be the first to benefit from London’s Crossrail train service, with fare cuts of up to [Read more]