Thursday, 25 September 2008

The People's Flag

The first elections of which I have any memory are those of 1964 and 1966, when Harold Wilson ended 'thirteen years of Tory misrule'. That wasn't his only good line - I particularly liked the one about the 'white heat of the technological revolution'. I would have voted for him, if I hadn't been too young - although I knew better by 1970, when I was no longer so young.

One of the other big issues of the time was the re-nationalisation of the steel industry, an election promise which was implemented by Wilson. Nationalisation then was about taking state control of 'the commanding heights of the economy' - and it was intended to benefit the taxpayer. All very different from the 2008 version of nationalisation.

In my mind, the shift happened under the Heath government between 1970 and 1974, when the failing aero engine company, Rolls Royce was temporarily taken into public ownership. I still remember the little ditty of the day:

The People's flag is deepest blue
We're buying up Rolls Royce for you
But if it makes a profit then
We'll flog the b****** back again

This year we've seen probably the largest nationalisations in history as both the UK and US governments bail out large financial institutions at the taxpayers' expense. These are not nationalisations aimed at long-term benefits for the taxpayers; they are short term expedients, forced on governments because they simply cannot allow some institutions to fail.

I agree that the governments were left with little choice; they simply could not allow these companies to fail. We need to recognise, however, that these bail-outs must mark a very significant turning point in the way the economy is run. The argument for light or non-existent regulation, and for high rewards for successful companies and individuals, has long been based on the assumption that those who take risks should reap the rewards.

But what has now become clear is that, in some sectors of the economy at least, the risk is ultimately borne by us as taxpayers, not by the people making, or benefiting from, the bad decisions. I cannot think of a more graphic illustration of that than the news that the people in America who ran Lehman Brothers into the ground have had their bonuses protected as part of the takeover by Barclays.

Risk and reward is one long-standing principle – but there's another we should bear in mind; the one about paying the piper. If we as taxpayers are going to end up shouldering the risk, then I think we have every right to expect that governments will exert much more control over the activities which create the risk. For too long, governments have turned a blind eye to the insane way in which the financial markets have been turned into little more than casinos, where even the gamblers have often not understood the bets they've been placing.

And there's another thing that governments need to look at as well. Recent events have been driven in large measure by corporate and individual greed, and often highly short term greed at that. Would the temptation to take silly, excessive risks be as great if the rewards available for so doing were not themselves silly and excessive?

4 comments:

Stonemason said...

Well this Unionist doesn't take any issue with your post, but how do we find the honest poachers to turn into the honest gamekeeper?

I think we need the "poachers turned" because so few understand the mechanisms of the modern financial casino's, that should read "modern markets" but casino has a truer ring.

John Dixon said...

Stonemason,

"this Unionist doesn't take any issue with your post"

I think you'd be surprised at how far it is possible for 'unionists' and 'nationalists' to agree on a whole range of topics. The late Phil Williams used to tell the story of the man from Bargoed who said to him once, "You know, if you only dropped this talk of self-government, Plaid Cymru would sweep the Valleys."

The chief difference, very often, is whether, and to what extent, the solutions can, or should, be implemented at a Welsh level by an independent parliament, or at a UK level by the current parliament. Given the radical traditions of Wales, one of the strongest arguments for self-government for me has always been that Wales, given the power, would move further and faster than the more naturally conservative England.

"how do we find the honest poachers to turn into the honest gamekeeper?"

That's a good question. One of the tragedies of the current mess in the financial markets is that so many bright people are using their talent and ability to find 'innovative' ways of working the system to make massive profits for the few. Just imagine what could be achieved if that brain power was put to work to seek advantage for the many. Part of it, surely, is about what motivates them. As long as personal and corporate greed are the main drivers, they will continue to behave in the same way.

Stonemason said...

Speaking with you I might be wondering why I remain a Unionist, then I read some of your fellow bloggers and must respond quite differently to them.

But .....

I personally could campaign for "self-government" in a regional context, a model for the whole of the UK. With much less government from the centre.

John Dixon said...

Stonemason,

Some 'nationalists' respond to 'unionists' on the basis of what they assume them to believe rather than what they actually say; and some 'unionists' respond to 'nationalists' on the same basis as well. It's unfortunate, and prevents rather than facilitates debate.

I think that most 'unionists' (but not necessarily all!) start from a genuine belief that Wales is better off united with England. I disagree, but recognise that it's a perfectly valid position to hold.

I want Wales to move forward, but I want to do so by convincing the people of Wales that my vision of the future is the right one. I don't know any way of doing that, other than by being willing to engage in debate. Independence for Wales will come if, and only if, the people of Wales decide that they want it.