From gurus to God

<I>Economist</I> journalist Adrian Wooldridge offers his take on everything from management fads to religion. Photo / Supplied

Adrian Wooldridge is one of the Economist's most senior journalists. British born and Oxford-educated, he spent more than a decade in the United States as its Washington bureau chief and its Los Angeles correspondent. He has also been its social policy editor, and has overseen its surveys on entrepreneurship, telecommunications, education, multinational companies and management consultancy.

Now back in London, he writes the Schumpeter column, and is management editor. Together with the editor of the Economist, John Micklethwait, he has written books about management theories, globalisation, the right wing in America, and finance. This week he is in New Zealand for the Auckland Writers & Readers Festival, promoting the pair's latest book, God is Back: How the Global Rise of Faith is Changing the World. Below is an edited transcript of his conversation with Karyn Scherer on election day in Britain.

I guess London must be a pretty grim place to be at the moment.

Well, we have a sort of phony calm before the war right now in the sense that the election campaign has really not dealt with this public spending problem. I think everybody actually knows there are some very severe problems to come and some very big cuts to come. Our public-sector debt is very serious - it's almost on the level of Greece and Spain and Portugal. I think that if we get an unclear election result, which is likely, then you could quite possibly get a run on sterling and the markets might get very jittery about it. It could be a period of significant turmoil.

How scary do you think it might get?

I've been living in America for the past 13 years, so I'm quite new to Britain. It seems to be a prosperous country in lots of ways, but it's a false prosperity because people have been borrowing vast amounts of money and spending well beyond their means. So there is the potential for unrest - not on the Greek scale or in the Greek style, but certainly I think we'll have conflicts between the Government and public sector workers. Britain won't be unique - I think we'll see that right across Europe. In the next couple of years we'll see sovereign debt problems, cutbacks in the public sector, and public sector strikes - all rather 1970s themes which will make it difficult for the Government to govern.

You were in the US when the financial meltdown hit, so you must have a sense for what that might feel like.

Normally these panics are overstated by the media. However, I think it was the opposite this time. I think we actually underestimated the extent to which the people in charge were very, very worried and were not completely convinced they were doing the right thing. There was a public panic in the media, but I think what was going on in the White House and in the Treasury Department of the United States was even more panic. They kept being surprised by what they were trying to deal with and the more I read about it the more I think we really were playing with fire. We really were in quite a dangerous situation. If Greece collapses or Portugal collapses, it's less important. But if you have a real crisis of confidence in the euro, that's a huge problem.

Has there been any discussion at the Economist about whether the media did enough to raise these issues at the time?

I'm not sure, but at the Economist we have been warning for a very long time about overleveraged economies, and for a very, very long time about the property bubble. And we were right about that. The root of this was a gigantic property bubble and people over-borrowing, and everything stemmed from that. The policymakers in the United States did not listen, and Greenspan didn't listen.

I see Newsweek has been put up for sale. Yet the Economist is doing remarkably well. Why do you think that is?

Because we're extremely good. I think there's a flight to quality in these circumstances. And I think people perceive the Economist to have a quality that Newsweek and perhaps Time don't have. The Economist is a very peculiar beast in that it tries to cover the whole world, and tries to cover both political affairs and social affairs, and business and economics. The Economist has always been a very global publication. And I think globalisation is speeding up and the idea that there is a global magazine that covers all of these things is attractive to people.

But surely you are as affected by the digitalisation of media as much as anyone?

It is difficult to deal with that when you're a weekly news magazine, as we now have to produce content on a daily basis. That means employing more people. And nobody has really learned so far how to make money out of all of this. We're giving away most of our content free and I think everybody is going to have to start charging for these things. But I think in a world in which you are saturated with information and which everybody has access to the web and can publish their own work, much of which is nonsense, you have to preserve quality. People's most important commodity is time and you have to be able to say to people: "If you read us, you will be using your time more sensibly and more wisely."

That seems logical, yet you don't see very many media organisations going down that path, do you?

That's because it's a very expensive path to go down.

How is the revised version of your book on management gurus going?

The Witch Doctors came out in '96, and it's a peculiar experience redoing it because the companies that we talked about have changed quite dramatically. Enron, for example, has completely disappeared and so has Andersen Consulting. But it's remarkable how many of the gurus have lasted longer than the companies they were singing the praises of.

Are they as influential as they once were, do you think?

It's true that the whole faddism thing is not quite as big as it was in the 90s. But on the other hand, they're operating on a much bigger stage than they used to. If you go to places like China and India now, the whole world of management theory and management gurus is very much central to what they are doing. And if you look at the number of MBAs and the number of business schools around the world, it's still increasing quite rapidly.

But isn't there starting to be a backlash against fads like EQ, and TQM?

There's always a perpetual backlash, but the books keep selling. And we have a new generation of management gurus, who are actually journalists.

They are selling huge quantities of books and they are basically selling the same thing the management gurus used to sell, except they write a bit better. The old adage still applies: simplify and exaggerate. It works extremely well.

Isn't there a bit of a backlash against the journalists as well? Look at Chris Anderson, for example. Was the "long tail" really right?

I'm furious about Chris Anderson, as I used to share an office with him! That's a brilliant book, in some ways, but there's a lot of evidence that he is actually wrong. And I don't think his more recent book on giving everything away for free seems to have happened much either. I think the same thing is true of Malcolm Gladwell. People have picked apart Outliers endlessly.

I guess there's a parallel between management theory and religion.

Exactly. Even if you are disillusioned with it, you still need it.

I do wonder if that will change in the wake of the global financial crisis.

We'll see. I suspect not, because I think the salary differentials of MBA students are high enough to keep them going, despite the fact that many of the people who were at the heart of the financial crisis had MBAs, and they all went to the best business schools.

Has the financial crisis changed your thinking in any way since you and John wrote your book on the joint-stock company and how successful that model has been?

That's a very good question. When we were writing that book, there was a whole series of problems with Enron and WorldCom and the rest of it. I would say that the crisis was just a crisis of finance and the banks, not particularly a crisis of the way that companies are formed or deal with risk. I don't think we're seeing the decline of the joint-stock company. I think we've seen an incredible problem with risk management in the banking sector.

There might be some fairly severe ramifications in terms of taxpayers having to bear the costs of bailing them out, though.

Absolutely. As a taxpayer myself, I think it's extraordinary the way the banks have gotten away with it. They pay themselves like risk-taking entrepreneurs, and yet they are public utilities. There will be more attempts to regulate them and rein them in. But I think that in general, post Sarbanes-Oxley, ordinary mainline corporations have actually been rather well run and rather risk averse.

Hasn't the latest crash burned off the last of the retail investors who remained after the '87 crash, though?

I would say that what we are in for in the rich world, as it were, is a period of very long slow growth. People are being very cautious. It's the opposite of irrational exuberance and I think the whole corporate sector will be slow to grow, and slow to create new jobs. Most of the growth in the world is going to be coming from the emerging markets.

What about China?

I was in Shanghai the other week and it was astonishing to see what's going on. I think there are bubbles in the real estate market, and it is certainly growing at a very unsustainable pace. But I think that shift in global wealth to China and India is going to go on inexorably, because what they have is a lot of talent and a lot of very good companies now and there's no reason why it shouldn't continue.

Your book The Right Nation seemed to say that the Republicans were invincible. But then we got Obama.

The Right Nation was partly an attempt to write a portrait of a political movement, and it was partly an attempt to make a claim about America in general - that the centre of gravity in America and its culture is further to the right than the centre of gravity in Europe and the rest of the world. I wouldn't defend everything we claimed in that book. We claimed that the Republicans had a political lock on the country that clearly they didn't have, but I would say in the Bush years the Republicans hugely over-reached and created a backlash which led to Obama. And I think we are getting the same thing on the other side now, which will shift the power to the right again. If the Republicans had a good candidate they would have a chance of upsetting Obama, but they don't and they are divided about that.

Isn't America's influence on the world waning, though, with developing countries less inclined to listen to what it has to say as they get richer?

I think America's influence on the world is both waning and increasing at the same time. You have this paradox. America's power to influence the world has taken a big bashing from the Iraq fiasco and obviously there are other countries that are rising, particularly China but also India, which are more independent and more willing to go their own way. America is constantly getting frustrated by China's willingness to say "no". But at the same time, you have America's cultural power, which is incredibly pervasive throughout Asia. When I was in Shanghai recently I was taken to somebody's house, and it was in Beverly Hills, and I can tell you there were no hills. It was a very American-style McMansion and their life was very American. If you go to India as well, they used to have a certain deference to British culture and Oxbridge and all of that. Now it's all American business schools and American entrepreneurialism.

Is there a danger disillusionment might set in once they achieve American-style wealth, and American-style inequality?

Yes, obviously in China there is a lot of tension from the rural people who feel left behind. But on the other hand, if you look at the Pew surveys, the levels of optimism and contentment and general happiness with life are incredibly high in places like India and China, because if you've been very, very poor for a long time and you see your country growing at 20 per cent a year, you're basically thinking the world is getting much better. Look at Singapore. It could have been a basket case, but it's become a prosperous state.

Who's idea was the title of your latest book, God is Back?

Actually, it was my idea. John and I have always had more difficulty with titles than with anything else, actually.

I guess everybody says to you: "Has he ever been away"?

Religious people say he's never been away, and secular people say he isn't back, so you alienate both sides. That book was meant to argue the opposite of what it argues, in some ways. When we did The Right Nation, which is really a book about American exceptionalism, you're forced back to the question of religion. America is the one big rich country that is very, very religious and that's a huge difference from Europe. So we got the idea that the heart of American exceptionalism is American religiosity, which is what Tocqueville had always argued. So we began to look at that and why America and only America could produce this vibrant religious culture, and then we began to look around the world and we realised that it is Europe that is the exception. This idea of religion and modernity not contradicting each other is also happening in Latin America, and in Africa, and it is also happening of course in Asia.

I didn't realise how fast Christianity is spreading in China.

It's very hard to gauge, of course, because the authorities don't approve of it, but I have no doubt that it is happening. It's partly because people crave some spiritual sustenance or some anchor in their lives because the pace of change is so absolutely dramatic and so extraordinary. One reason why people are not into religion in Britain is because they associate it with the old fuddy-duddy world. But in China it's regarded as a very modern thing because they tried to stamp out religion.

Had Richard Dawkins published The God Delusion when you began?

We started doing it before Dawkins, but one of the reasons we were interested in religion was because religion was so central to what George Bush was doing. And the reason why people like Christopher Hitchens and Dawkins became obsessed by religion was because they saw Bush and the religious right. But I think the rise of this neo-atheism is very much part and parcel of what we're talking about, which is the return of religion as a vital force in public and social life. It's because it's become important and it's because it's become more influential that they feel the need to engage in that battle.

You are an atheist, and John is a Catholic. How do you both manage to maintain such a benign attitude to the negative side of religion?

First of all because I think there are a lot of good things that religion does. One of the central arguments of the book is that religion is not necessarily a force for good or evil, but a force that is incredibly powerful and a force you can't do anything about. It always has been and is now reasserting itself. We need to create the sort of political framework to deal with that, so the bad side is diminished and the good side is accentuated. America, in our opinion, has done that.

What about the argument that if religion is a substitute for community, then we'd be better off fixing the community?

That was the project that was the heart of the expansion of the welfare state, which has gone on since at least the Second World War. That has had huge negative consequences, partly because it's just become too expensive and partly because it has crowded out a lot of voluntary associations. My world view is very much on the side of voluntary associations doing more and reclaiming some of the world they have lost because of the state taking over their functions and crowding out and marginalising them. And I happen to think that religion is one of those sort of voluntary organisations.

You talk a lot about religion in business terms. Is religion just another market?

The point about America is that it's always had this radical separation of Church and State and it's always said the churches can stand or fall on their own two feet. That's maybe made them much more aggressively commercial in some ways, but it does mean that nobody is forcing you to be part of them. And that strikes me as a very good compromise. I recently had to do an Oxford Union debate on whether religion has been good for the world, and I think people got slightly confused when I stood up and I said I'm on the side with all the bishops, but actually I am an atheist. It is in many ways a strange position to be.