Читать книгу The Lessons School Forgot - Steve Sammartino - Страница 12

Nothing indicates what people will do more clearly than their incentives. These days our economic lives, which can be loosely equated to ‘the market', are an aggregation of short-term interests. Government and corporate leaders simply aren't around long enough to care about the impact of the major decisions they make. In Australia, where I live, the federal government has three short years in which to allocate the resources at their disposal to improve the country for their constituents; in the USA it is four years, ending with a full year of campaigning. The average reign of a Fortune 50 °CEO is 4.9 years¹, yet the average annual pay for the said CEO is now US$13.8 million, which is 204 times the median wage of the workers they lead.²

Leaders are incentivised to make decisions that maintain their position. Even if they have shares in the company, which is meant to align their interests, invariably they'll focus on making the balance sheet sing while they're in charge. So they'll avoid long-term, financially painful shifts in favour of short-term maintenance. If it makes it worse for the company later on, they won't care, because they'll be sitting under a palm tree somewhere with their multimillion-dollar severance ‘go away' money. Wouldn't that be nice! Some other overpaid CEO will happily have a crack at cleaning up the mess.

And, you guessed it, the average politician makes the same play. They throw good money after bad in declining industries to keep people in jobs and their approval ratings high. In Australia we've experienced the same industrial upheavals most developed nations have gone through as low-cost foreign labour markets have improved their penetration of the manufacturing sector. This year (2017) the auto industry as we know it finally shuts down completely. It was of course inevitable. Australia, with its high wages, relatively small population and geographical remoteness from its main trading partners, could not continue to compete in a rapidly globalising market where trade barriers and tariffs are being reduced. But here's what our local government did: they subsidised the industry. When the gig was clearly up, they paid wealthy global corporations to keep the pretence of manufacturing in Australia.

Up until 2013 the auto industry in Australia received an annual $550 million in subsidies.³ Car maker Holden, a wholly owned subsidiary of General Motors, has a market capitalisation of $50.5 billion, but received from our government an equivalent of $50 000 per employee per year in subsidies.⁴ In the long run, the money invested on behalf of taxpayers becomes a sunk cost that could have gone into retraining and facilitating the development of future-proof industries more suited to the Australian (insert your country here) economic setting.