Humanity is still wandering totally disoriented in the corona swamp. Meanwhile, in The Hague, the men and women of State watch over the conflict of interests and lead society and society straight into a new bubble of debt, deepening sadness and an ever-cumulating state of controlled chaos.
Salvation shareholder capitalism is near – everyone loses!
The power and especially the importance of conscious leadership with character is most felt when it remains aloof. Fortunately, hundreds of climate refugees on Lesbos are leading by example. They sew the mouth caps together themselves. Side by side, because in Camp Moria there is no room to keep 1.5 meters distance. And also because, like the other 23,000 refugees, they no longer have a house to retreat to.
The corona crisis plunges us even further into the social drama and spiritual crisis that have been festering beneath the surface of our consciousness for decades. The COVID-19 virus is also now creating three new crises, all of which are economic in nature: a physical shortage of assets (respirators, corona testing equipment, ICU beds, etc.), liquidity problems – created by the loss of revenue, sales and profits – and heavily outdated business models that will die out during the crisis.
Chapeau for Rutte and his cabinet
Lack of money is the most pressing problem right now, and that is what the government is rightly focusing on. And they are doing so with verve and much better than their peers elsewhere in Europe. Nowhere in the world is 2% or possibly even 10% of GDP immediately set aside to combat the crisis. The EU only frees up 0.6% of European GDP, a drop in the ocean. So chapeau to Rutte, who was promoted from masterful polderer to worthy statesman on Monday 23 March. With flying colors. But that doesn’t automatically make him the leader we desperately need right now. A true leader with character, who now makes the best possible choices for all of us. Because let’s face it, almost all actions seem to be aimed at saving shareholder capitalism. A model that many philosophers and also more and more economists consider bankrupt. Hopefully it is a last convulsion of neoliberalism and a different consciousness will soon dawn. An era where other choices are made. Choices that any leader would make, when governing from the heart instead of only reacting from the head.
…a worthy statesman does not yet make Rutte a leader and example for all Dutch people
Leaders with character, thinking and governing beyond their cabinet term, rather than passing on major problems to future generations. Leaders who set an example for other people, so that they do not follow but also lead. People who are more in charge of their lives and contribute to the well-being of others. Instead of always being behind the times and having to react to new circumstances. Leaders without ideals and vision do not exist, not even in politics. In that respect Rutte could take an example from mayors like Aboutaleb and Halsema. They clearly stand above the parties and dare to make choices that are not (immediately) well understood by their residents. Is that because they can stand above the parties in the college and the council? And if so, what does this mean? Isn’t the Netherlands a metropolis with 17 million inhabitants?
In this blog I do not want to ‘howl’ with the wolves in the forest and be critical of our government without nuance and examples. I also see that Rutte & Co are doing their utter best. So let’s focus on facts in the here and now. In a simple way and with examples that make it abundantly clear what I think, mean and would like.
Unchanged policies: inequality and conflicts of interest
When the cabinet announced the Emergency Measure on Work Retention (NOW) a week ago, KLM, as a major polluter, was at the front of the queue for state support. Our past glory is still a pearl and paragon of progress for the cabinet and therefore gets preferential treatment from team Rutte. Incomprehensible and immoral. Also unacceptable and a reckoning on March 21, 2021 is imminent. Although; people forget quickly, so what is there left to settle at the next election? No doubt the parties and politicians tumble over each other to claim the handling and solution of the crisis. But what have they solved structurally?
The Emergency Work Retention Bridging Measure is designed to accommodate employers and employees when there is a loss of turnover. This will prevent hundreds of thousands of workers on fixed and flexible contracts from being laid off. The question in this case is: for whom is this scheme really meant and does the government save the workers or the companies with this? It is a fundamental choice for politicians, because it is not only about liquidity, perception and public opinion. It is now mainly about leadership and what is really needed. Economics is about dividing and ruling and leading focuses on creating equal opportunities for growth and development. Not just for companies, but especially for people. And not just for the strong, but especially for the weak in society. And – as we are now painfully learning – certainly also for people with crucial professions; in healthcare, education and public services. Important people and professions that we have literally come to value less and less in recent decades.
But the government is once again making different choices. It is still entangled in the neoliberal conflict of interests and puts companies and big business above the interests of all Dutch people. Thus Rutte and his polder team miss the opportunity to make optimal use of the solidarity and togetherness that currently binds society together. A missed opportunity now threatens to make the country really take a step in the right direction. Why doesn’t our prime minister now connect with society in a common desire union?
Why are large companies and SMEs not treated equally? Why is equal treatment of workers at the top and bottom already at risk of going wrong?
The facts don’t lie. Back to my example of KLM and government discrimination. Because there are certainly critical comments to be made about the current crisis policy of Rutte III. Why are large companies and SMEs not treated equally? Why is equal treatment of workers at the top and bottom already at risk of going wrong?
The worst will be the first?
The Royal KLM will be one of the first to receive state aid. A key condition the government places on the NOW state aid is that no staff may be laid off. Nevertheless, KLM still intends to lay off fifteen hundred to two thousand of its 33,000 employees. Even after receiving the state aid. Furthermore, the company intends to receive state aid for all the remaining 31,000 employees, and a rough estimate quickly exceeds 100 million euros per month!
How logical is it that Dutch society pays for 100% state aid to KLM pilots who earn on average 70% more than colleagues at other airlines elsewhere in Europe?
To date, I have read or heard little about some of the dilemmas in this issue.
Why is KLM allowed to lay off employees with a NOW state aid of hundreds of millions of euros and not baker Sutorius around the corner? How logical is it that Dutch society pays for 100% support to KLM pilots who earn on average 70% more than their colleagues at smaller airlines in Europe? And on top of that, they make far fewer flying hours! Is that fair to the 900.000 immigrant workers in the Netherlands, who for € 15 per hour worked their asses off in our greenhouses and on our fields? And thus have contributed significantly to our economy. They are now in danger of falling by the wayside and will not receive a single euro of state aid for the time being. They cannot go home either because the borders are closed. If we cut back 20% on state aid to the pilots and c-level managers at KLM, we can offer the aforementioned people a token of appreciation and humanity. It’s not about thinking left or right. Or about being liberal or social. It’s about humanity and leadership. About doing what is right. About what is desirable and not just what is desired. This is proving quite difficult for a government that owns almost 15% of the shares of Air France-KLM.
The situation is even more serious at our club of Royal aviators. KLM spent nearly 200 million to buy back its own shares at the end of 2018. A great gift to the incumbent shareholders, which means that 2,000 people now have to be laid off because there is no money.
Can someone explain to me why in times of great crisis society pays for the costs and in good times the profits are distributed to shareholders?
In the current crisis, KLM could easily have kept these people on board for a year or made arrangements up to a maximum of €100,000 per employee if its policy had not changed. Why should Dutch society now pay for this serious form of mismanagement and self-enrichment by shareholders? Can someone explain to me why in times of great crisis society pays for the costs and in good times the profits are distributed only to shareholders?
In America the situation is even more distressing and one could speak of a ‘serious violation of human rights’. Namely the right to equal treatment.
Over the past decade, American airlines have spent more than 90% of their cash on buying back their own shares. Thus, incumbent shareholders have received a great gift. Now these airlines are begging Trump for support which, of course, his friends will not abandon, as they have been flying “First and no Economy Class” with him for years.
What is being saved in these times of great social and economic disruption is shareholder capitalism. On the backs of society and people’s health and well-being.
Where do we find leaders of character who are willing and able to break this pattern for good? It is not difficult, if we start leading from the heart and for the good of all. Leading consciously and for the common good also means less favoring a group of shareholders, with a powerful lobby and tentacles far into the boards of our democracy.
Leadership: one for all and all for one
As a philosopher I am more thinker than doer and as a human being, former serial entrepreneur and impact investor I am more leader than manager. When I combine these traits I arrive at logical thoughts for myself, which of course are not understood – let alone shared – by the pure doers, who in my experience react more than govern. Is nothing wrong with that, but let’s call it another way.
The drastic curtailment of economy, mobility and civil rights, and the massive scale on which money is now being released for emergency response, raise an inevitable and also uncomfortable question. Why are we doing this in the first place?
Out of humanity or to keep shareholders out of the wind?
A few examples, because I need to get it off my chest, so that I can then mercifully embrace my loved ones again. And also because I can then remain open to the ridiculous ramblings of statesmen who just cannot free themselves of their obstructive convictions and party political interests. Whatever these may be.
British 3i, as the owner of Action, has pulled over two billion euros from the company since 2016. In 2012 the company was still worth 500 million euros. Now, anno 2020 Action is the fastest growing trinket retailer in Europe, worth more than 10 billion. In total, 3i has invested about 275 million euros in Action, which is in stark contrast to the 2 billion in dividends that 3i has paid itself. And to top it off, a few days ago Action stuck a big knife in the back of its most important stakeholders: its suppliers and employees. Suppliers were told they were not going to be paid for 90 days.
What would you as a government do now if Action knocked on your door for state aid for its thousands of employees in the Netherlands? I assume you would first pass the bill to 3i, where there must be billions in cash? After all, it’s crazy that during a crisis the risk is placed on society and previously earned profits remain with the shareholders?
I know what I would do. Not as a future thinker, author, or former director and impact investor. But simply as a human being and leader of at least my own life, intention and non-negotiable values.
In any case, I would not do the same as Secretary of State Mona Keijzer. She made an indignant phone call to the grocer, who then retraced her steps.
“Action succeeded?”, I think not, by which I mean not to a sufficient degree.
Who does not pay, does not rule
How logical it would be if we followed the following policy and principle in turbulent times: ‘who doesn’t pay, doesn’t determine’.
Now let’s just tell 3i that Action in the Netherlands is not eligible for NOW state aid, just like the 900,000 migrant workers in the Westland and the many hundreds of thousands of other temporary workers.
Of course we do want to help Action in principle, because as a true and conscious leader we do not want to exclude and leave anyone behind. After all, it’s not just about employment, but above all about our dignity and humanity. And that is precisely the appeal we must make to Action’s shareholders under the current harsh conditions. And of course also to the shareholders of KLM, Shell, Unilever, AKZO Nobel, Philips….
State aid OK, but only if your shareholder contributes proportionally. To save your company and not just to prevent the dismissal of your employees. The point of departure is the following: if the company were to collapse without state support, it is virtually bankrupt and therefore worth almost nothing. Especially if the crisis continues for a long time and there is no “Quick Fix” available.
As leaders, we are not unreasonable and apply a humane and morally responsible standpoint in this situation: the company still has a value of, say, 10% to 25% of the moment just before the crisis. We support Action, KLM and consorts on the basis of providing a convertible loan or issuing new shares. The convertible loans are subject to a unilateral condition; the person paying determines whether they are repaid at Euribor plus 2% or converted into shares at the valuation at the time the loan was issued. If the shareholders refuse to cooperate and the company is in danger of collapsing, we expropriate the company (better sounding than taking care of the assets, people and public interest) and pay compensation based on current value. We have been doing this for a long time with (agricultural) land and natural areas. So nothing new under the sun, right?
We place the process and the proceeds in the fund ‘De NV Nederland’, so that everyone can benefit from the proceeds in the future. In other words, all Dutch citizens. We promote corona envoy Feike Sijbesma to president of the fund and ask him to lead the fund from its intention to benefit 17 million people. I am sure that Feike can do that very well and if we ask him politely you never know….
Do we need to talk about profit tax? And the five to ten billion it costs Dutch society? Because Shell, Unilever, AKZO Nobel and Philips don’t have to pay it in the Netherlands? Because they are allowed to compensate losses abroad in our country. Money that we now desperately need for 17 million people. And previously could have been used terribly well to improve, for example, our education and health care systems.
The collective realization that we are all nature makes leading very easy….
I know another one like that….
KLM emits approximately 8.6 megatons of CO2, according to researchers at CE Delft. According to the CBS, that’s over 5% of total emissions in the Netherlands. Of course the Royal Netherlands does that not only in the Netherlands but all over the world. But if a Dutch company can offset its losses abroad here, it is not illogical to think that it can offset its emissions abroad in the Netherlands. If we in the Netherlands want to put the world in crisis on a sound footing, we would for a certain period of time -let’s say two years from the moment we are back ‘to normal’- levy an extra national tax on global CO2 emissions for the big polluters like KLM. An extra emission and crisis tax of, say, 75 euros. This would bring the emission price to around 100 euros per ton. In the case of KLM, this would save NV Nederland almost 650 million euros per year (8.6 megatons x 1,000,000 x 75 euros). And in two years more than enough to keep all the people at KLM on board without extra state support. If the company does not accept this, we will nationalize it in accordance with the aforementioned guidelines, in the interest of almost everyone. And if KLM manages to reduce its CO2 drastically, then everyone will benefit. With nature in the first place.
And that brings me to the consideration of the day. Aren’t we all nature? Could this collective awareness lead to making good choices? Just as nature has always done: very effective and very intelligent.
Inspiration source: De Groene Amsterdammer 25 maart 2020 | Dirk Bezemer