Luke Johnson wrote this in the FT yesterday:
Business is tough now, but it could get much worse.
The backlash against free market economics is growing. From the demented new laws surrounding hedge funds and private equity proposed by the European Union, to the 50 per cent-plus income tax rates introduced in the UK, to the nationalisation of Chrysler, socialism is in the ascendance.
Right now, entrepreneurs are focused on cutting costs, generating cash, meeting bank covenants and coping with generally ghastly conditions. Thousands of businesses are struggling to survive. But once they win that battle, a chronic and perhaps more wearing conflict awaits: the contest to stop the state expropriating so much or tying everything up in so much red tape that it all becomes more effort than it is worth.
It’s manic stuff. Regulating businesses that have brought our economy to its knees is apparently “spell[ing] trouble for those who invest, add value and create jobs.”
And “Sharply rising redistribution and regulation is hardly the way to encourage wealth creation. In a mobile world, risk takers will go where their skills are rewarded and where the opportunities are greatest.” But it is now clear that a) those who took the risk did so with other people's money and walked away with the rewards whilst b) if wealth is measured in any way that does not equate to totting up the amount Luke Johnson has in his bank account then more equal societies (created in part by redistribution) are wealthier on every measure anyone can think of. I suggest Mr Johnson does just a little reading.
It’s also horribly phobic: Mr Johnson’s phobia is the ordinary person without his resources. As he says:
I attended a round table of entrepreneurs and senior executives from various industries. They worry about consumer spending, about debt, staff morale and so forth. But they all raise the issues of regulation and taxation, and how they are suffocating their companies: employment laws, planning laws, competition laws, health and safety laws, and so on.
Tax pays for people’s health and education: the people who he once employed on low pay in Pizza Express: on whose back he built his fortune and without that state security net he could not have paid them so little. Employment laws stop people being exploited by employer’s whose only definition of well being is their bank balance. Planning laws protect our environment, or should. Competition law protects us from monopolists. How many people owe their lives to health and safety laws. Would he drive a car if they did not exist? It’s hard to credit the callousness of what he has written.
Luke Johnson is chair of Channel 4. Channel 4 is a state owned public broadcaster. he was appointed by a labour government. He is not fit in my opinion to hold that office: he shows so by his contempt for society inherent in his article.
It says a lot about Labour that they put him in such a post.
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I totally agree with Luke Johnson. The most distressing thing about all of this is that socialists like Mr R Murphy now think they can brand anyone who supports free markets as morally bankrupt over the actions of relatively few investment bankers fully supported by New Labour at the time. The government is just an inefficient middle man who takes from those who create wealth and gives to those who do not. God bless Margret Thatcher and thank god I still live in Bermuda.
These “relatively few investment bankers” just happenned incidentally to control all the major banks in the UK and USA. I know that in Bermuda the prospect of ordinary people in the UK and USA losing their jobs and homes as a result of these people’s actions is probably not significant, but over here it is. By the way I don’t object to free markets at all. I do object to rigged markets. The fact that the bankers were supported by New Labour cuts no ice with me. I don’t like New Labour any more than I liked Margaret Thatcher.
James, I don’t want anybody to lose their job or home, but I suspect a load of those jobs were created directly or indirectly by the boom in the city. Cheap and easily available credit allowed many to own homes who probably couldn’t have afforded to otherwise. Now things are spiralling into reverse in a destrutive down cycle which will not be reversed by increasing taxes on high earners. I reckon unemployment will exceed 3 million before this is over, house prices will fall another 20-30% in real terms and eventually inflation will kick in and all taxes will have to rise further. All in all the UK will be as depressing a place to live as it was in the 70’s. A shame as I did want to retire there but am feeling unwelcome already.
James, good wages enable people to own their own homes, not cheap credit. All cheap credit did was to boost land values – first-time buyers were much, much worse off. The returns to labour have been squeezed by capital, especially financial capital. The crunch came when too much capital accumulated in relation to effective demand. The Tories are planning to scrap the minimum wage when they get back into power – the very worse solution (see C. Chope’s recent bill). Time to study a little Marx.