EU Referendum


Politics: not the business of business


27/08/2014



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Russia has replaced the eurozone as the major worry facing the global economy, says Martin Sorrell, chief executive of WPP, the world's biggest advertising company. And with that, he is warning his fellow "business leaders" that geopolitics has "raced up the agenda". With which he bundles the Middle East.

Adding to this list of worries, he also warns that the prospect of Scotland voting for independence and Britain leaving the European Union could weaken the UK economy.

The inference here, is that such developments aren't good. In fact, Sorrell comes right out and says so, focusing particularly on the Scottish referendum. "It heightens the level of uncertainty", he says, "so it's not good. There is a vote and we don't know what the result is going to be. Whether it's a yes or a no, any business is having to think about what the implications of yes are".

And there speaks the voice of "business", but it rather challenges the comfortable assertion that world events can be neatly partitioned into "economics" and "politics", the one in the domain of the business community and the other reserved for politicians. Quite obviously, political events and their related decisions have economic ramifications and vice versa.

That much is so obvious that one would have thought it hardly needed saying, except that, in terms of the EU, we are seeing so-called "business" campaigning groups which seek to separate the issues, and argue that economic interests must be resolved separately from the political domain.

In fact, when it comes to "geopolitics", we see that the vainglorious expansionist policies of the EU have lead to the chaos in Ukraine, and the deterioration of relations with Russia, which is now giving rise to Sorrell's concerns.

But, to the Sorrell's of this world, this represents "uncertainty", which is to be avoided at all costs. The world much be governed in a manner that gives business the "certainty" they need to make money and pay their CEOs the inflated salaries and pension packages.

The interesting thing is that uncertainty often equals opportunity, especially for entrepreneurs who are able to exploit new situations to their advantage. But for the corporate mind, wedded to its balance sheets, the uncertainty is a total anathema.

It is, however, the corporate mind that gets the hearing, while the politicos are mesmerised by the needs of "business" and treat their warnings with undue reverence.

Where this myopic, "business-centric" vision fails, though, is that business leaders may be very good at extracting revenue from their customer bases, but rarely to they understand geopolitics, or the bigger picture.

Sorrell, on the one hand, bemoans the Russian situation and then, on the other, complains about the uncertainty engendered by a campaign to leave the European Union. What he fails to do, of course, is make the linkage. If it had not been for the EU, the Russian situation would doubtless not be a tense as it is now.

More specifically, even if the EU continued in its own blundering fashion, a United Kingdom free from the encumbrances of the EU would be in a position to formulate its own policies, and stand aside from the destructive tendencies of its European "partner".

Assuming that British politicians could see the situation more clearly than their Brussels counterparts – which may be a dubious proposition - the UK could act as a honest broker, and work with the Russians, instead of continually seeking to make matters worse.

We appreciate that for the UK suddenly to develop a grown-up foreign policy would itself be something of a miracle. But then, a UK that had managed to leave the EU must have grown some cojones and might just be capable of doing the right thing.

The broader point, therefore, is that business should leave politics to the politicians – at which they may be bad, but "business leaders" are even worse. The role of business is to react to and cope with the environment in which they are placed. Politicians – as far as they can, and it is compatible with their other responsibilities – should create environments favourable to business enterprises.

What should not happen it that the two should lose sight of their respective roles. They will always inter-react, but there should be no confusion. Business should mind its business and avoid meddling in things about which it knows very little. Politicians should manage politics, and remember that they are the servants of the people as a whole, not of the business community alone. 

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