Friday, 29 November 2013

The "Deserving Rich" - A Confederacy of Dunces



Many years ago, I witnessed an evangelical church service which culminated in the pastor asking the congregation to thank God for blessing one of their number with a business so successful that he had now taken delivery of his second Daimler motor vehicle. It might seem an indulgence to have not one but two such cars, he explained, but by providing in this way, The Lord ensured that there would be more comfortable seats for this Chosen One (and his similarly blessed spouse) to drive elderly congregants to the Sunday Service.

The rich run the world. It has been this way for generations. Once upon a time, religion was used (as it often still is) to sanctify the status quo with Divine Approval, or even Divine Inevitability. To challenge your Lord was to challenge The Lord - Church and State, Indivisible, as Emperor Constantine appreciated when he adopted monotheism at the height of a bloody six-sided Roman civil war back in the fourth century.

Religion has declined somewhat since then in its ability to reinforce the established social order and indeed at times religious people have led the charge against it. So now, in 21st century, the defenders of the beleaguered, de-regulated market capitalism which our entire planet is relentlessly subjected to have to come up with some other means of validating their bloated share of its resources. God won't cut it - and even the Pope is signalling some measure of distaste for the sheer scale of the skew of wealth on an increasingly resource-scarce planet. While one billion people exist in permanent hunger, just one thousand corporations and their shareholders dominate the world: the top 10% of the world's population own nearly 90% of the world's assets; the bottom half - nearly three billion people, share 1% - just one per cent - between them. And within the 10% richest, the skew is even more marked - the 1% at the very top own nearly half of everything. These figures are from 2000 - in the last ten years, things have got even worse.

Advocates of this inequality have, of course, long argued that it is the only workable way of doing things; that it harnesses the allegedly innate greed and competitiveness in human nature and, somehow, the agglomeration of lots of individuals pursuing their own selfish desires to better themselves over their rivals somehow benefits the common good. The rich would generously "trickle down" their wealth to the rest of us (somehow that sounds marginally better than "the masters would throw scraps from their tables").

To oil this process, everything becomes fair game - a potential commodity. Anything remotely scarce can be priced and bought and sold - and, as we see in a world where food and water are coming under increasing pressure in terms of supply, even the absolute essentials of life are now mercilessly viewed as items for speculation and profit. Water is not a human right, says the former CEO of Nestle as his company wipes out rivers in India for their bottling plants; while Monsanto owns 93% of India's cotton seed against a backdrop of a silent Armageddon - nearly a quarter of a million Indian farmers have committed suicide since 1995; one farmer every thirty minutes. Indeed, a tidal wave of mental health problems and rise in suicides has been increasingly a hallmark of global capitalism in country after country. iPhone users will be relieved to know that Apple have at least installed "suicide nets" on some of their buildings to stop their staff throwing themselves out of top storeys.

So much for the common good.

Yet with the banking crisis perhaps not quite overthrowing the system but shocking it so severely and at such a direct cost to hundreds of millions of taxpayers around the world, the proponents of free market capitalism may well be beginning to feel a little anxious. Not only it the system coming under growing strain, but more and more people are openly questioning its sustainability and, even, its morality. Rich individuals' ability to avoid tax is well attested, while fewer and fewer companies pay corporation taxes via perfectly legal methods such as off shoring and using tax havens. Moreover, within companies, we no longer exist in a world where CEOs might earn 10, 20 or even 50 times the lowest paid in their company - the figures now reel off in the hundreds; or, in the case of Wal Mart, the CEO, the appropriately named Mr Duke, earns 1,034 times the median salary of his company workers: the lowest paid rate is not on record.

For a long time, the orthodox view was, of course, that we had to put up with these excesses; that without such captains of industry well rewarded for their efforts steering the means of wealth creation forward, we would all be the poorer and whole industries, even nations, would be ruined. But 2008/9 and the rank inefficiencies and corrupt practices exposed across the world in boardroom after boardroom put paid to that myth. Stretching back to the origins of capitalism, the job creating, risk taking entrepreneur was prized as the person who would create employment and prosperity for others. In essence, this was always a myth, though a powerful one - Robert Tressell in The Ragged Trousered Philanthropists written in 1911 illustrated repeatedly how deeply held this belief was even among the starving poor.

But it became a transparent lie when the risks being taken were clearly with other people's money, often the pensions and savings of individuals or the debts of the very poorest, and the people taking the risks were seen to be little but talentless, self-regarding gamblers. That most of them have endured and continue to pay themselves large bonuses and are currently busy inventing ways to bypass new EU rules on bonus caps, shows the tenacity of the system.

And yet, with the myths exposed, if the system is to remain validated, a new talisman or fetish needs to be established to excuse and sanctify the status quo.

Enter Boris Johnson, Mayor of London, earlier this week. His case was that IQ, or intelligence quotient, the measure of an individual's ability to understand concepts and problem solve, means that inequality is inevitable. With 16% of "our species" with low IQ measures and 2% with super-high ones, it is apparently inevitable that "if you shake the cornflake packet, some of the cornflakes will reach the top." It was an odd proposition - as far as I am aware, IQ tests , which are rather debatable measures in themselves, are not used to appoint CEOs and senior staff of big corporations; which is not to say that the occasional (but very different) psychometric test isn't thrown a little wildly into the mix from time to time. And of course, EQ, or emotional intelligence, the ability to empathise with other humans, is an ever more remote requirement for such positions: in fact, quite the opposite traits are often prized, as demonstrated in Snakes in Suits: When Psychopaths Go To Work, by Babiak and Hare. But, whatever we live in, it is not a meritocracy and does nothing to explain or excuse inequality of outcomes in the workplace or wider society.

After this supposedly clever, even allegedly intelligent, analogy, Johnson followed up with an argument echoing the "greed is good" speech of the fictitious villain Gordon Gekko character in the movie Wall Street. Although he did issue a sop to the need for wealth to be voluntarily shared more than in the past, Johnson went on to argue, as Gekko's character did, that greed is the driver of humanity.

Quite aside from the unsustainability of a world filled with billions of relentlessly self-interested, greedy humans, this argument, repeated so many times by the wealthy over the last three centuries since the emergence of a market economy, is contradicted completely by the realities of human experience down throw tens of thousands of years of existence. Archaeology and other human science research has shown pretty conclusively that the most inherent tendency among both humans and other primates is to co-operate and empathise with each other. Without this, society would never have come into existence - we might at the very best have hoped to still roam the Savannah in small groups of bickering sociopaths. But more likely, we would have died out from eating each other many aeons ago.

Our planet has sustained capitalism for barely three centuries, a blink in the eye of both its existence and humanity's. It is not our natural way of doing things, nor is it sustainable - although severe damage has been done to our world, with fairer distribution of resources, one billion people would not need to go to bed hungry, and we would not be driven to rape our world of its diminishing natural resources. Greater equality, pooling and sharing resources and nurturing our inherent sympathy and empathy for other people need to be at the heart of both our social and economic cultures. None of these can be achieved through an economic system centred on maximising private profit.

The rich both now and in the past argue that a fairer society is not practicable - but then, of course, they would, wouldn't they? A bit like the guilt-ridden Church at the start of this piece, they know deep down that what they are doing is wrong, is not working. But, seduced by their own greed, they project the same motives to everyone else, dismissing any calls for change, for redistribution, as mere cries of envy, rather than pleas for justice. Let them eat cake, indeed. Or go to food banks - except now some of Johnson's bloated colleagues are even suggesting these encourage poor people to be feckless.

The result is a society twisted into unnatural conflict and self-harm. Although we have never had more wealth in Britain, for example, we are told we cannot afford community - young people must pay for their own education, old people are a burden and social services of all kinds, from care homes to libraries, must be cut or tendered out to profit-seekers. There is no such thing as society - only individuals, competing and coveting each other.

For three hundred years, we have been told again and again that we cannot manage without this system and the people who run it and who benefit wildly disproportionately by all measures, whether on the basis of ability, contribution or need.

But in the world we face now, with diminishing resources and environmental degradation, with food and water under pressure and our seas acidifying at a truly terrifying rate, the Earth will not sustain capitalism for another three centuries - even three decades seems increasingly unlikely.

The plain, simple truth is that we can no longer afford it.


Tuesday, 26 November 2013

The Man Who Stares at Groats - positive currency for Scotland's Future


Salmond and the ancient Scots groat
The Scottish Government has today launched a far reaching white paper, Scotland's Future, outlining its plans for a new, independent country if Scottish voters say Yes next September. In a polished performance, as well as presenting the proposed constitutional settlement and complex division of assets and liabilities between Scotland and the remainder of the United Kingdom, First Minister Alex Salmond and his deputy, Nicola Sturgeon, outlined a range of key policy objectives should the SNP be successfully elected as the government of a newly independent country.

The SNP's plans are mildly left of centre, with economic growth at the heart of their plans for a settlement along a vaguely Scandinavian type model of mixed ownership and social welfare - an objective probably reflecting the broad political consensus within Scotland but something increasingly alien to the gradually harsher, neoliberal approach of the two and a half main parties south of the border.

Controversially, the paper includes retaining a currency union with the rest of the UK and keeping the pound sterling as Scotland's currency. This may be driven by the SNP seeking to reassure voters that independence will not create some new alien world with a return to the ancient Scottish coinage of the groat but it leaves a post-independence Scotland somewhat beholden to the economic policies of its much larger neighbour, precisely the recipe for disaster that has racked the European Union in recent years. What if, as does not seem unlikley, an independent Scottish Government wishes to follow an expansionist policy while London continues to opt for austerity? There is little doubt which piper would call the tune and Scotland's independence in economics at least would be curtailed as a result.

Independent countries are most successful if they have independent currencies - and of Scotland's Scandinavian comparators, only Denmark has yielded to the Euro. Sweden and Norway, one inside and the other outside the EU, thrive by their own currencies, while the remarkable turnaround in Iceland's economy since the disaster of 2009 would not have been possible without its sovereignty on currency (as well as a Green - Left government). A Scottish currency is a key part of the Scottish Green Party's egalitarian pro-independence platform, lauched by MSPs Patrick Harvie and Alison Johnstone a couple of weeks ago. (Q&A video with Patrick Harvie below.)

There is little doubt Scotland could function very well indeed as an independent state and given the increasing cultural and political divergence between Scotland and, in particular, the dominant "middle England", there is no compelling reason to remain in a union which few south of the border are particularly bothered about. If the unionists' call north of Gretna is Better Together, their southern equivalent, were there one, could as easily be titled Couldn't Care Less.

The narrow and mean-minded approach of the unionist camp - denouncing currency union as fantasy when they had previously endorsed it and running on a ceaseless tirade of abuse towards Alex Salmond in particular - does little to enhance its case. It lacks vision and seems bereft of any emotional connection with the debate, trading often dubiously constructed figures about fiscal changes and bizarre stories about not being able to see Dr Who on the TV, rather than addressing any positive reasons for remaining in union. Its harsh rebuttal of the white paper before it was even published will do little to help its case just as some polls seem to show the gap between the two sides narrowing slightly. If the Coalition Government and Labour unionists remain as stridently intransigent on opposing currency union, it is to be hoped the SNP does the logical thing which it should have done in the first place and moves to a separate Scottish currency as the only choice remaining given the blatant ill will of the UK parties. It would be a massive error to nail their colours to the mast on a union with entities that don't reciprocate.

In the meantime, there are over 600 pages to read, available here, and ten months of campaigning to go. For Scottish expats like myself, south of the border for some years, it will be an interesting time guaging the impact of the debate on the rest of the country - the commonly held, but rather incorrect, view being that Scotland is subsidised by the English taxpayer (Scotland actually contributes more tax per head than the rest of the UK and receives significantly less than Londoners and many parts of the north of England).

With the rightwing media portraying Scotland as a burden to the rest of the UK, this line of argument no matter how incorrect may nevertheless become more of an issue south of the border in the run up to September. In the event of a No vote, then, as the Coalition's Secretary of State for Scotland has indicated, there may well be some move to change the public funding for Scotland in the long established Barnett formula, which sets funding for Scottish services. Consequently, having voted against independence after being told it would be economically damaging, Scots may then face being economically damaged by Westminster in any case.

So, the choice may become starker still - who do people in Scotland have confidence in most : an increasingly remote, centralist Government in Westminster; or themselves?


Thursday, 14 November 2013

Who Needs A Bedroom When You've Got the House of Commons?

MPs debated the Bedroom Tax this week. Tories and Lib Dems combined to vote down a  Labour proposal to scrap this pernicious tax which has driven thousands of vulnerable people out of their homes and left others in debt for the first time, anxious about their future. It is so counter-productive that in the Mersey, one social housing society is even considering bulldozing perfectly good houses because the way the bedroom tax works means that they can no longer let them out to any one.

But for one Tory MP, caught in the heat of the debate, it all got too much.

So he had a kip.