Monday 23 January 2012

Diverting attention

The Labour and Conservative leaders seem to be vying with each other to see which can offer the most trenchant critique of the style of modern-day capitalism.  It will never lead to any real action, though.  Once they’ve milked this one for all the sound bites they can get, they’ll just move on to something else. 
And, for all his bluster, Cameron seems either unwilling or unable even to intervene in remuneration decisions at RBS, despite the Government owning 83% of the company.  How serious can he really be about empowering shareholders?
More significantly, an argument about the style of capitalism avoids any discussion about the substance.  With capitalism suffering an enormous crisis, and the dependence on borrowing and growth shown to be unsustainable, it’s not an alternative style that we need, but an alternative model.
Sure, as its supporters regularly trumpet, capitalism has been a huge driver of affluence from which we have all benefited.  Even Marx recognised that.  But the idea that it can or will continue indefinitely owes more to faith than fact.  And to point to the benefits without discussing the disbenefits is to arrive at a very unbalanced conclusion.
Capitalism may well have driven growth and affluence, but it has also driven rising levels of inequality, and by externalising costs in pursuit of private profit has left human society as a whole with the costs of the environmental damage caused by rampant growth and exploitation of natural resources.
Criticising fat cats and boardroom pay may attract media attention, but it’s a diversion form the real issue, which is about how we move from a global competitive economic model to a local co-operative one.  It’s about fairness in allocation of finite resources rather than power and strength.  And it means the sort of changes which Tory-Labour politicians will never propose.


Sipp investing said...

Please explain one thing to me: how in bloody hell does Sir Fred Goodwin - the bloke who almost toppled the entire British financial system - walk off with a multi-million payout and retain his nighthood. Is there not something wrong with this picture??? This is what enrages the man in the street and creates such bitterness towards banks and the establishment.

Anonymous said...

The ledgend of the Cynon (a story of capitalism in Wales) : Once upon a time there was a coal mine which the owners and the government said was unprofitable. It was a tower of a mine and had been occupied by a hoard of communists who wanted to bring down the government to effect a socialist transformation of society. All involved, including the local princess, were dumfounded when the government turned round and said "take it, it's yours, we don't even know where this obscure place called Long Meadow is". It was decided to try out a new fangled devise called a spreadsheet and some numbers were punched in. There were a few good panels of coal and an inspection of the headings found the retreat method could be used. Estimated 470,000 tonnes per year. They knew how much that was worth. Now for the costs. It was decided there would be no compromise on the terms and conditions of the miners, but it wasn't as costly as first thought. Then there was some extra investment needed to take the coal down the mountain and dump the waste up in the forest, surprisingly, there was some cash available by using the machinery as collateral on future earnings. The enchanted forest was felled for timber used in the mine and the infill used to plant a new one. Gas was a 'problem'. It was decided to drain the methane into the national grid, and everyone wondered why nobody had thought of this before. To set up the coop involved a bit of capital from everyone, and many just got their redundancy and didn't want to move away from Long Meadow. After all the numbers were plugged in it still came out with an annual profit. Then a few years later, disaster stuck, the first few years liberated £7million net profit per year, and all the communists shared it equally between them. There still remains a mystery in the ledgend, as 5% on all turnover was paid out in gold to the government in Capital City as 'carbon levee' and 20% on 'corporation tax'. The local town known as "Queen of the Valleys" still can't find the gold, and the local princess still keeps telling the folk of the village, now ravaged by strong winds, that they're too poor to rule themselves.