LA BRUYÈRE
On the need to threaten:
It is much safer to be feared than loved. Love is sustained by a bond of gratitude which, because men are excessively self-interested, is broken whenever they see a chance to benefit themselves. But fear is sustained by a dread of punishment that is always effective.
MACHIAVELLI
Since the majority of men are either not very good or not very wise, one must rely more on severity than on kindness.
GUICCIARDINI
It may, of course, be possible to acquire the velvet glove and iron fist of a courtier, and possible, too, to learn to navigate around colleagues as we might around a reef-ringed coastline—but having the need to do so is scarcely calming. From the perspective of an office or a factory floor, it is easy to fathom the lure of three acres, half a dozen ducks and liberty.
4. Dependence on an Employer’s Profitability
For a worker in an organisation, job security depends not only on internal politics but also, and more ominously, on the company’s ability to remain profitable in a marketplace in which few producers can defend their competitive position or pricing power for long. If the ferocity of the competition inflicts on many workforces an anxiety not dissimilar to that one might feel when standing on a melting ice floe, it is perhaps because the most effective and swiftest way for management to improve profitability is almost always to decimate staffing levels.
Companies under financial pressure may find it hard to resist dispensing with workers in countries where wages are high in order to hire cheaper replacements in faraway lands. They may equally be tempted to enhance profitability by merging with competitors, in the process eliminating great swathes of duplicate workforces. Or again, they may turn to mechanisation, computers or robots. Consider, for example, the automatic teller machine, or ATM, which was developed in 1968 and first unveiled the following year, when a single unit was fitted into a hole in the wall at a branch of Manhattan’s Chemical Bank. Within a decade, 50,000 ATMs were in operation worldwide; by 2000, the number had risen to 1,000,000. But however technologically impressive they were, ATMs offered flesh-and-blood bank tellers few grounds for celebration: studies soon showed that one ATM could do the work of no fewer than thirty-seven human tellers (and, into the bargain, rarely fell ill). In the United States, about half of all those employed in retail banking—some 500,000 people—lost their jobs between 1980 and 1995, thanks in large part to the invention of these silkily efficient machines.
As if all that weren’t troubling enough, employees must in addition worry about the consequences of the pressure put on companies to introduce new and better products into the marketplace. For long stretches of history, the life cycles of goods and services exceeded those of the human beings who produced and consumed them. In Japan, the kimono and jinbaori went unchanged for four hundred years. In China, people were still wearing in the eighteenth century exactly what their ancestors had worn in the sixteenth. Between 1300 and 1660, plough design did not alter across northern Europe. Such stability of production must have given artisans and labourers a reassuring sense that their work would outlive them. Since the middle of the nineteenth century, however, product life cycles have been sharply attenuated, and the trend has shaken workers’ confidence in the long-term integrity of their careers.
Sudden and decisive trouncings of old products and services by new ones have occurred in almost every area of the economy, as canals were made obsolete by the invention of the railway, passenger liners by the introduction of the jet engine, horses by the development of the car and typewriters by the proliferation of the personal computer.
The market’s passion for movement and change can burden companies with product-development costs so enormous that their very survival must depend on the successful launch of a single item. Like a palpitating high roller who, instead of being allowed to cash in his winnings after a good run, is forced at gunpoint to continue risking his assets, a corporation may have to let everything ride on the outcome of a few wagers or even a solitary bet, and as a result either amass vast but precarious riches, or, alternatively, self-destruct.
5. Dependence on the Global Economy
The survival of both companies and their employees is further threatened by the performance of the economy as a whole.
The history of the economies of Western nations has, since the early nineteenth century, been one of repeated cycles of growth and recession. Typically, four or five years of expansion have been followed by one or two of retraction, with occasional massive retrenchments lasting five or six years. Graphs of national wealth often resemble the profiles of angular mountain ranges, in whose every valley lie the bankruptcies of long-established firms, the layoffs of workforces, the closings of factories, the destruction of stock. We may seek to attribute these events to unnatural dimensions of economic life, and we may hope that one day we will learn to avert them, but for the time being, the best efforts of governments and central banks have demonstrated that there is little to be done about such turbulence.
Every cycle follows a similar pattern. It begins when growth picks up and companies invest in new capacity to meet perceived future needs. Production costs tend to escalate at this stage, as do asset prices, especially for equities and property, driven up in part by speculators. Inexpensive credit encourages businesses to commit to large, capital-intensive factories and offices. At this critical point, demand and current output both begin to slow, even as consumption continues to accelerate. A lack of savings spurs an increase in personal and commercial borrowing. To satisfy domestic demand, companies start to import more and export less, a trend that soon results in a balance-of-payments deficit. The economy is now officially out of kilter, freighted by overinvesting, overconsumption, overborrowing and overlending. Here begins the slide into recession. Prices are pushed higher by the use of less efficient means of production, by the growth in the money supply and by speculation. Tighter and much more expensive credit raises the cost of outstanding debt. Asset values, inflated in the upswing, are punctured. Borrowers can no longer make their payments, and the collateral available for new loans is restricted. Incomes, investment and consumption all fall off. Companies and entrepreneurs flounder or go bankrupt; unemployment rates rise. As confidence evaporates, borrowing and spending dry up. Long-term capital investments made in better days now come on line, increasing supply and depressing prices just as demand is slackening. Companies and individuals are forced to sell off assets at a loss, deepening the crisis, but many potential buyers wait for the market to hit bottom before purchasing, further delaying recovery.
Rather than a sign of hysteria, a state of steady anxiety may be a reasonable response to the very real threats of the economic environment.
Percentage change in U.S.gross domestic product per capita,1890–2000
2.
If we are anguished by the thought of failure, it may be because success seems the only dependable incentive for the world to grant us its goodwill. A family bond, a friendship or a sexual attraction may at times render material incentives unnecessary, but only a reckless optimist would rely on emotional currencies for the regular fulfilment of his or her needs. Humans rarely smile without having some robust reason to do so.
3.
Adam Smith, The Wealth of Nations (Edinburgh, 1776): “Man has almost constant occasion for the help of his brethren. [However], it is in vain for him to expect this from their benevolence only. He will be more likely to prevail if he can interest their self-love… . It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity, but to their self-love.”