There was a time, not so long ago, when it was reasonable to assume that those on the right wing of politics were ‘pro-business'. And, as a matter of fact, they by-and-large delivered what business wanted.
I stress, there was such a time. But in the Anglo-American world that no longer seems to be the case.
Trump's shut down of the Federal government is going to hit business hard, and quite soon. You cannot take more than 5% of spending power out of the economy, as he has, and not see the consequences pretty quickly. Added to his trade wars and other uncertainties, the last thing Trump is doing is giving US business what it really wants. And the tax cuts are already but a memory.
The same is true here. Most of the UK business community does not want Brexit. For some on the left that may be evidence that it is something to do. For those of us who place value on the economy meeting the needs of people it should be seen as a warning that right-wing ideologues have parted company with the community whose interests they claim to promote most of all.
We should not be surprised. After all, the economics that these ideologues subscribe to long since departed from any evidence base as to how business actually worked. And with most of those professing undying faith in free enterprise having never actually taken the risk of working in a business, the necessary experience to know that the theory is wrong is simply absent.
And so we end up with the bizarre fact that the right wing of politics is now intent on destroying value. Let's be clear: the first victims will be those on the margins. They always are. This is why such policies have to be opposed for reasons of social justice. But thereafter business will be hurt badly by them. And the Right does not seem to care. They continue as if business supports them when there is little evidence it really now does on some key issues.
I am not suggesting this will stop the ideologues securing money.
Nor am I saying that this will make them change tack.
What I am hoping is that business, more broadly, might have the sense to realise change - real, fundamental reform of British politics - is also in their interests.
It very obviously is. A strong mixed economy of the sort the Right hates is exactly where business prospers best. But has business got the courage to say that?
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Well, on this particular point things are a little clearer in the US:
“Wall St shifts to Democrats” 30/10/18
https://www.politico.com/newsletters/morning-money/2018/10/30/wall-street-shifts-to-democrats-394652
“Wall Street Tries to Shape Democratic Victory by Backing Moderates” 31/10/18 (hmmm…)
https://www.bloomberg.com/news/articles/2018-10-31/wall-street-gets-behind-blue-wave-with-bet-on-friendly-democrats
“Michael Bloomberg rejoins Democratic party amid presidential run speculation” 11/10/18
https://www.theguardian.com/us-news/2018/oct/10/michael-bloomberg-democrat-party-2020-presidential-run
The 2nd headline there says enough to let you know that the corporate realm may easily abandon the ideological Right but the Left need to be wary of who their new friends are. If you lie down with dogs you get up with fleas.
That is potentially bad news for any Democrat voter since business will do what it usually does with the Democrats and buy their policy agenda through election funding and essentially strangle anything really new policy wise before it is born.
Witness what happened with Obama and have a look at the ‘Lifting the Veil’ on line documentary which raises these issues.
Yes Pilgrim,
That is the apparent danger as you suggest but for the sake of balance I should also concede that those articles predate the mid-term election (if only just) and the mid-terms saw Congress receive what was arguably the biggest single influx of progressive Democrats ever.
In something of a footnote to that, however, it has turned out that the progressive superstar of ethical, grass-roots fundraising, Beto O’Rourke, took a large sum of donations from individuals in the fossil fuels industry despite taking a pledge not to. All things considered that is not enough to discredit him generally but its not a good look either.
https://grist.org/article/beto-orourke-might-have-an-oil-money-problem/
Overall this is becoming an interesting “watch this space” area in the lead up to the 2020 election.
I’m a company executive ( a business interest if you like ) and have recently been paying good money to get messages like this out there:
“True entrepreneurs will realise it is enlightened self-interest. Taxes fund education, health, transport, trade and more. If you don’t pay the money for it now, you pay later when your business is hit by talent shortages, extended sick leave, and so on. Taxation is essentially a massive crowd-funding scheme. We club together to invest in having better education, healthcare, transport and more. I wouldn’t be happy on Kickstarter if other backers only paid part of what they’d pledged. Transparency and fairness are important. . ”
Naturally I want to retain Freedom of Movement to work both on equal opportunities grounds and because it means less bureaucratic overheads recruiting good talent.
What more do you suggest I and executives like me say?
Get the CBI to argue fir a strong mixed economy
Stop the IOD promoting far right libertarianism
We have a mixed economy, and it is a strong one. It is strong in part because it is interconnected with other economies, a point the CBI acknowledges, which is why it supports FoM and no tariffs or quotas with the EEA/EU.
As regards the Institute of Directors, have a speed read of this
https://www.iod.com/news-campaigns/news/articles/IoD-snap-survey-post-withdrawal-deal-vote
That is hardly the views of an organisation promoting far right libertarianism.
The IoD works with the IEA, the TPA and others to promote flat taxes and gut government spending
I do know what I am talking about
https://www.theguardian.com/commentisfree/2012/may/22/flat-taxes-taxpayers-alliance
Is there an ideal ratio of state and others in a mixed economy? I’m trying to get my head around what you mean by “strong”.
Thanks
M
It appears that the sweet zone is well over 30% to include state run healthcare, and below 45% or so
There is no one answer but make it 40 + or – if you like
I’ve long said that the Left made a historic mistake in being so opposed to a free market economy, simply because the only truly “free” market is a fair market, in which there is as near as possible equality of bargaining power.
A market without equality of bargaining power simply cannot be called “free” – it is, instead, a stitch-up in favour of the more powerful player.
Of course, complete equality of bargaining power is probably impossible, but if the Left had recognised that, properly understood the free, and certainly the fair, market is a Socialist instrument, they would thereby have been able, in the interests of the common good, vigorously to support beneficial free and fair trade, and equally vigorously oppose monopolies, cartels and market failures.
Instead, by appearing to oppose the free and fair market, the Left has often been reduced to a bystander. If the situation you have outlined in your post above is correct, then it’s time for the Left unequivocally to remedy that defect, and convince business that they, the Left, have the interests and concerns of business to heart, and certainly more than do the current “who cares about business” ideologues on the Right.
But of course, you have often blogged on this point e.g. when saying that the reform of the stranglehold of the Big 4 is actually pro-business, and many other blogs pointing out how certain actions are, and others are not, business-friendly, whatever appearances may suggest.
I like that argument, a lot
Adam what you say is correct. But to achieve what both you and Richard favour we first have to remove the right of shares to vote. Only people not shares should have votes.
@ Andrew Dickie
You make a good point. What everybody badly needs to recognise is that belief in “free market capitalism” needs to be replaced with belief in “free and fair market capitalism.” This last phrase is the one we should be using. Hayek was right about price signalling information needing to be decentralised but he never seemed to properly understand, or at least emphasize, there needs to be fairness in the setting of the price signals.
Strongly agree with this line of argument. £64,000 question is getting a detailed answer to the question of how to do it. Precisely what policies are would deliver that shift to free and fair market capitalism, and dealing with the objections. Bringing those factions of business that would support it onside. The FT is nearly there already. Avoiding throwing the baby out with the bathwater, killing the goose etc. (Though the City goose is front of the queue to have its neck wrung!)
Rigorously thought through answers welcome
For me Labour has swung from pandering too strongly to the current model of capitalism (though I’d defend their positive achievements), to an instinctive desire at the centre to strangle capitalism. Even if, as Richard points out, their manifesto is not that radical. Ive seen too much of the consequences of that model ever to be convinced.
A centre-left party committed to radical reform to the current capitalist model, looking forward and not back to a 60/70s state socialism, decentralising power and money, tackling the challenges of technology and reshaping finance to work for the economy, environment and society. Could vote for that
“Though the City goose is front of the queue to have its neck wrung!”
Good.
https://neweconomicperspectives.org/2014/03/financial-sector-greatest-parasite-human-history.html
So John,
Its the old Blairite ‘electability’ schtick again. I haven’t heard that since 2016.
An important post – let us hope that the business community can come to its senses.
Parliament has to either stop BREXIT or negotiate a long orderly disentanglement so that replacement processes are put in place if we leave.
I just remembered this well-known article from US billionaire, Nick Hanauer. It is right on target for what you’re getting at here. Anyone who is interested in this general idea should read this.
“The Pitchforks are Coming for us Plutocrats”
https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014?o=1
“We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.”
Then there is of course this well known contributor:
“Billionaire Warren Buffett: ‘I don’t need a tax cut’ in a society with so much inequality”
https://www.cnbc.com/2017/10/04/billionaire-warren-buffett-i-dont-need-a-tax-cut.html
And Buffett is, of course, associated with the Buffet Rule which would require “millionaires to pay at least 30 percent of their post charitable contribution income in taxes.”
https://www.investopedia.com/terms/b/buffettrule.asp
Which should probably be the minimum requirement across the Western World and is supported by these folk:
“the Patriotic Millionaires, a coalition of some 200 rich people that is advocating for the end of trickle-down economic thinking. They want rich people to pay higher taxes, they want a higher minimum wage, and they want less money in politics.”
https://www.theatlantic.com/business/archive/2016/09/patriotic-millionaires/502313/
In “the Anglo-American world” it would appear that the emerging glimmers of light are all on the American side thus far. What would explain that? A different class system perhaps? I’m not sure.
Good question
I have no answer
And let’s be clear, the change is still nascent
Another possibility is that the UK doesn’t have an equivalent to the US Republican Party. From the Bush/Cheney years onwards they have been so shamelessly extreme in pandering to the rich that it has sparked a backlash from their own constituency.
The Tories have mimicked them – and still do
Brexit is but a British Tea Party
Too true – the ERG driven Tory party now has a lot in common with the Tea Party driven Republicans. In both cases, the ‘backlash’ has been channeled towards ‘others’, migrants, foreigners, social liberals, and an ‘elite’. Except it’s the epitome of a wealthy elite doing the channeling.
List the rest of their policies – climate change, public services, size of the state, taxes on corporates and wealthy, human rights at home and abroad. The Venn diagrams of Republicans’ and today’s Tory policies overlap to a large extent.
Not surprising then to find the many links and flows of funding across the Atlantic, not least in the referendum
Having read the responses thus far I believe you’re all living in fantasy land. Self-regulation, on the scale required here, has never worked. The global business community is on a rampant, unstoppable, trajectory. It can’t help itself. Big is beautiful (https://www.nytimes.com/2018/06/17/opinion/big-business-mergers.html). Only a government of a major economy, with a significant majority, would have the power (cajones) to orchestrate the reforms you suggest. In reality it would have to be the US and that’s not going to happen any time soon. Not even China has the power – or the will – to initiate such reforms (https://www.bloomberg.com/opinion/articles/2018-12-31/china-s-economic-slowdown-is-worsening-stop-dithering-beijing).
The only other instruments of change would be another massive global economic melt-down, a world war, a trans-national ‘peoples’ revolution or an ecological life-threatening disaster. Any of these is a possibility.
The outlook is both gloomy and very unstable – hence the continuing appeal of popularism for which reforming centrists of all persuasions have no realistic solution. In the meantime the Koch Brothers along with their allies, adherents and acolytes will continue to run the show. But …. the march of a 1000 kms begins with a single step, so everyone needs to keep on campaigning in whatever capacity available.
Barista – a large coffee for me and Prof.Murphy. Grazie.
I have to believe you are wrong
Or give up
I am not giving up
Richard, I didn’t suggest giving up. Please carry on campaigning. It’s what we must all do at whatever level is possible. In order to get the scale of the crisis into realistic perspective, I was just making my point that at this moment in history the odds on achieving the suggested reforms are minimal as all the indicators suggest the ‘ideological right’ is continuing to advance and shore up its agenda – at least on a macro level. And I predict there is worse to come down the pipe-line before accumulated attempts to neutralise and eventually euthanise the host-devouring parasite will be effective.
I appreciate that may come across as being unduly pessimistic, but everything I read suggests the enemies of progressive democracy (encompassing socio-economic justice) are well entrenched and in control. Furthermore I fear they are prepared to adopt a scorched earth policy rather than concede defeat to anything that remotely whiffs of ‘socialism’. Of course they will hand out what they hope will be enough ‘goodies’ to mollify the masses – a strategy that has worked incredibly effectively over the centuries. With almost total control over technology and the MSM they are better placed than ever to manipulate minds.
To be honest, I’m not sure how China, Russia and India precisely fit into this plan but, while not underestimating their growing influence, I don’t hold out much hope that they would or could challenge US hegemony as catalysts for progressive change. Hence I’m at a loss as to knowing where to look optimistically. Aside from the aforementioned catastrophes, the only hope rests with mass uprisings which historically have rarely proved to achieve their objectives.
Having spent many years working within the US corporate sector – and having recently watched ‘Vice’ – I have no illusions as to where real power lies. Trump, the Tea Party, Orbán, Bolsonaro, Duteerte, even ‘Brexit’, et al. are the visible tips of something more sinister. There’s a dirty and dangerous war being waged largely out of sight of the general public.
Big apologies for a much longer riposte than intended. Your original mention of the phrase ‘ideological right’ was a trigger for a hugely complex and important topic that goes to the core of what I believe to be evolving globally. Conspiracy theorist? Moi?
I agree the threat from the right is very, very real
I will not be giving up
I’ve always liked the idea of a ‘social market’ – a market environment that takes into consideration other factors than bottom line transactions:
– quality of life outputs/impacts (good jobs, fair wages, worker protection/representation)
– environmental impacts (the less the better and no trading of these)
– reasonable rules governing rents/investment
– business paying its way with local taxes etc.
– a mix of ownership – state where appropriate / private where appropriate
– less competition and more co-operation.
– consumer protection / product longevity and recyclability
There are probably many more desirables………………..