CFP: Coleman Prize

23 12 2015

CALL FOR PAPERS Coleman Prize 2016 To be awarded at the ABH’s 24th Annual Conference, 27-28 May 2016 Joint Conference organized by: Association of Business Historians (ABH) and Gesellschaft für Unternehmensgeschichte (GUG) 27-28 May 2016 Humboldt-University Berlin, Germany

 

Named in honour of the British business historian Donald Coleman (1920-1995), this prize is awarded annually by the Association of Business Historians to recognise excellence in new research in Britain. It is open to PhD dissertations in Business History (broadly defined) either having a British subject or completed at a British university. All dissertations completed in the previous calendar year to that of the Prize are eligible. In keeping with the ABH’s broad understanding of business history, applications are strongly encouraged from candidates in economic history, social history, labour history, intellectual history, cultural history, environmental history, the history of science and technology, the history of medicine, or any other subfield. To be eligible for the Prize, finalists must present their findings in person at the Association’s annual conference, held on 27-28th May 2016 at Humboldt University in Berlin. A complete list of previous winners may be found here.

 

Titles of previous prize-winning theses include: • ‘Inventing Purity in the Atlantic Sugar World, 1860-1930’ • ‘Bridging the Middle Atlantic: The Liverpool-New York Trading Community, 1763-1833’ • ‘Markets, Standards and Transactions: Measurements in Nineteenth-Century British Economy’ • ‘Respectable Persuaders: The Advertising Industry and British Society, 1900-1939’ How to Apply Please send a PDF including the title of your PhD dissertation and a brief abstract (up to 2 double-spaced pages) to christine.leslie@glasgow.ac.uk by 20 January 2016.

 

Shortlisted candidates will be requested to submit electronic copies of their theses by 15 February 2016. Finalists will be notified by 15 March 2016 and invited to present at the Berlin conference. The value of the prize is £500, sponsored by the Taylor & Francis Group, a scholarly publisher. Finalists may apply for partial travel support from the Francesca Carnevali Travel Grant. Further information regarding the Carnevali Grant can be found on the ABH website 





Why We Need a Research Transparency Revolution in Business History

19 12 2015

AS: We plan to present this paper on the 2016 conference circuit.

Andrew Smith, University of Liverpool Management School; Maki Umemura, Cardiff Business School.

Paper Abstract:  In both the physical and the social sciences, there is an increasing emphasis on research transparency. The failure of Business History as a scholarly community to participate in the ongoing “transparency revolution” in Qualitative Social Science risks placing our research community in a serious competitive disadvantage relative to other research areas. This competitive disadvantage would have an adverse impact on the careers of business historians. This paper argues that the creation of research transparency institutions is vital for business history scholarship. Thanks in part to the recent historical turn in management research and teaching, Business History has risen in prominence in management schools  Keulen and Kroeze, 2012; Rowlinson et al. 2013;  Kiesen, 2015; Rowlinson 2015, 78). If Business History is to continue to capitalise on these crucial gains, we need to start constructing transparency institutions. This paper is designed to initiate a conversation about what these institutions should look like. The paper begins by outlining a model of disciplinary competition for societal resources. Our model  draws on literature on the sociology of academic knowledge as well as on recent observations about the state of business-historical research and other qualitative approaches to management learning (Kipping & Üsdiken 2014; Kipping, & Üsdiken, 2014). The paper then moves on to discuss the development of research transparency institutions in both the hard sciences and in disciplines that are much closer to business history in terms of research methodology. Drawing on recent research on the current state of business history (De Jong, Higgins, and van Driel 2015; Kipping, Wadhwani, and Bucheli, 2014; Rowlinson, Hassard, and Decker, 2014; Whittle and Wilson 2015; Decker, Kipping, and Wadhwani 2015) and on publications dealing with the nature of business-historical sources (Fridenson and Scranton, 2013; Lipartito, 2014), the paper discusses the unique challenges business historians might face in creating research transparency protocols.  The paper concludes that Business History organizations and journals should attempt to move towards a regime of Active Citation whereby references to primary sources in paper contain a direct link to a scanned image of the source being quoted or otherwise cited. We argue that this reform will strengthen Business History as it contends with similar disciplines for scarce resources such as research council funding, venues for the presentation of research, and the creation of academic posts.





Our New Paper: Towards polyphonic constitutive historicism: a new research agenda for management historians

16 12 2015

The journal Management & Organizational History has published the paper I wrote with Jason Russell. Our paper, “Towards polyphonic constitutive historicism: a new research agenda for management historians” is in the forthcoming Special Issue: Re-visiting the Historic Turn 10 years later: Current Debates in Management and Organizational History

Ten years after the call for a ‘historic turn,’ this paper builds on recent developments in organizational remembering scholarship to outline a new research agenda for management historians. Traditionally, management historians have focused on understanding what actually took place in the past. The research agenda for management historians proposed in this paper involves a shift in focus to understanding how perceptions of the past influence economic action in the present. This paper outlines a new methodology for management research. The paper argues that management scholars need to draw on the latest research in the field of social memory studies to ensure that our methodologies for investigating organizational remembering are polyphonic. Polyphonic research involves an attempt to capture and analyze diverse voices, rather than just a single voice or just the voices of a few elite individuals within an organization. We critique much of the existing literature on how the past on organizational memory is non-polyphonic in the sense that the historical ideas of only a small number of actors are considered.

 





Cutting Through the Nonsense: My Thoughts on An Engine for Growth 2015 Report Card on Canada and Toronto’s Financial Services Sector

14 12 2015

I’m writing this blog post in response to a recent report that was published by the Conference Board of Canada. The report,  “An Engine for Growth 2015 Report Card on Canada and Toronto’s Financial Services Sector” appears to have been produced with the cooperation of the Toronto Financial Services Alliance (TFSA), a lobby group that clearly wants to expand the size of Toronto’s financial services sector. (Details about whether the TFSA paid the Conference Board to write this report are not yet available, but if you have them, please email me).  The report isn’t arguing in favour of any specific policy. Instead, it is designed to soften readers up for concrete policy proposals by convincing people that financialization is good. My guess is that it is targeted at policymakers in Canada’s new government, including the new Minister of Finance, who himself worked in finance but has, on occasion, criticized proposed retirement policies that would have increased the degree of financialization in Canada.

The report reminded me a little bit of PR documents produced by similar lobbying groups in the City of London prior to the 2007-9 financial crisis, during the period of Finance-Led Growth in the UK. (Actually the financial sector still talks about the City of London being an “engine of growth”-– old metaphors never die).  It is similar to the earlier British reports in the sense that is designed the convince the reader that the financial services sector makes a massive and net positive contribution to the local and national economies and that it therefore needs the support and encouragement of policymakers. The tactic used by the report is to say: “Hey, look at the thousands of people who are employed in the financial services sector. Their wages stimulate the local economy, etc. Finance is a big share of GDP, pays lots of taxes for hospitals and schools, etc. Our financial institutions are very profitable and stable so it would be good for everyone if the government could help Toronto to become a world-class financial centre. Blab, blah, blah.”

I disagree with the basic thrust of the Conference Board’s report.  Don’t get me wrong: I’m not some sort of moron leftist who hates banks and wants to reduce financial services to 0% of GDP. I don’t want to go back to barter and I think that African countries could definitely benefit from a good dose of Victorian-style financialization. I recognize that financial institutions are very important public utilities. No country I would want to live in has a financial sector that is less than 10% of GDP.  However, I think that it is not at all clear that government policies designed to nurture the perpetual growth of financial sector as a share of GDP  would actually benefit the real economy of a city or country, although through certain accounting tricks it might be able to increase (measured) GDP.

The people who wrote the “Engine for Growth” report appear to think that more financialization would be good for the economy of Canada and, in particular, Toronto.  They think that Canada and Toronto would be better off if Toronto could essentially become another London or Wall Street.  I disagree with this view. Maybe Toronto and its immediate environment might benefit, but not Canada as a whole, at least not in the long-run.

I have come round to the view that the UK experienced excessive “financialization” in the years leading up the crisis. The percentage of the UK’s GDP and the workforce involved in finance, which rose above the levels seen in similar economies (e.g., Germany) was at an unnaturally elevated level. People joked that everyone in London either worked in finance or sold services to the people who did (e.g., the waiters at restaurants in the financial district). This was an exaggeration, but the joke contained an element of truth. Lots of paper profits were made in this period between 2002 and 2008, when London displaced New York as the world’s top financial centre. Some of that money filtered down to the real economy when it was spent by bankers in restaurants, strip clubs, etc. However, it is not at all clear that this financial activity truly increased actual prosperity in any meaningful sense. As Diane Coyle, an economist at Manchester Business School, has pointed out, the rules that govern how nations calculate GDP mean that unnatural bank profits and even bank losses can actual boost GDP, and thus apparent living standards, even if the real economy doesn’t grow at all.  John Kay, an Oxford economist, Financial Times columnist, and former bank board member, has said that much of the additional activity that took place in the UK financial services sector after deregulation in 1986 was totally parasitical on the real economy: some people in London got great jobs in finance and the sector appeared to be a net asset to the UK economy, but now taxpayers throughout the UK are paying for the party.

 

We are paying for the pre-2008 party through a massive increase in the national debt that took place when we bailed out the Too Big to Fail Banks and the rest of an artificially large financial services sector. Financial services grew too large, in his view, because the banks enjoyed an implicit subsidy because they were TBTF and investors knew about this subsidy. The last chief executive of the UK’s now defunct Financial Services Authority, Lord Turner, has concluded that much of the money-making activity in the financial services sector prior to 2008 is socially parasitical (“socially useless”). Turner isn’t some leftist sociologist but a onetime Conservative Party member who  was Vice-Chairman of Merrill Lynch Europe between 2000 and 2006.

 

 

Let me quote some of the relevant sentences from the Conference Board report:

 

Financial services have been a major source of growth for Canada over the past decade, with the sector’s employment, financial results, and international trade and investment performance outpacing the average for all sectors.

Just because a given sector (e.g., finance or the arts or paying men to dig holes and fill them back in again) is growing fast, doesn’t mean it is actually increasing GDP or doing some useful.  Given that banking enjoys an implicit subsidy that operates through a weird mechanism, I would want to see some hard evidence of social usefulness here. It may be that Canada’s financial sector is much larger than it would be under a regime of free market capitalism.

 

Financial institutions account for one-quarter of the profits generated by Canada’s private sector and have high profit margins.

A critic might say that’s because they are artificially profitable since they enjoy an implicit subsidy due to their TBTF status that other firms (say Tim Hortons) doesn’t have.

 

Compared with their international peers, Canadian deposit-taking institutions have healthy levels of capital adequacy and liquidity, with high rates of return and low levels of non-performing loans. Broadly speaking, Canadian deposit-taking institutions perform well on measures of capital adequacy. For example, the Tier 1 to RWA ratio in Canada was 11.9 per cent at the end of 2014. This is similar to the ratio in peer countries and well above the current guidelines set out by both the Basel III (6 per cent) and Office of the Superintendent of Financial Institutions (OSFI) (8.5 per cent). (See Chart 9.) Similarly, the total regulatory capital to RWA ratio in Canada, at 14.2 per cent, is well above Basel III (8 per cent) and OSFI (10.5 per cent) guidance

 

Measuring how much capital a TBTF bank requires under Basel III is notoriously difficult, since the question of how we risk-weight assets is very complex and a bit subjective. However, even if we accept the claim that the Canadian deposit-taking institutions have higher capital levels than their peers in other nations, they are still below the levels that  Anat Admati and Martin Hellwig regard as necessary to ensure that bankers do not again take undue risks. They think that the capital ratios should be in the range of 20-30%, which is what they were in most countries before the advent of Deposit Insurance and the implicit government subsidy that comes with that. Only capital ratios above 20% will eliminate the type of moral hazard in evidence before the crisis.

 

“Canada’s financial services sector is innovative; 73.6 per cent of financial services firms had undertaken some form of innovation in the previous year versus 63.5 per cent for all sectors.”

Yeah right. Can you measure innovation in a more meaningful way?  Simply asking people whether they have introduce one or more innovations, however, defined, is a very poor metric. Looking at home many patents in financial technology are filed by Canadian banks would be a somewhat better metric.  Even then, patent counts are a crude metric of how innovative a company or sector is. An even better measure would be whether Canada is a net importer or net exporter of financial technologies. Has a Canadian bank ever created a new financial technology (e.g., a new type of contactless payment card) that it then patented and licensed out to foreign banks? If so, that would show up in Canada’s export data as an export of Intellectual Property.   Now maybe Canadian banks have originated the odd innovation in socially useful retail banking technology or in socially useless trading technology (e.g., the supercomputers that do socially useless High-Frequency Trading) but I haven’t heard of it.  We certainly don’t hear about it in this report. Judging by the report, Canadian banks and other companies don’t appear to be doing much fintech innovation of either the socially useful or the socially useless variety. That’s a bit sad, actually, either way. They can’t even be Flash Boys.

I should mention that the UK government has now targeted “fintech” technology as a growth area. The current government here is concerned that while British firms were world leaders in financial technology in the past (the ATM was basically invented by Barclays in London in the 1960s), the UK is now falling behind in fintech and is becoming a net importer of fintech that was invented in US financial institutions and by US non-financial companies (Apple recently got into fintech with its new payment systems, which it has licensed out to Barclays here in the UK).

My impression is that Canadians aren’t even thinking about how the country can become a leader in fintech. Canadian banks do seem to be pretty quick at adopting fintech invented elsewhere but the country isn’t a net exporter of fintech.

 

Ok. The report boast that:

Canadian employment in 2014 (at 780,000 jobs) and for 6.8 per cent of Canadian GDP. the sector’s role goes well beyond the jobs it supports and the GDP it generates. A well-functioning financial services sector is a critical ingredient in a successful economy, as it links the economy together in a unique way. Financial services are a necessary input for every single business across the country and are used by essentially every adult individual. Only a handful of other sectors, such as telecommunications or transportation, have the same impact on the day-to-day functioning of the economy.

 

It’s certainly true that financial services are very important public utilities. Payment systems run by banks are the pipes in the economy of any advanced society. The banks’ role in routing monthly salary payments and in processing cheques and electronic transactions is very important, perhaps as important as the sewer system that shunts excrement all around town. However, I’m not aware that the Canadian financial system is incompetent at performing these basic functions. In fact, I believe that cheque clearing in Canada is much more efficient than in the United States. So why would it be necessary to increase the number of people or the share of GDP involved in providing this utility?

 

 

In fact, Canadian ROE for deposit-taking institutions is among the highest for countries that contain one or more major global financial centres. At the same time, non-performing loans as a share of all loans in Canada are among the lowest for the same group of countries. Canadian insurance firms also report above-average ROE, compared with their international peers, despite the challenges of limited premium growth and the impact of low interest rates on investment returns.

Hmmm—it’s dangerous when banks rely on ROE as a metric of their performance, since that metric incentivizes managers to economize on capital by funding expansion by issuing debt instead of through equity. As a taxpayer in a country with TBTF banks, I would prefer if people in finance started focusing on return on capital employed (ROCE) instead of Return on Equity.

Let me close by talking about what isn’t any report—any hint that the authors are aware of the possibility that there will be a wave of disruptive innovations that will do to banking what Uber had done to traditional taxi companies and what Netflix did to Blockbuster video. The absence of any discussion of the possibility that new technologies and business models such as P2P lending and blockchain might cause financial disintermediation is astonishing to me. In fact, I couldn’t even find the word “disintermediation” in this hilarious document!

I strongly suggest that the readers of this report look at the literature on the issue of fintech and financial disintermediation. They would do well to read The End of Banking, which give a good introduction to both the problems with banking as it currently exists and the potential of new technologies to replace banking with something more efficient and socially productive.





If America had closed its doors to Syrians, there’d be no Steve Jobs and you wouldn’t have your iPhone

12 12 2015

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Image courtesy of the BBC.

It’s well known that the biological father of Apple founder Steve Jobs was a migrant from Syria. If Jobs’s father  had not been barred from enterring the United States by a proto-Donald Trump, there would have been no Steve Jobs, and thus no Apple, and no iPads, etc. To illustrate this point,  the artist Banksy has created a mural in the French town of Calais that depicts Steve Jobs c. 1985 as a migrant. Calais, which is a collection point for migrants attempting to sneak into the UK, is one of the places in France where support for the anti-immigrant Front National has surged in recent months.

The mural is essentially a rebuke to anti-immigrant politicians in France, the UK, the US and other advanced economies who fail to realize that dynamic, young, risk-taking migrants are a net economic asset a great addition to any nation’s gene pool, even if they don’t engage in entrepreneurship themselves.  Banksy, who is himself a rather successful entrepreneur appears to grasp what multiple bankrupt Donald Trump fails to understand.

This video illustrates how the advanced economies ought to be handling the Syrian refugee crisis.

 

 

 

 

 

 

 

 

 

 

 





New Article: Organization men and women: making managers at Bell Canada from the 1940s to the 1960s

9 12 2015

 

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Image Source: Pinterest

That’s the title of a new paper by Professor Jason Russell in Management & Organizational History.

Abstract
The development of management as an occupation in post-World War II Canada is a topic that has received some attention from historians, but it is still an aspect of work and labor history that merits closer attention. This article seeks to reveal something about the nature of management work in Canada in the postwar decades by looking at how managers at Bell Canada were trained from the late 1940s to the late 1960s. This includes examining management theories that were prevalent at that time, the international aspects of them, and how they were used in Bell’s corporate training programs. This analysis shows that, in the case of one of Canada’s largest companies, management training was as much a process of adapting people to the methods and beliefs of the organization as it was about educating them to perform management functions.





Seeking Co-Panellists Association of Business Historian Conference for 2016

7 12 2015

The Association of Business Historian Conference for 2016 will be held  27-28 May 2016, Humboldt University, Berlin, Germany. The conference, which will be held jointly with the Gesellschaft für Unternehmensgeschichte (GUG), will attract business historians from the UK, Germany, and many other countries.  Full CFP is here.

I am interested in organizing a panel about business-historical research methodologies after the historic turn in management and organization studies. If you are interested in being part of such a panel, please email me right away as the deadline is 15 December.  My co-authored paper will be about what the ongoing Transparency Revolution in Qualitative Social Science (for example, see here and here) means for business history research and management research more generally.








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