I see that David Farrar, the National parties favourite polling poodle, is trying to spin up the old line about politicians not being business people. He is a blithering idiot.
As a died in the wool private sector advocate who only works in the private sector, who specialises in exporting, who has had extensive arms length political experience, and who has done all of those things for more decades than Farrar has been alive – I’d say that Farrar is full of billshit.
The two roles are and should be pretty distinct and work at different timescales. One is concerned with making income for shareholders in a 2-5 year timescale, and the other is responsible for providing resources over much longer timescales. The most useful measure for that is the 20 years it takes for raising a child from birth to when they start getting productive in the economy and society.
This spin line of his in particular I found extraordinary
I was once like many MPs, thinking I understood business. I had worked for a charity doing their finances so thought I understood profit, loss etc. But then I worked for a small struggling advertising agency and found out first hand how hard it is. It isn’t just about your paper profit. It is about managaing cashflow, creditors, the IRD etc. It is about the business owners sometimes paying themselves less than the receptionist, so the firm survives.
David Farrar as far as I can see runs what I can only describe as being a petty small crony capitalist business that largely sells services to the National Party, some government contracts, and hopefully he also has a few private sector contracts as well. He has never had to export anything (apart from himself off on holiday), has never run anything that involved more than a handful of permanent employees, and as far as I am aware has never managed to make a single dollop of the overseas income that this country is so dependent upon.
It also doesn’t to my eye particularly involve any degree of risk outside of his own incompetence. But we can probably forgive his ignorance about business. He also clearly doesn’t have any training in how to run a business. He obviously lacks the clarity on how to structure business systems and projects.
I do. I come from a family who manage things, usually for other people. Traditionally these have been factories with hundreds of employees, and generally for ones that export. But we’re pretty good at managing anything. From nightclubs to programmer teams. We generally don’t bother owning business because that isn’t the interesting part of business.
As much as we love our entrepreneurs who like the thought of owning stuff and come up with the daftest things that occasionally work, they miss out on all of the fun bits of business. In my opinion, their bloated egos usually get in the way of making sure that everything that is currently there works and completes with the least amount of effort possible. We’re interested in making things work. But like everything else in business, it isn’t the individual that counts. It is how they work together to form something that is greater than the sum of its parts. Different skillsets working together works just as effectively in business as having disciplined
I am the black sheep of the family. These days I write code because that is what I like to make work. Today, I usually I mostly write it for networked devices, designed here, that is then sold and exported into vertical niche markets world wide.
The code that I write usually takes years to build and can have small or large teams working on it. I’m always a core part of the team on the software side because my expertise is in making sure that the millions of dollars of investment and thousands or work hours actually achieve the desired results. I have done this for decades for everything from small startup companies that I have helped found to corporates building a next generation product of their decades old system. My expertise usually involves being aware of all parts of the supply chain from the components to how the support team the customer finds it working. It also involves some pretty high degrees of risk and it only requires a single mistake early in the process to cause major issues. But it is also a hell of lot of fun.
But I didn’t start there. I got an extensive education in how government could distort rational business practices early.
Back in 1981, I came out of a earth science + business degree and started working at Ceramco at the crony capitalistic heyday of Robert Muldoon – when the number of our head office staff was dwarfed by the number of our lobbyists in Wellington fighting to keep the tariff barriers that made our profit high. The first projects I was involved with were putting tonnes of refractories into the Think Big projects. Neither the projects, nor my part in them really made much sense to me. As a country we were trying to build an industrial infrastructure that really didn’t use any particular advantages of our country.
While we were producing adequate refractory products. They simply weren’t up to the grade for what was required – we mostly wound up importing and selling all of the important high end components. The company was in it to make a buck. But I don’t think that I met a single person that thought the projects were much use beyond that. The freight costs and delivery times from NZ meant that the projects would always be marginal and our internal population was too small to adsorb even a fraction of the output.
After doing 4 years, I decided that I was simply missing something. So I managed to get into Otago’s MBA programme to train more intensively.
In my opinion, the most useful thing about business training isn’t what you learn. Most of that tends to fall into the blindingly obvious category of knowledge was you have a good introduction to it.
It is about becoming aware of all of the bits that you need to know about, but will never know well enough, all of the things that you have to depend upon in a business. So I learnt about the financial accounting, marketing, economics, and law along with a myriad of other interconnected pieces. But you learnt about the interconnections between these things through the innumerable case studies that explored these issues and the nascent business simulations of the day.
A decade later I led the team that commercially produced one of those business ‘games’, Mike Bikes and its assorted offspring, that several generations of business students locally and worldwide have had to endure over the net as an important part of their course work.
But one area that piqued my interest during my academic stint was the utter dependence of businesses on the supporting role of government. As well as utter dependence of government on the revenues gained directly or indirectly from business. I even grew to understand why Muldoon’s government was doing the weird things that they had done in the later 1970s and early 80s, and the forced but rather excessive response by the 4th Labour government.
Despite my start as the kind of government disliking business fool of the type that David Farrar is now trying to rile up for this election, presumably for the purposes of his pocketbook, I grew interested enough in politics to start studying it.
I have spent the last 30 years involved in one way or another with politics, while making sure damn sure that I didn’t spoil my own working fun by actually getting drawn into the maelstrom. It is a interest, albeit an important one in my life, that makes me help run this blog as a talking ground for political debate. Of course you can see my skills in it. It runs for $134 per month, is long lived, and I don’t do much of the heavy lifting – the authors and commenters do. 🙂 I’m a manager – my job is to enable others.
Frankly from my perspective, any business person with skills that are greater than their ego or greed wouldn’t want to get involved in politics. Too messy, too long term, and simply not that much fun. What you will get and what you’d expect to get are the people untrained in business. In fact they look just like David Farrar. And that is exactly what you see in the National lineup that he describes.
National’s lineup look like those who are parasitic on the internal economy and have little of no exposure directly to the world economy that many if not most people working for the productive sectors of business now work in. The problem is that they also appear to be pretty untrained and don’t understand their role either.
MPs are there to provide the infrastructures, both physical and legal, that the business community relies apon to build businesses over the long term. The skills that are required for that task are not those that the business community is any good at providing, nor is it something that they are trained in, and it is sure as hell not something that they are good at. The time scales are far longer than the business community are used to dealing with. And business people have a really bad habit in politics of doing special favours for their mates and themselves. You don’t have to look too far to see this. Start with Steven Joyce or with the farmers.
We don’t need or want crony capitalism in politics. It is far too expensive for the country as Muldoon successfully demonstrated in the 1980s, and as some of the MPs of the 4th Labour government (most of whom departed to Act) demonstrated leter in the 1980s.
Politics and government doesn’t mean giving special favours for little groups and shielding them from the world economy. If all of the urban businesses and residents directly pay for water and water treatment, then farmers should learn the costs of their ‘free’ resource as well. It is part of the cost of doing business, and you don’t want to waste it. I pay $1200 for my household of two annually and the businesses I work for pay far more. It is treated like a resource that can’t be squandered.
Having business amateurs like David Farrar trying to speak for the people who actually know how real non-crony businesses operate is somewhat insulting to those hard workers who generally stay out of politics, provide most of the underlying employment in the country, and who focus on the world economy that most of us are involved in. We don’t need the advice of a business parasite.
In government, business needs people who understand and can work with the long time scales of government and the physical legal infrastructures that we depend upon. Productive businesses working on a world stage don’t need or even want business failures like crony capitalists playing favourites there.