BRITAIN'S FAILURE IN INTERNATIONAL COMPETITION.
What links Football and Industry?
Of the Anglo-Saxon nations, the United Kingdom has probably been the country most gripped by market fundamentalism since the days of Margaret Thatcher in the early 1980's. It is thus a very interesting “laboratory” to enable an assessment to be made of the impacts of market fundamentalism on performance.
This piece examines the effects of free markets on two key elements of the UK economy - Industry and football.
Football has been chosen because the national game has been deeply affected by the dynamics of the economy around it and the values that have driven it. In this way, it can be portrayed as a microcosm of the wider economy. The lessons that might be learned from football in the wider economy are probably applicable outside the UK - to other countries that are on the road to market fundamentalism as the guiding dogma.
Once upon a time English football ruled the world game. As with many other industries, the maxim, “British is Best” was commonly accepted.
But in 1953, something happened.
England was thrashed 6-3 at Wembley, the hallowed temple of English football, by a Hungarian team led by Ferenc Puskas. He demonstrated skills that had not before been seen in England, and the Hungarian team as a whole showed superior technique, superior organisation and fitness. This shock caused some changes in coaching and player fitness methods, some learning was imported from other more advanced nations, and the game started to improve. Nevertheless, football in Britain remained essentially inward-looking. The system (and the people in charge) of club football and leagues, together with football governing bodies remained unchanged.
The World Cup victory at Wembley in 1966 was regarded at the time as proof that English football had resumed its rightful place as best in the world. But 1966 proved to be an illusion. Since then the English national team have failed to make a significant impact on any international tournament.
In 2013, Greg Dyke, the new chair of the English Football Association said that England was unlikely to win another international competition unless radical action was taken to invest in the development of national talent to the highest level. Changes were needed in the entire system and values behind the game in Britain.
So what is wrong?
Here are some ideas:
- Football has become big business. The money flooding into the top level of English football from TV and branding is massive. Top football clubs have changed from locally-focused institutions, deeply embedded in their communities, to Companies, some quoted on the stock market, others owned by private equity capital or (often foreign) billionaires.
- Many owners seem to view “their” clubs as an extension of their egos and expect top results for spending billions. They demand quick success and the best players, NOW.
- In the process, the influence of community and supporters has diminished. Football fans have essentially become fodder for big business, through their season tickets or TV fees.
- TV revenues from the rights to show mainly Premier League games draw massive sums into those clubs. This bonanza is spent on huge rewards for a small number of superstar players and buying talent ready-made. Lower league clubs get relatively small sums that trickle down from the top table.
- This leads to a scramble to buy top players. Owners, fans and most of the media seem to believe that success can be gained instantaneously by purchasing talent - mainly from abroad.
- Top players are paid millions. They are represented by shadowy agents who wheel and deal on the part of their stables of players.
- Top players become superstars in the eyes of the public and the media.
- The superstar aura has extended to managers. Top managers are expected to produce top results - in a very short time - or get written off by fans and the press, then fired by owners.
- All of this is played out in a frenetic “soap opera” atmosphere. England national teams are still expected by fans to rule the world. Each failure is swiftly forgotten. Quick fixes are sought to solve the problems of failure. Managers are frequently changed and superstar players are expected to bring dramatic success. Meanwhile, the system behind English football remains essentially unchanged. The richest clubs dominate the whole national game.
What is the meaning of all this?
English football has fallen victim to money and the free market. Premier League clubs control most of the wealth and strongly resist any attempts to change the system to one which would offer support and development to the game as a whole. Regulation of the free market system is therefore very weak.
So, players are bought and sold, but few are nurtured or developed from an early age to the top level. Therefore only 30% of players in the top league are English.
Young English players generally find breaking into the top level is very difficult because the way is blocked by “instant” purchases, the majority from abroad.
It seems that the relatively few “superstars” left amongst English players are more attached to fame and money than giving their all for the national side. Top clubs reinforce this by making it clear that players belong first and foremost to them, and the national team comes second.
England managers come and go quite frequently, each new one hailed as a saviour until team results are revealed as falling short of fantastic expectations. Of the last four managers, one was Swedish and one Italian. All were paid huge sums.
Very few people seem to bother to ask whether the fault lies with managers and the small pool of available players - or with the whole system of top level English football.
So Greg Dyke's warnings about the system and values behind English football are welcome, but there have already been signs of denial from clubs and many elements in the media.
Meanwhile, the national team, suffering from unrealistic expectations and a dearth of local talent, continues to languish in the lower reaches of international rankings.
Is there another way?
Two of the most successful national sides have been Spain and Germany. For some years, German and Spanish national sides have featured at the top of international competition. Spain won the 2010 FIFA World Cup. Spanish and German clubs have done well in European competition. Last year the European Champions League final was fought between two German clubs. These clubs were strongly influenced by supporters and did not blow billions on buying players. Instead, they leavened essentially German sides with a limited number of foreign players.
In those countries the system underlying football is quite different. There are vastly more coaches at all levels, money is invested in player development and advanced skills. In Germany, the 50+1 rule ensures that fans have a majority share in the clubs, the vast bulk (17 out of 18) top level club coaches are German. A significant number of places in top teams is reserved for German players, whilst allowing room for some talented players from outside Germany. Thus the way to the top clubs is kept open for local talent. But most important, significant amounts of money circulate round the entire foot-balling system and are not trapped at the top, as in England.
So whilst there are improvements under way to improve coaching in England, this will not be enough, as it is the whole system of values, money and power that needs to be reformed.
Is English football a metaphor industry?
Think for a few moments of the UK industrial and financial economy. The United Kingdom has lost its place at the forefront of a competitive world economy.
High technology and knowledge based industries have formed a lesser and lesser place in the economy. Other developed countries have vastly outpaced them by investment in advanced technology. British technology companies have been sold to the highest (often foreign) bidders by “investors” who think only of quick profits. The only growth areas have been retailing and consumer services, which do not offer enough highly skilled employment to compensate for the loss of manufacturing, science and technology.
The UK balance of payments is stuck in deficit. Employment is becoming more and more unskilled and insecure as skilled jobs decline and the UK economy tries to compete with other developed countries by having a “flexible” and unskilled labour force.
Now think how all this has come about:
The London financial markets were deregulated in 1986. Since that time, the flow of money into London through often foreign banks has vastly increased.
As this has happened the power of the financial markets in relation to the rest of the economy has vastly increased, and the pressures on management for short-term results grown to a point where companies at the top of the UK economy, those quoted in the FTSE 100, have become impossible to resist. Top managers' rewards and tenure now depend almost entirely on pleasing the financial markets. Companies are bought and sold; acquisitions and mergers have almost replaced organic means such as long term internal investment. The “agents “ of big money, investment bankers, constantly push for more mergers and acquisitions and the massive fees they can earn by supporting what amounts in reality to little more than destabilisation and value destruction.
The tenure of CEOs has decreased noticeably over the last 20 years. There has grown a new breed of “superhero” CEOs, who are feted in the media and financial markets until short term results falter. Then they are replaced.
So companies are bought and sold; managers are bought and sold - and UK industry has declined dramatically in world rankings.
The symbiotic relationships between big business and finance ensures that wealth circulates within a very narrow system. Vast amounts of money are circulated round the apex of the system. Rewards for those at the top of finance and industry are vast, and huge quantities of money are used in economically damaging speculation or siphoned out of the system into offshore tax havens.
What of those who are excluded from these privileged circles?
- There is stronger and stronger evidence that customers have been swindled and exploited by the “free-market” system. Privatised utilities such as railways, electricity, gas and water companies have raised their fares constantly, whilst under-investing in improving services to customers. The behaviour of the finance sector towards their customers has been a disgrace. Big business and the banks lobby constantly and effectively bribe politicians to keep the so-called free market system working in their favour.
- Apart from a small number of employees at the top of the system, the lot of the majority of the working population has worsened significantly over a long time. Differentials have vastly increased between top and the middle earners, those at the bottom of the earnings scale cannot support families on the minimum wage. Real earnings have stagnated and employment is becoming increasingly temporary and part-time. Job insecurity is now the norm for a large part of the workforce.
Are there similarities between Football and Industry?
Common phenomena in “marketised” UK industry and football:
- Strong pressures to produce short-term results, caused by powerful institutions and people who believe spending money, buying and selling, hiring and firing will produce near-instant success
- Celebration of superstars and heroic figures who are expected to produce exceptional results, and are quickly fired if they falter, even for a short time
- A marked preference for buying and selling to short-cut the much longer but more positive process of nurturing and growing
- Exploitation and manipulation of customers and supporters, who are not seen as having a legitimate role in influencing the behaviour and actions of the rich and powerful
- Powerful lobbies that seek to influence government and politicians at large to foster the agendas of the powerful minority. Use of mass media to campaign for policies that will not limit the unfettered ability of powerful interests to act solely in their own interests
- Marked and permanent long-term failure to compete internationally
- In the cases of both football and industry, Britain is a talented country. There are excellent universities and youth academies. Both produce potentially very valuable outputs. But, owing to the closed circle of money and power at the top and a lack of long term investment, they fail to make the contribution to national performance that they should.
Effects on football and industry - and the nation
It can be strongly argued that both English football and UK industry have been subject to similar forces with the same results. Both are failing to compete with countries that have adopted more balanced approaches to enterprise; blending competition with a degree of nurturance and ensuring that there are sufficient external influences to regulate and direct markets toward long run success.
In the cases of more successful societies, the interests of a wider community than that of rich and powerful minorities are taken into account in formulating and implementing policy.
What we should have learned from the last 30 years is that free markets do not serve the whole community. Instead, they are fatally susceptible to dominance by the rich and powerful unless the interests of multiple stakeholders are taken into account. And, in all cases, the state, (like football referees) has been shown to play a very important role in involving all stakeholders and ensuring fair play.