The Freedom to Crash

Let’s rewind and replay the mantra: leave the powerful businesses to do as they see fit, especially those in the financial sector because in deciding what would make the most money for themselves they are deciding what would generate the greatest prosperity for the whole economy. Remove regulations from them so that they are free to make us all richer.

And what happened next? Share prices went up to unrealistically high levels on the back of people spending money they had been encouraged to borrow beyond their means of paying back. Share prices dived, confidence dwindled, lenders cut back lending, less spending, less production, more unemployment, and the depression began.

We rewound too far. That was the Great Crash of 1932. The crass embrace of market freedom allowed businesses to behave as selfishly and irresponsibly as they liked until they brought the whole economy crashing down on everyone. Lessons were learnt. Out of the revulsion against unrestrained corporate power, state intervention to curb the excesses of business behaviour, to protect workers and those losing their jobs, and provide social and economic stability became the norm.

But if we fast forward to the 1970s and 1980s, the market mantra was in full flow again. All good was to come from powerful businesses being given more freedom to act. Reduce regulations controlling them. Enable them to take over functions of the state. Weaken the unions which might get in their way. Above all, tax them less and less so that the rich could get richer, and the poor would be more desperate than ever to borrow money from the deregulated lenders.

Throughout the 1990s, commentators warned that the greater freedom of the corporate sector was not leading to greater responsibility. In the financial world in particular, with taxes minimised, bonuses unlimited, the common practice was to make as much money as possible by lending to people, even if they were already heavily in debt. The bigger the debt, the higher the returns on the forecast sheet, the more those who raised the lending levels would be rewarded. So they all celebrated the escalation of their wealth until someone realised that if people were unable to pay their debts, there would be no profit at all. Panic set in. Credit started to dry up. What if the people we’ve entrusted our money with don’t have enough cash flow themselves? More panic? No, that can’t happen, the people who for decades have demanded more and more deregulation knew what they must do – turn to the government and asked for public money to bail them out. Yes, these people who want to be left alone by government, who successfully got their wish of contributing less to the public purse as taxpayers, they now want the government to rescue them by drawing on funds which others less well-off have had to help sustain.

After 1932, President Roosevelt tried to persuade the business sector that they needed to work with the government to put an end to their irresponsible wrecking of the economy. Corporate leaders were interested in the government clearing up the mess they had made, but they had no intention of surrendering their power to make money as they saw fit, regardless of the suffering it would cause others. To his eternal credit, Roosevelt did not get scared off by the corporate barons. Instead he put his weight behind a series of legislation to bring businesses under tighter control by the government. When he famously spoke about the four essential freedoms, the freedom to crash was decidedly not one of them.

Talk about Slavery

According to the walking quote machine, Sepp Blatter, footballers like Cristiano Ronaldo who earned millions of pounds from their job were being treated like slaves. Sepp was deeply concerned that football millionaires could not just tear up the contracts they had freely entered into, and move to organisations willing to pay them even more money.

In reality, of course, footballers could leave their employment at any time they want. If they have signed a contract to say that in return for whatever salary they have negotiated they would stay for at least X years, and they leave before those years are up, they (or their new employer) would have to pay compensation. So far, so little sign of slavery in sight.

However, the ability of the top players to command astronomical fees does have a significant bearing on the power structure of the sporting industry and society more generally. What we now have is a tiny minority of people who take the largest share of money out of football. For most people, their passion for playing the game, even if backed by a good level of skills, would be doomed to frustration as at best they could cling on to a precarious job with a club away from the summit of the super-rich. Calls for a fairer distribution of the money generated by football are ignored as even more is concentrated with the powerful few.

The argument is always that you have to reward talent, or talent will be wasted. But this is to conflate the need for differentiation with a craving for exaggerated superiority. Take a thousand footballers, it would be demotivating if they would all get the same payment regardless of their abilities and talents. So we could differentiate them into pay bands with the widest gap set at ten, twenty, or even fifty times between top and bottom. Would that not be enough to motivate everyone to get as high as possible while giving all those who meet the basic requirements a decent security and respectability for the work they do? After all, Geoff Hirst did not need to be offered double the payment of his teammates for him to score a hat-trick in the World Cup Final.

It is sensible to have reasonable differentials. But once you go beyond that and allow a few individuals to have such concentrated wealth and power to dictate terms to others, to have the audacity to criticise what little contractual constraints there are left on them as a form of slavery, you would have replaced what was a fair sporting contest by a plutocratic competition between organisations which could borrow or, if they had billionaire benefactors, obtain enough money to recruit the most skillful players from the world.

A society which accepts this – even celebrates it as a sign of success – will allow its corrosive ethos to spread. To those who could demand better terms, more and more would be granted, while less and less is available for everyone else. Differentials would come to have no relevance at all to secure motivation to be a better player, but simply to boost one’s ego and control over others. With the top getting just about whatever they asked for, all those lower down would have to accept the few crumbs left behind. In sport, and in everywhere else, the lowest paid end up having to put up with the most disgusting conditions, the most disrespectful terms, and the most humiliating treatment. Now that’s slavery.

Thou Shall Make Money

If instead of Moses, the CEO of a multinational corporation had gone up to meet the Almighty, he would probably have returned with just one commandment – thou shall make money. In any case, that’s the only one that seems to have prevailed above all else. In the name of enabling businesses to make money, anything goes.

What about all the other commandments? Well, the notion that there should be no other gods went out the window long ago when Mammon arrived on the scene in his private jet. As for idols, America has got lots of them, and so have Britain, singing, dancing, sporting, acting, all neatly quantified by the size of their contracts, the appearance fees they command, and their sponsorship deals.

Turning to the limit on the use of the name of God, it would seem that money buys you the right to invoke God in anyway you want. If you were rich, you could thank God as often as you’d like for the precious gift of money making granted to you. If you were poor, you would be blaspheming should you blame God in any way for your wretched position. If your country was wealthy and possessed enough weapons to blow up the rest of the world, you would be entitled to say God bless your country routinely.

The Sabbath should of course be kept holy, except when you want to make more money by opening shops throughout the weekend so that people who were busy earning their wage throughout the week could get their shopping done, and people who didn’t work enough to make ends meet might just earn a little bit more to stay afloat.

Fathers and mothers should be honoured to the extent they bring their children up to respect money making as the key to a successful life. Cursed are they who divert their sons and daughters to questioning social injustice or pursuing alternatives to a wealth-generating consumption lifestyle.

As for lying, stealing, or killing, it depends very much on your corporate strategy. Your products can damage people’s health seriously? They might give them ruinous addictions? But if they could expand your turnover and profit, it would be your duty to keep misleading the public. You look at the money brought into the company, and you think because you are high up enough to give yourself a larger share of it and force people below you to take what would in effect be a pay cut because of inflation, don’t worry about the blatant theft. And if the guns and missiles you sell would almost certainly take the lives of hundreds of thousands of innocent people, so long as you are making lots of money, no one would dare excommunicate you.

And if lying, stealing and killing are not going to get you in trouble, then your wealth, the lawyers it can buy you, and the charity donations you can make to religious organisations would guarantee that adultery (so long as it is of a heterosexual nature), coveting your neighbour’s house, spouse or anything else, would not even be noticed.

So go forth and multiply what’s in your bank account is pretty much all that matters. If you can make money by lending it irresponsibly to others who cannot really afford another loan, carry on. Blessed are those who ruin the lives of others, and still get away with another hefty bonus.

The Gene Code Lottery

People in Britain are outraged any time they hear about the National Health Service agreeing to cover the costs of certain medical prescriptions in one region but not others. They denounce the injustice of “postcode lottery”. After all, it is supposed to be a ‘national’ health service. It was established to ensure no citizen, rich or poor, would have to worry about having enough money to cope with sickness. But now budget constraints are increasingly leading to talk of rationing. How are we to decide who should get what when there is not enough to go round?

I have just learnt from a friend in America that Oregon has earlier in 2008 adopted, of all things, the lottery as the mechanism to deal with their healthcare crisis. 600,000 people in that state – 17% of the population – have no health insurance. The state wants to help them but due to ‘budget constraints’, it can only afford to cover the health insurance of 24,000 of its citizens. So all those without health insurance are invited to enter a lottery draw and a lucky 4% of them would be given a lifeline. The rest would have to accept their fate.

But budget constraints on government spending are always the results of decisions on what are to be prioritised. This is not just about decisions around building more bombs and fewer hospitals, but about how much revenue should be raised for the public good and how much should remain in the hands of private individuals. Those who subscribe to meritocracy would maintain that individuals who have the skills and drive to make money for themselves deserve to keep their hard earned wealth. The state’s role is to remove any barriers from people from realising their potential, and the rest should be left to individuals who apparently always know better than society’s collective wisdom regarding what to do with their money – be it about smoking, alcohol abuse, funding for medical research, or neglect of vulnerable children.

The problem with meritocracy is that it is not so easy to define anyone’s potential or what constitutes a barrier for the state to remove. Your genes, the upbringing received from your parents, your family’s socio-economic position, the neighbourhood/country in which you’re born, any serious sickness or disability you have to contend with, the quality and commitment of your teachers, the restrictions on your mobility to find better opportunities to flourish, all these can enhance your potential, or place virtually insurmountable barriers to success.

We actually have a choice. We could leave everything as it is. There will always be those born with multiple advantages, and those trapped by one misfortune or another. Let them get to the top, or sink to the bottom as events unfold, and from time to time let the state step in and offer the unlucky ones, or say 4% of them a helping hand to ease their burden a little. But overall we should not interfere with the Lottery of Life.

Or we could put an end to this gambling culture. Why deceive people into thinking they all have a fair chance to get on in life when the odds are stacked against many of them, with only a very few winners taking home the entire jackpot. Instead we should be honest and let people know that the only responsible way of living together is to have a system whereby those who have already handsomely won the gene code lottery and many besides should contribute a sufficient share to help deliver what is necessary for the public good. Those who have the misfortune to seek medical or other help through no fault of their own could then count on getting the support they need without undue constraints.

The S Word

You can tell a lot from people’s reactions to a single word. Take subsidiarity. For many people, this is an awkward, complicated word. It seems to suggest that things should not be as they are. It is almost subversive in implying that those with power should think about giving some of it up. You can see why some people feel uncomfortable about it. However, for others, this one word beautifully captures the essence of empowerment, devolved governance and participatory democracy. Power is to be exercised at the lowest possible level where it can be effectively exercised. The question of delegation is neatly turned upside down. It is not about what should be passed down to the more local level, but what should be passed up.

In any structure of governance, it is inevitable that the precise of location of power is contested. Those who don’t like the S word tend to focus on cost efficiencies as the key reason why power should be concentrated in bigger and more centralised bodies, while those who take subsidiarity seriously would argue for more power to rest with smaller, more local bodies such as neighbourhood or parish councils. So can these divergent views ever be coherently reconciled?

The first question to ask ourselves is why powers should not be taken away from people who are perfectly capable of exercising them. To answer this question, we cannot get away from taking a position on the notion of democratic citizenship. We either subscribe to the view that people in general can and should never be more than recipients of public decisions made by a ruling elite, or we embrace the concept that we are all self-governing citizens who will entrust others further removed from us to make decisions for us only when we are not so well placed to deal with those decisions.

It was John Stuart Mill who pointed out that unless we want to have a nation of sheep, blindly obedient and submissive, we must cultivate wider engagement by citizens in municipal decision-making. Once we accept the premise that citizens must be enabled to have their say as much as possible over their own governance, the rest follows. Not only should more powers be accessible to them at the most local level, but even when powers need to be exercised at a higher level – for the sake of efficiencies, strategic coordination, or whatever other reason – it is essential for citizens to be made aware of how their views can help to inform and shape those decisions.

This means that it is in fact a false dichotomy to suppose we must choose between ever larger units of governance and a proliferation of smaller units. The way forward is to reconnect units of governance at every level to make them accessible to varying degrees to citizens themselves. On matters where citizens can work directly with the most local, neighbourhood level bodies to prioritise improvement to their environment, power should rest with those very local organisations. On other matters, the focus needs to be on how the citizens working through the most local units can influence and hold to account the larger units of governance. This is the way to develop an empowering framework of governance, and achieve real subsidiarity.

The Good, the Bad & the Foreign

“Our laws and customs must be preserved,” so say many ‘descendants’ of the distant Anglo-Saxon tribes, fearing that the British or the American way of life would be altered by ‘outside’ influences. Despite their alleged adoration of their cultural heritage, they seem genuinely ignorant of how Franco-Normans, Germans, Dutch, Arabs, Jews, Huguenots, Hindus, Chinese, not to mention those from Africa and the Caribbean, have over a thousand years shaped the ideas and practices of Britain and her North American kin. If the old Anglo-Saxon way of life had been shielded from the rich and stimulating input from ‘outside’, it would have left us with a dull, primitive tribal existence.

But if automatically rejecting all things new to arrive from abroad is sure to lead to a stultifying dead-end, it would be no wiser to try to incorporate every belief or practice brought to these shores. Curiously, that’s exactly what the multi-cultural relativists want. Without making any distinction between good and bad ideas, so long as someone holds it dear, they want to find a place for it. “So where you come from, women have to take orders without question from men; homosexuals are routinely beaten up; children are prevented from learning about empirical reasoning; hatred of those who do not share your religious creed is normal; let us see how we can accommodate your precious cultural practices.” Anyone who challenges this mind-numbing crassness risks being charged with being intolerant.

Of course anyone not consumed by terminal irrationality can see that whether our laws and customs at any time should change or not depends solely on the legitimacy of the proposed changes. Would the changes correct prevailing injustice? Give help to people whose suffering has been neglected? Stop abuse of power which has gone on too long unchecked? Facilitate the objective enquiry for knowledge and tackle superstitions? Prevent the domination of vulnerable groups by an unaccountable elite? Enable more people to learn to appreciate each other as fellow citizens and not be blinded by prejudices? Proposed changes which, on the evidence available, are likely to deliver such tangible improvements should be considered for adoption, and those which are not, should be put aside. Whether the proposed changes originated from people who have long settled, or newly arrived, in the country concerned is neither here nor there.

Some may say that this progressive outlook on the basis for reforming society is precisely what characterizes Anglo-American culture, and should not be undermined by ‘foreign’ ideas. But while it is true that the progressive ethos has strong roots in the democratic development of both Britain and America, it is far from the case that it pervades all aspects of our intellectual, social and political life. Ideas which are dangerously reactionary, pro-exploitation of the weak, opposed to the fairer distribution of power, come not just from abroad but are sadly found amongst many native advocates who just as fervently detest the prospect of more progressive communities.

Furthermore, progressive ideas have long been embraced by individuals, groups, and countries outside Britain and America, and when they offer suggestions or criticisms in the spirit of helping us live up to the progressive vision, the geographical or ethnic origins of those proposals are irrelevant in considering their merits. It also follows that apart from our progressive heritage, and the development of laws and customs it favours, how any other aspects of our culture – music, cuisine, sports, festivals – mingle and change over time is something best kept away from any form of legal or political intervention. The worst fate to befall Anglo-Saxon, Anglo-American, or indeed any form of life, is for it to be arbitrarily frozen in time.

Between Nader and the Plastic Sea

There is now more plastic in the oceans than plankton. Six times more in fact. And who’s producing all this stuff to choke our marine life to death, or any of the other environmentally damaging materials endlessly spewed into the seas and the atmosphere? It’s none other than the corporate giants who put their own profits above the interests of all who have to suffer the consequences of their irresponsible behaviour.

So when they think they can get away with the excessive packaging, energy consumption, and addictive consumerism they generate simply by planting a few trees or charging customers for the use of their plastic bags, it is not surprising that there is a surge of desire to call for someone to lead the charge against shameless corporate powers. Someone with a deep understanding of the harm they inflict on the public, a track record in challenging them to change their ways, and an inspiring resoluteness in standing up to them. Someone like, well, Ralph Nader.

Nader would not be deflected by tokenistic PR gestures, intimidated by the legal machines at the disposal of plutocrats, and certainly not bought off by potential corporate donors. So why, when he said he would stand in yet another Presidential race, have so many truly progressive-minded people shaken their heads in sadness?

The critical issue here is how we must avoid the dream of an ideal outcome getting in the way of something better ever coming to pass. Of course corporate business is now far too powerful in relation to workers and citizens in general. Whatever proposal to restrain them is put forward, it is always possible to suggest that more could be done, and faster. More regulations, tax deterrent, fines, and so on, but none of this would take effect if the public positions for deciding on such issues were always occupied by those least prepared to do anything about them.

Nader is not alone in thinking that the Democratic candidates for the Presidency have tended to be too cautious in challenging corporate hegemony. But to change that, we should make the case more effectively, more widely that political leadership to curb corporate irresponsibility is urgently needed. If we have yet to persuade enough of our fellow citizens to demand the leadership we believe is needed, it would be counter-productive to embark on a course of action which would only increase the probability of the Presidential contest being won by the most pro-corporate candidate there is.

Why jeopardize what reforms we could realistically secure by taking votes away from the candidate who would indisputably do more than whoever the standard-bearer for the corporate establishment is? What would a futile gesture do, except leaving people worse off than they otherwise would? Radical agitators once believed that it was better to hamper moderate reformers so that their failures would usher in much more unbearable conditions, and the people would rise up to demand revolutionary changes. History has taught us that it was a fool’s dream.

None of us wants to see our oceans turned into a global corporate cesspool. To clean up this mess, we must forget futile gestures and PR exercises – especially when they would only weaken our closest allies and lend false legitimacy to the polluters. We should concentrate on raising public awareness of the need to reform so that those with a real chance of winning public office can count on a widening base of support to rein in the corporate abuse of power.