Category Archives: Capitalism
For years Stroud District Council has been led by a cooperative alliance of the Labour, Green and Liberal Democrat parties – a ‘rainbow alliance’ (below).
Last May. Gloucestershire County Council’s agenda and minutes post recorded that Cllr Lesley Williams and Cllr Rachel Smith advised that the Labour and Green members had formed a political group called the Labour and Green Cooperative Alliance. They explained that under the arrangement the Labour and Green members would work cooperatively but would continue to look at issues on an individual basis.
Professor John Curtice summarised the electoral maths: almost half the nation voted for broadly progressive parties in 2015 (49% backed Labour, the LibDems, Greens, SNP or Plaid Cymru, while 51% chose the Tories or Ukip). He considers the impact of a coalition with even one ‘minor party’.
Labour MP Clive Lewis and Green MP Caroline Lucas noted that in the 2017 general election more than 40 local alliances were formed, where almost exclusively Greens put the national interest before that of their party.
It had a huge impact on the vote – more than doubling the average swing away from the Tories.
They pointed out the challenges we face:
- markets that are too free
- a state that can be too remote,
- a democracy that still leaves so many voices unheard
- and climate change on a scale our people and our planet simply can’t cope with.
Continuing: “It will take a politics that is social, liberal and green to overcome these challenges. No single party or movement has all the answers. We are going to have to learn to cooperate as well as compete to build the society of which we dream. And we are going to have to recognise that the future is not a two-party system but one in which smaller parties grow – both in influence and in their electoral representation”.
They point out that the millions of young people who voted live in a world of social media in which their identities and allegiances are permanently in flux. They like and they share. They flock to one idea, group or party and then another. A politics that is purposeful but also responsive, open and collaborative is needed.
The case for an alliance between ‘progressive’ parties, has been described by Simon Jenkins (above right) as unanswerable:
“In 2015, 49% of voters went for broadly progressive parties, including Labour, the Lib Dems and nationalists. But at elections they fight each other as rivals. As a result, 40 to 50 seats that might have gone to a single left-wing candidate went Tory.
Then, as now, Westminster tribalism won. Machismo required Labour “to contest every seat in the land”. That is apparently more important than denying the Tories a strong majority – let alone winning elections.
MPs Lewis and Lucas end:
“We are from different parties and different political traditions – and we celebrate that because, while we share so much, we can learn much more from each other. If we work together there is nothing progressives can’t achieve.
“The limits of the old politics are there for everyone to see – the limitlessness of the new we are just starting to explore.
People on the mailing list of this website are drawn from many areas of Britain and visitors come from several countries (opposite: eleven in May), the overwhelming majority from America.
British readers, expats and other well-informed readers are asked to send, via comments, any other examples of an effective co-operative alliance within councils and parliaments.
George Monbiot recently pointed out that the Commons report on the Carillion fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. It trounces the company’s executives and board and laments the weakness of the regulators.
But, as Prem Sikka said in his April article, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.
Both agree that the problem begins with an issue the report does not once mention: the extreme nature of limited liability. Sikka points out that this system, under which executives are only financially accountable for the value of their investment, has also benefited frauds and led to the self-enrichment of executives at the expense of workers, consumers, creditors, pensioners and citizens.
Monbiot adds that the current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). The owners of the company were permitted to walk away from the £2 billion owed to its suppliers and subcontractors. (Left: the former Carillion chief executive Keith Cochrane in Westminster after appearing before the Commons work and pensions select committee)
Monbiot continues: “There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies”.
So what is to be done?
Prem Sikka (right) proposes that the bearers of unlimited risks and liabilities should be given rights to control the day-to-day governance and direction of companies.
He advocates including employees and citizen/consumers on company boards – because both ultimately have to bear the financial, health, social and psychological costs associated with environmental damage, pollution, poor products, industrial accidents, loss of jobs, pensions and savings. Through seats on company boards, they could secure a fairer distribution of income, challenge discrimination, curb asset-stripping and influence investment, training and innovation.
Across the 28 European Union countries (plus Norway), most have a statutory requirement for employee representation on company boards – unlike the UK, Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Malta and Romania.
George Monbiot proposes a radical reassessment of limited liability.
He points out that a recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. He adds, significantly, that as numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP
His own ‘tentative’ and ingenious proposal is that any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.
If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.
Monbiot then says “I know that, at best, they address only part of the problem” and asks, “Are these the right solutions?
- support them,
- oppose them
- or suggest better ideas.
He ends: “Should corporations in their current form exist at all? Is capitalism compatible with life on earth?”
The FT reports that senior executives at several of the largest US banks have privately told the Trump administration they feared the prospect of a Labour victory if Britain were forced into new elections.
It then referred to a report by analysts at Morgan Stanley arguing that a Corbyn government would mark the “most significant political shift in the UK” since Margaret Thatcher’s election and may represent a “bigger risk than Brexit” to the British economy. It predicted snap elections next year, arguing that the prospect of a return to the polls “is much more scary from an equity perspective than Brexit”.
Jeremy Corbyn gave ‘a clear response’ to Morgan Stanley in a video (left) published on social media reflecting anti-Wall Street rhetoric from some mainstream politicians in the US and Europe, saying: “These are the same speculators and gamblers who crashed our economy in 2008 . . . could anyone refute the headline claim that bankers are indeed glorified gamblers playing with the fate of our nation?”
He warned global banks that operate out of the City of London that he would indeed be a “threat” to their business if he became prime minister.
He singled out Morgan Stanley, the US investment bank, for particular criticism, arguing that James Gorman, its chief executive, was paying himself a salary of millions of pounds as ordinary British workers are “finding it harder to get by”.
Corbyn blamed the “greed” of the big banks and said the financial crisis they caused had led to a “crisis” in the public services: “because the Tories used the aftermath of the financial crisis to push through unnecessary and deeply damaging austerity”.
The FT points out that donors linked to Morgan Stanley had given £350,000 to the Tory party since 2006 and Philip Hammond, the chancellor, had met the bank four times, most recently in April 2017. The bank also had strong ties to New Labour: “Alistair Darling, a Labour chancellor until 2010, has served on the bank’s board since 2015. Jeremy Heywood, head of Britain’s civil service, was a managing director at Morgan Stanley, including as co-head of UK investment banking, before returning to public service in 2007”.
A step forward?
In a December article the FT pointed out that the UK lacks the kind of community banks or Sparkassen that are the bedrock of small business lending in many other countries adding: “When Labour’s John McDonnell, the shadow chancellor, calls for a network of regional banks, he is calling attention to a real issue”. And an FT reader commented, “The single most important ethos change required is this: publish everyone’s tax returns”:
- In Norway, you can walk into your local library or central council office and see how much tax your boss paid, how much tax your councillor paid, how much tax your politician paid.
- This means major tax avoidance, complex schemes, major offshoring, etc, is almost impossible, because it combines morality and social morals with ethics and taxation.
- We need to minimise this offshoring and tax avoidance; but the people in control of the information media flow, plus the politicians, rely on exactly these methods to increase their cash reserves.
But first give hope to many by electing a truly social democratic party.
Is the rainbow suggesting a new party logo?