Issue 223: 2019 11 14: Winner Takes All

14 November 2019

Winner Takes All

Drama in Whanganui

By John Watson

This winter I will be visiting Whanganui in New Zealand.  It is a bustling market town in sheep country and I expect my visit to be enlivened by some really top class drama.  Russell Beale for example.  He is very, very, good and perhaps there will be a top-class performance from Dame Judi or Sir Ian McKellen.  Who knows?  I won’t look at the programme until I get there and then it will be a nice surprise.  Maybe there’ll be some international opera stars performing as well.

No, it isn’t the effect of the British weather driving the RSC to a new winter home.  Nor are they putting on a special tour for sheep towns in New Zealand.  Yes, you’ve guessed it.  I will be watching the stellar performances at the local cinema and they will be being streamed (no doubt with some adjustment to take account of time differences) direct from London to cinemas throughout this country and throughout the world.  What a marvellous idea.  People in remote places get the chance to see first-class work.  The RSC and its equivalents have a new source of revenue.  All is for the best in this digitally connected world.

Except, not quite.  Yes, audiences are delighted. Yes, first-class product is delivered but what does it do to those repertory companies which would once have filled local theatres?  What, for that matter, does it do to the audience for amateur dramatics, an activity which exists as much for the participants as for the spectator but needs a good audience nonetheless?  Will the cognoscenti of Whanganui take their partners to a local production or to the production streamed from London?  It is impossible that the former should not be diminished.

Then there is the news.  Until recently, Whanganui sported an active local newspaper with a local editorial staff.  Now the editing is done in Auckland.  No doubt that is much more efficient but the result is again to place the focus on a small number of specialists at the expense of the locals.

The loss of local business activity and its concentration in the hands of a few is a direct result of improved technology and permeates the economy.  Suppose you run some great quoted company and need to select your auditors.  How many possibilities are there?  Why, four of course: KPMG, PwC, Ernst & Young and Deloittes.  There are lots of good second-tier firms but they just don’t have the resources to compete at the top table.  The result: the concentration of the work in a few firms and a big gap between them and the competition.

These are a few examples but one can see the same effect anywhere: big football clubs taking the support from small football clubs; Amazon taking business from the high street; a few top journalists writing for a large proportion of the press and starving their juniors of work.  The digital revolution has strengthened the process by which “the winner takes all” and so has reduced the number of suppliers of goods and services.

That isn’t always a bad thing.  The concentration of aircraft building into the hands of very few firms has led to quite extraordinarily high safety standards.  Mass production on a global scale enables people to enjoy things which would otherwise be beyond their reach.  Look at the price of holiday cruises for example.  And yet there is something unhealthy about a society in which product leaders take all the business, leaving so little by way of reward for their competitors.

The first point here is Darwinian.  Progress depends on having a number of approaches and seeing which flourish and which do not.  Limit yourself to one supplier and the only competition will be between the different approaches taken within their organisation and, when you bear in mind the urge to maximise profits, that competition will often be minimal.  But there is a second point which is perhaps more important.  In the past we have relied on the ability of those who do not come first in the race to take some reward too as a mechanism for sharing wealth.  We cannot afford to lose that.  It will be no consolation that the actors of the RSC are highly paid if the repertory and touring companies cease to exist.  Yes, you could cure the position economically by taxing the highly profitable and giving the money to those left without a role but that does not really go to the heart of the matter which is the destruction of their occupation.

Many, since the days of Ned Ludd, have pointed to the social perils resulting from the destruction of jobs by new machinery and techniques.  In most cases they have been proved wrong and the disappearing jobs have been replaced by new activities.  After all, nothing stands still and change is necessary for a healthy economy.  Still, there is a question of how much change.  The focusing of profits on fewer and fewer businesses is happening everywhere and will only increase with the introduction of robots.  It would not be satisfactory to end up with a few very rich corporations and everybody else in poverty.

So what is to be done?  In the US they used to restrict the power of their banks by preventing them from operating in more than one state.  Merger or anti-trust legislation prevents certain mergers or the use of dominant influence by a supplier.  Neither, however, restricts the extent to which a dominant position can be built.  Perhaps the answer is to limit the protection given by patent and copyright legislation so that competitors can copy more of the technologies or structures which make the market leader successful.  On the other hand, restricting the rights of the holders of intellectual property to an extent where its production became uneconomic would be an own goal.

It is all very difficult and requires some clear thinking.  Perhaps indeed it is something for the research department of the various political parties to get their teeth into once Brexit is sorted out.


Follow the Shaw Sheet on

It's FREE!

Already get the weekly email?  Please tell your friends what you like best. Just click the X at the top right and use the social media buttons found on every page.

New to our News?

Click to help keep Shaw Sheet free by signing up.Large 600x271 stamp prompting the reader to join the subscription list