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The fable of fraternity, fratricide and weasel-word wisdom

Updated Tuesday, 5th October 2010
Falling back on jargon provides comfort, but not much clarity, as markets attempt the trade-off between size and stability.

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The public spotlight has recently shone on the personalities and behaviour of brothers in politics. From the Kennedys in the US to the Kaczynskis in Poland to the Milibands in the United Kingdom, the focus is on whether fraternity or fratricide is the default position of this band of brothers. The instant pop psychology of the mass media, based on a misreading and misinterpretation of the psychoanalyst Melanie Klein, notwithstanding, the question of whether I should be my brother’s keeper or killer is a pertinent one.

Ed Miliband
Ed Miliband

A similar question arises in business,where the sibling relationship and rivalry is between market share and profitability.

In the abstracted world of neo-classical economics, firms are price-taking profit maximisers, disciplined by the free entry and exit of rivals into the market: a condition of perfect competition.

On the other hand, monopolists and oligopolists (a few firms dominating the market) engage in a process of price administration and compete on product differentiation. These kind of companies like to be competitive, but avoid price competition as this may lead to price wars. Thus, although they have a profit constraint (profit satisficing), market share can act as a barrier to entry to potential competitors.

Therein lies the rub: at the early stages of development, profit is crucial to survival whilst building up share can ensure sustainability.

However, for more mature businesses pursuing profitability, per se, may excite the interest of predators leading to a hostile takeover. Creating too large a market share, on the other hand, can invite the interest of regulators, thereby constraining the growth of the firm.

The apparent trade-off between them seems less sharp than a few decades ago. The American economists Adolf Berle and Gardiner Means looked at the relationship of ownership and control of firms in their book The Modern Corporation and Private Property, published in 1932.

The modern corporation, in this view, is run by managers whose interest is control; leaving the question of ownership to share and stock holders. Managers are left to manage the firms at their discretion, subject to generating reasonable returns to owners.

Gardener Means summarised the prevailing position in his 1962 book The Corporate Revolution in America:

“We now have single corporate enterprises employing hundreds of thousands of workers, having hundreds of thousands of stockholders, using billions of dollars' worth of the instruments of production, serving millions of customers, and controlled by a single management group. These are great collectives of enterprise, and a system composed of them might well be called 'collective capitalism'."

The potential fratricide between owners and managers is exemplified in the book and film Barbarian at the Gates which chronicled the take-over of RJR Nabisco, based on a leveraged buy-out worth US$25 bn, in 1988. It netted the then CEO of RJR Nabiscso, Russ Johnson, US$53m, probably against the interests of the firm’s shareholders. The new fraternity of owner-managers and manager-owners had arrived.

This relationship became embedded with the development of stock and share options for the managers of businesses. A consequence of this change is that the idea of shareholder value is more strongly promoted.

The increased 'financialisation' in the last 25 years, the business environment has been accompanied by an increase in jargon. It can appear that science and technology have contributed great discoveries and knowledge whilst the study of business and management seemed to have produced jargon.

The weasel-worded wisdom perpetrated by business leaders seems to come from a reading of pot-boiler books produced by academic gurus (sic) who populate the intellectual lowlands of many business schools. “Re-engineering the business” is often a clarion call based on the most slender grasp of applied mechanics. Having a “window in your diary” conjures unfortunate memories of nuisance phone calls made by double glazing staff from their local pub. “We really need to push the envelope on this one” brings to mind the daily rounds of post men and women, or perhaps more pertinently the serving of writs on the “perps” of this nonsense. And on “ball park estimates” – well, "don’t get me started".

The German philosopher Hegel opined that knowledge proceeded through conversation, whilst that (infamous) chronicler of London and lexicographer, Samuel Johnson, stated that the narrative is a superior form of knowledge.

A weasel about to toy with a mole
Slippery fellow, slippery language? A weasel toys with a mole

Other examples serve to affirm the provenance of the fraternity of conversation and narrative in the production and dissemination of knowledge. Listening to the exponents of weasel-word wisdom and its roots in jargon is to see fratricide of the English language (the dominant language of business) in action.

Economists are notorious for only being able to hold two ideas in their head at the same time, with their stock in trade being acronyms. So, it could be argued that jargon acts as a shorthand in a community of shared expertise and interest.

The trouble is when jargon expands beyond its boundaries – with the old joke being that if all the economists of the world held hands they would circle the planet a number of times, but you still wouldn’t get a decision. You could add to this that, even if you did get an answer, you wouldn’t understand it.

You don’t have to be Ralph Waldo Emerson to know that “language is the archive of history” - the clearer the former the better the latter is understood.

Part of that archive is the first two verses of the 19th century English nursery rhyme Pop Goes the Weasel:

Half a pound of tuppenny rice
Half a pound of treacle
That’s the way the money goes
Pop goes the weasel

Up and down the City Road
In and out the Eagle
That’s the way the money goes
Pop goes the weasel

"Pop goes the weasel" is Cockney rhyming slang that refers to pawning your coat to cover your outgoings when you have little or no money; and the Eagle is a pub in City Road on the fringes of the City of London.

The Eagle, City Road
The Eagle, City Road

Perhaps this could be referred to as a piece of market jargon, but its continuing metaphorical utility seems appropriate for our troubled times, rather than the weasel-words of a number of public figures masquerading as purveyors of wisdom and insight.

The bottom line is that some of our business leaders and academics, whose only lexicon is jargon, should have taken more note of the trade-off between penury and subsistence. Then, and only possibly, the recovery from our troubled times would be have clearer and not hidden by the poverty of thought and language that passes for communication in business.

In the market for communication there is not trade-off between the profitability of clarity and the market share in simplicity, we need both in abundance. The fratricide of jargon should give way to the fraternity of articulate voice in business and society.

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