0 Think the economy is working for you?

  • Society
  • by Adrian Mark Dore
  • 19-11-2023
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I’m sure you are under no misapprehension that the economy is working for you. 

Like so many, you’re feeling the squeeze and watching your quality of life tumble. You are probably equally concerned about our deteriorating environment. 

If these socioeconomic and environmental problems concern you, read this article; otherwise, don’t bother. 

Is there a common denominator underlying the cause of these problems, and if so, what? 

Man’s economic activities are directly linked to our economic, social, and environmental outcomes. That means economic activity, or our economy, lies at the heart of our problems. 

However, in a democracy, the economy is supposed to serve the majority, which by inference means it must also serve the environment upon which our survival depends. 

Therefore, theoretically, in a democracy, the economy should not lead to socioeconomic or environmental problems. However, as these socioeconomic and environmental problems are a reality, we can conclude our economy is dysfunctional. The economy is not working as it should. 

But how in a democracy can this happen, as the economy is an instrument of government intended to serve majority needs? 

Because the government has been corrupted by a tiny wealthy minority, leading to our economy's corruption. 

So, our socioeconomic and environmental problems are a democratic problem. 

This makes it your problem because a democratic problem requires a democratic response. It needs your voice and vote to reverse this corruption. 

So, what do you need to do? 

The extent of economic corruption is vast, covering the entire economy. However, the biggest change we can make is to change our economic policies from supporting free markets to implementing social market policies

Social market policies recognise the importance of balancing market (business) and social needs. Free market policies believe in supporting markets over society. 

Stop and consider just how fundamentally stupid such an approach is. How can you grow an economy by weakening the society which supports it? Neither can you grow business (the economy), which is necessary to support society, without considering business interests. Thus, a balanced approach is needed, not an imbalanced one-sided policy. 

So, free market policies are fundamentally bereft of any logic. 

These are the policies they espouse: -
1. Reduce taxes, particularly on the rich and corporations.
2. Reduce government regulations and oversight.
3. Reduce the size of government and services offered, privatising most. 

Consider this to understand how these principles are fundamentally wrong and go against all we know and understand about business and society. 

To run a business successfully requires four primary capitals (or resources.) They are financial, human, natural and common capital. Three of these capitals are self-explanatory. Only common capital needs a little clarification. 

Common capital represents the resources the government has invested on our behalf in infrastructure and services. These resources enrich and make our lives easier. Common capital investment is what distinguishes a developed from a developing economy. Living in a developing economy is harder for individuals and businesses. 

The money to invest in common capital comes from taxes. So, reducing taxes on the wealthy and corporations, those who benefit the most from our society and who can contribute the most, makes no sense as we are directly weakening common capital, which makes us strong. 

Reducing government regulations and oversight leaves people vulnerable to exploitation by the rich and powerful. Look at what deregulation did in the banking sector. It led to the 2008 financial crisis. We need regulation and oversight for a fair and balanced society. 

Reducing the services governments provide to their citizens, such as health, education, unemployment benefits, social services, policing, and more, leaves a weaker society and, thus, a weaker economy. 

There is no logical reason to implement any of the aforementioned free market policies. In fact, we should be doing the complete opposite. 

Furthermore, neoliberals fight to weaken (or destroy) labour unions so they can keep wages low, maintain unfavourable work conditions and offer poor job security. So, human capital suffers under free market policies but no better than natural capital. Ask yourself – are we facing an environmental crisis or not? All thanks to poor economic choices (namely, the adverse effects of free market policies on the environment.) 

Free market policies harm three of our four primary capitals, namely - human, natural and common capital. It only serves financial capital needs, which is absurd.

Over four decades ago, we were told that by leaving more money in the hands of the rich (through the aforementioned absurd free market policies), they would invest it wisely. This would benefit us all. Well – the proof of the pudding is in the eating; we haven’t benefited in the slightest. In fact, the quality of life for the majority has seriously declined because this is all a lie. Only the rich have benefited. Have we not learnt a thing over the past four decades – free market policies are bereft of all logic. 

It's time to kick free markets out of the field of play so we will never be plagued by it in the future. 

Unfortunately, proof that we have learnt nothing over the past four decades comes from delusional people like Liz Truss (Britain’s most spectacular failure as a Prime Minister, lasting only 47 days on the job), who is still pushing failed free market policies. Regrettably, she remains (for the time being) as a  Member of Parliament. 

She had a “Growth Commission” set up to investigate how they could improve Britain’s growth potential. These are some of the brain-dead suggestions they came up with in November 2023.

  1. Ripping up red tape. (Fewer regulations.)
  2. Reducing corporation tax from 25% to 15%.
  3. Limiting top income tax rates but adjusting rates to bring more mid-range earners into the top brackets. Effectively shifting the tax burden onto the middle class.
  4. Reducing paid annual leave.
  5. Reducing the notice period for redundancy dismissal.
  6. Reducing severance pay for redundancy dismissal.
  7. Reducing restrictions on overtime work.
  8. Freezing and limiting the growth of the minimum wage.
  9. Limiting sick pay. 

This is just more of the same free market bullshit intended to make the rich richer and the poor poorer. Yet this is what is promised.  “The Commission insisted implementing all its measures would deliver 23% more growth by 2043 - handing every Briton £11,300 or each household £26,000. Failing to follow its plan would, the Commission suggested, mean GDP will hover at 1% for the next 20 years.”  This is the same bullshit fed us four decades ago and where has it got us. We are all worse off. How can they be so audacious as to sprout such outdated, ridiculous rubbish and claim it’s the only solution? 

How can you grow an economy by weakening three of our four primary capitals? You can't. You weaken it as they have proved year on year over four decades. They overlook simple logic. When you pay decent wages and look after society, you have a strong, vibrant economy from which we all benefit. 

Remember, free market policies are known by two other synonyms – Economic Apartheid and Neo-feudalism – for good reason. It also leads to the growth of the rentier economy and globalisation, both unfavourable outcomes for the majority. So, if you want to change things, demand we scrap free market policies and replace them with social market policies, and do it now. Remove politicians of the same ilk as Liz Truss at your earliest opportunity.

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