The Second Curve: Thoughts on Reinventing Society

By Charles Handy

If something has been done that way for centuries it needs a looming disaster to allow any change from the status quo. There is some sense in that but it means that progress is slow, often a series of unplanned responses to emergencies rather than a planned pursuit of a vision.

But society is not working as it should. Living is getting harder, not easier, for most. Inequality is growing.

Governments tweak and twist and adapt but are more concerned to stay in power than to conjure up new visions and new possibilities.

I confess that I have little idea how my grandchildren or their contemporaries will be earning their living 30 years from now,whether the nation state will still rule their lives or will have been replaced by city states and confederations, how they will measure success in their lives or how they will choose to live.

Already, as I see it, too much of all that is new favours the few and not the many. Society is out of balance. Power is unequally distributed.

Change is easier to envisage when crisis looms but harder to implement with resources and time running out.

I seldom questioned the way things worked, or were supposed to work, in Britain and in much of the rest of the world. I assumed that because things had always been that way that was the way they were meant to be; that those in authority knew what they were doing and were well advised. I know better now.

The pace of change in a democracy is glacial, to be measured in generations not years. Governments may often know what they should do, but not how to get re-elected after doing it.

Democratic governments can only move when they know that the move will be widely accepted. As a result the directions of change often come from outside the parliamentary system, not from within it; from people like us, in short. *

The only variable is the length of the curve. The Roman Empire lasted 400 years, but finally reached its end. Other empires lasted less long before they dipped, as the British Empire did and the American one surely will. *

Institutions, in particular, are notoriously unwilling to die, seeing it as their duty to soldier on against the odds.

First there is the hubris born of success, at the top of the curve, then the undisciplined pursuit of more of the same, followed by a denial of any risk. Thereafter there is only a futile grasping for salvation and an eventual capitulation to irrelevance or death.

I want the world that my grandchildren will live in to be a different and a better place. If my suggestions seem outrageous, ill-considered or dangerous then so much the better.

Can some businesses become too big to fail because of the damage to others that might result?

Should money be allowed to influence voters in what are supposed to be democracies, but if not, how can political campaigns be financed?

Can schools, as institutions themselves, prepare people to live outside institutions?

Can emails and Skype, Facebook and Twitter compensate for physical connection? *

What will hold a society together? Will we dissolve into ghettos of religion and race or will we find something better than war or economic success to build a united country?

I am sure that each one of us can make a difference – to our own lives and even to the countries of which we are citizens.

One of our faults is that we are too modest, too willing to believe that those in power know best.

If we want to see a better society it has to start with us. Change is seldom welcomed by those in power.

Researchers in Oxford University suggest that 47 per cent of today’s jobs will be replaced by computers within the next two decades – 250 million in just the next one, says the McKinsey Global Institute. By the time you read this these numbers may well look dated.

What seems sure is that the world that our grandchildren will work in will have very different organisations and very different life options than the ones I knew. Whether they will be better or nicer is another question.

The new fashion for this virtual connectivity means that our laptops are effectively our offices.

Convenient though that is, it also means that I can never leave my office. Unless I am disciplined enough to turn off all the technological gadgets I am more enslaved, not less.

Already 93 per cent of all the businesses in Britain are microbusinesses, employing less than five people, often just one person or a couple.

Whatever governments may wish, the reality is that in Britain today less than half of all adults of working age are in full-time employment. *

Sixty per cent of Britain’s registered businesses,have no employees, just the proprietor.

Like so much else in the world ahead the workplace is increasingly going to be what we make it. Work is what we do, not where we go.

Let us be clear from the start: Adam Smith did not say that the ‘invisible hand’ would allow self-interest to work for the good of all. He only mentioned that metaphor once in his book The Wealth of Nations, and that was to suggest that an invisible hand would incline a merchant to invest at home rather than in foreign lands. Just one example of how language can be twisted to mean what you want it to mean.

But he also said that ‘by acting according to the dictates of our moral faculties we necessarily pursue the most effectual means for promoting the happiness of mankind’ and ‘to feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature’. Bankers take note. *

But he had no illusions: throughout history, he observed, we find the workings of ‘the vile maxim of the masters of mankind: all for ourselves, and nothing for other people’.

Markets, he insisted, needed good rules and strong government if they were to work in the interest of all.

As Robert Kennedy once said, GDP ‘measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country: it measures everything in short except that which makes life worthwhile’.

In truth we do not know how well our economy or our society is really growing at any given time, even in economic terms, let alone human well-being.

The individual pursuit of more money is a particular snare, because there is no obvious end to it. There will always be someone with more to act as a comparison and a challenge. It is one of the paradoxes of growth that it can end up as a recipe for perpetual dissatisfaction. One solution is to say ‘enough’ and move on.

Where would we be without capitalism and the free enterprise system? It has enriched the world hugely over the last three centuries and continues today to create wealth and work. You have to ask, however, as many now do, whether the wealth and work are as fairly distributed as they should be, whether the single-minded pursuit of wealth is not only leaching our societies but also putting power beyond the reach of the people and their politicians.

Perhaps the real problem is that too many people don't think that much about it, that they just assume it is the way it was ordained to be – just like slavery of old.

If we seem to be living better lives it is mainly because there are now two earners in each family where one used to suffice, and those two are working harder and longer than ever before. That is not the way the world was meant to be.

It is interesting to consider the implications that would follow if we thought of a business as a community rather than a property.

Most large businesses seem to be more like the totalitarian centrally planned regimes of the old communist world than anything resembling democracy. That communist world was brought down by its bureaucratic rigidity and by its inability to harness the energies and enthusiasm of its people in pursuit of its cause.

Citizenship is the key concept in a democracy. Odd then that Britain still calls its people subjects not citizens.

Managers do things right, leaders do the right things.

Are we drowning in debt? What are the consequences?

The state pension scheme in Britain is unfunded, as it is in most countries.

It is a bit deceptive since many who pay their National Insurance often believe that they are contributing to a pot that will in due course pay for their retirement and any unemployment, when in fact their contributions are paying for those who have gone before them and they will in turn be funded by those who come after.

In years gone by there were six people in work for every one retired, and those often died in their seventies. What happens when there are only two workers for every pensioner and those pensioners live until they are nearly 90?

Already the income collected from National Insurance contributions in Britain is £10 billion less than the outgoings.

It is just as bad at the personal level. Personal debt levels in Britain are running at £1.4 trillion, having doubled in the last decade, or £54,000 per household. Those figures include mortgages but there is still £95 billion owing to credit cards and other sources of financial credit.

These debts are making a nonsense of much of the welfare system at the poorer levels of society where half of the benefits paid out can go straight away to pay the interest on payday loans, with not enough left over to live on, let alone pay off the original loan. It can be a trap for life.

The even more staggering fact is that one-third of the people working in Britain today have no private pension and have made no calculations at all about life after work, apparently believing that something will turn up.

Everyone is increasingly on their own, responsible for financing their own life beyond employment, apart from a very basic poverty-relieving pension from the state.

The problem for most householders is that they are already up to their eyeballs in debt and have nothing to spare to put into savings.

But as the number of new taxpayers falls while the pensioners keep living longer the Ponzi equation begins to falter.

Carlo Ponzi, the dishwasher from Parma, turned Charles Ponzi, American temporary millionaire, has a lot to answer for. We also need to remember that he died a pauper.

In the coming generation we may see the worst of two past worlds, a group of people living off the wealth built up by the previous generation and a continuation of the extreme pay to top people.

This is perhaps the most urgent problem facing us today, to restore a proper justice to the creation and distribution of wealth. Wealth has to be spread around more widely without destroying the motivation to create it in the first place.

We miss the countervailing power of the trade unions, who have stuck to their old power bases in the large organisations, now mainly confined to the public sector, and seem to ignore the opportunities open to them as the champions of the self-employed and the proprietors of small businesses, the new and growing workforce.

What then, in default of union action, could governments do? Why not, for a start, significantly raise the national minimum wage that is now a feature of most of the advanced economies?

It does not make economic sense that the savings of a nation should go disproportionately into property, which produces no useful wealth for the country and very few jobs, and which, in turn, makes it more profitable for the banks to follow suit with their loans, thereby starving business of much-needed finance for growth.

The real inequality and unfairness in modern capitalism is going to be the lack of meaningful work for the less skilled and less talented among us, and there are many millions of them.

We should spend less time ranking children and more time helping them to identify their natural competencies and gifts, and cultivate those. There are hundreds and hundreds of way to succeed, and many, many different abilities that will help you get there.’

It could be argued that universities are largely responsible for the flaws in our school systems because we have allowed their preoccupation with academic and intellectual studies to shape the curriculum and priorities of the schools.

Ideally we should aim for an individual curriculum, one tailored to the needs of each child, rather than a national curriculum that seeks to make every child the same.

You could say that my school might have ruined my life, even while proclaiming me as one of their most successful students.

Knowledge evaporates, learnt skills live on. You never forget how to ride a bicycle.

Ever since university I have been more interested in the process of education then the content, believing that content can always be found when needed but the process has to be learnt young.

As I have since come to realise, learning never stops, it lasts until you die. *

Education is meant to be a preparation for life. Its results therefore should properly be tested by the outcomes in life after education.

Examinations test only the absorption of knowledge shortly after its reception, not its use in life.

A Government of all the people, by all the people, for all the people was Theodore Parker’s famous definition of democracy back in 1850.

Trust in governments and politicians has evaporated in recent times, destroying the harmony of the nation.

The result, to an outsider, appears to be a fossilised system, run by a closed circle in an overly centralised structure.

We might also celebrate the 800th anniversary of the Magna Carta by updating this, our only semblance of a formal constitution. A formal legal constitution would help to deal with the next source of confusion for both government and work organisations, the problem of managing internal differences.

The obvious answer is federalism, a well-tried system which the British recommended to their departing colonies and dominions and defeated enemies, such as Germany, where it demonstrably works rather well, but resolutely shunned at home.

Britain is sliding slowly into a quasi-federation or what they prefer to call ‘devo max’, to avoid that dreaded f-word. The new federal Britain would include Wales, Northern Ireland, Scotland and, maybe, five English megacities or regions.

Too many people do not bother to vote, either because they no longer trust their elected politicians to act honourably or competently or because they do not feel that their vote will make any difference. A federal system in which local issues were decided locally and largely paid for locally would pull in more voters who could see that their votes made a difference.

It would also help if it were made easier to vote. Electronic voting via the internet must surely come one day.

If people want to influence the decisions that most directly concern them they need to become active citizens in their own locality.

Citizens are the point and the strength of a nation. They have rights, but also obligations, and are active, or should be, not passive.

For too long it has been assumed by too many that there is little they can do to affect the way things are done. That is not a good basis for active citizenship. Government must become more open and more real to its people. That will require some major adjustments to the way the country is run and to the assumptions that underpin it.

In the end it all comes down to the perennial question, ‘What is it all for?’ Why do we so strive so earnestly to improve our lot and that of society?

I translate it as ‘doing your best at what you are best at, for the benefit of others’: living up to your potential, in other words. The ‘benefit of others’ is important.

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