My last blog post was on recycling so I guess it is appropriate if I recycle some material from an old blog post to deal with Nick Clegg’s latest attack on the 'it’s not what you know, it’s who you know society'.
Today Nick Clegg has announced that Britain’s top 100 firms have agreed a code on recruitment and work experience schemes that will involve payment to interns and the restriction of information that appears on application forms so that firms know less about people’s names, schools and so on. Furthermore, the businesses have agreed to promote work experience programmes much more widely. This is a voluntary code but businesses that do not agree will be 'named and shamed'.
Of course, this is just what we need – more employment regulation. It comes in a long line of announcements and enactments over the last two weeks about executive pay, council house tenancies, the disastrous implementation of the moratorium on employment regulation for small firms, alcohol regulation, the extension of employment rights to temporary workers and the regulation of the scrap metal industry. I am wondering if I have misunderstood the government’s red tape challenge – is the challenge to ministers to produce as much red tape as possible?
The first question Mr Clegg might try to answer is 'why is recruiting on the basis of "what you know" more moral or fair than recruiting on the basis of "who you know"'? It happens that Mr Clegg is both quite clever (I believe) and exceptionally well connected as a result of the start in life that his family gave him. Both his intelligence and his initial connections from Westminster School are a matter of pure luck. Both his intelligence and his networks will have been enhanced by a combination of luck, hard work and skill. If somebody is not very clever but good at building networks, why should they be looked down upon more than somebody who is clever but not good at building networks? The hard work that one puts into networking is not obviously less virtuous than the hard work that one puts into developing one’s intelligence. The good luck that comes from being born with a good brain is no more virtuous (indeed it is not virtuous at all) than the good luck that comes from being born with a set of well-networked parents.
Secondly, taking decisions about who to hire is difficult. You need information about a whole range of qualities many of which are quite subtle. Do people have the right skills? How well do they communicate? How honest are they? How hard working are they? And so on... It is incumbent on employers to do what they can to find out about the skills and attitudes of their potential employees. Preventing them from using some mechanisms will cause them to take bad hiring decisions, risky hiring decisions or make it less likely that they will take hiring decisions at all.
Clegg seems to want a rationalist world which takes its cue from those who believe that all knowledge is explicit and formal and where employers completely remove the human element from employment decisions. This is simply a way to make employment more risky and, as such, reduce the number of non-standard hires. The most disadvantaged in society may suffer most from this. Let’s suppose that I had an application form from an ex-convict and all I had to go on was the application form. Would I employ that person? It is highly unlikely. On the other, let’s say that my next-door neighbour said to me: 'I am a prison visitor; there is somebody leaving prison for theft, but he was largely set up by a gang that he got involved with. From the moment he came into prison he tried to get more qualifications. Could you give him a chance?' According to Nick Clegg, if I were recruiting for Tesco, then, no, I could not. What a pity. Why should we penalise good, honest, sociable people who were unlucky to be born with not-very good brains but have worked hard and built up good connections? Why should the state tell private firms how they should recruit their employees? What would society look like if we tried to eliminate every aspect that contributed to the advancement of particular persons that was not determined by 'what you know'?
The last thing my elder son said to me this morning before he went to sit his Economics AS-level was 'does the state have to provide public goods?' Rushing out of the door, I said: 'Not necessarily. Remember there is a textbox in your book about lighthouses being a public good but not being provided by the state.' He might use that information; it might get him an extra grade. It would not have been 'what he knew' but 'who he knew' that would lead to that extra grade. How utterly dispiriting life would be if we tried to eliminate the subjective and the social aspects of employment and other decisions. Perhaps children should just be taken away from their families at birth and stuck in state nurseries and schools, never to see their parents again. That might make it easier to ensure that personal contacts, networks and 'who you know' have nothing to do with employment prospects. Though, I am sure that the networks would spring up in another guise.