Failed business people who blame the banks rather than themselves identify themselves as people whose future ventures should not be supported.
Shortage of money is generally a symptom of a problem rather than the problem itself. Failed businesses fail because their bankers refuse to provide more money. But except in a trivial sense, the refusal of their bankers to provide more money is not the reason for their failure. Aircraft crash when they hit the ground, but the reason they crash is that their systems fail. Businesses fail through bad products, bad operations and bad strategies and cash shortages are the consequence not the cause.
As at Farepak, the collapsed hamper business which gathered the Christmas savings of thousands of financially unsophisticated customers and invested them in new and unsuccessful retail ventures. Running out of money was the symptom of a problem, which lay with the business and its managers.
And so to Oxford, where the opponents of governance reform explained last week that the university’s central problem was not its systems but a shortage of money. The product could hardly be more different from a Christmas hamper, but the business lesson is the same. If you have the best educational brand name in the world and a shortage of money, the issue is one of strategy and management, not the shortage of money. Oxford has experienced an absence of effective resource planning and financial control in the short term, in the context of a long-term history of relationships with government which weak administrators could neither escape from nor manage effectively.
The debate on the future of Venice is equally surreal. The expenditures needed to save Venice are not large. The barrier that would provide protection from the sea for most of the next century will cost €5bn or so. Not a lot in the context of a city visited by 16m people a year: much less in the context of a uniquely glamorous fundraising opportunity. Since the Venice crisis first registered 40 years ago, much of the money needed has been provided. Shortage of funds is not the problem, but the symptom of a sustained failure of governance and management.
Amartya Sen’s famous observation that famine is almost always the result of political failure rather than actual shortage of food is essential to a more general understanding of the problem of development. It would be good to believe that the big push talked about at the 2005 Gleneagles summit would allow a once and for all transformation of the lamentable economic condition of sub-Saharan Africa. But here too, the lack of resources for African development is not the problem, but the symptom.
The causes of economic failure lie in endemic opportunism, unstable and corrupt political systems and the absence of the tangible and intangible infrastructure of a modern market economy. There is no shortage of money ready to invest in China and India, which have begun to put these things right. External funding of their growth is barely necessary, because these countries are largely able to generate the resources internally.
The cry of shortage of money encourages a culture of victimhood. The failure of my business is not the consequence of my mistakes, but the stinginess of financiers. The answer to Oxford’s difficulties is that government and business should be more appreciative, though they should leave their cheques at the tradesman’s entrance and not presume to tell us how to manage our affairs. The poverty of Africa is not the result of domestic failure to establish supportive economic and political systems, but the responsibility of colonialists who should make reparation for their historic depredations.
Even if there were elements of truth in these complaints none will evoke a positive response, nor should they. Failed business people who blame the banks rather than themselves identify themselves as people whose future ventures should not be supported. It is a lot easier, but also a lot less constructive, to blame others for one’s plight than to learn from self-criticism and self-examination. Whether the issue is water lapping on the Piazza of San Marco or the beggar asking for a coin for a cup of tea, the mantra is the same: it is the players, not the scorer, who determine the outcome of the game.
