The Separation of Work and Life

To illustrate complex issues, I frequently draw on the work-life balance as a relevant and timely problem affecting virtually everybody. Usually, conversations are about how to find effective private strategies and good public policies to facilitate an individual and sustainable balance between the two parts of how people spend their time: work and life. There are many different practices applied or perspectives taken, and, for the sake of complexity, I would like to add another question: Is a separation of work and life always meaning- or purposeful (another more logical question would be, if comparing work and life is somewhat similar to make a distinction between apples and fruits…)?

By using the expression "work-life balance", we are implicitly relying on the idea that work and life are something different, something separated from each other. Aside from the logical fact that life includes work, I think it is a worthwhile exercise to question this tacit assumption of a dichotomy between those domains. Quite often, the separation of work and life is regarded as healthy or generally good in an imperative and moral manner. "You should enjoy your leisure time!" or "Could you please stop talking about work during your recreational activities?" are common expressions in this context. I hope that the pressure to enjoy one’s leisure time is not as high as the pressure to separate work and life…

My point is that life and work cannot easily be separated. Do you think that activities like working, living, loving, being a soccer fan, having your friends’ messages on your mobile, chatting privately during work time, having a swim during lunchtime, and so on, are easily separated into the work-life dichotomy? The domains of work and life influence each other and we are not machines being able to throw a lever to shut off life while working.

If the domains of work and life interact, why do we always assume that work negatively affects life? Could it not be that work is positively affecting life, for example by giving meaning and sense through purposeful actions? Many persons define themselves through their professions, while having their personal identities at stake when talking about work.

I think the best way to think about the relationship between work and life is to perceive these two domains as mutually supportive. Bringing in parts of one’s personal skills and knowledge, personalities, even problems, into the work domain enriches the professional environment. On the other hand, there is also a transfer of professional benefits to worker’s private lives. Competencies learned during working time can be used quite effectively in different settings related to the private domain.

Therefore, a separation between life and work does not further the search for a meaningful balance between the two domains. In my opinion, the two domains have to be integrated into a holistic perspective that brings in the best of both worlds under a common purpose. Life will be much easier and more meaningful if we do not have to separate work and leisure time obsessively. 

A doctoral student’s view on plagiarism affairs

Yesterday, a scholarly commission of a German university has decided to revoke the doctorate of the country’s education minister and a close confidante of the chancellor on the basis of plagiarism.1 What seems to be the latest instance of a series of similar affairs not only raises again questions about the integrity of involved, mostly high-ranking individuals of public or political interest, but also about the justness of stripping academic titles most often earned decades ago. Without being a legal expert, it seems convenient to me to turn this discussion into a rudimentary trial, presenting incriminating evidence and exonerating circumstances as judged by a protagonist and stakeholder theorist’s point of view.

Provided that the authors knew what they were obliged to do when writing scientific pieces in which they relied on the ideas of others (intent?), there is undeniably ethical ambivalence behind “…systematically and deliberately faking a mental performance throughout the entire dissertation…”.2 The driving force of misbehavior can comprehended to a certain extent; metaphorically think of a school kid who decides to take on the risk of cheating at an exam in hope of getting away with it and gaining the respect of his/her mates for being the best in class. Also the personal choice to jeopardize one’s sincerity and take on the burden of living with and even building a career upon a skeleton in the closet could be acceptable as long as nobody else is harmed and consequences are taken if it does come out.

From a broader and more stakeholder-oriented perspective, the quality and originality of single research efforts is certainly of interest for a wider range of involved individuals and institutions (failure to render assistance?). Ultimately, the reputation and trust in academic education and the community itself is at stake. In my opinion, the setting in which such major research projects are developed is essential in preventing misbehavior. By actively striving after adherence to scientific principles, the set of stakeholders should provide an enabling context including ethical values. However, it seems also evident that such a setting cannot be characterized by an ever-growing pressure on young scholars to perform along one single dimension, namely the quantity of peer-reviewed publications.

Last but not least, one needs to be aware of the fact that the act of crime is in most cases several decades ago (prescription?). At that time, research was carried out and dissertations were written under nowadays inconceivable circumstances - the World Wide Web and Google & Co. did not exist. But also the means to rigorously check for plagiarism were missing, so the inhibition level for copy/paste was presumably much lower. To draw a comparison between now and then seems pointless in that regard.

The bottom line is (sentence!) that it would be wrong if long-ago decisions of individuals to violate the principle of intellectual property in order to boost their ego leads to negative sentiments towards contemporary science and the involved stakeholders.

Marc Moser

References

1 Cottrell, C. 2013. "University Revokes German Official’s Doctorate", in The New York Times, viewed on 5 February, http://nyti.ms/12wwcxN.
2 Bleckmann cited in Cottrell (2013)

After the Occupy Movement

Danach – After the Occupy Movement, After Capitalism?

The Occupy movement, originating on Wall Street, rapidly swept through the US, Europe and Latin America, reaching also Asia and Africa, albeit with less fervor. Under the banner of “Occupy Paradeplatz” the protest planted itself in the middle of the Swiss financial heart right in front of the headquarters of the two largest Swiss banks, the UBS and Credit Suisse. After being politely told by the police to move, they set up camp in the Lindenhof Park overlooking the old town of Zurich, where they held out until the police once again cleared the terrain after some weeks.

What happened since then? Was this just a momentary venting of outrage, gone as soon as the emotional waves waned? Whereas this may have been the case with some of the participants, the action has taken root in numerous ways. Behind the scenes a lot is buzzing, including a first Symposium (http://www.danach.info/) which united leading thinkers and doers. Anything but reactionary, I was impressed by the well-reasoned, nuts-and-bolts approach to shedding light on our current financial system and what to do about it so as to avoid a complete crash (although, as the title “Danach”, German for “Afterwards”, suggests, most shared the conclusion that it will crash before truly significant change will make its way also through the political and economic systems).

One of the most fascinating insights I gleaned was just what money is and how it was created in today’s economy. What precisely money is, is not based on some kind of natural law, but is what we have made it to be. Thus we can deliberate about how we want to employ it and what precisely we want it to do for us. Conventional economic wisdom (and what I was taught in my undergrad economics course) has it that when I or you deposit our money into a bank account the bank makes good use of it by pumping it back into the economy in the form of loans for businesses or home owners. In reality, they do not even require such deposits but rather are able to “create” their own money pretty much out of thin air or simply go to the central banks where they get it for next to nothing. Thus, as claims positivemoney.org, some 97% of all money in circulation in the UK is “created out of nothing” by private banks (see http://www.positivemoney.org.uk/).  The problem with this scenario is that there is a complete detachment of this kind of money with the real economy, real value creation and real wealth. Moreover, since money creation is so easy, it inexorably leads to various financial bubbles and to rising personal and public debts.

To solve this problem, the concept of “positive money” or, a similar initiative in German called “Vollgeld” (http://vollgeld.ch/) , has been promoted. The basic underlying idea is that there should be a complete separation between speculative money (loans, bonds, stocks, derivatives etc.) and the “real money” that is deposited by people in a savings account.

Since these speculative investments would no longer be insured by the government, it would consequently solve the “too big to fail” dilemma, all the while also attributing the real burden of risk on such investors in search of superior returns. Since simple savings accounts would no longer be subject to being dragged into a bank failure due to the speculative investment part of the bank, the risk of bank runs would be largely mitigated. One version of this would make simple bank deposits no longer be part of the bank’s balance sheet and no longer reaping any interest rates.  Only savings accounts, with which the bank makes direct loans, would still reap interest rates. Moreover, through the introduction of “Vollgeld” there could be a one-time write off of all state debt as banks  are required repay their credits to the national banks. (For a detailed explanation of this, in German, take a look here: http://tinyurl.com/cn7c5lt )

Numerous other interesting insights were presented, including the notion of the use and/or misuse of interest rates and how interest rates force economies to keep on growing in order to not collapse (an impossible proposition in a finite world).

The simple take-home message was quite clearly that the current financial system is not sustainable and bound to collapse sooner or later unless fundamental changes of how our money is created and organized are undertaken. Current remedies, beginning with financial transaction taxes, the Volcker rule, Basel III and all the way to the separation of investment and deposit banking, fail to get at the systemic problems inherent in the current system. As always, the jury is out on just what will transpire. But I think it’s safe to say that it can’t remain “business as usual” or even “business more or less as usual” forever for the financial institutions of the world.

Manuel Heer Dawson

Two further very interesting links regarding this matter:

http://neweconomicsinstitute.org/

http://www.monetary.org/

In search for positive narratives of leadership

Within the context of our new research project “Towards positive narratives of leadership”, we have recently been in contact with numerous professional colleagues, leaders in firms and public enterprises. In this process we have seen that a large number of managers are looking for new paths for reliable and sustainably successful leadership behavior, after the many years of crisis as well as market and management failure. They don’t believe that yesterday’s mindset can solve the problems of tomorrow.

For many leaders the negative headlines have clouded the view of positive role models. However a positive role model is just what we were able to witness at the beginning of the New Year: hardly anyone believed in the end that the US would be able to negotiate the fiscal cliff. Thanks to their joint positive effort, Biden and McConnell managed to find a solution. Clearly what we need most are positive narratives for leaders that they are able to develop mutual solutions.

What do we mean by “positive narratives for leadership”? Five ideas come to mind:
First, it means that the firm is not understood as a selfish fighter against all other individuals or institutions in markets as well as in society, trying to reap profit from others by every legal and not so legal means. The firm is not outside but part of society, for which it must have positive regard and from which it must accept limitations and regulations. In a positive perspective, firms are required to act as economic and societal institutions. Thereby not only the leaders in firms are challenged but also those in society.

Second, leaders have to be aware that in a global and knowledge intensive society, the interactions with highly qualified and indispensable stakeholders are the key to superior value creation. These stakeholders are always human beings and have to be accepted and treated as such. They have to be accepted with their distinct knowledge, experience, values etc. All stakeholders, not only selected managers or shareholders, deserve respect and trust in providing firm specific engagement.

Third, short term profit maximization has to be replaced by the principle of economic and social value creation with and for stakeholders. This includes that contributing stakeholders get a fair share of the value created. The one-sided consideration of selected investors or managers in value distribution has to be avoided.

Fourth, the firm is always part of a complex and dynamic network of contributors and not the dominator. This embeddedness in a stakeholder network opens opportunities for mutual stimulation and positive developments for both the firm and the stakeholders.

Fifth, we also have to take a fresh look at competition. Gaining and maintaining a monopolistic competitive advantage towards others is not part of a positive mindset. The real values created for all relevant stakeholders must be transparent so that customers, investors, ranking agencies etc. can decide which firm creates the most value in an economic and social dimension.

It is a fascinating but also an urgently needed requirement to search for positive narratives of leadership that can serve as role models for leaders.

Sybille Sachs

Why the Density of Regulation for Global Issues is too high today

Recently I was at a conference about finance and ethics. One of the discussed topics there were regulations in the finance industry. Although the discussion was controversial there was somewhat of an overall agreement that regulation is basically necessary but that its density today is too high. I asked myself why there is on the one hand an insight that regulations are needed and on the other hand a moaning about too much regulation?

The answer, I think, is to be found in the globalization. When the West triggered the economic globalization by national and international market liberalization and deregulations one consequence was the global integration of finance and other industries. The second consequence was that especially states in the West lost control over important political instruments for regulation. And by eliminating regulative buffers, the development of economic and financial crises was facilitated because unleashed financial streams could flow nearly without control.

Besides the political instruments already given away due to deregulation and liberalization the now established economic globalization has created new realities: according to the political scientist Ch. A. Kupchan, still state-based political instruments as e.g. financial- and monetary policies have become ineffective in a globalized world because of its inherent global competition. This all shows that states – and especially Western states which carried out deregulation more thoroughly than others – aren’t able to provide solutions (alone) for global issues as the challenges in the global financial system.

Because of this inability of states and the need to solve global issues, many international and transnational regimes and organizations have come into existence or tried to expand their sphere of activity in the past two decades (e.g. OECD, WTO, Basel III, Kyoto Treaty, GRI). They aim to contribute to solutions of global issues by providing systems of regulation. Because a global coordinating authority like a world-state is not existent, this development meant that a plethora of state and private-actors, organizations, initiatives, conferences and summits try to provide regulations concerning concrete issues.

The result is that there is a mess referring regulation of global issues today. It is not very surprising therefore that regulation concerning single issues such as e.g. unleashed finance or labour conditions in producing countries has become very dense and confusing. One even can speak of a market for regulation of global issues: different international regimes and organizations etc. offer each their “regulation-package” for one and the same issue (what leads to arbitrariness instead to effective solutions).

Because the mostly unintended lack of coordination on a global level can be seen as a central reason for the high density, it is inappropriate to speak of a willfully regulation frenzy. Thus, it is better to speak of an absence of effective regulation on the level of single states as well as of an absence of coordination on a global level, which principally would be the level on which meaningful regulative solutions need to be established.

It remains to be seen if the development of institutional structures for global governance is on the way to a necessary simplification of regulations which are at the same time more binding. Solutions are the aim to which regulations are expected to contribute effectively: this is what they are needed for. Besides, also factors such as moral, (economic) Weltanschauung or mind-set play important roles for effective solutions. But regulations are an indispensable part of them.

Claude Meier

About minimizing costs and transferring costs

 In general, minimizing costs is seen as a virtue: Who in the process of producing goods and services seeks to keep costs as low as possible avoids the unnecessary squandering of often valuable resources, which could otherwise be put to good use. Who would oppose this? Unfortunately, one soon discovers that the word ‘minimizing costs’ is not always used in this positive sense, but often with far less noble intentions.

When I call my insurance company, as a rule I’m told that all the employees are busy at the moment, that my call is however welcomed and I will be connected as soon as possible with an available representative. Then without being requested, an overview of the products and services of the company are transmitted, framed by a catchy melody by Mozart or Louis Armstrong. In the meantime, without having asked for it, my waiting time has increased and with it the cost. After a certain time the whole welcome ritual is repeated – all at my expense! The reason for this is that the insurance company has reduced the number of its employees in order to cut costs, which by virtue of my waiting time has in essence been transferred to me. This is not cost minimization but rather cost transferral.

Something similar takes place when I’m at the train ticket-window of the Zurich Main Station to get a train ticket not available from the automat. Of the 11 available windows, only 3-4 are open; of which one is served by someone in training and another Korean tourists are trying to put together their trip through Switzerland. At the 2-3 well functioning windows a queue of maybe 10 or 15 people are waiting. Again the company is minimizing its costs at the expense of their customers. How the cost transferral of the Swiss train service takes place can be witnessed at the above location, daily for hours and especially at rush hour. It would be interesting to calculate how many man-years the economy loses or to estimate how much is lost in human wellbeing, including that of the persons at the windows, who are subject to constant pressure and the cantankerous reactions of customers. In no way does this correspond to the concept of “people for people”, as we understand up-to-date value creation in firms.

The most crass examples of unreal cost minimization are those promoted by some politicians. They tell the public for example how the cost for health or educational institutions can be kept low or that one can save money on infrastructure. However they fail to say that this very often involves a tangible reduction in benefits. This has less to do with the virtues of minimizing costs than with a net loss in the quality of life.

Edwin Rühli

An unfair and unnecessary comparison

A recent study by a renowned Swiss think tank (avenir suisse) showed that during the last 20 years real incomes of the middle class diminished relatively compared to those of people in the high or low income segments in Switzerland. The roots of this phenomena are identified by an increasing supply of workers from emerging markets, changes in technology and the corresponding higher demand for high-skilled workers. All these factors lead to pressure on average wages, namely of those from the middle class.

While still among the highest real incomes worldwide, the study argues that people in the Swiss middle class get increasingly dissatisfied as their opportunities to improve into the high income segment shrink and the differentiation from the lower income segment gets increasingly difficult. Therefore, people are somewhat trapped in the middle class. To counteract this development the study proposes to downsize and simplify the welfare state as all kind of social benefits for people in the lower income segment are primarily financed by the incomes of the middle class. Hence, taxes affecting the incomes of the middle class should be lowered.

In my opinion, this argumentation is problematic in at least two ways. First, a decrease in taxes for average incomes and a reduction of social benefits indeed allows the middle class to differentiate themselves from people in the lower income segment. But at what price? On the one hand, rising inequality by increasing the income of the middle class and making the poor poorer sounds not really fair to me, on the other hand it does not take into account people in the high income segment, who are completely ignored by the study I mentioned above. This brings me to my second point: the reduction of taxes for those having the highest incomes. During the last couple of years there has been a redistribution of income in Switzerland from the bottom to the top induced by various abolitions and reductions in the taxation of incomes in the highest segment. It is then again simply unfair to tell the middle class that their relative decrease in income is caused by social benefits, for example health care insurance or childcare for people in the lower income segment, when at the same time people in the higher income segment enjoy lower taxation.

The one-sided comparison of the middle class with people in the lower income segment is problematic because it diminishes solidarity in the whole society. In the US, for example, the incomes of both middle class and people in the lower income segment stagnated during the last 30 years, compared to those of the people in the higher income segment. Hence, the single comparison of incomes between the middle class and the people in lower income segment is not fair and, in my opinion, unnecessary. It leads to an increased discrimination among people and reduces the cooperative potentials in a society. Or in the words of Stiglitz (2012) “The other vision is of a society where the gap between the haves and the have-nots has been narrowed, where there is a sense of shared destiny, a common commitment to opportunity and fairness, […] which emphasizes the importance not just of civil rights but of economic rights, and not just the right for property but the economic rights of ordinary citizens.” (p.289).

Tom Schneider

Reference: Stiglitz, J.E. (2012). The Price of Inequality. New York: Norton.