0 Free market policies - the broken agreement.

• Economy
• by Adrian Mark Dore
• 24-02-2023

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.

• Economy
• by Adrian Mark Dore
• 23-02-2023

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/  

0 Why the purpose of business affects you.

• Society
• by Adrian Mark Dore
• 19-02-2023

 This statement may appear obscure and of little interest to you. After all, who cares about the purpose of business? It certainly won't top most philosophically minded people's to-do lists, but perhaps it should. I'm sure it's on the list of those concerned with our socioeconomic and environmental problems.   Some may think there are more profound and interesting questions to answer. There are, but the most fundamental consideration is how we sustain and provide for ourselves. Our employment provides the means to sustain us, and business provides employment. Therefore, the purpose of business must be one of the most basic and important questions we should consider, as it affects us all.   Milton Friedman, a founding father of neoliberalism (or free market economics) and a Nobel laureate, described the purpose of business as “serving the needs of shareholders as the sole purpose of business.”   I need not remind you that we live under the yoke of free market economic policies and, thus, under Friedman’s narrow and almost incomprehensible belief in the purpose of business.   In our modern and enlightened era, to think that the sole purpose of business is to serve shareholder needs is incomprehensible. To have thought this fifty years ago is equally unfathomable. How stupid can we be to make the world’s resources available to business so that only shareholders may benefit? That’s absurd, but it doesn’t end there. We reward this absurdity with a Nobel prize for economics. The highest accolade for an idea that calls for rules and regulations protecting us and the environment to be removed so shareholders may exploit and plunder these resources.   Surely, we can’t be that stupid to believe that this unfair and imbalanced practice would not cause serious social and environmental harm. Perhaps they could not have perceived the full extent of the damage, but not to have realised it would cause serious damage is nonsense. I leave it to your good judgement to determine their motives in supporting the incomprehensible.   Peter Drucker, often referred to as "the founder of modern business management", said the purpose of business is to create customers. Again, this is an important issue in sustaining business. Some people have taken the two ideas of "shareholder reward" and "customer satisfaction" and combined them, claiming that they make up the purpose of business. They say, "the fundamental business purpose requires a business to use revenues and capital to produce customer satisfaction to reward capital providers." Yes, we need to reward capital providers and customers for business to succeed, but what should be equally obvious is that they are not the only stakeholders in business. Other stakeholders contribute as much, if not more. The environment provides the raw materials, without which nothing happens. Society provides labour, who, without their knowledge, diligence, and skills, nothing happens. If we don't reward all stakeholders over the long term, business will fail.   In determining the real purpose of business let's return to Peter Drucker, who said: "the purpose of business lies in society, since a business enterprise is an organ of society." He got that part right. Building on the idea that business is an organ of society, we can conclude that the purpose of business must be to serve the interests of society. For a business to survive, it has to reward all constituents or stakeholders - that's just plain obvious. The rewards or benefits it must pay each stakeholder varies. Profit for shareholders, wages, job security and satisfaction for staff, protection and nurturing of the environment for the environment, etc.   From the perspective of each stakeholder, including shareholders, their rewards may appear to be the purpose of business. It's certainly the purpose or reason they entered or became involved in business. In ensuring all stakeholders and shareholders are rewarded according to their contribution, there will be conflicts of interest amongst constituents. To resolve these conflicts, we must turn to the real purpose of business, which is to benefit society. Therefore, decisions should be framed in language like this: "what outcome best serves the interests of society without unduly denying other constituents of their just rewards?" This acknowledges the relationship between society and the environment; we cannot destroy what sustains us. We need to protect all life on earth. Right now, we frame our decision-making in a different language - "what best serves shareholder interest?" No wonder we are in such a mess.    Now that we understand the purpose of business, we have to correct the massive imbalances in our economy. We need to change our inadequate and inappropriate business measurement standard so that we can measure and manage all stakeholder interests to make informed decisions. Only when we introduce a balanced measurement standard will we be able to make informed decisions which best serve society, thus achieving the true purpose of business. See my article "Economic Apartheid is caused by the Accounting Model" for more details.  Major social and environmental changes will only happen when we align business objectives with those of society and the environment.    This misalignment lies at the heart of our problems. That's why knowing and agreeing on the purpose of business is so important.   What I've said here is nothing new. Frankly, it's just plain common sense. So why does there appear to be some confusion as to the purpose of business? It's not because business leaders don't know. It's because the wealthy one per cent want to mislead us and confuse the issue. They don't want to change. They want Milton Friedman's "half-baked" ideas to prevail, not because they are correct, but because they serve their narrow interests well.  You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 Quality-of-life in freefall. The measure the rich don’t want you to see.

• Society
• by Adrian Mark Dore
• 18-02-2023

We live in a democracy, so we assume our government and economy serve us. But things don't seem or feel right. We are unable to put our finger on the problem. We know we are being misled and lied to. That much is obvious, but how are they doing this so effectively?   They use measures - the wrong measures to mislead us. They use measures that serve their needs, not ours, and tell us these are the correct and only valid measures. They constantly point to these measures, telling us things are going well. They are for them (the rich) but not for us, the poor majority.   If you want to control and influence the economy, the best way is through measures, as measures dictate outcomes. What you measure is what you get. If you don't measure something, it means you don't care about it, and don't manage it. The rich only measure financials as that's all they care about. The rest is unimportant to them. As a result, they produce strong financials with no regard for anything else. Yet, it is these other things which concern us most.   At a macroeconomic level, they use GDP, and at a business level, the Accounting Model's profit & loss. These are the measures we live by. Yet, these measures cannot be an indication of society's true well-being by the longest stretch of the imagination. At best, they are meaningless.   In other articles, I deal with these two measures to show how appalling and harmful they are. However, this article is about another two important measures. One is bandied about fairly frequently by the wealthy, who use it incorrectly to try and prop up the lie that they and their systems are serving us well. They tell us we should be grateful to them for how well they are doing for us in difficult times. What absolute rubbish. We are doing badly, and they are hiding the truth from us.   The measure they bandy around is standard-of-living. Little or no mention is made of the more important measure, quality-of-life. This article explains both these measures, their importance and difference, and how the quality-of-life measure is a true indicator of how much worse off we are today than decades ago.   Standard-of-living and Quality-of-life. The wealthy have deliberately conflated these two terms to hide the fact that while standard-of-living is rising, quality-of-life is falling rapidly. While both measures are important, quality-of-life is far more important to us. We need to be clear about what these two measures measure, as the first step in discrediting the lies we are fed.    Standard-of-living.  Standard-of-living refers to products and services made available to citizens of a particular country or region. These are products and services which affect our living standards. They are represented by a "basket" of products similar to the basket idea used in calculating the Retail Price Index (RPI) to gauge inflation. Obviously, the products and services in the "basket" are entirely different and represent what the average person uses. They represent products and services that are available, affordable, within the average citizen's financial reach and in general use. The basket is divided into categories, which are then subdivided into subcategories. Within these subcategories, the products and services comprising the subcategory are listed. Each product/service is scored by its availability and affordability. These scores are combined to give an overall score. The product/service is then weighted by its importance within the subcategory, and a final score is calculated. Scores are then aggregated, and a final index score is determined. This describes the principle of the index in broad terms only. The categories comprising the index are: - ●    Home, ●    Food, ●    Clothing, ●    Travel, ●    Entertainment, ●    Communication.    As you have gathered, standard-of-living is influenced by business. They are responsible for introducing new products into categories, improving them, lowering their costs, and making them more affordable and readily available. This, in turn, improves the standard-of-living index. The higher the index, the better. Government plays an important part in creating a favourable and supportive environment that allows all this to happen, but it's businesses who "deliver the goodies." They improve our standard-of-living through innovation and competitiveness.   Quality-of-life. Quality-of-life deals with the different aspects that directly affect our lives. These different aspects are influenced by the government, which formulates policies and implements laws, procedures, and practices to regulate the context in which they operate to benefit its citizens. It includes such things as shown below: -   Quality-of-life is also calculated as an index by measuring categories and sub-categories, to determine the individual and overall direction of the index. What is happening here in the UK is mirrored across most, if not all, developed economies. In the UK, we are facing a significant decline in quality-of-life, as reflected below.     The above paints a bleak picture of decline across virtually all measures. No wonder there is such public unease and discontent. Now you can understand why vested interests conflate these two measures and generally muddy the waters regarding what each should measure. They do all this to hide the unpalatable truth that only standard-of-living is doing well. This is because it's in their interest to keep improving products and services. The other is doing appallingly. Big government and decent tax margins are needed to build a high quality-of-life for the majority. However, this is precisely what vested interests don't want. As they get their way, quality-of-life will decline further and faster. Quality-of-life is one of the key indicators that should steer government decision-making, not GDP.   You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/  

0 We are profiteers, not capitalists.

• Capitalism
• by Adrian Mark Dore
• 15-02-2023

Most people are keen to blame capitalism for our economic woes. Hence the call to fix it or discard it. This article describes how the wealthy have manipulated our understanding of capitalism to hide the truth and mislead us. How they are happy for capitalism to be blamed so they can hide the real causes of our problems. The big problem being, we aren’t capitalists, but the worst form of profiteers. To start with, it’s important to establish what capitalism is. Is it an ideology or a system? The popular perception is that capitalism is a system rather than an ideology. A system implies it operates according to a practical framework for organising and operating the economy. However, I contend it’s only an ideology, providing a framework to understand and interpret economic activity. As an ideology, it can’t be held accountable for problems, as it’s just a set of beliefs, not a practical working system, generating undesirable outcomes. The wealthy one percent want to promote the idea that capitalism is a system, so the public has something to blame for our problems. It’s used as a smokescreen to hide the real systems, practices and procedures causing the problems. It shifts attention away from these real problems and results in people chasing their tails, blaming a nebulous ideology rather than the real issues. As capitalism is an ideology, not a system, we have developed systems, practices, and procedures to run and manage businesses and the economy. These systems, practices, and procedures we use daily to run and manage business produce the outcomes that cause our problems, not the ideology. For example, we use the Accounting Model, a financial measurement standard, to run and manage business. This causes problems as it focuses on financial outcomes, ignoring other critical business success factors and stakeholders. Financial measures account for less than twenty percent of the value creation potential of business, yet despite this, it’s used as our business performance measure. Obviously, in this role, it’s entirely inadequate and inappropriate, as it ignores the impact of other stakeholders, who contribute over eighty percent of the value creation potential of business. As an ideology, I contend its primary objective is not to create profits. I know this runs contrary to popular beliefs but bear with me as I explain why. Profit is the objective of shareholders, who are just one of many participants (or stakeholders) in our economy. However, the real objective of business is its longevity. This depends upon sustained long-term profits, which can only be achieved when the interest of all stakeholders are served. Thus, business must serve all stakeholders (society and the environment) to achieve longevity. Therefore, profit is important, but not its sole objective. This is in stark contrast to our inadequate and inappropriate measurement standard (the Accounting Model), whose sole aim is short-term profit for the benefit of shareholders. This short-term profit obsession is a distortion introduced through the greed of shareholders. The reality is capitalism cannot succeed over the long term if profit is its sole objective. Therefore, a more realistic interpretation of the objective of capitalism is "to serve the needs of humanity in a sustainable manner through the ingenuity of man, allowed to engage in free enterprise." The operative words are "sustainable manner." This requires a balanced approach to meeting the needs of all business participants (or stakeholders.) An imbalanced system, serving only the needs of one or more participants, cannot survive over the long term and falls short of the fundamental requirement of serving all on a sustained basis. While profit is an essential component of capitalism, it isn't its sole objective. The short-term profit obsession of shareholders (as dictated by the Accounting Model) is the antithesis of capitalism. The standard definition of capitalism is limited in describing the shareholder's role as "capitalism is based on the private ownership of the means of production in the creation of goods and services for profit." Capitalism cannot be seen in this narrow context. It has to be seen in its wider social context, where business longevity depends on serving the wider community. What's more, the notion that capitalism depends upon perpetual growth is not true. By adopting a long-term perspective, business will be guided by sustainability issues. A new measurement standard measuring and managing the inputs and outputs of all stakeholders is crucial to the transition of capitalism from a short-term profit obsession to a long-term sustainability perspective. As mentioned earlier, the wealthy promote the idea of capitalism as a system when it's an ideology. This is because if people think it's an ideology, they can't blame it for anything, as it's just a belief and not a system which produces outcomes. They want to draw your attention away from the systems causing the problems. For example, our inadequate and inappropriate business measurement standard (the real cause of our problems.) We can link it directly to our most serious social, environmental, economic, and business problems. So, by blaming capitalism, people cannot come up with specific problems and, therefore, specific solutions. As a result, they go around in circles chasing their tails. This is precisely what vested interests want.  Capitalism is a practical ideology. Entrepreneurship lies at the heart of capitalism. Due to their efforts, our standard of living keeps on improving. We need to encourage and support their ingenuity and hard work, for which they are justifiably entitled to profit. Profit is to be welcomed and celebrated, provided it does not become our sole objective. If the definition of capitalism is to "serve the needs of humanity in a sustainable manner through the ingenuity of man, allowed to engage in free enterprise", what's not to like about this ideology? To serve the needs of humanity, business must make a profit to survive over the long term. Profit-making is essential. Unfortunately, the wealthy have corrupted capitalism and made profit our purpose. This is not capitalism - this is the result of the rich corrupting capitalism through their short-term financial measurement standard, dictating business outcomes in their favour. If we replace our inadequate and inappropriate business measurement standard with a balanced one, looking after all participants' needs, we can uphold the objectives of capitalism. We will then see profit as a means to an end and not an end in itself. Until then, we are definitely not capitalists. We aren't what we call ourselves. We call ourselves capitalists, but that's just a ruse. We can call ourselves anything if we want, but that does not make us what we say we are if we don't follow its ideology. Just as we may call ourselves Christian or Jew (or any other faith,) that does not make us what we say we are unless we follow the philosophy of what we claim to be. What we are is what we do every day in our life. The same applies to business. Because business is at the heart of our economy, what it does every day reflects what our economy actually is. We call ourselves capitalists because we conform to some of its precepts, but that is not enough to qualify us as capitalists. We don't serve the long-term interests of humanity – we serve the interests of a few. We are not capitalists but something sinister. We are what we do every day in business. What we do every day is dictated by our business measurement standard. It dictates outcomes. These outcomes represent the ideology we follow. They show us who we are by reflecting what we do every day, not what we say we are. What are we if not Capitalists? We use a financial measure as our business measurement standard, despite financial considerations accounting for less than twenty percent of the value creation potential of business. Its aim is to optimise short-term profit exclusively for the benefit of shareholders at the expense of other stakeholders (or participants.) It's an adversarial system pitted against stakeholders' interests, only considering shareholder interests. By definition, this makes it a profiteering system. We define a profiteering system as using an unfair advantage to generate a profit. The "unfair advantage" here is a measurement standard that does not consider other stakeholders' interests. It only gives weight and credence to financial matters without considering other interrelated participant needs. We usually associate profiteering with an external activity where business profits from an external entity like a customer, competitor, or government, using some unfair advantage. However, in this case, it's the worst form of profiteering as it's "internal profiteering." This is the worst form of profiteering because shareholders profit from those associated with them to make them more prosperous. For example, they suppress wages to enrich themselves. So, we are not capitalists but profiteers - the worst form of profiteers, those who exploit their own stakeholders for profit. Understandably vested interests want this kept from public knowledge because, armed with this understanding, are you prepared to allow this harmful practice to continue? Our inadequate and inappropriate business measurement standard is only one of our problems. There are other systems, practices and procedures causing the actual harm, which vested interests want to hide from you behind the capitalism smokescreen. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/