Thursday, 16 May 2013

Whose Money Is It Anyway?

When our country needs help, shouldn’t we all contribute more according to our ability for the sake of the common good? Some to their credit are willing to do just that, but others keep coming up with reasons why they should be left alone. One argument suggests what money individuals make is their business and no one else has a right to demand a share of it. Another claim that because of the ‘Debt Crisis’ there is simply no money left to share with anyone. And finally, there are those who insist that what spare money there is should only be lent to private individuals and firms, but it must not be invested in any form of public provisions.

Let us look at these arguments one by one.

For a start, it is obvious that though some people know how to make a lot of money, it does not necessarily follow they have a right to keep that money. For example, there is no legitimacy to the money-making activities of those who push narcotic drugs, traffick people, steal, con, or extort from others. There are also problems with people who pollute, promote addictive consumption, or tempt others into taking excessive risks with their money or their health. In all such cases, society has an interest in deciding what laws and policies should be put in place to curb the activities in question, which may involve taxing, fining or even confiscating the proceeds generated by them.

Apart from taking money from those who have acquired it by dubious means, a democratic state also has a responsibility to ensure sufficient resources are pooled together to deal with threats which would otherwise harm society. This can’t be left to individuals to chip in as they see fit, for the simple reason that there are inevitably freeriders who would try to benefit from the pot without sparing any of their own fortune.

At this point we hear the familiar cry of “There’s no money.” But has all the money really disappeared? In the UK, unclaimed assets – money sitting in accounts with no claimant – are conservatively estimated to stand at £77billion. Evasion and avoidance of taxes stash away another £120billion. And corporations outside the financial sector (ie they are not banks) are sitting on cash reserves of £756billion (Ernst & Young estimate). In truth there is plenty of money, the question is what should be done with it.

Many people seem to forget that when the banking sector was in danger of collapsing, it took bailout money from us via the state (estimate fluctuates between £500billion to 1trillion). Now the UK banks sit on assets of nearly £7trillion and pay out £13billion in bonuses (2012), yet some still pretend it would be sacrilegious to suggest that they should help the country by loaning, investing, or paying a windfall contribution to fund public works to revive the economy. These same people urge the banks to lend more to the private sector when private debt as % of GDP is six times higher than that of the public sector debt. Furthermore, while this approach is showing no sign of generating growth, a definitive study* has confirmed that a fiscal expansion funded by borrowing will lead to growth, and with the current unemployment level, reduce the deficit.

Let’s start using our country’s money more wisely.

[*The Economic Consequences of Mr Osborne - Fiscal Consolidation: lessons from a century of UK macroeconomic statistics, by V Chick & A Pettifor, University College London & Policy Research in Macroeconomics, 2010, revised 2011]

Wednesday, 1 May 2013

The Greed Tyranny

Why do people with much more power and money than the rest of society take it upon themselves to reshape public policies to secure even greater domination over everyone else? What drives them to seduce politicians with their substantial donations and media influence? Or to strike fear into voters against imaginary threats so they would back policies that actually serve the corporate elite at their expense?

The answer lies with the sixth giant, Greed.

After the defeat of fascism in the Second World War, progressives rallied to Beveridge’s vision of slaying the five infamous giants of Ignorance, Idleness, Squalor, Disease, and Want. A civilised society in partnership with a responsive state would ensure the provision of education, employment, housing, healthcare, and social security. Public debt of over 200% of GDP was brought down through growth fuelled by state investment in building a better future for everyone. Quality of life improved substantially, especially for those on lower income.

But they forgot about Greed. And Greed struck back with a vengeance.

From the 1980s on, Greed in the form of plutocratic manipulators have driven forward a relentless agenda to make the wealthiest 5-10% in society even more rich and powerful by releasing them from any bond of solidarity with the other 90%.

Ideological arguments do not so much shape this agenda as are deployed to justify the overriding aim of amassing more power and resources for those with the most, while making everyone else more dependent on them.

These plutocrats – Reaganites, Thatcherites, funders for ‘protest’ parties like the Tea Party & UKIP – push for taxes to be cut to widen the gap between rich and poor. They press for public provisions to be slashed so that it will hurt the 90% but will have little impact on the wealthiest. They arrange for public assets to be handed over to private corporations so the few can make profit from the rest and penalise those who cannot afford to pay. They repeal laws as red tape if these hinder the wealth accumulation of corporations, but bring in regulations to clamp down on any resistance from workers and unions to arbitrary business diktats. Worst of all, they orchestrate scapegoating campaigns to deceive people about the real causes of social and economic problems, and divert public anger towards vulnerable people least able to defend themselves: immigrants, disabled people, the unemployed, those in dire poverty.

Greed, with the other giant causes of human misery in its tow, is now a tyrannical force in politics. Those most adept at squeezing dry the fruit of ordinary people’s labour, and siphoning off the resultant nectar to their private reservoir, are granted a place at the apex as ‘wealth-creators’ and can pick their own privileges. Everyone else is robbed of equal access to quality education, decent jobs, affordable homes, free healthcare, and a real safety net.

Politicians looking to rally the great majority of the public to join forces in rebuilding our society, step forth and declare: it’s time to end the tyranny of Greed.

[There are two public talks in Cambridge this May on ‘The Problem with Plutocracy’ by Dr. Henry Tam:
7 May, Tuesday, ‘Left with a Hard Choice: the contest of democracy v plutocracy’
13 May, Monday, ‘Will this be the Plutocratic Century?’
For more details, see ‘The Problem with Plutocracy’]