Archive for the 'Economics' Category
OWL’S HOOTS NO. 3
Friday, April 10th, 2009
Owls Hoots No. 3, 10 April 2009: John Florio on scholars, the dangers of inequality arising from neoliberalism, the superorganisms known as ants, museums in North America coping with financial turmoil and museums in London expanding. Museums as Happiness Pioneers. And the British Government’s enquiry into the invasion of Iraq and possible consequences for the BBC.
The scholars angry quill: Here is a further quotation from John Florio (1553 – 1625), linguist, lexicographer and translator of Montaigne, which comes from “Giordano Bruno Philosopher Heretic” by Ingrid Rowland:
“Be circumspect how you offend schollers, for knowe,
A serpents tooth bites not so ill,
As dooth a schollars angrie quill”
More on the impact of “the market”: Last week, under the heading of managerialism buried, I referred to the ABC Radio National Background Briefing program on MBAs. Managerialism is a flow on from market fundamentalism: small government, privatisation, deregulation, efficiency, acountability and so on. The result has been, along with the well known reductions in social welfare, health and education, increased inequalities as the “˜top end of town gained huge increases in wealth whilst the poorer sections of society, if they were employed at all, gained little or even stood still. In the so-called “developed world” the USA and UK show the greatest inequalities whilst Scandinavian and some European countries and Japan show the least.
Reviewing “The Spirit Level: Why More Equal Societies Almost Always Do Better” by Richard Wilkinson and Kate Pickett (Allen Lane), Lynsey Hanley (in the Guardian, 14 March), quotes the authors, “inequality causes shorter, unhealthier and unhappier lives; it increases the rate of teenage pregnancy, violence, obesity, imprisonment and addiction; it destroys relationships between individuals born in the same society but into different classes; and its function as a driver of consumption depletes the planet’s resources.”
The promised essay on managerialism and related matters is now posted. Included are a number of important conclusions concerning museums and organisations generally!
Ants ” Superior Civilisations: Two fascinating articles on ant societies ” super civilizations – have appeared recently. In the New York Review of Books, Tim Flannery reviews a new book by Bert Holldobler and Edward O. Wilson (and with line drawings by Margaret C. Nelson), “The Superorganism: The Beauty, Elegance, and Strangeness of Insect Societies” (published by Norton) and in the Guardian Alok Jha has a review of the views of Wilson and Holldobler (“Six legs good”, 9 March 2009).
Jha writes, “They developed architecture and built farms millions of years before we did. They work together so seamlessly that colonies are known as ‘superorganisms’. And they could hold the secret to working out how our brains evolved.”
US and Canadian Museums reduce budgets and staff: Martin Knelman (“Gallery endures a second, unwelcome transformation”, Toronto Star March 23, 2009) reports that the Art Gallery of Ontario has not received the visitor numbers anticipated with the recent expansion designed by Frank Gehry. Budgets will have to be slashed and staff numbers reduced.
The overall space of the AGO increased 20 per cent, gallery space increased 50 per cent and the size of the collection doubled to more than 73,000 works of art. Practical operating costs ” security, maintenance, utilities ” have almost doubled ” and the annual budget went up to $52 million (more than $30 million of which is salaries). “Attendance has been running 20 per cent below projections for the past four months”. One factor perhaps is the $18 adult admission: the place is jammed every Wednesday night, when the entry fee is waived.”
(Last month it was reported – by James Bradshaw in the Globe and Mail March 3 -that buckets line the AGO’s staircase, while condensation blurs view from windows.)
Christine Kearney reported in YahooNews for March 13 that the Metropolitan Museum of Art was closing 15 of its merchandising stores across the United States, leaving only eight stores open in New York and will cut about 250 jobs, or 10 percent of its workforce, before July 1.
The Academy of Natural Sciences in Philadelphia has announced a hiring freeze will cut salaries by 5 percent. The Museum of Contemporary Art in Los Angeles almost had to close until billionaire philanthropist Eli Broad came up with a $30 million rescue plan in 2008.
In other US cities there are also reductions in budgets and staff losses. Endowments have dropped by around 20 per cent. Faced with a dramatic drop in revenue, the Minneapolis Institute of Arts will cut its staff and budget by 6 percent, and reduce exhibitions and programs by as much as 20 percent next year. The Walker Art Center in Minneapolis has also cut its budget by 5 per cent and may lose another 5 per cent later.
Museums in London expanding: Meanwhile in London, Tate Modern and the British Museum are expanding. Jonathan Glancey (The Guardian, 1 April 2009, “Why Tate Modern’s extension stacks up“), informs us, “When Tate Modern opened in 2000, visitor numbers were expected to be 1.8 million a year at tops. Almost a decade on, the figure is 4.6 million. Even though Tate Modern’s home, the former Bankside power station, is a colossus, the sheer number of people visiting throughout the year has made an extension almost inevitable.”
Tate Modern 2, “a dramatic origami-like unfolding of brick and glass” designed by Herzog and de Meuron, the Swiss architects who transformed the redundant power station to the new Tate Modern is expected to open some time between 2012 and 2014. The British Government has subscribed £50m towards the anticipated £215m total cost.
ArtInfo announced April 2 that “with the Victoria and Albert Museum, the Tate Modern, and now the British Museum all touting expansion plans, it seems the global economic downturn hasn’t taken the London art world with it. The British Museum announced this week an ambitious £135 million ($198 million) extension intended to accommodate blockbuster exhibitions. It is expected to open 2012.”
Meanwhile the Museum of Modern Art has dramatically redesigned its website: check it out!
New York Arts consultant Adrian Ellis reviews the recession and US museums in the Art Newspaper Issue 200 of 11 March and discusses how to compensate for the loss of philanthropic, endowment and visitor incomes.
School visits to museums and museums as happiness pioneers:The March-April issue of Museum (published by the American Association of Museums) has two excellent articles, “Fun is no joke” (by Mary Ellen Flannery) reviewing school “ field trips to museums in the USA and museums as “happiness pioneers (“Fiero”, an exerpt from the Center for the Future of Museums lecture by Jane McGonigal). McGonigal’s lecture is available on the Future of Museums site along with other interesting items.
McGonigal says there are four things which seem to be “pretty universal” for people: satisfying work, the experience of being good at something, time spent with people we like and the chance to be part of something bigger.
Iraq and the BBC: British Foreign Secretary David Milliband announced last month that there would be an inquiry into the invasion of Iraq and the reasons for it.
“The pressure for an inquiry has been intense because many people believe that the war was illegal under international law and that Tony Blair, the then prime minister, twisted intelligence evidence in order to justify the invasion.”
When BBC journalist Andrew Gilligan reported the views of Dr David Kelly on the “intelligence” justifying the British Governments decision to join the US invasion of Iraq the Government forced his resignation which was followed by the resignation of Director-General Greg Dyke and Chairman Gavyn Davies. Kelly later committed suicide. An inquiry into the death of Dr Kelly by Lord Hutton was denounced by critics as a kangaroo court.
Dyke was hugely popular. The incoming Chair and Director-General oversaw considerable downsizing which was protested by strikes. The responsible Minister talked of difficulties with funding. There is no indication that the BBC has managed to avoid slip ups in its broadcasting.
Will Millibands inquiry bring back David Kelly, repair the damage to the BBC, put Tony Blair on trial? Of course not!
This page, which should appear weekly, is an addition to the blogs page.
A Future Australia?
Thursday, December 11th, 2008
Museum people, I hope, are taking careful note of the announcements, assertions and debate of the last three weeks in Australia about education policy and funding, the assertions that our public education sytem is a disgrace, that what we need is greater accountability, that the latest international tests are a wake up call for Australian educators and that Australia is failing in the standards of its child care institutions. Because all of this has implications for what museums will do in the next few years.
Fourteen months ago (on 19 September 2007) I gave an invited talk to a small audience at the South Bank Campus of Griffith University’s College of the Arts as part of their Lunch Box talks. As I am writing an essay on education and schooling at the present time I thought it might be time to publish the text of that talk.
The three weeks from the last week of November through mid December have been times of substantial developments in education and schooling in Australia. “Experts” told us again that if schools are to improve, and they must, then we need a culture of performance and accountability. In his fourth Boyer lecture, expatriate Australian Rupert Murdoch reminded us that “The unvarnished truth is that in countries such as Australia, Britain, and particularly the United States, our public education systems are a disgrace. Despite spending more and more money, our children seem to be learning less and less””especially for those who are most vulnerable in our society.” I doubt the veracity of Mr Murdoch’s assertions as they relate to Australia.
New York Schools Chancellor Joel Klein, brought to Australia by Deputy Prime Minister and Minister for Education Julia Gillard, told us of the great successes of his program to replace a culture of excuse to a culture of performance. Careful consisderation of the time since Mr Klein has been Chancellor have led some to claim that there have been anything but advances in student achievement in New York.
At the end of the week, it was announced that very substantial funds were to be granted by the Commonwealth to education and schooling through the Council of the Heads of Government (COAG) for some extremely important strategies.
This month (December) we have seen arguments in the Australian Parliament about the provision of funds to Independent schools and whether that funding should be tied to a national curriculum. On December 9 the results of TIMSS (Trends in International Mathematics and Science Study) for 2007 (tests conducted in 2006 in Australia) were announced and some newspapers pounced on the results to claim they were a wake up call for teachers since the results were not as good as they should be.
On December 11 a UNICEF sponsored study found serious problems in the early childhood sector in many countries, especially Australia and England. As always the Sydney Morning Herald‘s Adele Horin had a very good article about the issue. Much of the consideration of this issue will unbdoubtedly be placed in the context of the ongoing consideration of the collapse or the ABC Learning Centres and child minding which is doubtfully where it should be placed.
And on December 12 Prime Minister Rudd announced substantial funds for infrastructure including funds for training and development in TAFE institutions .
In my view the vitally important issue of ensuring the highest quality of teachers, through recruitment, training, mentoring, appropriate pay and conditions, gets submerged in pointless arguments about accountability and league tables for schools, accusations that public schools are failing and so on. That is also the view of experts in the field!
Similarly, the vitally important issue of early childhood education, especially in respect of children from less well off parts of the community which is where the greatest gains are to be made, get submerged in issues about child minding so working mothers can go to work to make enough money to cover the mortgage and buy the food and the failure so far to put in place a paid maternity (and paternity) leave scheme which equates with that of many advanced economies.
As always with these essays, none of this is irrelevant to museums. Increasingly, early childhood education is recognised by museum people as an area where they can make substantial contributions, as shown by the Queensland Art Gallery and the studies of Barbara Piscitelli and by some other museums including the Australian Museum.
The drive for accountability and testing severely cramps the time of school classes for other activities which give substantial complementary experiences outside the classroom, such as visits to museums: the children are too busy practising for their tests! And the arguments about curriculum can end up constraining the kinds of experiences offered by the museum to visiting school groups through a focus on learning facts ““ the dreaded “˜worksheet’ – rather than experiencing the joy of stimulating experiences when the children are able to be in charge of their own learning, making their own creative connections between things and events previously unconnected in their minds.
In all of this is the influence of certain special interest groups, amongst whom are the “˜economists’. As a friend of mine, a distinguished educator said the other day, “I’m sick of economists running the system, and I’m sick of schools being so filled up with audits of various kinds that there is no space for teachers to inspire kids.”
In my talk, I started by saying “Education is one of the three or four critical issues for all peoples and communities and investment in it leads to increased wellbeing as well as economic growth. It requires investment. Recent economic policies have instead steered us toward an education and work environment more suited to a low wage economy: learning and creativity are being undervalued. The solutions are to be found in recognising the positive outcomes of self determination and encouragement of creativity, not centralised control.” (Reember that this was written in mid 2007!)
By the question “Is there a future for an Educated Australia?” I meant, “do we, or more particularly those with influence and we as those who influence them, recognise that our common future depends on our investing in learning and understanding. And I am not going to argue that we learn certain things rather than others, math and spelling rather than Indonesian or the classics. To a very large extent engaging in educational experiences, no matter the content, leads to a more enriching life.”
I talked about three gains from education:
- intrinsic – the gain to us as individuals, and sometimes to those around us, from reading, from listening to music, from appreciating science, history, art and creative activities of any kind,
- civic ““ the gains flowing from investment in early childhood education particularly but from lifelong education indeed and
- economic – increases in productivity, decreases in unemployment, economic growth.
Continue to “Is there a Future for an Educated Australia“
Decay in a Time of Penury
Sunday, September 28th, 2008
Recently, I wrote in On Line Opinion of 19 September 2008 about the controversy swirling around the budget situation in New South Wales which contributed to the resignation of the Premier the Hon Morris Iemma who later resigned from Parliament. A new government was formed by the Hon Nathan Rees as Premier and he appointed a cabinet which did not include the former Treasurer, the Hon Michael Costa, who also later resigned from the Parliament, but not before an extraordinary media conference.
The summary of my article follows: “New South Wales is asserted to be facing a financial crisis necessitating a mini-budget. In fact the revised estimate of NSW State debt, at just under $8 billion, is miniscule and the overrun of $900 million in the recurrent budget – anticipated as a result of the shortfall in stamp duty on property – is near inconsequential. Cutbacks will drive the State further into real crisis in transport, schools and hospitals. The assertion that the State’s credit rating is threatened is mere intimidation.”
This article is not simply another venture in political controversy. There are substantial implications for museums and other cultural activities in the actions which might flow from the view which the former Treasurer and Treasury spokespersons have taken. A mini-budget which would substantially reduce recurrent and capital funding could see further reductions of staff at museums and other negative impacts. It is imperative that museum people and those interested in and supportive of museums understand that the statements on government budgeting by economically conservative politicians and media commentators fail to give an accurate picture of the situation.
As I say in the article, “Since the adoption by governments of the market or business model – in New South Wales by Harvard MBA graduate Premier Nick Greiner – there have been ongoing reductions in the operating budgets of government agencies through across-the-board cuts, non-funding of awarded salary increases and the notorious “efficiency dividendsâ€.
I also say, “While over the longer term, sustained imbalances in recurrent expenditure are clearly unsatisfactory, there surely can be no risk assumed for occasional deficits. Indeed they are appropriate occasionally to even out overall performance. After all, reacting suddenly to declines in the budget position leads to retrenchment of staff who take with them skills and corporate knowledge which have cost a great deal to acquire. It is likely that the reductions have already gone too far in some areas.”
The details of any mini-budget to be presented in November 2008 are yet to become apparent.
Across the continent, it is possible that the new Western Australian Museum development on the site of the former East Perth Power Station, announced18 February this year by the then Premier Alan Carpenter, could be deferred. In his announcement Premier Carpenter said, ” the massive, half-a-billion dollar infrastructure project would be a stunning cultural and social institution for WA, which would tell the amazing stories of the State and its people in a building that would bring new life to a major heritage site.”
On the ABC Radio National Program, “The National Interest” of 26 September, new Western Australian Premier Colin Barnett mentioned that some capital projects – and he specifically mentioned proposed new museum, approved by the former government, would have to be reviewed. As the program’s presenter Peter Mares says, “And he’ll need all of the mining tax revenue he can get his hands on, if he’s to live up to his promise to up spending in regional WA – a non-negotiable commitment in his bid to keep his minority government in office.”
The Western Australian economy is booming because of the substantial resource projects; one could suggest that this is an appropriate time to invest in things like museums. It would be odd if Australia defers and downsizes its cultural projects when cities such as MedellÃn in Colombia are building libraries and art galleries in order to address poor education, poverty and crime amongst young people. Last year a number of media reports described these strategies by which mathematician and city mayor Sergio Fajardo was “turning blight to beauty“.
Why do organisations succeed? Lessons from Southwest Airlines
Monday, September 1st, 2008
Successful organisations support and develop their staff. That is one of the principal roles of executive leadership. Museum executives contemplating reorganisations might contemplate this seriously. So might media companies such as Fairfax (in Australia) and governments offering small wage increases to which the response is negative industrial action.
In much of what I have written over the last several years – indeed since 1986 – I have banged on about how important it is that leaders at executive level focus on developing staff. I have promoted this as one of the principal requirements for success. Many others do the same. But many executives in their day to day work do not! Of course being clear about the goals and rationale of the organisation is another of the half dozen most significant contributors to success. Not efficiency though inefficiency is not appropriate, not rules and regulations though some rules are essential or we would end up in chaos. Not technology though technology allows considerable advances in many areas.
Numerous examples of success flowing from attention to staff are given in the pages of this web site, examples from hospitals to airlines to grocery stores to public broadcasters. And yes, there are examples from museums, though few museum executives or board members pay attention to them. Like other organisations many firms have become besotted with the mantra of market economics and its attendant managerialism.
Many organisations respond to perceived bad times by pulling back, by reducing staff numbers, by looking for ways to trim costs. Instead they should never let up on the important work of creating a climate for innovation and making a difference. One of the fundamentals of managing any entity, from nation states to the local grocery store or local museum is that in bad times some of the money saved during the good times should be used to reduce fluctuations in basic practices like marketing, training and development, product improvement and research and development. Once staff are let go in bad times, rehiring and retraining staff when good times return costs so much that making gains becomes much harder. Most of all, large scale layoffs means loss of corporate memory, of how things get done in the organisation.
The fact is that executives seldom look at other organisations to see why they are succeeding; they seldom accept that it is the way staff are treated that makes a great difference, that gives a competitive advantage. With the increasing number of museum and arts organisations putting people from the business world on their boards, the tendency to cut back in times of financial stress would seem to be increasing.
One of the things that worries me about the financial stresses of the last 12 months is that many firms, including nonprofits, are simply applying blanket approaches to problems, adopting blunt instruments. These don’t just include cutting back on staff numbers, often through natural attrition or voluntary redundancies. Some banks are simply cutting back on lending generally, as if they still have not worked out how to evaluate the credit worthiness of clients seeking loans. The result is likely to be that more powerful clients will continue whilst less powerful but perhaps more worthy clients will not. Some governments approach prospective budget overruns in the same way: cancel the contracts for indoor plants, delay filling of vacancies, and restrict travel. It all ends up causing more problems than it is worth. It is disruptive and, in the long term, destructive of managers’ credibility!
To return to the main focus of this intervention. The latest story I have read which shows how good staff policies are linked to high firm performance is a story about Southwest Airlines in the USA. In a report by Joe Nocera entitled “A chat with Herb Kelleher†(International Herald Tribune May 24, 2008) we witness the differences in the annual meetings of two of America’s major airlines. (I have previously reviewed a paper on Southwest and American Airlines by Judy Hoffer Gitell (in California Management Review in 2000 ) which compares the different approaches to management structure and behaviour in the two companies. (Southwest is a point to point operator whilst American Airlines is a spoke (or hub) operator and this does influence their approach, a point brought up in commentary on Southwest’s success.)
Nocera begins by telling us “The Dallas-Fort Worth area is home to two of the country’s biggest airlines, American and Southwest, and for years they’ve both held their annual meetings on the same day. This year was no exception: Wednesday was the big day. He goes on to outline the different responses of staff to the event.
Nocera concludes his article comparing the two airlines by quoting the opinions of some consultants to the reasons for Southwest’s success. One of them pointed out “every time the legacy airlines have run into trouble in the last two decades, Southwest has used the opportunity to steal away market share. Even though its own profits are down this year, it still has plenty of financial powder to make investments its competitors won’t be able to match. And as the old-line airlines try to raise prices to keep pace with fuel price increases, Southwest, with its fuel hedges and productivity advantages, will squeeze them all that much harder. One analyst, Ray Neidl of Calyon Securities, has gone so far as to predict in a report that after the dust settles, Southwest will be, as he put it, “the last man standing.”
Nocera observes, “That may be an overstatement, but it’s not much of one.â€
Read more.
Museums Have Visitors: They Don’t Serve The Wishes Of Market Analysts
Thursday, April 10th, 2008
Increasingly, criticism is being voiced about the destructive effect of the market on civilized society. This has even reached the hallowed halls of museums. Two leading museologists Robert Janes, formerly of Glenbow in Calgary and Maxwell Anderson, now Director of the Indianapolis Museum of Art and formerly of the Whitney in New York have criticised this trend. Janes (“Museums, Corporatism and the Civil Society†Curator The Museum Journal 50(2): 219-237, 2007) observes, “the prevailing worldview in North America is grounded in the belief that continuous economic growth is essential to individual and societal well-beingâ€. He argues that this is enfeebling or diverting museums from realizing their unique strengths and opportunities as social institutions in civil society: museums, he asserts, must exploit their uniqueness, resist domination of marketplace thinking and seek ways of achieving meaning and sustainability within their communities.
Anderson (“Prescriptions for Art Museums in the Decade Aheadâ€, Curator the Museum Journal 50(1), 9-18, 2007) asserts, “rather than following a path towards community service or an educational mandate, the [museum] field has been led astray by a corporate mindset.†Anderson identifies the primary challenges facing art museums in rebalancing their mission, and suggests a series of remedies to the unrealistic economic model that threatens to exclude education as museums’ primary mandate.
Before dismissing what is said below as overly ideological, consider this statement from John Gray (School Professor of European Thought at the London School of Economics) reviewing (in The Guardian September 15, 2007) Naomi Klein’s recent book, The Shock Doctrine: The Rise of Disaster Capitalism (Allen Lane).
“Over the past few decades, many of the ideas of the far left have found new homes on the right. Lenin believed that it was in conditions of catastrophic upheaval that humanity advances most rapidly, and the idea that economic progress can be achieved through the devastation of entire societies has been a key part of the neo-liberal cult of the free market. Soviet-style economies left an inheritance of human and ecological devastation, while neo-liberal policies have had results that are not radically dissimilar in many countries. Yet, while the Marxist faith in central planning is now confined to a few dingy sects, a quasi-religious belief in free markets continues to shape the policies of governments.
“Many writers have pointed to the havoc and ruin that have accompanied the imposition of free markets across the world. Whether in Africa, Asia, Latin America or post-communist Europe, policies of wholesale privatisation and structural adjustment have led to declining economic activity and social dislocation on a massive scale. Anyone who has watched a country lurch from one crisis to another as the bureaucrats of the IMF impose cut after cut in pursuit of the holy grail of stabilisation will recognise the process Naomi Klein describes in her latest and most important book to date. Visiting Argentina not long before the economic collapse of 2002, I found the government struggling to implement an IMF diktat to roll back public spending at a time when the economy was already rapidly contracting. The result was predictable, and the country was plunged into a depression, with calamitous consequences in terms of poverty and social breakdown.â€
Timothy Garton Ash is Professor of European Studies in the University of Oxford, Isaiah Berlin Professorial Fellow at St Antony’s College, Oxford, and a Senior Fellow at the Hoover Institution, Stanford University. He is the author of eight books and his essays appear regularly in the New York Review of Books and weekly in the Guardian (widely syndicated in Europe, Asia and the Americas). In an article in the Guardian last year (22 February 2007) Ash said,
“What is the elephant in all our rooms? It is the global triumph of capitalism. Democracy is fiercely disputed. Freedom is under threat even in old-established democracies such as Britain. Western supremacy is on the skids. But everyone does capitalism. Americans and Europeans do it. Indians do it. Russian oligarchs and Saudi princes do it. Even Chinese communists do it. And now the members of Israel’s oldest kibbutz, that last best hope of egalitarian socialism, have voted to introduce variable salaries based on individual performance. Karl Marx would be turning in his grave. Or perhaps not, since some of his writings eerily foreshadowed our era of globalised capitalism. His prescription failed but his description was prescient.â€
In the last 40 or so years much of the business world and many governments (as expressed by New Public Management or NPM, particularly in developed western countries, have adopted market (or “rationalâ€) economics and corporatism. Market mechanisms, according to this approach, should be allowed to determine production and pricing and government should stay out of the way of entrepreneurial business ventures. The focus is on the short term because the emphasis is efficiency as assessed by return on investment reflected in stock price as spruiked by stock market analysists. Rather than seeking new products and markets and quality service, the market oriented business seeks increase in the wealth of shareholders. (To varying extents, Nordic and some other European countries have been less prepared to adopt the market economic model.)
Continue to essay