Category Archives: Capitalism

British-American democracy hijacked: Professor Luis Suarez-Villa

Professor Luis Suarez-Villa (Social Ecology and of Planning, Policy and Design at the University of California, Irvine) wrote in the FT recently:

American democracy was hijacked long ago by money and powerful interests, turning it into what amounts to a system of legalised corruption.

Lobbying, political action committees (super-pacs), myriad forms of campaign contributions and patronage are at the core of this phenomenon.

By comparison, the so-called Russian meddling in the 2016 election seems amateurish at best, and perhaps (more seriously) a way for the political establishment to divert the attention of the American people from the real problems of a corrupt system of public governance, whose patrons and beneficiaries want the rest of the world to think it is democratic.

A review of his book Corporate Power, Oligopolies, and the Crisis of the State (2015) expands his argument:

“The largest, wealthiest corporations have gained unprecedented power and influence in contemporary life.

“From cradle to grave the decisions made by these entities have an enormous impact on how we live and work, what we eat, our physical and psychological health, what we know or believe, whom we elect, and how we deal with one another and with the natural world around us.

“At the same time, government seems ever more subservient to the power of these oligopolies, providing numerous forms of corporate welfare—tax breaks, subsidies, guarantees, and bailouts—while neglecting the most basic needs of the population.

“In Corporate Power, Oligopolies, and the Crisis of the State, Luis Suarez-Villa employs a multidisciplinary perspective to provide unprecedented documentation of a growing crisis of governance, marked by a massive transfer of risk from the private sector to the state, skyrocketing debt, great inequality and economic insecurity, along with an alignment of the interests of politicians and a new, minuscule but immensely wealthy and influential corporate elite.

“Thanks to this dysfunctional environment, Suarez-Villa argues, stagnation and a vanishing public trust have become the hallmarks of our time”.

His charges apply just as accurately to the British scene: British democracy has also been hijacked by money and powerful interests, turning it into what amounts to a system of legalised corruption.

 

 

Emeritus Professor Luis Suarez-Villa is the author of several other books, including Globalization and Technocapitalism: The Political Economy of Corporate Power and Technological Domination and Technocapitalism: A Critical Perspective on Technological Innovation and Corporatism.

 

 

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Carillion provokes MP’s broadside: “taxpayer-funded services should be conducted in an ethos of public service rather than for private advantage”

Major banks and credit insurers are calling on the government to ‘step in’, as Carillion’s debts soar and ‘huge write-downs’ are announced on the value of several old contracts.

Some – according to the Financial Times – are seeking a taxpayer guarantee for the company’s debt and assurances that Carillion will be allowed to compete for future contracts, despite the company’s troubled state. Oliver Dowden, newly promoted to the frontbench, says that the government is making contingency plans for Carillion folding.

If Carillion goes under, writes MP Jon Trickett, “We would effectively be paying for these services twice. This government has socialised the risk but privatised years’ worth of profit for shareholders . . . it is allowing firms with public contracts to pay millions to private shareholders as the public suffers from cuts to disability benefits, schools and the NHS”. He adds:

“They are in debt to the tune of £1.5bn, while being valued at less than £100m and are being investigated by the Financial Conduct Authority over financial statements issued in the run-up to July’s profit warning . . .and if they fold, Britain could face a huge bailout so that our schools, hospitals and train lines keep running”.

Will the 99% bail Carillion out?

The government now relies on this contractor for a wide range of services. The Financial Times lists Carillion’s major contracts in the transport, defence/security and health sectors and points out that Labour’s Shadow Business Secretary has asked why ministers continued to sign off major contracts with the company even after it issued a profit warning in July 2017.

Theresa May’s new Cabinet ministers have – nevertheless – confirmed that they still intend to continue with the privatisation and outsourcing of public services to private firms which then make a profit at the expense of the taxpayer.

Some politicians and party members have, through directorships, shareholdings or the employment of family and friends, a vested interest in these companies, many of which donate to Conservative party funds, hoping to ensure another Conservative government.

MP Jon Trickett, shadow minister for the cabinet office, whose principled political life is outlined here, presents the view of ‘Corbyn Labour’, that taxpayer-funded services should be conducted in an ethos of public service rather than for private advantage: “Whether that’s to run welfare payments to those receiving universal credit, running hospitals or administrating schools in huge academy chains . . . “

He points out that when these firms cannot make good on their obligations under these contracts the British public picks up the bill, citing the termination of Virgin’s contracts on the East Coast main line.

The MP adds: “I represent a former mining area, which hasn’t seen meaningful private investment in decades, and little public investment since the 2010 election. Some of the poorest people in the country, with some of the worst prospects due to years of Tory government, live there. They have seen private firms make profit out of their benefits, their schools and crisis-stricken NHS services”. He ends by giving an assurance:

“Labour would reverse the presumption in favour of outsourcing and provide more cost-effective services, treating workers better by running many services in-house”.

Jon Trickett’s article: https://labourlist.org/2018/01/jon-trickett-crisis-at-carillion-reveals-the-risks-in-tory-outsourcing-dogma/

 

 

 

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Assisted Dying 13: Prolonging life at all costs gives a bonanza for private health care, pharmaceutical companies and the financial services industry

“Is it a ‘success’ having thousands of elderly, immobile people in care or nursing homes, with Parkinson’s or Alzheimer’s, post-stroke or myocardial infarction; blind from macular degeneration or deaf; incontinent and catheterised, unable to tend or feed themselves but living out some form of existence? I rather doubt it from a quality of life point of view, not to mention the strain it places on health and social care resources”.

So said David Peddy, challenging MP Dr Sarah Wollaston’s celebration of increasing life expectancy.

Bronwen Maddox, director of the Institute for Government and formerly an investment analyst in the City and on Wall Street, focusses on the argument that ‘we’ are about to see “the end of inheritance”, stating that the assets of the British middle-class will have to be spent on their own care in their later years.

Ms Maddox adds that some MPs are suggesting that government try to encourage people to see the equity in their homes as a resource while prompting the financial services industry to develop cheaper, more flexible products for extracting it.  

Some readers commented:

  • My life. My choice.
  • Right to die, please.
  • Those concerned about care costs eating away their inheritances – and who do not wish to be ‘cared’ for –  support assisted dying. It’s a win-win solution.
  • I would like the right to die when I become too incapacitated to lead the life that I want. Hopefully when I get to that stage it will be generally available as it is in some other continental countries.

Emma Duncan, editor of the 1843 magazine and former deputy editor of The Economist, wrote today in The Times:Seeing my mother spend her final years longing for death has convinced me the law on assisted suicide must change”

“My brave mother, who could meet pretty much any challenge with her head held high, was brought low in the end. As her spirit faded, the one thing that still got her going was the law on assisted suicide. It infuriated her. She could not see why she should be kept alive, unwillingly and at great expense. She asked me several times to put a pillow over her head or take her to Dignitas, but I pointed out that I could be charged with assisting her suicide, and it would be tiresome for my children if I were jailed, so she gave up. But she never stopped complaining about the law, or sending money to Dignity in Dying, in an attempt to get it changed.

“To honour her spirit, I shall be taking up the cause she espoused

“Her case, which she continued to put cogently to the end of her days, was twofold. The first argument was about freedom of choice. Our laws are, by and large, governed by the notion that people should do what they want so long as it doesn’t hurt anybody else. My mother wanted to die, but suicide is impossible for the old and frail, though for a while she tried starving herself to death. Why, so long as she was settled in her mind — something which an application to a judge, with a lapse of time between request and confirmation, could establish — would the state not make it easy for her to do what she wanted to do?

“The second point was about cost. She thought it a horrible waste that hundreds of thousands of pounds were being spent on keeping her alive when they might have funded better education for people starting out on their lives. And it was going to get worse as society aged. “Think of the waste!” she would say. “It’s simply ghastly!”

“When I would point out that changing the law might cause some suffering, of old people bullied into suicide by greedy relatives, for instance, she countered that Switzerland and the Netherlands, with liberal regimes, report no such problems”.

Emma’s mother believed that the balance would shift heavily in favour of a law liberal enough to let even those without terminal diseases end their lives.

Emma ended: “We will be cremating my mother’s body tomorrow, but to honour her spirit I shall take up the cause that she espoused. I believe, as she did, that change will come. And the sooner it comes, the better it will be for brave people who want to take control of their death rather than be vanquished by old age”.

 

 

 

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Time for change: junk the Anglo-Saxon model* in 2018

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?

*the Anglo-Saxon model

 

 

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FT: Populism is failing, but it is too soon to cheer: tame it and regain control!

The Financial Times’ Philip Stephens focusses on what he calls ‘populism’. He deplores the ‘electoral insurgency’ of the past few years leading to far-left and far-right parties winning significant vote shares across Europe.

After highlighting the failures and inconsistencies of the Trump government and the Brexit negotiations he warns the ‘hardliners’ in Mrs May’s cabinet that their choice is between:

  • swallowing a softer version of Brexit
  • or breaking with the prime minister
  • so risking a general election and a victory for Jeremy Corbyn’s Labour Party.

Adding “It is just possible that Brexit may prove too difficult to actually happen”

Last year Business Insider reported that the former head of the British civil service, Gus O’Donnell, told an LSE event that politicians need to focus on voters’ feelings of wellbeing to counter the rise of populism and win elections.

Linked to http://uk.businessinsider.com/gus-odonnell-focus-on-wellbeing-to-counter-populism-2016-12

His Times colleague, Gideon Rachman adds:The belief that the economic system is unjust has stoked the rise of rightwing and leftwing populism across the west”.

He continued by saying that until the shocks of 2008, centrist politicians in the west were able to offer a morally coherent view of the economy: a free-market economy would reward effort and spread opportunity. The creation of the global market system was reducing inequality and poverty across the world.

After the financial crisis, however, the “globalists” (to use a Trumpian term) began to lose the moral arguments and – Rachman continued – the fact that banks were bailed out as living standards stagnated, offended many voters’ idea of natural justice.

Stephens’ advice: centrist parties will win back support only when they separate populist leaders from their supporters — when they recognise that those voting for extremists are not by and large the “deplorables” described by Hillary Clinton and – belatedly – he admits those voters have real grievances — economic, social and cultural and offers a strategy to win back their lost support:

“Map an alternative route for society’s left-behinds”, not to do them justice, but because it is expedient:

Long-discarded notions should be disinterred:

  • progressive taxation,
  • active competition policy
  • and social equity

He ended lamely by asking: “And what, after all, was actually wrong with the social market economy?”

 

 

 

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Broken Britain 12: rising homelessness? Retaliatory evictions?

“100 tenants a day lose homes as rising rents and benefit freeze hit” – The Observer July 2017.

In the same month, a Joseph Rowntree Foundation study attributed 80% of the recent rise in evictions to the “no fault” process under section 21 of the Housing Act 1988.

Two months’ written notice is all that private landlords need to do: they don’t need to give any reason when they ask tenants to leave.

It allows the worst landlords to ignore disrepair – tenants who complain are given notice – a process officially recognised under the name retaliatory eviction’.

Read more about retaliatory eviction’ – the subject of Commons Briefing paper SN07015 by Wendy Wilson – published on June 13, 2017.   

 

Jeremy Corbyn raised the issue forcefully in Wednesday’s Prime Minister’s Questions

His exchange with the Prime Minister may be seen here, courtesy of Steve Walker and the full transcript in Hansard may be seen here.

Mr Corbyn reviewed the government’s record:

  • Homelessness is up by 50% and rough sleeping has doubled. Homelessness and rough sleeping have risen every single year since 2010.
  • Evictions by private landlords have quadrupled since 2010. There is no security in the private rented sector.
  • One-for-one replacement of council housing sold off through the right to buy was promised, but just one in five council homes have been replaced.
  • Hundreds of thousands of people are on housing waiting lists.

Shelter is calling for the introduction of a stable rental contract to become the norm in England.

Campbell Robb, chief executive, said: “With the possibility of eviction with just two months’ notice, and constant worries about when the next rent rise will hit, the current rental market isn’t giving people – particularly families – the stability they need to put down roots. The stable rental contract offers renters a five-year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework”.

Scotland for best practice to date: the Scottish secure tenancy

In Scotland, under Jack McConnell’s Labour government, by an order under section 11 of the 2001 the Housing (Scotland) Act tenants of local authorities, housing associations & tenants who are members of fully mutual co-operative housing associations, from 30 September 2002, became Scottish secure tenants.

Read the excellent terms here. Will a Labour government in this country adopt this Rolls Royce standard model and also introduce a stable rental contract for those in private accommodation? Or will the profit motive win the day?

 

 

 

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Broken Britain 10: FT, Bronwen Maddox – Parliament’s physical, moral and intellectual decay

Summary: pictures and emphases added

Bronwen Maddox, director of the Sainsbury-funded Institute for Government, comments in the FT that the physical decay of the Palace of Westminster is more than a metaphor: “Like the culture and conventions inside, the building’s failings contribute to the problems of running a respected 21st-century democracy”.

She adds that the culture is the greater problem, citing Michael Fallon’s conduct and his assertion that his inappropriate advances to women had “fallen below the high standards that we require of the armed forces” – not those of Westminster.

Via Twitter and referendums, many voters are questioning the value of a representative in parliament. The ‘firestorm’, fanned by the fragility of the government and fractures in the main political parties, is driven by MPs’ own impatient fear that something needs fixing if they are to have a chance of countering public contempt, she adds, asking: “What should be done?”

Her answer: Theresa May is right to call for a new independent regulator. The Independent Parliamentary Standards Authority, created in 2010 after the expenses scandal, covers only pay and expenses”.

Public distaste for Westminster has deep roots. The financial crash a decade ago, and the expenses scandal, bear much blame; but voters resent many of the messages that politicians feel obliged to deliver, such as the constraints on spending.

Ms Maddox believes that the strains, risks and sheer career uncertainty of being an MP have rarely been greater. Select committees, whose healthy contribution to the scrutiny of government and legislation is growing, depend on MPs putting in time to master specialist areas. She notes that the problems go deeper than MPs’ behaviour and conditions of work.

Parliament is faltering in its basic job of holding the government to account, passing well thought out legislation, and doing so in a way that commands public trust.

The rifts in the two main parties are so deep that they are barely functioning within Westminster as conventional parties. Brexit has squeezed out almost all other legislation from the timetable. A minority government’s struggles to survive mean that much debate is stalled or simply avoided.

Ms Maddox sees that people are angry, and have got used to saying so.

She thinks that the fury about sexual harassment promises to achieve what those debates failed to — forcing a change in how Westminster runs itself. But she completely ignores the most serious problem in Westminster. Lobbying by affluent corporate interests is influencing the nation’s decision-makers.

MPs and civil servants pass through the revolving door to the corporate world and vice-versa – ensuring that legislation passed generally benefits the financial/industrial/commercial world but not the vast majority of those who elected MPs to serve the common good.

 

 

 

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Brexit – advantage the already rich: John Buchan, Jeremy Corbyn and Private Eye

John Buchan, 1915: Financiers can make big profits on a falling market and it suits their books to set Europe by the ears.

Jeremy Corbyn, March 2017; the Tories’ hard Brexit’ will benefit super rich and hold back millions.

Private Eye, 6.10.17: investors could swoop on cheap assets after Brexit wrecks the British economy

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Jeremy Corbyn opened in I News:

When Pret A Manger opened its first sandwich shop in 1986, I doubt many of us would have expected well-known high street chains to end up trying to pay their staff in leftovers. But that’s exactly what’s happened. Last week, Pret had to abandon plans for a work experience scheme paying 16-18 year olds only with food after a public outcry.

A taste of things to come . . .

It was an even faster U-turn than Tory chancellor Philip Hammond’s reversal of an increase in National Insurance for the self-employed – also after an outcry. Both the Hammond and the Pret sagas look like a taste of things to come. The not-so-hidden agenda of hard right Brexiteers, from trade secretary Liam Fox to foreign secretary Boris Johnson, is to create a bargain basement economy for big business.

In 2012, Fox said it is “too difficult to hire and fire” and “intellectually unsustainable to believe that workplace rights should remain untouchable”. Employment rights under threat Now that Article 50 has been triggered, Fox has his chance to sweep away decades of hard-won employment, consumer and environmental rights enshrined in EU law. In fact that’s exactly the direction Theresa May has made clear she intends to go if she can’t get the Brexit deal she wants – and Johnson has said not getting a deal is “perfectly okay”.

The Tories are preparing a Great Repeal Bill as part of the Brexit process, and all the signs are they will try to use it to tip the economic scales even further in favour of their super-rich supporters. They have after all spent the past seven years giving them one tax break after another while imposing austerity on everyone else.

Altogether, on official figures, they will have handed out £73bn in welfare for the wealthy between now and 2022. They have cut inheritance tax, the bank levy, capital gains tax, the top rate of income tax and corporation tax – squeezing or slashing support for the NHS, social care and other vital services.

While the earnings of working people have been held back, executive pay has soared to levels beyond most people’s wildest dreams. The chief executives of the top 100 companies on the London Stock Market were paid on average £5.5m each in 2015 – that’s 183 times average earnings.

The Conservatives justify tax cuts for the richest and big business by saying they will lead to an increase in investment. But there is no evidence of that.

On the contrary, investment in the UK has fallen, leaving us with antiquated infrastructure and uncompetitive industries. The future of our country cannot be left to the free market and the whims of the wealthy.

 

 

 

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National Rail Ticket Office 1 – National Express 0

As more people are pressured to operate online in order to increase corporate profits we report:

Gloucestershire reader’s verdict on grappling with online National Express Coach booking: appalling!. Her experience:

  1. Website refuses to accept three destinations listed on their map: Preston, Charnock Richard and Chorley.
  2. Phoneline kept her waiting for 15 minutes (so busy) and then cut her off.
  3. Local Post Office attempted a booking. Destination accepted but
  4. would not accept any proposed departure time.
  5. Customer decided to travel by train – involving three changes and at three times the cost.

 

 

If only . . .

Time for change?

 

 

 

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FT: a strange blend of truth and spleen unwittingly affirms Jeremy Corbyn’s ‘superannuated socialist’ stance

The FT’s Philip Stephens, Tony Blair’s biographer, pertinently remarks:Today’s elites should ask themselves just when it became acceptable for politicians to walk straight from public office into the boardroom; for central bank chiefs to sell themselves to US investment banks; and for business leaders to pay themselves whatever they pleased”. He continues:

“Now as after 1945, the boundaries between public and private have to change. At its simplest, establishing trust is about behaviour. . . The lesson Europe’s postwar political leaders drew from the societal collapses of the 1930s was that a sustainable equilibrium between democracy and capitalism had been shattered by market excesses.

“Citizens were unwilling to accept a model for the market that handed all the benefits to elites and imposed the costs on the poor. In the US, then president Franklin Delano Roosevelt responded with the New Deal. Europe waited until the continent had been reduced to rubble in 1945 before building what the British called the welfare state and continental governments called the European social model. Economic prosperity and political stability were the rewards.

“The present generation of politicians should learn from the experience. Defending a status quo that is manifestly unfair in its distribution of wealth and opportunity serves only to put weapons in the hands of populists . . .

“One way to start redrawing the boundaries would be to take on the big corporate monopolies that have eschewed wealth creation for rent-seeking; to oblige digital behemoths such as Google and Apple to pay more than token amounts of tax; to ensure immigration does not drive down wages; and to put in place worthwhile training alongside flexible markets”.

The difference: Corbyn would act for altruistic reasons, but thepresent generation of politicians’ concede only to retain privilege

Stephens (right) ends by saying that what we need is a social market economy – combining the central elements of a free market (private property, free foreign trade, exchange of goods and free formation of prices) and universal health care, old-age pension and unemployment insurance as part of an extensive social security system

And most of this is precisely what Jeremy Corbyn, Britain’s Labour party leader, wholeheartedly supports. Though dismissed by Stephens as a ‘superannuated socialist’, he would uphold and enhance the system presently faced with public disgust at the ‘fat-cat’ political-corporate revolving door with its rewards for failure. This disgust is combined with anger at the austerity regime imposed by those currently in power, which prevents local authorities from continuing basic public services and deprives some of the least fortunate of food and decent housing.

 

 

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