Friday, April 04, 2008

Small Looking A Little Lovelier Each Day

Here in NuLabour Britain we have tested Big Government to destruction. Again.

Whether you think the government is simply incompetent, or downright evil (see Heffer's argument for the latter), one thing's for sure, its blundering, dumbed-down, one-size, "progressive" fascism has inflicted huge and long-lasting damage on us. The small government alternative looks more attractive by the day.

So it's interesting to see precisely the same thoughts welling up in the private sector.

This morning brings an extraordinary volte-face by one of the titans of global banking, John Reed. 10 years ago he created the original MegaBank in the form of Shittygroup, but now says:

"The specific merger transaction clearly has to be seen to have been a mistake. The stockholders have not benefited, the employees certainly have not benefited, and I don't think the customers have benefited."

Meanwhile, former UBS Chairman Luqman Arnold is urging the break up of that bank as well. Yes, we know both of those gents have axes, and both these banks are in dire credit crunch straights, but this marks a sea change from Big is Beautiful.

And it isn't just in banking.

Nothing comes bigger than Big Pharma. There too, investors are starting to openly question the wisdom of Big:

"Borje Eckholm, president and chief executive of Investor AB, the Swedish investment group linked to the Wallenberg family, and one of the biggest shareholders in AstraZeneca, has questioned the long-term viability of the Big Pharma business model by asking whether it could discourage the development of new medicines.

"You have to ask yourself: do you have economies of scale in R&D? It's not clear but one of the fundamental ways that companies create value for shareholders is strong R&D. It raises the question: is big better? Maybe you have to split it up into smaller parts.”

And what of the much fancied big Swedish model herself? Jacob Wallenberg directly lays into her wealth destroying antics:

“I have been on public boards for more than 20 years and the focus of the work on the board has changed dramatically. The amount of time that I spend as a board member on questions that are parallel to the pure business question has exploded.

The public market has become part of the political field where every question of interest to society is being superimposed on publicly quoted companies, be it CSR [corporate social responsibility], females on boards, being a good public citizen. More and more people are scratching their heads on how much time is reasonable to spend on all these questions.”

Translation- you need to get smaller and less public or government will destroy you. And if that kind of nonsense is a huge burden for business, just remember how much worse it is for public sector operations like schools and hospitals.

Yesterday, Dave talked of ending the public sector's addiction to those mega-IT projects like the NHS Supercomputer. He's definitely on the right lines, but it's no good just ordering the public sector to embrace the wonderful world of "open achitecture" (er, like he's an IT expert already?).

What is needed is a serious programme to dismantle Big Government itself. And with any luck, Big Business may show the way.

PS Following on from Heffer's piece, Jeff Randall has an excellent article today on why 'eco towns' are the wrong answer to the over-population question. "The main cause of Britain's population growth is inward migration... This is the real issue, not the Government's bogus bleating about a need for "affordable" housing (code for subsidised). The immigration boom did not happen by accident. It was not, as my colleague Simon Heffer pointed out on Wednesday, the result of incompetence. There has been a deliberate and coldly calculated effort to transform Britain into a Labour-voting multi-cultural melting pot. For years, ministers have peddled falsehoods to give credibility to their dangerous social experiment. They insisted that importing lots of poor people would somehow make us rich. They claimed also that these new arrivals would solve our pensions shortfalls and soak up job vacancies. Warnings about the inevitable pressures that these newcomers would put on social services, education, health and policing were rejected as "scaremongering". Those who expressed doubts were smeared as "racists"... Well, look, I won't reproduce the entire article - read it.

PPS The last time there was a Swiss banking upheaval, Union Bank of Switzerland (UBS) gulped down its competitor Swiss Bank Corporation (SBC) with copious blood-letting all round. Tyler chortled over the gallows mnemonics immediately assigned by City well-wishers - Sacked By Christmas and U've Been Sacked.

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