The Financial Times had an editorial yesterday in which they discussed Kamala Harris' economic policy, which they deemed to be inadequate.
The Financial Times might be the best newspaper of comment in the UK at present, employing some of the best journalists in the process, but when it publishes editorials of this sort, it reveals all its biases.
The FT was unhappy about Harris's plan to increase corporation tax in the USA, in the process trotting out absurd arguments to justify their position, including that this might look to be ‘socialist', deter business leaders from supporting her, and provide Trump with the opportunity to attack her. They actually offered no substantive reason for their opposition at all.
In that case, we have to guess what the FT's real objection is, which I presume is that this reduces the increase in shareholder wealth resulting from corporate activity. In truth, that philosophy has always been an excuse for corporate entities to be used to gouge the state to maximise the private wealth of a few in society. Harris should stick to her plans.
The other plan of Harris' that the FT most definitely does not like is that to prevent monopolistic price gouging by US supermarkets and others who have imposed excessive rates of inflation on the most vulnerable members of US society. As the FT says of this plan:
Harris should note that state meddling in market pricing often makes matters worse. Economists … reckon high inflation in the post-pandemic period was driven more by supply-chain snags and labour shortages than by greed.
Broader plans to root out any monopolistic practices by retailers are welcome, but price growth is still best tackled through monetary policy and measures to boost productivity.
This is a quite extraordinary claim on the FT's part. Harris has not talked about price controls. She has only talked about tackling monopoly, to which the FT pays lip service only. In the process they reveal their true colours.
Once upon a time, those who really believed in fair competition, the effectiveness of markets, and the virtues of free enterprise were determined to stamp monopoly abuse since they recognised it for exactly what it was, which was an exploitative practice that not only harmed people within society but which also harmed markets themselves. Apparently, the FT has now lost its ability to recognise this fact. How the mighty are fallen.
Finally, the FT supported Harris' plan to improve child tax credits and provide support for those in need in the USA. Please excuse my cynicism, but how terribly nice it is of them to think it appropriate that those who suffer the consequences of gross market abuse might be mildly compensated for the fact that they are made the victim of it through no fault of their own.
And what did the FT want in place of the policies that they object to? They want growth, of course. Forever, the answer of the neoliberal will be to make the pie bigger, whatever the cost of the planet and the implausibility of the outcome, most especially when they claim this plan must be delivered by state support for private business.
What I would note is that there is nothing in principle wrong with the ethical ownership and operation of private businesses within an economy. I would, however, stress the importance of the word ethical in that last sentence.
In my opinion, the FT editorial does not share my view. What it is promoting is unethical capitalism, and there is no theory that justifies that, but there is an explanation that is available in one word, and that word is greed.
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It is unfortunate that the FT did not indicate what level of corporate taxes would not be “socialist”.
Given under Nixon corporate taxes were 35% (ish) , Raygun (above 35%).
As of now they seem to be around 16 – 17% . It is clear, based on FT (erm) “reasoning” that in the period 1968 through to the late 1980s, the US was run by crypto Marxists.
Given up reading the FT, it is a shadow of what it was & seems incapable of forming a coherent argument.
“The FT was unhappy about Harris’s plan to increase corporation tax in the USA”
Bill Clinton raised ALL taxes and the economy boomed!
Mr. FT person can sick that factoid in his pipe and smoke it.
@Pilgrim Slight Return – as I stated in another thread; “Yanks are not polite when there is money laying on the table!”
Why does the FT want state support for business?
The saem one word
Greed
Why does the FT want state aid for business?
The state is run in the interest of (business, ruling, elite) class interests, why wouldn’t it?
Our state has a veneer of democracy. The democratic bit is kept in check with a ruling ideology based on the fiction of household accounting and no alternative, that gives it legitimacy. All societies with democracy need a process that makes politicians join the club. Joining makes them acceptable. This is not a conspiracy but the application of groupthink and peer pressure (the politicians become peer of the powerful club, forsaking their constituents). If they don’t they either serve a lobby fodder – but are seen as good constituencies, or if they have ambition they are sidelined and othered. Again not conspiracy just human ape behaviour in massive societies we haven’t evolved ways to understand and manage properly.
The eternal balancing act of so called democratic politics is how much it needs to give away to keep the mass of people on side..
When there was a surplus from the Empire it was easy, when the surplus came from North Sea Oil it was easy. Now it is getting rougher and tougher.
The FT plays its part in the process of giving legitimacy to all forms of capitalism, at the sophisticated end of the spectrum.
Footnote; Aristotle recognised the need to stop the powerful subverting democracy, we seem to have forgotten. Those proposing deliberative democracy (using selection by lot aka sortition) are on the right track but underestimate how far the rot has gone.
Well said.
The blindness by ‘economists’ to greed and monopoly power because no-one would ‘rationally do something like that’ is getting beyond a joke now. It really is past its sell-by date.
How well the bad endures. It can only do this with corruption via money and economics is rife with it.
Growth – it’s portrayed as something that benefits us all, but in fact it is a rich mans dream that has been socialised at huge cost to the rest of us. We’ve been sucked into THEIR agenda and the FT is no different.
And in a global economy it can be guaranteed the Financial Times has nothing to say about those countries whose governments assist Unethical Capitalism by allowing/promoting monopoly.
https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
I know you’ve featured them before, but here is the latest offering from the Marsh Family. A bright start to a rather gloomy day, weatherwise:
‘Gimme Hope Kamala’
https://www.youtube.com/watch?v=se-didBGn8A
(please amend if the link doesn’t work)
I hope the link works ok. A bright start in contrast to the gloomy weather outside. The Marsh Family featured previously on this Blog – Gimme Hope Kamala:
Now on the blog as your link did not work
Worth noting that Harris has history on the issue of controlling monopoly and ‘price gauging’ from her time as Attorney General in California. For some ‘facts’ on the issue and Harris’s proposal it’s worth reading this short article (e.g. numerous US states already have anti price gauging policies). https://www.axios.com/2024/08/20/price-gouging-kamala-harris-communism-kamunism
Thanks
Democrat’s strategists are no fools and think a rise in corporation tax is a vote winner.
If only Labour did, too.
Agreed
‘Ethical capitalism’?
Capitalism always tends to monopoly and increased exploitation.
Maybe somewhere like Finland where social provision is high and inequality low – and the constitution embeds workers rights and minimal social provision
Maybe its what they used to call a ‘mixed economy’
I believe in the mixed economy
And we will always live in one
That is why we need to make them work
Andrew
We take what we can.
The thing is, compare the U.S. Democrats to Laboured over here.
The Democrats look much cleverer to my mind because of January 6th 2021. Maybe the penny has dropped and they’ve looked the gorgon in the face.
Maybe the Right over here have been rioting in the wrong places?
I mean, you don’t crap in your own back yard do you (their back yard being parliament of course which has been leading the way in fascism and intolerance).
I think someone needs to do a really big “crap” right in the middle of Parliament and the US House.
It would fit right in with all the “crap” that is already present!
The FT is always making unsupported claims like ‘Economists say this…’, ‘Experts tell us that…’. It rarely specifies WHICH ‘economists’, ‘experts’, etc…
I’d strongly challenge the notion implied in the term ‘unethical capitalism’ that there is then a form of capitalism that is ethical. There is not.
The pursuit of profit has no ethical connotations. Gordon Gecko shouted that one down.
The pursuit of capital growth, in terms of accumulations of personal wealth, is amoral.
The structures of limited liability deliberately exclude responsibility for one’s actions.
The deliberate exclusion of negative outcomes in terms of externalities is unethical, and can be nothing other. The polluter has never paid. Just ask the Boards of English water companies.
The skewed power relationship between the owners/controllers of capital and labour is entirely unbalanced and cannot possibly be ‘fair’ or ethical.
The BoE deliberately increases unemployment to protect capital and drive down wages FFS.
The regulatory capture of labour laws by corporate interests in government, even threatens to curtail the right to withdraw one’s labour legally.
It is mostly one way traffic… Sadly, even under Labour.
This does not mean that market societies are automatically unethical, and there cannot be fair exchange, or ethical trading.
Polanyi outlines pre industrial revolution social and economic relationships as being more predicated on reciprocity, redistribution, and householding (eat yer heart out Reeves)
with trading of goods being based on reciprocal exchanges between social entities.
However, the power relationships between these social entities need to be reasonably equitable to represent a fair market economy.
That cannot conceivably be under capitalism where money has almost all the power.
Smith highlighted the tendency of capitalism to monopoly and monopsony, and, especially, his bête noir, the immorality of rentiers.
His economy was based on small units of equal standing, trading on an equal footing. He disliked both rentiers and monopolists intensely.
(Marx utterly ridiculed and castigated the petit bourgeoisie, but imo absolutely misjudged their social importance. That has not ended well in any of the authoritarian socialist states his dogmas spawned).
Smith’s theory of moral sentiments, which is by far his most important work, reduces to the single underpinning principle of “do as you would be done by” and that simple ethical foundation has been endorsed by both Kropotkin, a communist anarchist, and Bookchin, a social ecologist.
In no way does it provide a bulwark for capitalism, (or Marxism).
That we can have a founding ethical base agreed by both theorists of market economy and socialism suggests there are valid alternatives to capitalism, which can only call upon Social Darwinism, with its elites, and authoritarian Marxism.
Both are equally hierarchical in social stratification and power relationships.
Similarly, Aurelian’s critiques, much respected on this blog, are based on a brutal assessment of the hierarchies of inner and outer parties, their competencies, motivations, and abuse of power through status alone.
He is basically arguing against techno neo-feudalism, with numpties like Musk in control, willingly bolstered by technocracies, with smug talkers like Blair as cheerleaders.
Just like the Irishman advising a tourist wanting to get to Dublin “‘Well sir, if I were you, I wouldn’t start from here”, we are stuck with a start position that is an existential threat, especially in climate and biodiversity terms, and that is where capitalism has got us, collectively over 250 years.
However, I really would not put any näive faith in the chimera of ‘ethical capitalism’ as a potential solution, where only intense regulation can mitigate its Ourobouros’ tendency to eat itself, and spit out the mortal remains of the weakest.
Rant suspended as I need another coffee.
I have to disagree
As someone who has been self-employed and making profits since the early 1980s I think i have been ethical, and have no shame about making profit within that constraint
Ethcial capitalism is possible, in my opinion
Oh, absolutely, it is possible .. but is very far from integral.
There was an excellent contribution on here, last week I think, that the purpose of a system is what it does (POSIWID).
Stafford Beer’s observation was that there is “no point in claiming that the purpose of a system is to do what it constantly fails to do.”
And the great man himself was equally dismissive….
“Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work together for the benefit of all.”
JMK
Points all noted 🙂
Market capitalism is by no means perfect as its cult followers pretend. They are in denial it can be pernicious and therefore never perfectly equitable. The denial is childish!
Apologies for the diversion but:
“Economists … reckon high inflation in the post-pandemic period was driven more by supply-chain snags and labour shortages than by greed.”
So if the FT now believes inflation was driven by supply-side issues rather than “too much money”, why are they not campaigning against the unnecessarily high interest rates?
I noted that too
But you said it
You trumped me
Bond holders like high interest rates because they lend to governments
https://adamtooze.substack.com/p/chartbook-311-bondholder-and-the?utm_source=post-email-title&publication_id=192845&post_id=147620395&utm_campaign=email-post-title&isFreemail=true&r=iyf4i&triedRedirect=true&utm_medium=email
I think you are over simplifying more complex argument by some way.
Janan Ganesh was on the same track in the FT in recent days, calling on Kamala Harris to scrap the public spending elements of Bidenomics if elected, blaming it for inflation, which, as has been noted on this blog recently, is, to put it mildly, a highly contentious view. Ironically, in the unlikely event she did row back on Bidenomics, she is likely to find a lot of opposition from elected Republicans who have discovered that their constituents quite like money being spent in their areas. Who knew?
“a lot of opposition from elected Republicans who have discovered that their constituents quite like money being spent in their areas.”
@Ralph Cunningham
EXACTLY!!!! If you sit in the House of Representatives it is your first, second and third JOB to bring home as much Federally money as you can to be spent in your congressional district.
The FT seems like one of the few decent right-leaning newspapers from what I can tell, but yeah that doesn’t prevent them from having their obvious political bias when it counts. I find the Harris-Walz campaign genuinely enthusing though, the FT is wrong about the Democratic Platform, which is still just a more radical social liberalism than Biden’s more neoliberal social liberalism – although the Democratic Membership is way more in favour of Progressives than they were before, so that’s probably why the FT has sprung into action. Given all the pro-union rhetoric (I’m glad to see) and the thunderous reception AOC got along with Shawn Fain does show appetite for socialist policies, but it’s also great to see the left being pragmatic enough to realise everyone’s rights in a democracy come first against the Republican nightmare. The FT doesn’t want a new consensus to emerge however though, as is often needed to prevent crisis to actually restore trust in democracy, so it’s just signalling to readers to attempt to entrench the neoliberal grain as it would likely prefer something closer to the New Democrats with their free market stability to win instead of Trump, when in reality that would most likely open the door to Trump.
I don’t know if this is really a thing and it can be quite annoying when the right bangs on about it with conservatism, but I see Walz as very small-S socialist, and they’re definitely playing into liberal to libertarian socialist tendencies – that I find personally great and does go down well with the American voter with appeals to freedom in the face of Trump’s despotism. The Democrats finally seem to have cracked the code for appealing to the trends in young peoples generally social liberal and left-leaning economics, which mobilises activists, without alienating older voters more distrusting of overt socialism or social democracy who also love their country more uncritically but share the instinctive freedom loving tendency that is so common in the US; we just have to hope it all pays off. It seems learning from Bernie’s defeats are all paying off with the current momentum.
They have one massive problem though. It’s called Gaza, and I have nit yet read what Harris said last night