If you were told how to run your successful business by a blustering, anti-science, bullying felon who once suggested drinking bleach to cure Covid, and the extent of whose management knowledge appears to have been culled from a TV game show – oh, wait… – what would you do? 

If you’re CEO of a blue-chip US company, having marched your men to the top of the hill, you may well be hastily marching them down again, shredding your commitments to diversity (Accenture, Deloitte, KPMG, Goldman, Meta, Amazon, McDonald’s, American Airlines, Boeing, and much of Hollywood among others), combating climate change (Walmart, BP and a bunch of financial institutions) and the ‘moral crime’ of working from home (Elon Musk – Amazon, Dell, J Morgan Chase, Goldman Sachs, and Tesla and X, obviously), while taking steps to install a more muscular, masculine, even aggressively energetic workplace as you go. KMPG has gone as far as to scrub all mentions of its past DEI programmes from its websites. One (anonymous) top banker celebrated this epochal civilisational advance thus: ‘I feel liberated. We can say “retard” and “pussy” without the fear of getting cancelled . . . it’s a new dawn.”

Sucking up to Trump is the expedient choice. Yes, for companies like consultancies KMPG that depend on government contracts, it’s a money decision too. Yet they might have been better advised to pause and reflect on what it says about the company and its leaders when apparently core values can be tossed overnight as if the company, perish the thought, had never believed any such thing.

Not much that is complimentary, is the answer. The damage is both direct and indirect, affecting both customers and workers, their most important constituencies. When Meta announced its changes, which included cancelling content moderation, Facebook and Instagram users piled in with extravagantly unprintable allegations about chairman ‘Mark Suckerberg’s’ personal habits, causing panic among corporate customers that their ads might end up against a fake nude of the Meta chairman (sorry). Retailer Target, which had traditionally made a point of wooing Black customers, found itself facing demonstrators and boycotts for its retreat. The same at Tesla, where, enjoyably, investors have got in on the act, slashing 20 per cent off its share price (and $140bn of Musk’s net worth) on the news that the company’s January 2025 UK sales were 45 per cent lower than a year earlier. Some analysts suggest there may be further to fall.

These responses are the material manifestation of  a damaging loss of confidence. Indirectly, the long-term costs may be higher. How would employee morale not be affected by their employer backing away from a commitment to fairness at work? How would ambitious young job-seekers not prefer to send their CVs to consultancies that didn’t expunge basic commitments from their websites like a Soviet commissioner erasing non-persons from the photographic record? Unsurprisingly, Gallup is reporting levels of engagement that are plumbing new depths. What employees want from leaders, the pollster reports, is (in order) hope, trust, compassion and stability. Well, with compassion, stability and hope in shrinking supply, trust, which up to now had held up relatively well, takes a triple whammy. Not to defend it, but the level of contempt reserved for company bosses is well illustrated by the extraordinary public show of support for Luigi Mangione, who shot UnitedHealth chief executive Brian Thompson in January (of which more on another occasion).

Evidently even further from CEO minds is any thought of wider managerial responsibilities. They might cast their minds back to the 1930s, a similarly turbulent and threatening period in world history, as management was beginning to take cognizance of itself as a standalone discipline. Surveying the rise of authoritarianism, Peter Drucker noted the salience and importance of institutions to democratic society. As Martin Wolf put it recently in the FT, ‘Civilised societies depend on institutions. The more complex the society, the more vital those institutions. Institutions provide stability, predictability and security.’ Companies, schools, universities, courts and hospitals are all institutions. All need managing and managers, and the effective functioning of society requires that they be managed well.

From this derived Drucker’s conclusion that management held a unique and often forgotten responsibility: to hold society together by keeping the institutions and organisations that make up its weft and warp honest and effective. Absent trust that they will deliver their services – justice, education, health, information and news as well as our daily bread – fairly and efficiently, the collapse of civil society into partisanship, cronyism and authoritarianism, as eloquently described in a recent essay by Nobel economics laureate Daron Acemoglu, is all too credible. America’s collapse, he suggests, will follow Hemingway’s famous line about bankruptcy: ‘It happened gradually, as shared prosperity, high-quality public services and the operation of democratic institutions weakened, and then suddenly, as Americans stopped believing in those institutions.’

How should managers react to these highly politicized times? In one sense, that’s easy: double down on the way you would behave in more ‘normal’ times. Management’s first duty is effectiveness. Whatever politicians froth about, an increasing number of firms have learned that purpose is as necessary as profit; your purpose being what you do, it had better be something you and your employees believe in. Since the case for good jobs is unanswerable on any dimension, fairness, or equity, at work is not an option. (The business case for diversity is hard to prove; but it stands to reason that if your customers, suppliers and investors are diverse, it may be helpful if your decision-makers and salespeople are too – ask Target.) Work should be done where it is most productive, not where it gratifies the boss to exert his power for the sake of it. ‘Hardcore working’ à la Musk is idiotic and dangerous, as is multi-tasking – viz the near disaster of Doge’s teenage nihilists abolishing units responsible for Ebola tracing and prevention and nuclear security before twigging that this might cause, er, issues. As for the planet, although Musk would like it otherwise, we only have one of them to experiment with, and every business needs to do its bit to keep it habitable. No planet, no business. It’s not as if the advance signs of the current scorched-earth policy weren’t already visible. It’s not wokery that is driving insurance firms to abandon large tracts of California, or a hoax that in a decade Mar-a-Lago will be under water, however loudly its owner commands the waters recede.

So all in all, it’s time for managers to stop pretending they are just hired hands at the behest of shareholders or even worse, politicians (not me, guv!), do what they know to be the right thing, and call out those who don’t, as their employees want them to. It’s called leadership. It takes courage, and in return it gives people hope and stability, helping to shore up the institutional trust that holds society together instead of splitting it apart. It’s still not too late, just. But the clouds are gathering. ‘It’s not dark yet’, advised Bob Dylan on his album Time Out of Mind. ‘But it’s getting there.’

After Christmas I started writing a piece about the weaponisation of management in the wake of Trumpism. How the war on woke capitalism was turning management from a rational (sort of) means to a rational end – ie, identifying ‘what works’ and then using it to do things reliably better – to become an ideological end in itself, as big corporations rowed back from their climate-change and diversity commitments in the face of pressure from activists or legal proceedings by anti-woke Republican US states. That’s still the narrative. But in just three weeks it has moved from a national canvas to a global one, becoming a much bigger story: the self-weaponisation of management of the most powerful companies in the world in favour of an authoritarian president of a global superpower with territorial and economic designs on other sovereign countries, and indeed the whole world order. Another way of thinking about it might be ‘siligarchy’ – a  merger of Washington and Silicon Valley, on Washington’s, ie Trump’s, terms.

Just look at that $1tr worth of tech titans, including three of the richest men in the world, sitting in the front seats at Trump’s inauguration, seats seemingly purchased with the $1m that seemed to be the going rate for the tithe each had paid to the new president’s ‘inaugural fund’ (to receive which, as far as I can tell, is its only function). Given that Donald Trump has never been a fan of Big Tech and its perceived crimes against free speech, some rapprochement by the latter was to be expected. But that only partly explains the depth and alacrity of its collective grovel. This has seen, channelling Groucho Marx (‘I have my principles…and if you don’t like those I have others’) press barons Jeff Bezos and Patrick Soon Shiong disowning their liberal newspapers, the Washington Post and LA Times, and spiking their pre-election presidential endorsements; Elon Musk from his lodgings in Mar-a-Largo demanding the overthrow of the ‘tyranny’ of Keir Starmer in the UK and the victory of the far-right AFD in Germany; and Meta chairman Mark Zuckerberg abandoning fact-checking and content moderation at Facebook and Instagram in favour of ‘free speech’ and a pushback against ‘creeping censorship’.

In short, it turns out that the Valley’s tech bros, far from being the libertarians many people took them for, are actually quite willing to make common cause with an authoritarian state, even or in fact especially with an authoritarian state, to advance their own profits and power. 

The ploy is both cynical and transparent. What Big Tech has that Trump needs is weapons of mass information, which they are happy to deploy in return for something that they covet: shelter from increasingly irksome European regulators. Already under scrutiny – Google, Apple, Meta and Uber have all been fined by the EU – the tech platforms now face a further regulatory squeeze under 2022’s Digital Services Act, which the EU is using to investigate them on a series of counts. Regulators can be surprisingly powerful. When X was banned in Brazil last year for failing to comply with court orders, a simmering Musk quietly backed down and paid the fines levied a few months later. It wasn’t a question of free speech but of sovereignty and the rule of law, Brazilian commentators approvingly noted at the time.

But with the advent of Trump 2.0, sovereignty is suddenly in play. In the face of Musk brandishing X as a megaphone to shout down rational politics in the UK and Germany (what price France, with upcoming elections and a surging far-right party, as next in line?), and Facebook and Instagram flooding the world with misinformation, regulation becomes an obvious bargaining chip. Bezos has welcomed Trump’s ‘energy around regulation’, hint, hint. Zuckerberg and J D Vance have protested that regulation is a tariff in disguise. More directly still, in his recent address to Davos Trump himself complained that fines levied by Brussels on tech firms for breaking competition rules were ‘a form of taxation’. ‘We have some very big complaints with the EU,’ he warned.

All this coincides with a strong corporate pushback – backlash is probably a better word – on what can now be fashionably dismissed as ‘woke’ management in general, as companies take advantage of the charged climate to undo some of the concessions made during and since the pandemic. Jettisoning fact-checking and dialing down DEI and ESG programmes saves jobs and money. It also clears the way for a return to the brash ‘move fast and break things’ management style that some male CEOs seem still to pine for. The increasing enforcement of office working is one aspect of this. Another, bang on cue, was Zuck’s lament in his podcast with Joe Rogan that the feminising of corporate culture had led to  a ‘neutered’ workplace in need of more ‘masculine energy’ and ‘aggression’ (that turned out well in the past, didn’t it?).

Zuckerberg also said he favoured a ‘repopulation’ of the ‘cultural elite class’. This presumably means the elevation of anti-censorship warriors like himself, fellow tech bros Marc Andreessen, Musk, Silicon Valley eminence grise Peter Thiel (like Musk, a product of apartheid-period South Africa), David Sacks, Trump’s crypto tsar (ditto), far-right ideologue Stephen Miller (‘the second most dangerous man in America after the president – and unlike the president he knows what he is doing’) and other Ayn Rand-y types like Curtis Yarvin and others even farther out. For a flavour of their thinking, see Thiel’s extraordinary and sinister piece in the FT which sees Trump’s second term as the reverse of an aberration – a signal of the final eclipse of the pre-internet ancien régime (that’s anyone that’s not them) and the  triumph of the ‘new and strange ideas’ that the unfettered, internet will bring. Beneath the disingenuous title, ‘A time for truth and reconciliation’, lies an ill-disguised call for retribution and alternative truth, with an entirely gratuitous reference to Jeffrey Epstein (a bit player in the Qanon conspiracy theory) slyly inserted to insinuate that people like him are among the failings that the old elite should be held accountable for.

In a column on his excellent Substack, Paul Krugman identifies something he calls ‘MAGA brain’: the Trumpian assumption that the only way to get results is through being vindictive, unfeeling and ruthless, with anything softer being interpreted as weak/wokeness that invites bullying. Allied to Trump’s belief in the sole primacy of power and the use of force to take or take down what he has decided he does or doesn’t like (sometimes on personal whim – eg wind farms, Panama), it adds up to mafia capo management – brutal, male, exclusively top down, inevitably corrupting everything it touches.  Under Trump, management is being taken back to the, albeit AI-assisted, Dark Ages.

Read my obituary that was published by The Guardian on 22 December 2024 here.

Three years ago, chancellor Rachel Reeves vowed to end the tax loophole exploited by a handful of private equity executives as they ‘asset strip some of our most valued businesses’. As Labour’s manifesto succinctly explained, ‘Private equity is the only industry where performance-related pay is treated as capital gains. Labour will close this loophole.’

Reeves was right and her description jusrified. But her budget left the loophole unbunged. Instead, she merely raised the charge on ‘carried interest’, as these earnings are called, from 28 to 32 per cent. From 2026, ‘carry’, as it is more usually known, will be brought under the income tax umbrella – but under ‘bespoke rules to reflect [the industry’s] unique characteristics.’ Mayfair breathed a sigh of relief.

Labour’s original plans aimed at the UK’s 3,000 buyout chiefs, who claimed carry of £6.4bn in the two years 2022-23. Taxing it as income would have brought in £500m a year. Under the budget proposals, that shrinks to a mere £140m – one-tenth of the £1.3-£1.5bn savings from cutting the winter fuel allowance. From which it’s hard not to conclude that, just as some companies are too big to fail, some of the rich have become too powerful to tax – never mind how the sums are earned, or how much we need the investments they are supposed to bring to the economy.

Start with the earnings. Carried interest originated in 16th century Italy, where merchants and shipowners levied a charge of 20 per cent against the profits of the cargos they ‘carried’ to pay for transport and the risks of a long-distance sea voyage. It was later used in the oil and gas industry to compensate the financial interest for the risk that the wells of the drillers it was funding refused to gush. Both of these involved real risk: ships could be wrecked or seized by pirates, oil wells might be dry. The only thing private equity shares with either of these is the time it takes for the profits to materialise, measured in years.

 As to risk, for equity privateers it is negligible. For one thing, they already command a hefty annual ‘management fee’ of 2 per cent of assets under management, sometimes more. And the amount of personal capital put up by PE partners is often derisory, or even nil. The only reason for Reeves not taxing carry as income is FOMO – fear of missing out on their taxes or investment.

But if some high earners did depart, how much would it matter? PE’s motive force was always personal greed – ‘I could see it was a gold mine’, exulted Blackstone’s Stephen Schwartzman, now a multibillionaire many times over, when he looked at KKR’s infamous ‘barbarians at the gate’ Nabisco buyout of 1988. But in the early days it could also be argued, and was, that what PE claimed to do – generate superior returns for institutional investors by geeing up managers at indifferently performing companies to do better – contributed to conomic efficiency.  If the price was that some of the targets went bust with their resources redistributed to more efficient actors – hey, that’s just capitalism’s creative destruction for you.

More than $12tr-worth of worldwide PE deals later, that argument looks a lot thinner. For a start, those ‘superior returns’ are disputed. They can’t be proved, because private equity is, as it says on the tin, private (another word would be ‘opaque’, which doesn’t quite have the same ring). That in fact turns out to be its major competitive advantage against investing in public markets, since PE gets to choose the benchmarks it measures its performance against (among many other ways of gaming the figures). While there are still plenty of institutional investors eager to buy, some reputable studies suggest that on current form they would do just as well investing in public stockmarkets – which, as one academic puts it, ‘(to put it mildly) is not what PE investors are paying for.’ For another expert, given the high costs of the initial buyout deal (buyouts are an expensive business), the exorbitant ‘2 & 20’ fees and charges over the lifetime of the fund and ‘the many layers of potential agency conflicts’ involved, it would be  outperformance that was surprising, not the lack of it.

The economic efficiency claim is no stronger. Most of the inviting (ie inefficient) targets have long ago been picked off and ‘improved’. Instead, the massive surge in buyout volumes in the decade after the 2008 crash increasingly consisted of short-term trades in which targets were bought and quickly flipped to another buyout firm to cash in on rising stockmarket valuations – transactions of no benefit except to the fund and requiring little management skill. Even PE insiders admit that those glory days, when zero interest rates meant that anyone with a line of credit could turn a tortoise into a hare almost overnight, are gone, probably for ever. Others privately fret that with IPO exits drying up and investors clamouring for payment, PE houses are concocting ever more complex forms of debt refinancing, with the risk that a default could trigger a private-markets meltdown. A totally unregulated industry, opaque valuations, no settled definitions, conflicts of interest, mounting debt – what could possibly go wrong?

The truth is that private equity is shareholder-value capitalism on steroids, and for that reason alone Labour should be subjecting it to the beadiest scrutiny. PE is a one-trick pony, with debt as its only weapon, at levels that crowd out any other management concern. Interestingly, it is now beginning to admit as much: with debt becoming a two-edged sword, PE chiefs are suddenly wondering how real companies back on planet earth that actually make and sell things work and even prosper. Some are even contemplating shaving off some of the carry for the workforce of their bought-out firms.

But this is all obfuscation – ESG-washing, if you like. For the one area where PE really does generate outsize returns is one that it would rather not boast about, since it is the carry that richly benefits not clients but its own top managers. Analysis by Said Business School’s Ludovic Phalippou shows that between 2006 and 2015, while PE investors were getting returns similar to those yielded by the stockmarket, the funds’ managers were pocketing $230bn of lightly taxed carry. Most of the loot went to ‘a relatively few individuals, mostly founders of large PE firms’ – a finding reflected in Phalippou’s calculation that between 2005 and 2020 the number of PE multibillionaires rose from three to 22. The wealthiest of all, Blackstone’s Schwartzman, was worth $37.4bn in 2021, a pot that is growing by at least $1bn a year. No market can be called efficient that generates such grossly distorted rewards, let alone for so long.

Blackstone’s buyout of Hilton Hotels for $6.8bn in 2007 eventually resulted in a profit of $14bn, $2.6bn of which was paid out as carry for the fund’s top managers. It has been described glowingly in the press as the best such deal ever. Yes, says Phalippou: but for whom?

Over to you, Rachel.

Three hours on the phone trying vainly to change your broadband supplier. Waiting half an hour for customer service to be told ‘We’re very busy right now. Please hang up and try later.’ At the surgery: ‘Sorry, we can’t give you an appointment. You can only book a fortnight ahead.’ Who’s responsible? No one. And it’s not just in everyday life. Who signed up for pet hates like, at random, call-centres or supermarkets that stock what they want to sell not what you want to buy? Open-plan offices or hot desking? Did anyone ask us if the unimaginably rich should continue to get richer while everyone else gets poorer? That Elon Musk should be able to use X as a political weapon or to buy votes in the US election?

Common to this everyday story of the unreachable organisation are two elements. One is a broken or absent feedback link, the other frustration and rage. The two are linked in the fact that for anything to change, someone identifiable would have had to have made the decision in the first place. But no one did, so it doesn’t. It’s in the code, or the rule book, or ‘the system’. The phenomenon is what Dan Davies in his entertaining and elegantly written (how often can you say that about a management book?) The Unaccountability Machine: Why Big Systems Make Terrible Decisions, calls an ‘accountability sink’ – the delegation of responsibility to rules, policy, convention, ideology – and increasingly to algorithms and AI, where no one can change it until something blows up or crashes, and it’s hastily escalated to a higher level.

Once you see it, accountability sinks are everywhere, from petty bureaucracy to world politics. Maximising shareholder value (MSV) is an accountability sink for self-interested management – the place where corporate ethics, morality or even the demands of long-term self-preservation go to die. The Washington consensus – a sink for rich globalists to rinse off responsibility for helping the global south. Politicians have long delegated swathes of policy to the market – remember Margaret Thatcher’s ‘there is no alternative’? – allowing consequences like deindustrialization or gross regional inequalities to be shrugged off as inevitable – just the way things are.

For Davies, the vacuum around accountability and the lack of agency it bequeaths to the rest of us is both the root cause of the rage now surging up among the world’s left behind and and the fertile breeding ground, diligently cultivated by the algorithms of social media, for conspiracy theories around the Deep State, shadowy world elites, and other imagined scapegoats, such as immigrants. Easy to see how it happens.

Of course, the world is too complicated to do without rules, bureaucracy and non-human decision-making. After all, we accept the law (mostly) as a framework for living together without overt conflict. But over time, the law has to change, even if slowly. And the urgent need now, Davies argues, is for missing feedback links to be restored in other areas, so that complaints can be addressed and bad decisions improved before the frustration boils over. How, in short, is the complexity of the world to be managed in ways that are receptive to feedback and thus can adapt and improve?

Certainly not through economics or management as they currently exist, snorts Davies – indeed, it’s their failings that have brought us to our current state of helpless frustration. Himself formerly a Bank of England economist, Davies excoriates his trade’s irrelevance to the real world – ‘the real blind spot of economics is the economy’ – and deplores its hegemonic influence on other social sciences, especially management, which thanks largely to Milton Friedman and his famous 1970 New York Times essay on the business of business being business, it largely annexed.

The problem with MSV, as the Friedman doctrine was synthesized, is that it dramatically oversimplifies the corporation’s multi-dimensional relationship with society, effectively crowding out any other concern, including considerations up to and including the survival of the planet. Management has largely gone along with this, partly out of self interest and partly because the maximisation of a single numerical value is easier to grasp and manage than trying to optimise the organisation for all its constituencies. Seizing on the potent enforcement weapon of debt, private equity and hedge funds have narrowed the focus still further, and are now hoovering up ever larger companies both good and bad, in every sector alike.

Not surprisingly, these developments have played havoc with ‘official’ versions of both economics and management. Revisionism is in full flow. In economics, on the IMF blog, no less, eminent economists queue up to describe what’s wrong with the discipline. In a striking mea culpa, Angus Deaton chides the profession for ignoring questions of power, without analysis of which ‘it is hard to understand inequality or much else in modern capitalism’. In management, the Global Peter Drucker Forum is trying to develop a ‘Next Management’, able to produce better commercial and social results in a world of AI and climate change. Notoriously, no economist or management expert predicted the 2007-2008 meltdown, or even appeared to notice the yawning inequalities engendered by globalisation, financialisation and the stupendous growth of big tech, let alone the consequences of the above in political terms – strongmen, plutarchy and a looming road to serfdom, not through socialism, as Friedrich Hayek predicted, but, lo and behold, the free market. Never have economics or management seemed to possess less predictive, explanatory or policy guidance power.

So where do we go from here? There are no simple answers. But Davies suggests a way forward in a surprising quarter: cybernetics and the writings of the engagingly eccentric but very serious Stafford Beer. Cybernetics, the science of control and communication in systems, emerged from operations research in WW2. It was highly influential in its day, with Beer, professor, consultant and information theorist, in high demand as adviser to organisations and even governments. Coming from a completely different place from the current accounting and finance-based model, cybernetic management is about information processing and variety rather than economics, and aims at viability rather than maximisation. It is one of a number of management roads not taken – perhaps to our cost now.

The first law of cybernetics is that in any control system, only variety can absorb variety; which in business translates as, the more variable and uncertain the operating environment, the more responsive and adaptable the organisation and its internal systems have to be. From a cybernetic angle, the kneejerk response of troubled companies to outsource, downsuze and purge middle management is often disastrously counterproductive, severing the feedback channels which could warn of things going wrong. Companies chasing MSV are particularly prone to this, Boeing and the UK water companies being eloquent current examples. From here it is a short step to Davies’ Darwinian conclusion that no system set up to maximise a single objective will survive in the long term, its single mindedness making it incapable of absorbing information that is putting its own life or even the life of humanity as a whole on the line, which is what it is doing now. In effect, it goes bonkers.

Davies argues that to open up space for new models of corporate governance and end today’s Gadarene rush to disaster, the starting point is to dismantle the private equity industry, MSV in its ‘purest’ form. How to do it? Simple: by making leveraged buyout firms responsible for the debts of the companies they buy out. By removing the accountability sink of limited liability, he suggests, ‘most of the attractiveness of using a company’s debt-servicing capacity to “buy it with its own money” is gone.’ Since viable systems seek stability, not maximisation, absent the all-consuming debt pressure ‘the natural equilibrium of corporate decision-making systems will be less hostile to human life.’

To be sure, in an ever more closely linked and complex world more non-human decision-making is inevitable. But if we can restore sufficient feedback links to to warn the system when life is becoming intolerable – AI and social media could be purposed to help here – people might be less furious, public debate less toxic and ‘the system’ less Kafkaesque. It would lighten the lot of the hard-pressed middle manager, too. As well as to his family, Davies dedicates his book to ‘the middle managers of the world, the designers of spreadsheets, and the writers of policies. Your work may be prosaic, but you are the ones who shape the world we live in.’

Tracking fraud in the 2008 crash, investigator Bill Black coined the term ‘criminogenic organisation’ to denote one whose management systems and incentives are arranged such that dodgy behaviour is inevitable. Set up a sales organisation, make people’s jobs or bonuses dependent on meeting unreasonable targets, turn a blind eye to their methods, and watch what happens. Nothing that people do may be illegal in itself, but how they do it irredeemably corrupts the overall performance – for which, and this is the beauty of it, no one is accountable.

Black was investigating a special case. But suppose that not just organisations but an entire economy can become criminogenic – that the overall system of incentives and management becomes self-reinforcing, so that bad behaviour happens even without fraudulent intent?

When in 1996 Boeing CEO Phil Condit decided to merge with smaller rival McDonnell Douglas and a few years later move the company HQ from Seattle, its historic base, to Chicago, he was upfront about the reason. He wanted to diminish the influence of Seattle’s powerful engineering function and free the financial team to run the company ‘like a business rather than a great engineering firm’.

That wasn’t fraudulent – better financial discipline wasn’t a stupid aim in an era of toughening competition. But those two symbolic steps are now universally seen as setting the company’s flight path to today’s ignominious real criminality: in July Boeing pleaded guilty to fraud and criminal conspiracy over the crashes of two 737 Max 8 aircraft in 2018 and 2019, killing 346 passengers, for which it has been fined $2.5bn. Now on probation, it is under investigation for the midair blowout of a door plug on a 737 Max 9 this January, and in April, five years after the fatal crashes, a whistleblower could still testify to Congress that ‘unless action is taken, and leaders are held accountable, every person stepping aboard a Boeing airplane is at risk’. 

Icon to pariah – it’s hard to overstate the depth of Boeing’s fall. (Only in this context would the well-publicised plight of two astronauts marooned in space because of a malfunctioning Boeing Starliner spacecraft rank as a mere PR setback.) Most people would say that Boeing richly deserves its punishment – except that as in most criminogenic outfits – that’s the point – the individuals most responsible will likely walk away richer and scot-free. And there is a co-culprit in the dock that bears an equal share of the blame. Boeing is a faithful proxy for the shareholder-primacy governance regime that, exactly like the faulty sensors and software that caused the 737 crashes, overrode all objections and forced the nosedive into fraud and possible ruin.

The 1996 Boeing-McDonnell Douglas merger was effectively a reverse takeover, with MDD’s financially-oriented brass moving into many of the top positions. One signifier of the new culture was the headquarters move to Chicago. Another was the replacement of quality and safety notices on the factory floor with a stock ticker and exhortations to keep the stock price in mind at all times. A cull of manufacturing jobs and the speeding up of production lines only reinforced the message.

With Wall Street plaudits ringing in their ears, executives pressed forward with their cost-cutting agenda even as warning signs began to appear. The outsourcing of development and manufacture of the 787 Dreamliner, Boeing’s last all-new design, launched in 2003, was a fresh slap in the face for in-house engineering and manufacturing. It backfired. Far from reducing cost, the complicated supply chain generated delays and huge cost overruns, while quality problems at the new non-unionised manufacturing plant in South Carolina, ignored at the time, continue to this day. Breakeven for the $33bn Dreamliner programme is still some way off.

But worse was to come. At least no 787 model has crashed. The horror show is the 737 Max – a monument to the fatal unintended consequences of unbridled shareholder capitalism and executive self-interest.

The Boeing 737, the industry’s best-selling short-haul workhorse, was born in the 1960s – pre-history in aviation terms – and through four generations the company has milked it, literally, to death. Proposals to replace it have come and gone, once in the early 2000s, and the second, fatefully, a decade later, when James McNerney, Boeing’s first CEO without an aviation background, once again opted to modify and reengine the 737 airframe, then more than 40 years old, rather than invest the $20bn it would take to develop a brand-new aircraft.

Lulled by this false economy and the deceptive early sales success of his new 737 variant, the 737 Max, McNerney increased Boeing’s dividend and initiated an extravagant programme of stock buybacks. All told, from 1998 to 2018, that is, the period of the new regime up to the first Max 8 crash, Boeing spent 82 per cent of its profits, a total of $61bn, on stock buybacks for the benefit of stockholders – enough to develop three entirely new aircraft from scratch. Including dividends, during that period Boeing shareholders were allotted an astounding 121 percent of its profits. 

Shareholders of course included Boeing’s senior executives, whose pay was and is substantially composed of incentive bonuses tied to shareholder returns. Unsurprisingly, the CEOs who presided over the illusion of success benefited hugely from the stock buybacks they authorised. According to one calculation, McNerney, the CEO who gave the go-ahead for the 737 Max, made $242.5m during his 10-year tenure, while from 2015 to 2018 successor Dennis Muilenberg, in charge during the recent disasters, made $93.5m, before leaving with an entitlement of another $62m. Current CEO Dave Calhoun received a 45 per cent pay increase this year and will depart at the end of 2024 with options worth up to $33m if the Boeing share price recovers. 

But back in the cockpit, there was a hidden snag, one directly related to the decision not to invest in an all-new aircraft. Fitting larger engines to the 737 airframe necessitated structural compromises that made the new plane more likely under certain conditions to stall. Boeing countered this tendency with a software fix. But that solution compromised the cost efficiency, deriving from commonality with the existing 737 fleet, that was key to the new plane’s commercial appeal: since flying a Max would be the same as flying any other 737, pilots weren’t supposed to need extra training nor airlines to update safety procedures. Shockingly, to square the circle, Boeing simply omitted to inform customers of the presence of the new software or, critically, the procedures pilots should adopt in case of malfunction.

Thereafter, there was no turning back. Modern aircraft are remarkably safe. There were no fatalities in 2017. For two catastrophic failures to occur to new planes in strikingly similar circumstances in the next 18 months was therefore doubly astonishing. Yet even after the second crash Boeing resisted grounding the Max, insisting that it was safe and hinting at pilot error or insufficient training. It wasn’t until China unilaterally halted flights that the US Federal Aviation Authority (FAA) followed suit and the whole sorry, indeed criminal, story emerged. Poor starting decisions followed by manufacturing and quality issues ignored or suppressed by management and the FAA, which allowed Boeing to self-certify its own aircraft, were compounded by deception and omission. In both crashes, a faulty sensor had caused the anti-stall software to malfunction, and without documentation or prior training, the unfortunate pilots had no way of overriding it. The terrifying but non-lethal blowout of a fuselage panel on an Alaska Airlines 737 Max 9 this year merely confirmed the obvious. Along with the grounding of the Max fleet, Boeing was ordered to reform its toxic culture of quality compromises, whistleblower harassment, and coverups.

The irony of the story, of course, is that the obsession with stock price is self-defeating. In Boeing’s case, having undermined the values that had been essential to its rise, it degenerated into negligence and deceit that in the last five years have wiped out half the company’s stockmarket value; the share price currently hovers barely above 2014 levels. Since 2020 Boeing has posted losses of $14.6bn and will likely burn through $8bn more this year. Order deliveries are running nearly 50 per cent below those of arch-rival Airbus.

Can Boeing recover? I doubt it. Important defence contracts probably preclude total disappearance. But the aerospace side is too corrupted to survive in present form. Changing the financial strategy is the least of it. Boeing’s proud engineering culture was shaped in a different age, long before the criminogenic incentives of late shareholder capitalism, let alone its turbocharged private-equity and hedge-fund variants, came into existence. After 25 years of indoctrination by executives who backed those incentives to the hilt – four out of five of them, incidentally, graduates of GE, another once-revered shareholder-driven company that has since imploded – it’s hard to see how that culture could be recreated fast enough to win back mass customer trust. Would you willingly pay to board a flight on a Boeing 737 Max 8 or 9 or Dreamliner today? To reverse the old catchphrase: sorry, if it’s Boeing, I ain’t going.

*****

PS: As I was saying…

A new wrinkle on the price scams I wrote about last time, from the September 2024 Which?: ‘It’s increasingly clear that if you’re not prepared to take out numerous retail memberships you will end up paying over the odds in supermarkets and pharmacies. Our latest investigation analyses almost 12,000 prices at Boots, Co-op, Morrisons, Sainsbury’s, Superdrug and Tesco, and reveals that many member “deals” are simply the going rate, leaving non-members with inflated costs at the checkout’. 

If you’re out late and banking on a rideshare to get you home, make sure your phone battery is charged. The less juice in your phone, and the geater the urgency of the call, the more the trip will cost you. Splashing out on a meal delivery now your salary has come through? Yep, the bill for your meal will likely be higher at the beginning of the month than at the end when you’re skint. If you’re buying on Amazon, don’t imagine that the products you are offered are the same, or in the same order, or at the same price as those proposed to a friend or relation just down the road, or indeed to yourself half an hour ago.

Welcome to surveillance pricing.

So far most people have been fatalistic about the tacit bargain embedded in the ‘free’ internet. ‘I know they know stuff about me, but I don’t have anything to hide, right?’; ‘Yes, the ads are a pain but I never respond to them; and I get search and email for free, so I’ll take it.’ This is the line of least resistance that regulators have taken too – until recently. But now the chickens are coming home to roost, with a vengeance. It’s not just surveillance pricing – surge prices that vary according to time and demand, booking and other add-on junk fees, algorithmic price-setting where a whole industry outsources its price-setting functions to the same third-party software – what all these add up to is that if companies have their way, the era of stable, open prices that we grew up in is coming to an end, with implications that go well beyond individual wallets and piggy banks.

Although Uber denies using battery status, which it admits tracking, in pricing rides, experiments suggest otherwise. McDonald’s, with 150m global users of its mobile app, uses ‘insight based targeting’ to ‘customise’ your ‘engagement’ based on time of day, product and ordering preferences, as well as location, weather, social interactions, and ‘relevance to key moments i.e. pay day.’ Amazon changes its prices every 10 minutes. A profusion of pricing consultancies have sprung up to exploit the rich layers of personal data available online to craft what they prefer to call ‘personalised’ pricing models, for companies such as McDonald’s and many others.

Surge pricing ‘will eventually be everywhere,’ according to one insider’s prediction. At least it is visible. The same can’t be said for the much slyer surveillance pricing. Long a marketer’s pipedream, individualised prices have had to wait for the combination of smartphone and apps to come to full flowering. Ever wondered why every website wants you to download its app? The latter, with its ability to mine data and simultaneously offer tempting prices displayed privately and in real time, is in effect a high tech, and vastly more potent, loyalty card. It is this app-smartphone combo that is at the heart of what Cory Doctorow terms ‘enshittification’ – the process whereby a genuinely useful service gradually morphs into its dark opposite as the algorithm learns how to exploit both buyers and sellers to dial up profit for its own shareholders.

First, says Doctorow, ‘the platform is good to its users, then, it abuses its users to make things better for its business customers; finally, it abuses those business customers to claw back all the value for itself’.

Take Uber (Amazon, Google Search, Facebook and X would do just as well). At its birth, Uber was touted as a new way of matching passengers with part-time drivers who, as with Airbnb, were happy to use spare capacity of a major asset for profit (hence the euphemism of ‘ridesharing’). For passengers, this was a great deal. Massively subsidised by shareholders, rides were both cheap and convenient. They were hooked. But after the initial euphoria, driving was a harder sell, and still is. So in its second phase Uber upped its rates for drivers. Now, however, having at last turned the corner into profit (although not much of it from rides), it is entering the third phase. Having racked up an astonishing $32bn of accumulated losses in its short life, Uber reckons it is payback time.

So here comes the smart part. Stuffed with electronics and software, new cars are already a privacy nightmare – surveillance devices on wheels, as they have been termed (one brand reportedly tracks occupants’ sex lives). Without going that far, Uber taps its ever-growing trove of car-borne and third-party-derived data to play passengers and drivers off against each other. Neither can see the price data shown to the other; surge pricing injects another variable that the algorithm can juggle to maximise Uber’s take from both sides of its market. In London at least, Uber fares are now in many cases little different from those of black cabs. Or maybe I’m just one of the suckers who’s taken for the more expensive ride?

Platforms are ripe for price maximisation in another way. Let’s stay with cars – yes, they are platforms too! – whose computers and sensors can harvest not only data but rents. BMW caused outrage when it decided to charge customers a monthly sum to activate already-installed seat heating. On certain models Mercedes charges owners a subscription of $1200 a year to use the car’s full performance capabilities. Tesla (who else) is reported to have disabled autopilot and other advanced features of a second-hand Tesla on the grounds that the new owner ‘hadn’t paid for them’. It can also remotely, and legally, disable cars to prevent them being fixed by an unauthorised repairer or modified in unapproved ways. Smart TVs that can read your mood and sell to you accordingly are on the way. Expect more of this, much more, in future.

Price holds an almost mystical aura in neo-liberal economics. At the precise point where demand and supply curves meet, price is ‘discovered’ by the magic of the market. Enthusiasts for the new pricing argue that it is fixed prices that are the anomaly here: what we are seeing now is a digitised return to the rule of the bazaar that applied up to the 19th century, when every purchase was bargained for: what could be more efficient than supply and demand in individual equilibrium? Yet it is obvious that the aim of companies flocking to emulate McDonald’s or Uber is not the pursuit of economic aesthetics, but that of profit improvement at the expense of producers, workers and advertisers who are not privy to the same information. Individualised pricing is an ‘expression of surveillance capitalism’s information asymmetries,’ sums up Shoshana Zuboff.

Prices and pricing aren’t of interest only to individuals, of course. Policymakers and economists study their movements intently, and often act on them. In crude terms, they see rising prices as a result of too much money chasing too few goods, and often choose to raise interest rates to persuade consumers to buy less. But what if rising prices are instead the consequence of price trickery by powerful companies (for which there is some, although inconclusive evidence) through the abuse of those information asymmetries? Or through informal industry price-setting via third-party software intermediaries that all hoteliers, airlines and agribusinesses (for instance) use? There should be no illusions. If they can do it, they will. ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices,’ Adam Smith noted in The Wealth of Nations back in 1776. As he was already well aware, ‘twas ever thus.

A long time ago, I wrote a piece for Management Today about the Conservative Party. One of my interviewees was Reginald Maudling (yes, that long ago), erstwhile chancellor of the exchequer and home secretary, a large, slow-moving man equally known for his intellect and fondness for fine claret. At the end of the interview, I asked a slightly drowsy Maudling about his political philosophy. After a long pause, he replied: ‘Well, I think of it like this. First, you know, one side has a go … and then it’s the other side’s turn.’ 

I used to dine out on this story, which seemed to me the height of UK political anti-intellectualism. But it recently received support from an unexpected quarter. Writing in the FT, Ruchir Sharma, chairman of Rockefeller International, noted that from an economic viewpoint it seemed to make surprisingly little difference which kind of party was in power. The US economy has done just as well if not better under the Democrats as Republicans, for instance. What does seem to give a kick to economic performance is a changing of the guard – electing a new government with fresh faces. In other words, giving the other side a turn. In a government’s second and subsequent terms, economic growth almost invariably slows.

One of the things this reminds you of is that there is no such thing as a fixed, once-for-all political destination. As the philosopher Michael Oakeshott famously put it, ‘In political activity . . . men sail a boundless and bottomless sea; there is neither harbour for shelter nor floor for anchorage, neither starting-place nor appointed destination. The enterprise is to keep afloat on an even keel’ until the next crew takes over – a process that with a few intermissions and bumps on the way has been taking place in the UK since the 13th century. And that indeed describes what Conservatives, particularly, generally did. They prided themselves on their lack of an ideology, at least an explicit one. Instead, to quote Oakeshott again, their disposition ‘to prefer the tried to the untried … [and] the actual to the possible,’ meant that keeping an even keel was the party’s natural bent.

The chaos of the last few years is eloquent testimony to the distance today’s Tories have travelled from the pragmatic ambition of the past. Maudling, canvassed for the governorship of the Bank of England, and his contemporaries would have been astonished and then appalled. So far from keeping an even keel, during its most recent tenure the supposed party of the status quo almost sent the ship to the bottom in its pursuit of ideological purity, leaving for its successors a situation of staggering political and economic dysfunction – not just a barely twitching economy but a myopic and depleted state, poverty-stricken local government and a society fractured from top to bottom.

How did we get to this point? In her intriguingly-titled Late Soviet Britain: Why Materialist Utopias fail, LSE’s Prof Abby Innes argues that the Conservatives’ increasingly dogmatic commitment to extreme neoliberalism uncannily mirrors the trajectory of the Soviet economy under Stalin and his successors. Soviet communism and British capitalism look like opposites. But as Innes expertly unpacks, ‘both Soviet and neoliberal doctrines are utopian political philosophies dressed up as science.’ Soviet central planning and an ever freer market were each held to be the one true means to strikingly similar ends: a perfectly efficient economy, which would lead to the shrinking or withering away, take your pick, of the now unnecessary bureaucratic state. (Those looking for the origins of ‘deep state’ theorising, start here.) 

‘Turn to any major [UK] policy reform of the last 40 years’, says Innes, ‘and you will find the steady development of Soviet pathologies in capitalist form’. Take privatisation and outsourcing, both part of the 1980s and 1990s attempt to bring neoliberal ‘efficiency’ to the public sector through the dreaded New Public Management. The result has been the worst of all worlds: privatised and outsourced services that work so poorly that an emasculated state is constantly forced to intervene (water, anyone?), hapless planning (dentists, doctors, social care), repressive regimes of ‘targets and terror’, an utter failure to nurture the national infrastructure, arbitrary and illogical service and grant cuts, and a mounting culture of cronyism, all familiar from Soviet Russia. 

Or Brexit, which with hindsight only makes political sense as a quixotic last throw by the economic libertarians running the Leave campaign to throw off the constraints perceived as stymying previous government attempts to achieve economic nirvana, and whose final form – quite unecessarily, the hardest and most destructive exit possible – led indirectly to the political chaos that has followed. The ultimate irony: far from market efficiencies allowing for a progressive withdrawal of the state from economic affairs, the UK government’s tax take is now the highest it has been for 70 years, and it micro-manages to about the 10th decimal place. Less with more, in fact.

Unfortunately, following a well-trodden dynamic, true believers always attribute failure of their project to insufficient radicalism or rigour of execution rather than wrong-headedness, so their only answer is to double down on what they were doing already. This only makes things worse and distances the perpetrators still further from the lived reality of their constituents. As we know to our cost, the ultimate casualty of this dynamic is democracy itself. If democratic institutions, or even the facts of life, bar the way to the ideological ideal of an untrammeled free market or perfect central planning, then it’s the former not the latter that have to give – witness Johnson’s proroguing of parliament, assaults on judges as ‘the enemy of the people’ and the progressive criminalising of public protest in the UK, not to mention Donald Trump’s antics in the US. The more the neoliberal project fails, the more its fanatical adherents fall back on populist and authoritarian means to try to force it to work. 

Given the circumstances, the most encouraging aspect of the recent elections, at least in the UK, is that Sir Keir Starmer might have been nicknamed ‘Mr Even Keel’. Of course, profound change will be needed to roll back the deep and lasting damage inflicted by neoliberal economics on the body politic and economic since the days of Margaret Thatcher, with precious little fiscal margin to do it with. (This is nothing new. When Maudling quit the Treasury after the Labour election victory of 1964, he left a note for successor Jim Cameron, saying, ‘Good luck, old cock. Sorry to leave such a mess’ – which Cameron apparently took to refer to the state of his office until he took a hard look at the books. That’s not a joke anyone would think to make today.) 

But the first essential must be to reestablish a measure of trust in state and government among understandably mutinous voters. That can only be done by plotting a political course that directly connects with lives lived by ordinary people rather than the rational utility maximisers of economic theory. The UK’s long parliamentary history has something to teach us here. Reflecting on the origins of the European state in the middle ages, one FT reviewer warned that without a foundational consensus on the role and effectiveness of the state binding together politics, law, economics and the place of religion, our future could all too easily descend into what Thomas Hobbes, the founder of modern political philosophy, bleakly described as ‘the war of all against all’. Steer well, Cap’n Starmer.

Incentives make the world go round. In fact, they run it ‘more than laws, regulations, critiques or the ideas of researchers,’ notes internet seer and polymath Jaron Lanier. 

An exaggeration? Well, here’s the late Charlie Munger, Warren Buffet’s right-hand man at Berkshire Hathaway. ‘The iron rule of nature is that you get what you reward for,’ he said, adding later, ‘I think I’ve been in the top 5 per cent age cohort almost all my adult life in understanding the power of incentives, and yet I’ve always underestimated that power. Never a year passes but I get some surprise that pushes a little further my appreciation of incentive superpower.’

Incentives look simple, which is why people get them so wrong. They’re so obvious in concept – ‘do this to get that’ – that they are taken for granted. The idea that financial incentives are the prime drivers of performance is central to companies’ performance management systems, and via agency theory – the idea that managers, as ‘agents’, need to be incentivised, ie bribed, to serve the interests of shareholder principals rather than their own – embedded deep at the heart of Anglosphere corporate governance. Indeed, in a neat instance of self-fulfilling prophecy, it has been placed there by the very management opportunism that agency theory was designed to control. As economist John Kay remarks, this dry, ‘fundamentally financially driven view of the corporation would probably have had little impact outside the academic world had its applications not been so congenial to investment bankers – and to corporate executives themselves’. Not just congenial: so hooked on incentives have executives learned to be that Elon Musk now ‘has to have’ $56bn to keep him motivated and interested in Tesla, according to its chairman. She is careful to say that no one is holding a gun to her head – but many people might wonder how different that is from blackmail.

The giant problem with incentives is not that they don’t work. It’s that they do, only too well: in order to work, they routinely override anything that gets in their way, whether that’s common sense, ethics, or even survival. Pondering the key role of financial incentives in the Great Crash of 2008, Alan Greenspan lamented, ‘I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms… I discovered a flaw in the model that I perceived as the critical functioning structure that defines how the world works.’

Yet despite the piled-up evidence of their harm, belief in incentives is strong enough to ensure that they are routinely abused, including in the public sector, as the go-to solution to buy off almost any business problem, whatever its cause. Unfortunately, they are not a remedy for poor management or poorly designed systems, which they only make worse through the unfailing appearance of perverse unintended consequences. Intel’s Andy Grove, never one to shy away from a hard truth, noted dryly that for every incentive that the company implemented, another had to be swiftly brought into existence to counter the effects of the first. (Interestingly the phenomenon of unintended consequences was first investigated by the same sociologist Robert K. Merton who described the self-fulfilling prophecy, and the two are linked. By definition, incentives, as bribes, stop working when they are removed; as exemplified in spades by Musk, they condition people to expect incentives, even though in survey after survey for most of us money ranks well below positive reputation, appreciation, and interesting and important work as motivator.)  

At the level of the firm, incentives damage teamwork and cooperation, especially when they result in high differentials in pay. ‘When work settings require even modest interdependence and cooperation, as most do, dispersed rewards have consistently negative consequences on organisations,’ write Jeff Peffer and Bob Sutton in Hard Facts, Dangerous Half-Truths, and Total Nonsense. This goes for sports teams and academic departments as well as companies. They are a disaster in sales, responsible for countless mis-selling scandals. In fact, look hard enough and they wiill be found somewhere in almost any scandal. Grenfell, for instance. As for chief executives, depressingly few companies bother to ask themselves if they are really better off with a CEO who is focused outside the organisation, on money and shareholders, rather than internally on customers and the workers who serve them. Hired hands who come for the money will leave for it too. As Kay remarks, ‘there are people for whom money is an overwhelmingly dominant motivation…, but they are defective as human beings, and generally not suitable for employment in senior positions in complex organisations.’

Over time, the incentive pathologies at work in companies play out as corporate self-cannibalisation. The unintended price of self-interested CEOs maximising shareholder value to meet the incentives laid out in their compensation plans is falling investment in skills, technology, jobs and R&D that endangers their company’s future existence. At the level of the economy as a whole, as Greenspan belatedly realised, the same ideology-based incentives almost collapsed the world economy in 2008, just as on a smaller scale they brought down Enron a few years earlier. In the digital age, other unintended collateral damage from the incentive bubble includes the destruction of privacy, the plunging quality of public discourse, the ‘enshittification‘ of the internet (to borrow Cory Doctorow’s graphic term), the rise of inequality, and of course the distress of the planet.

Or take private equity and hedge funds, monuments to and perhaps the purest expression of what happens when people and organisations are single-mindedly focused on financial incentives. As value extractors on a massive scale, they skew the whole economy with their insatiable wealth appropriation and the magnetism they exert over the financially ambitious. ‘We have a higher percentage of the intelligentsia engaged in buying and selling pieces of paper and promoting trading activity than in any past era’, Munger pointed out, a lot of it reminding him of Sodom and Gomorrah. Lanier wonders how any society can hope to survive unless there’s at least some degree of alignment between society’s interests and economic incentives. Without it, we’re very close to the place where, as Charles Handy put it in The Empty Raincoat, ‘The incentives, which may have been the fertilizers to grow more wealth, ended up consuming all the wealth which they created.’

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

You might think that the organisations best suited to looking after the people and things dearest to us – our youngest and oldest family members or our pets, for example, or, to take a rather different example, the water that is essential to life itself – would be mutuals, B Corps or even charities. Chance would be a fine thing. In fact, it’s precisely their users’ preciousness and linked vulnerability, translating into guaranteed demand for the organisations’ services, that ensure that the latter too often perversely end up in the hands of predators and ghouls that care about them least and exploit them most most rigorously.

Yes, we’re back with private equity, now almost constantly in the news, and mostly for all the wrong reasons.

Take water. When Margaret Thatcher privatised the regional water companies in 1991 she and her ministers hailed a coup: offloading a boring, predictable utility for the private sector to turn into a boring, predictable investment for widows and orphans. As parting gift, the government left the sector debt-free, taking on £25bn (£50bn plus in today’s money) of companies’ borrowings. But in the following years it was investors who celebrated. With PE in the lead, the companies used the steady income stream to ramp up leverage and engineer opaque and convoluted corporate structures that have invited comparisons with the banks in the run-up to 2008’s Great Financial Crash in 2008. 

Since privatisation, the water companies have invested £190bn. At the same time, they have also shelled out £78bn in dividends to shareholders and piled up £64bn of debt, leaving some of them, particularly Thames Water, supplier to a quarter of the UK population, in crisis as the fat years come to an end. Thames’ parent company is in default – an ‘uninvestable’ company that needs to raise £3bn in equity for a new five-year plan to fix chronic leaks and sewage spills. Labouring under £18.3bn of debt and a tidal wave of criticism, Thames now faces soaring financing, construction and penalty costs, while customers are looking at a possible 40 per cent price increase over the next few years, depending on the outcome of the current cat-and-mouse game with a newly-awakened regulator. Some observers fear a domino effect, with contagion (the right word) from Thames causing the collapse of the whole industry, including the hopeless regulatory framework that is an integral part of the debacle. Let’s hope there aren’t too many orphan and widow investors left to suffer a 40 per cent ‘haircut’, as it is euphemistically called, to their holdings if water goes under.

Then there’s pets. When the Competition and Markets Authority asked the UK public for their concerns about the £2bn veterinary industry at the end of 2023, a record 56,000 people responded, prompting a formal investigation of possible market abuses. These are many.

Pets are part of the family, and owners don’t skimp on their treatment. Since the pandemic pet ownership is on the rise, while the vets who treat them have typically been independent, local one- or two-person bands. That makes them the fluffiest of targets for PE, always on the lookout for fragmented businesses with guaranteed demand, which has been quietly but steadily picking them off: a decade ago 90 per cent of vets were independent, a figure that has now fallen to 40 per cent. The other 60 per cent are in the hands of six big corporates, three of them with PE involvement. This is the classic PE ‘roll-up’ – as in: PE buys up vet practice – easy to persuade an aging owner with a wad of money – then drives staff costs down and treatment costs up. Demand doesn’t waver (we all love our pets), and local branding is usually retained to disguise the change of ownership and ownership of other practices – as well as of related services such as pharmacies and crematoria, and in the case of Mars, one of the big vet owners, pet-food manufacturing too. Each of those, of course, follows the same maximising business model as the bought-out vets. Few vet websites list treatment prices, making comparisons hard. But unsurprisingly complaints of eye-watering price increases figured large in the CMA consultation, and Which? wants the Authority to take a close look at incentive pressures to over-treat.

For many of the same reasons – guaranteed demand, vulnerable consumers, a seller’s market – private equity firms have needed no encouragement to pounce on children’s homes, which local councils with the nod of government have largely outsourced to the private sector over the last decade, in the same way. Eight of the 10 biggest UK providers involve private equity – and, sure enough, as in the case of vets, there are persistent complaints of profiteering and over-specification, as well as distressing stories of short-staffing, poor care and maltreatment of vulnerable youngsters – again not a surprise given the incentives and nature of the business model. A critical CMA report in 2022 concluded that England had ‘sleepwalked into a dysfunctional children’s social care market’, now worth £6.5bn, where councils were paying excessive fees for inadequate or unsuitable services, and where ‘surprisingly low’ wages and training levels were a barrier to proper staffing despite profitability that was ‘unexpectedly high.’ It also worried about the firms’ risky levels of leverage. It wanted an overhaul of the entire system. Wales and Scotland are moving towards non-profit solutions, England not.

Can we ever trust PE with such precious cargos? There are small recent signs that the leopard is trying to change its spots, or at least their colour. Over the years some of the biggest PE houses have cheekily gone public, partly perhaps to provide a layer of relative transparency over a sector whose USP is that it is, well, private. And voices are now being heard among investors and industry insiders acknowledging a need for PE to be seen to be doing something to benefit employees of portfolio firms as well as investor-partners. There have even been suggestions that it should sign up to ESG goals – which seems surreal, a bit like inviting the wolf to self-identify as Little Red Riding Hood. 

Yet as reader Gordon Pearson noted under my previous PE piece, whether the business in question is water, treating sick animals or looking after children, the underlying lure of PE remains as brutally simple as it ever was: post acquisition, he was told by the multimillionaire CEO of Barclay Securities, ‘“the theory of what we are doing is to release half the cash, half the assets and half the people employed”. Use of the word release implied all such resources would be applied to more worthwhile activities. The truth was they would be either pocketed by the new shareholder or simply made redundant.’ 

Anyone thinking that is an exaggeration should consider this: according to FT calculations, 30 top executives in the big publicly-quoted PE groups saw the value of their shares soar by $40bn last year – quite apart from the similar amounts they were making on the ‘carry’ from their buyout deals. For the UK, the Treasury calculates the carry shared by some 3000 PE dealmakers at £6bn over the last two years. 

So no, private equity can’t be trusted to do the right thing for anyone except itself. The financial gains to anyone else are moot. Like the Norwegian sovereign wealth fund, neither our public sector nor our asset managers should contribute a penny more to these billionaire foctories’ ill-gotten gains.