In business, the UK and US are an ocean apart

The debate over the UK’s affinities to Europe and the US has once again come to the fore. George Pitcher suggests that, in commerce at least, we are strictly Old World

This week’s statement from Gordon Brown on Britain’s position on the euro – or restatement, as it should properly be called, since nothing has changed materially since 1997 – has rightly generated considerable interest in whether this country’s commercial future rests principally with Europe or the US.

Much of this kind of speculation dwells on contemporary historical issues. On the one hand, some observe that the UK has a record of joining European issues late and ineffectively and that the latest procrastination repeats those old mistakes. On the other, it is suggested that the UK’s recent support for the US in Iraq inevitably throws our destiny in with America’s.

Cultural issues receive less attention under these circumstances. That is not to say that there aren’t plenty of europhobes on the right wing of British politics, just as there are plenty of sneering anti-Americans on the left.

But these are tendencies which relate to xenophobic “Little Englanders” and perceptions of American neo-imperialism. These issues, though cultural, relate to political and social structures as much as they do to anything that actually happens.

It is as much a mistake to believe that Morgan Stanley and McDonald’s represent an American attempt to take over the world through “globalisation” – as if that is a phenomenon within the sole remit of the US – as it is to believe that the surrender of the UK’s sovereignty to European authority amounts to an abandonment of our island history.

These are problems of prejudice from which we will evolve – future generations will look with some bemusement at how we passionately believed that a common currency could negate a free Europe’s triumph in two world wars or that convenience food could be a weapon of oppression.

What really matter are differences in business culture, particularly if they appear so entrenched as to be insuperable. Essential attitudes to the practice of capitalism on each side of the Atlantic differ greatly. And they indicate a disconnection, with regard to how business is done in the post-modern world, that is altogether more vital to the UK and to Europe than whether Gordon Brown believes the euro to be fundamentally a good idea, though he would rather not be the Chancellor who takes us into it.

There are well-known differences in reward culture between the UK and the US, as the fat-cat outcry shows. The only type of fat cat you encounter in the US is the sort that doesn’t get enough exercise.

There is an essential honesty about the capitalist system in the US. It is bound, by its nature, to make some individuals very rich indeed. You may not like that, but if you don’t then you can always join the voluntary sector, or live in a log cabin and eat muskrat.

There are those who will argue that the issue is about rewarding failure. But the Americans tend not to reward failure, and we would do well to ask why. A very large part of the answer may be that Americans take their capitalism more seriously and hold their executives to greater account through performance in the contracts that they grant them.

In Europe, by contrast, we are still yoked by a “them and us” attitude, born of monarchical and post-monarchical constitutions. In the words of the First World War marching song: “It’s the rich wot gets the gravy, ain’t it all a bleedin’ shame”.

It took two American novelists to demonstrate the essential absurdity of this attitude, when F Scott Fitzgerald wrote that “the rich are different from you and me”, and Ernest Hemingway replied: “Yes, they have more money.” For Americans, wealth is about money; for Europeans, it is still too often about class. And, if anyone doubts that, I would invite them to look at the ghastly weekend coverage of someone called Prince Harry, an 18-year-old school-leaver, whom we are invited to bow to and address as “sir”.

Another essential difference between European and American business culture is the way in – and speed with – which we exercise protectionism in our markets. From steel tariffs to the denial of access to American skies for European airlines, the US unashamedly practises demonstrable double standards, protecting its own markets while complaining at lack of access to those of Europe.

Moreover, while the anti-trust environment in the US can be laborious, in Europe it is glacial. American federal authorities, for instance, eventually reached a relatively pragmatic settlement with software leviathan Microsoft in 2001 over alleged monopoly-supply arrangements in its markets. Our own dear European Commission has just let it be known that its own four-year probe into Microsoft’s marketing techniques is to be further delayed.

In this, as in so many other trading respects, we cannot keep up with the US. That is not to say that many of us don’t find the way that the US conducts itself, in business and otherwise, positively disgusting.

But the debate over whether the UK throws its lot in with the US or Europe is a false one. We are culturally bound in with Europe, not just by our historical institutions, but by the way we approach and regulate business.

We cannot behave in an un-European way – you might as well ask the Americans to be Europeans, as ask us to behave like the US.

George Pitcher is a partner at communications management consultancy Luther Pendragon

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