Most self-appointed curators of our society don’t have the skills, imagination or the cojones to succeed in business. In the main, professional politicians are failed doctors, lawyers, and businessmen; if they were any good they’d still be plying their 'trade'. Perhaps, this is the reason they resent 'trade', and never miss a chance to belittle business for its perceived shortcomings, particularly in respect of so-called short-termism. They echo the words of Lanfranc of Bec[1], the eleventh century Benedictine monk: “Business is nothing but the struggle of wolves over carrion, men of business can hardly be saved for they live by cheating and profiteering.”
Through rhetoric, politicians’ thinly veiled attacks on business have been transfigured … into administration … into bureaucracy … into Government. Government, the guardians of public morality! God help us! What hypocrites. You don’t get much more short-termist than Government! Nothing matters outside a four/five year window, namely until the next election … sometimes dramatically less than that. One bad opinion poll with one week of the Scottish Independence referendum in September 2014, and all three parties immediately promised Scots voters the earth, without a single thought for the can of worms it opened up south of the border.
Talk about the pot calling the kettle black. Political attacks on short-termism in business are just a smokescreen to distract from the real menace: public morality … which is the politicians’ excuse for, and a precursor to, interfering: as regulation and taxation. In general, commercially focussed short-termism isn’t too bad for business. Often it is totally necessary. However, Government short-termism is always bad, for everyone! As Ronald Reagan noted: “the ten most dangerous words in the English language are 'Hi, I’m from the government, and I’m here to help' ”[2].
Globalization has raised the spectre of companies jumping ship, and this has terrified the political elite (there’s no point differentiating between the parties, since in this respect they are all the same). They need to dominate the commercial tax base, so that it will keep coughing up the enforced exaction. However, they have learned that their attempts at explicit intimidation are too often counter-productive, and so instead they set out to stir up public resentment with weasel words like 'unpatriotic', 'long-term instability' and 'unfairness' to describe business practices. They are terrified that business can make decisions faster than political bureaucracies can act to counter (as per Obama and his attacks on 'inversion').
With double talk about ethics and morality, it’s easy for politicians to take cheap shots at the soft target of companies' ability to make decisions quickly (for that is what short-termism actually is). Theirs isn’t a personal, rather a public morality: a socially constructed bigotry; a self-referential, self-validating, codified and ignorant prejudice. Yes, ignorant! Because they just don’t understand the nature of short-termism.
Or maybe they do? And they are frightened when they realize that short-termism is a means for the business community to instill discipline into the monopoly of government. Because that’s the trouble with elections, the government always wins. And using the body-count of the manipulated masses, governments justify their holier-than-thou intolerance of any individual and organization that dares to spoil their free-spending party.
Business must not allow these pious commentators, these self-promoted and self-promoting representatives of the mob, to enforce their version of the 'common good'. Because the 'common good' isn’t good, it is merely common. Using the threat of public morality, politicians insist that all wealth, including that created by business, belongs to the state. Thus state leaders are free to steal that wealth, so they can subsidize preferred voters in order to stay in power … as in the Scottish Independence Referendum. Nietzsche shrewdly observed this mode of behaviour: “The victory of the moral ideal is achieved by the same `immoral` means as every other victory: force, lies, slander, injustice.”[3]
The `debate` on short-termism, or what laughingly masquerades as debate, is awash with force, lies, slander, and injustice. The one big lie is that short-termism focuses excessively on immediate returns, and consequently this discourages both the long-term creation of value, and future investment. They just don’t get it.
Business, like life, operates as a self-organizing Darwinian ecology. Only the fittest survive. And for a business to survive in the long run, it must first survive in the short-term. 'Inversion' is such a sensible tax-driven survival decision made to benefit shareholders. Companies must deal with the any and all immediate uncertainties, by steering in the flow of events as they present themselves. It's no good saying this isn’t happening, because your control freak long-term predictions say it can't happen. Commerce has always been about leveraging demand across space (distance) and time.
Even more so today in the age of global telecomms, when if you can't act in an instant, then you’re too late. Stick your head in the long-term sand, then your backside is in the air, and you’re going to get buggered! Control is a Myth! The human condition is as ever, coping in the here and now … with instant short-term responses. It's what we humans do; it's the only game in town. Short-termism is just another word for pragmatism. Just because a few shysters have turned the business of managing risk into a casino, doesn’t mean we close down the freedom to act immediately in self-interest, because that means denying the nature of risk.
Business is all about taking risks … it's a gamble. As the great American philosopher Kenny Rogers once sang[4]: “You got to know when to hold 'em, know when to fold ‘em, know when to walk away, know when to run.” To 'hold 'em' is the long-term response. By all means nurture long-term projects, but never, ever, get locked in. To survive and prosper you must be flexible and adaptive … 'fold 'em', 'walk away'. And of course the ultimate short-term position 'run' … if necessary, get in and out quickly – keep your assets liquid and transferable.
Operating in the short-term is not an evil; it’s another way of expressing the freedom to manoeuvre, not only in the face of uncertainty, but also against the self-righteous oppression of the state, and its self-legitimated violence against the creators of wealth.
Across much of the West the long-term future is falling apart in the hands of a degenerate political elite as the 'politics of envy' is being espoused by these sanctimonious authoritarians and their gospel of the evil of short-termism. However, they fail to grasp that they’re not in charge globally. Business is structurally coupled to acting in the short term, and it is this coupling that creates the wealth to keep society going. If politicians try to stop business profiting from short-term maneuvering over here, then it and the wealthy owners will simply decamp over there.
This is the thesis of my latest book, Flight of the Golden Geese[5]. The motto of these mobile High Net Worth Individuals is: “in the long run, we’re all dead anyway. Long live short-termism in business. Long live freedom! We’re out of here!” And you don’t get any more short-termist than that.