0 Vacuum Up - the reality. Trickle Down - the lie.
I am sure you have heard of the fallacy Trickle Down? If not, here’s a brief synopsis of the fantasy which so many believed. Some may still believe it, despite the weight of evidence to the contrary being so great as to throw the earth off its axis. The fantasy goes like this, “Allow the rich to accumulate as much wealth as possible because then some may trickle down and benefit you." The idea that you should forfeit your meagre wage so the rich may accumulate as much as possible, in return for which you may get a small portion back, sounds absurd. It is absurd. However, when the rich first peddled this fairy tale, it was couched in different words intended to mislead. It was sold on the basis that the rich were better and more knowledgeable in investing money. The more money they had would result in more productive investment, ultimately benefiting the majority by creating a bigger economic base. Benefits would trickle down and we would all be better off. There’s a shred of believability to this, except, from the outset, this was never their intention. The whole process has been highly dishonest and manipulative. It involves a two-pronged approach. Firstly, they weaken the majority, making them vulnerable to exploitation, using free market economics (sometimes called neoliberal policies.) They then develop rental businesses to exploit these vulnerabilities. These rental businesses and their exploitative business practices have been designed to vacuum up every morsel from the poor man’s table. These vacuum-up processes, together with associated practices and procedures, work well. That’s why the rich keep investing heavily in them rather than in our real, productive economy. You’ve heard of trickle-down, but probably not vacuum-up. Yet trickle-down is a fairy tale and vacuum-up a reality. This shows how well the rich hide the truth and mislead us. My article, “The truth about capitalism” describes how the wealthy create a smokescreen to hide the real problems, to stop people from digging deeper, to find the real cause of our problems. Creating vulnerabilities. Free market economics is used to weaken labour. They break the power of unions and suppress wages over decades. As a result, real incomes declined significantly. As part of the free market dogma, they call for smaller governments, which results in governments curtailing the services they previously supplied in sectors such as: - Health Education Social services Unemployment support Security (Policing) Other services (too numerous to mention.) This leaves people more vulnerable and desperate. Those fortunate enough try to plug the gap left by these reductions using their own resources if they can. This opens opportunities for the rich while lowering the quality of life for the majority. Mental wellness declines rapidly. Exploiting vulnerabilities. Having weakened the majority, they are left vulnerable to exploitation, using these rental services: - Holding wages down reduces consumer spending power. However, to ensure sales do not slip, and thus their profits, they provide the masses easy, unsecured credit. This opens up a vast and highly profitable new rental market for the rich while driving the masses into substantial debt. Much of the lending is predatory. Preying on the most vulnerable and charging exorbitant rates. Payday loans are an example of this. Holding wages down forces more and more people to become home renters. This opens up a substantial rental business for the rich. The wealthy compete with ordinary people to buy up houses. They force up prices, making it difficult for first-time buyers to get onto the housing ladder. Most are left behind to become life-long renters. These renters will eventually end up paying well in excess of the purchase price while the rich own the asset. This creates a potential problem for the government when these renters retire, yet rents keep escalating. Who provides housing for them, and at what cost? As the average person becomes progressively poorer and desperate, many turn to gambling as a possible “solution”. Online gambling has exacerbated the problem while creating a massive rental business for the rich. They make the situation worse by allowing people to pay using credit. People become more vulnerable in the absence of government support or reduced support. To protect themselves, those fortunate enough increase their insurance cover, thereby opening up a further lucrative rental market for the rich. Increased financial pressure on the majority, in combination with increased advertising hype from manufacturers, opens up greater rental opportunities for the rich. As people can no longer afford to buy things outright, rental schemes become more attractive. They roll these rental schemes up with a service and insurance agreement, further milking the poor man. This includes an ever-increasing array of products, such as: - Cars Furniture White goods The drive to make the majority own nothing and rent everything is relentless as the wealthy redirect more capital out of our real economy into the rentier economy. Hopefully, this short article will remind us why free market economics and the rentier economy form part of the Triad of Evil, together with their co-conspirator - globalisation. When we consider the reason free market economics was granted concessions in the form of reduced tax and regulation, it was on the proviso that they would invest in our real productive economy and not the unproductive rentier economy. Investment in the rentier economy hurts the majority. It does not benefit them. Therefore, as the wealthy have not delivered against their promise, it’s time to increase taxes significantly and reintroduce regulations to protect the majority and the environment, which they have exploited. It’s also time to raise taxes on all rental incomes to discourage investment in the rentier economy. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/
At the dawn of the Dark Age, when Thatcherism and Reaganomics were introduced, a new form of feudalism emerged. It established a new ruling class - the mega-rich, who preside over us today. The distinguishing feature of this new era is that nothing appears to be what it is. It's all a massive lie. We are fed a continuous stream of bullshit, so the ruling class may continue to extract inordinate wealth from the rest of us while leaving us feeling that everything is just fine when it's not. Misleading claims are made that we live in a democracy, are much better off than our forefathers, and that our planet is not dying. Sadly, we believe them, allowing them to continue their thieving practices as the feudal masters of yesteryear did. The only way this tiny minority can control the rest of us, other than by force, is to lie and mislead us. The extent to which we are lied to and misled is breathtaking. It covers virtually every facet of life. In this article, I raise one aspect - Austerity, or Spending Cuts. It's pertinent because government deficits have soared after the COVID pandemic and cost-of-living crisis. What will follow is a lie similar to this. "As prudent keepers of the public purse, we are left with no realistic alternative other than to look at making deep cuts to government spending." This is a monstrous lie, but to get away with it, they make it sound reasonable by comparing government and household budgets. They have us believe that governments and individuals face similar budgetary restraints. This is simply untrue. As individuals, our incomes are fixed. To keep out of trouble, our only option is to cut costs. They imply that governments are in the same boat. Therefore, cutting costs is fair, reasonable, and the only realistic option. However, this analogy is incorrect because a government’s income is not fixed like an individual’s. Their options for addressing a deficit are far greater. Cost-cutting is only one of many options. Much better options are open to them, assuming they are working in our interests. As they are not, they will follow a cost-cutting exercise despite its adverse effects on us all, which I explain below, but first… How does cost-cutting benefit the rich? Cost cutting reduces the size of government. That is precisely what the rich want. They want a government with a small tax base. Less tax for them to pay. A small government also leads to fewer regulations and poorer government oversight. This provides greater opportunity to avoid or evade tax as small governments are less efficient at tax collection. The same applies to all departments. They are less efficient at their assigned duties. Thus, opportunities abound, which the morally defunct exploit. They also encourage governments to privatise public services to "help reduce expenditure." These ventures provide rich pickings. So, the more the government cuts costs, the wealthier the rich become. The stronger their political power. Their stranglehold on us increases. We become poorer and weaker. How does cost-cutting harm the majority? A small government means they offer fewer services or services of a poorer standard to the majority. These services span all aspects of life. When these services are cut, or the quality declines, the quality-of-life for the majority fall. See my article "Quality-of-life in freefall. The measure the rich don't want you to see" for more details. The less the state supports and provides for its citizens, the greater the cost to its citizens. They either have to provide the service themselves or forgo it. Either way, it's a cost to them. This lowers their quality-of-life. As mentioned earlier, a small government means less government oversight and control. This situation is taken advantage of and involves a plethora of activities, from tax evasion (by the wealthy) worsening working conditions, and harmful environmental practices. It means fewer and less effective protections afforded us and the environment from the avarice of a few. Cost cutting reduces our investment in the "commons." The "commons" represent our infrastructure and institutions, which we share and rely upon to live our lives. The greater the investment in the "commons", the stronger our economy. Investment in "commons" is what distinguishes developed and developing nations. Developing nations' investment in "commons" is not as substantial. Things we may take for granted, like reliable power supply, communications, road and rail infrastructure, and a functioning judiciary and policing service, may not exist in some developing countries. Businesses benefit from the "commons" but are reluctant to maintain and build it, despite its importance to our economy. There is a simple fact that I'm sure few will deny. Economies are stronger when middle /lower income groups are strong. Cost cutting, as explained above, weakens them. So, by making them poorer and reducing our investment in "common" assets, we are harming the economy's medium to long-term prospects. The rich are shooting themselves in the foot through government cost-cutting. If cost-cutting is not the best solution… How does the government reduce its deficit? Assuming we had a truly democratic government dedicated to looking after the majority's interests, then cost-cutting should be its least favoured option. It should look at options for increasing its revenues, which it can do through the following. Increase revenues through increasing corporate and high-end tax rates. Applying special taxes to all rental incomes and imposing import duties on certain goods to raise funds to stimulate local manufacturing. Stimulate growth by investing directly in the economy through infrastructure projects, key strategic businesses, and R&D (Research & Development) projects. Second, invest in social support. Money invested in social support is recycled back into the economy quickly, thus providing what is commonly referred to as an "economic stabiliser." The more spent on social support, the more stable the economy becomes. That's why a BUI (Basic Universal Income) would result in a stable economy, as the economy would be guaranteed a minimum monetary flow irrespective of other factors. Third, encourage and support the return of manufacturing to create a larger, more productive economy. Despite cost-cutting being the least attractive option, our plutocratic government will continue to serve their masters. They will ignore the needs of the majority because their masters will lose over the short to medium term. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/
0 Free market policies - the broken agreement.
Free market economic policies (or neoliberal policies) have not delivered prosperity for the majority as promised. Instead, it has impoverished us while also causing extensive environmental damage. It is responsible for creating economic apartheid, where the needs of a small minority are served to the exclusion of the majority. We have lived with this poor economic policy for over four decades. It's time we replaced it with a policy which will better serve society and the environment. The easiest way to explain how an economic policy works is to think of it as an agreement between the two major players in our economy: Society and Markets. Markets are represented by shareholders (owners of businesses, the wealthy) and the government, representing Society and the country's natural resources. The Agreement The agreement calls upon both parties to perform certain acts. The agreed-upon economic policy describes these acts. The free market agreement (or policy) calls on the government to: - Reduce taxes on businesses and the wealthy. Apply fewer regulations and restrictions on business. Shareholders agree to the following: - Invest their profits back into the economy, thus increasing the productive economic base of the country. In the absence of government oversight (due to reduced regulations and restrictions), business is to act morally and responsibly in protecting the interests of society and the environment. Despite this simplification, it clearly illustrates the commitments made by both parties to serve the majority. No matter the policy chosen by the government, the objective should always be to serve majority needs, as that’s the responsibility of a democratic government. Outcome (Government) The government has over-delivered on their commitment, proving that we are not a democracy but a plutocracy (where the wealthy dictate economic policy.) The government has: - Drastically reduced taxes on businesses and the wealthy. Removed unfavourable business regulations. Applied favourable business regulations. Removed unfavourable business protections. Applied favourable business protections. Introduced subsidies and tax breaks. Points 2 to 6 represent free market hypocrisy. Free markets claim not to like regulations, protectionism, or unfair business practices such as subsidies and tax breaks. However, these dislikes are ignored when they benefit them. This is hypocrisy on a mega scale. In reality, our plutocratic government should not be allowed to sign a free market economic agreement, as they have a vested interest in supporting it. Under normal circumstances, this would be a fraud in the real world, as they have entered an agreement without declaring their vested interest. This should have precluded them from proceeding. Thus, the government themselves are acting fraudulently in supporting free markets. Outcomes (Shareholders) Shareholders have breached the agreement as they have not delivered on any of their commitments by: - Not reinvesting in our productive economy but instead investing heavily in the unproductive rentier economy, to the direct disadvantage of the majority. Not met their commitment to protect both society and the environment. Instead, they have used poor government oversight to abuse society and the environment in extracting wealth. The reality is they had no intention or ability to meet any of their commitments under this agreement. When you enter an agreement with the full knowledge that you are unwilling or unable to meet its terms, that is fraud. Read my article “Vacuum Up the reality. Trickle Down the lie.” to understand how the wealthy had little intention of investing in the real productive economy from the start. They use free market policies to weaken the majority and the rentier economy to exploit these vulnerabilities, as they vacuum up every morsel from our table. Regarding the second clause of the agreement, shareholders have no chance of meeting their commitment to looking after society and the environment because their business measures are focused exclusively on shareholder needs. Only when a universally accepted measurement standard, which can measure the inputs and outputs of all stakeholders, is available will business be able to meet its commitments of looking after all stakeholder interests. However, shareholders don’t want this. They want all the rewards for themselves. Conclusion Free market economics is fundamentally flawed because it needs to provide a balanced approach to equally serve society and markets. This is the primary objective of a democratically responsible government. The economy, like everything else in the world, needs balance. Only a plutocratic government will opt for a free market policy as it is fundamentally biased towards markets and their interests. Free market policies are exploitative. They have turned us into profiteers. The worst form of profiteers - those who profit from their own stakeholders. Read my article “We are profiteers, not capitalists” for more details. Free market economics has created economic apartheid. When precisely this occurred is hard to pinpoint. Suffice it to say the process was set in motion the day free market policies were introduced. From that day forward, economic inequality has become progressively worse. Its adverse effects are easily identifiable within five years, yet the government has persevered with this diabolical policy for over four decades. You can’t tell me the government hasn’t twigged to it being the problem? Of course, they have, but as plutocrats, they will keep denying it and kicking the can down the road. The Triad of Evil - free market policies, rentier economy and globalisation are the key problems we need to hold governments accountable for. They have allowed them to grow and prosper under their watch, to the majority’s direct disadvantage. Non-performance remedy When a party to an agreement deliberately defrauds you, as shareholders have done, you are entitled to seek recompense. Therefore, we are legitimately entitled to request that the trillions stolen from the majority over the past four decades, including all subsidies and bailouts, be paid back as a Reparation Payment. This is fair and reasonable, considering they deliberately defrauded society (including the environment) and must now return wealth illegally gained. The ideal mechanism to implement this repayment is through death duties applied on a progressive scale of up to 95% on estates over a minimum value (only applied to the rich.) This will still leave them well off but not grotesquely wealthy. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/
0 Our dysfunctional economy in a picture and a few words.
This chart depicts how we have transitioned from a functioning to a dysfunctional economy over the past four decades. The journey starts with a democratically elected government, which, by and large, serves majority needs, providing balance in serving society and market needs. The government is influenced by 10 “INFLUENCERS”, for which I provide a brief description below. Revolving Door is where politicians, or high-ranking public employees, leave government to join the private sector or vice versa. In this process, businesses obtain high-level access to government, thereby influencing decisions. Political Party Funding, and its general poor regulation. Funding implies obligations. There are always “strings attached” to funds. Lobbying is a substantial multi-million industry. If lobbying did not work, the sector would not exist. Its size tells you how successful it is. Cronyism, often an extension of the Revolving Door, and “old school tie”, plus numerous other forms of favouritism. Consulting / Services, where ex-politicians, often Prime Ministers and Presidents, offer their services as consultants. It’s an extension of the Revolving Door, but where they are not employees but independent providers of “services.” Media. Large private corporations often own the media, which play a critical role in shaping and altering public opinion. Corruption and other crimes. Unfair tax systems, where the rich are favoured (e.g. free market economic policies), allow them to increase their wealth and their political influence. Lack of government transparency. Political Polarisation means poor political cooperation in limiting corporate control over economic policy. These 10 INFLUENCERS result in STATE CAPTURE of the government. This is a relatively slow “drip by drip” process, eventually leading to PLUTOCRACY. A state where the wealthy exercise control over the government, dictating economic policies. This results in the implementation of the TRIAD of EVIL, where Free Market Economic Policies are introduced. In essence, Free Market policies shift the economy’s emphasis away from a balanced approach of serving society and markets to serving markets. This imbalance in favour of markets over society (and the environment) leads to ECONOMIC APARTHEID, hence the alternate name for Free Market Economic Policies. The extension of Free Market Economic Policies over global markets lead to Globalisation. A more appropriate name for it is GOBBLISATION, as businesses gobble up international markets for their exclusive benefit, not those of the majority. Free Market Economic Policies also lead to the rapid expansion of the Rentier Economy, which can be more appropriately referred to as the BLOODSUCKER ECONOMY. It justifiably earns this name as it extracts wealth from others through no productive input whatsoever. Simply through the ownership of assets, they extract wealth. Only ignorance or vested interests (plutocracy) lead to the implementation of the TRIAD of EVIL. The overwhelming evidence that it is responsible for social and environmental decline and the massive wealth growth of the rich is undeniable. Balance needs to be restored. Corporation tax and high-end tax rates must be increased, and tax specifically applied to rental incomes. This is just the beginning of the rebalancing process. We also need to restrict (preferably remove) the 10 INFLUENCERS In the UK, like elsewhere, talk is about the “problem” of reducing the deficit. Unsurprisingly, topping government’s list of to-dos is “spending cuts”, yet the solution is obvious to anybody other than a plutocrat. Increase taxes on the groups mentioned above. They are the ones who have benefited hugely over the past four decades. I don’t see the “problem” the government sees. However, I see the problem of continuing down the same old road as yesterday, impoverishing the majority and destroying the environment, so the rich may amass absurd levels of wealth. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/