In this election campaign, much is being made of whether or not the main UK Parties are business friendly. The fire sale of British owned assets, euphemistically nominated as foreign direct investment, is held to indicate that the UK is ‘open for business’. Over the past 35 years, company after company and industry after industry has been sold off to foreign ownership. The same has been achieved with the sell-off of public assets, the latest example being Eurostar, and public services and utilities which have been privatised and in the majority of cases sold to foreign owned entities.
It all has nothing to do with being ‘open for business’. The political motivation is to achieve a short term (ie relating to the next election) economic gain, completely ignoring the long term costs. The short term stats appear to be all that matters, so they can be quoted ad nauseam in media interviews.
Being seen as business friendly is clearly conceived as being worth either a lot of votes or a lot of money. So Parties shrink from confronting or challenging in any way what they conceive of as “business”. They appear ‘intensely relaxed’ about business people getting ‘filthy rich’. They seem tolerant of tax fraud on a massive scale. They shrink from regulation of markets. They are in awe of the financial sector. They talk about support for the SME sector, but do little. It seems they simply do not understand what business is about. Why should they? They’ve none of them been near it except for photo-opportunities.
Continue reading UK ‘Open for Business’
The idea of GDP is simple: the summation of what is produced within the UK avoiding any double counting. It is used to assess how well the economy is doing overall. For the government of the day, growth is good because it suggests we will all be better off. Though GDP is a very imprecise measure, it is one that most people broadly accept.
The economy used to be measured by gross national product (GNP). That measured what UK-owned assets produced, irrespective of where they were in the world. But GNP fell out of favour as UK owned assets were sold to foreign investors with the result that the economy, by that measure, appeared to be in decline. Successive Chancellors tried to make out the sale of UK owned assets was good, because it showed UK was ‘open for business’. But it didn’t really wash. So, since the 1980s, GDP has been the standard measure.
GDP is calculated by simply adding the product of various sectors together as if they were all of equal worth. But in truth some sectors benefit the common good and others are predatory on the common good. But if GDP is growing the government of the day takes credit for successful economic management, irrespective of the fact that it is the predatory components that have grown at the expense of the good sectors.
Continue reading The Great GDP Deception
The Corporate Reform Collective are launching their Manifesto for the incoming government at Westminster on Monday 2nd March at 6.30 p.m.
To support this initiative and join the debate at this People’s Parliament session contact:
The Corporate Reform Manifesto is available at http://gordonpearson.co.uk/corporate-reform-manifesto
This is backed up in greater detail with explanations and illustrations of how the abuses are carried out through complex corporate structures and how they can be controlled in their newly published book Fighting Corporate Abuse – Beyond Predatory Capitalism
PB 9780745335162 £17.99 | $31 216pp
by the Corporate Reform Collective
Buy the book today for £16 http://bit.ly/CorporateReform
The members of the Corporate Reform Collective are: Tom Hadden (Emeritus Professor, Queen’s University Belfast), Paddy Ireland (Professor of Law at the University of Bristol Law School), Glenn Morgan (Professor of International Management at Cardiff Business School), Martin Parker (Professor of Organisation and Culture at the School of Management, University of Leicester), Gordon Pearson (author of Strategic Thinking, Integrity in Organizations, The Rise and Fall of Management and The Road to Co-operation), Sol Picciotto (Senior Adviser to the Tax Justice Network), Prem Sikka (Professor of Accounting at the Essex Business School) and Hugh Willmott (Research Professor in Organisational Studies at Cardiff University).
What would you do if you’d lent loadsamoney to someone and they didn’t pay you back as agreed because they were unemployed and didn’t have the necessary? Would you demand they stop eating so they could repay a bit? Would you start taking stuff from them in lieu of interest payments? Would you threaten them with even worse deprivation, if they didn’t repay in full as agreed? Or would you realise you’d been stupid to lend them all that money in the first place without checking their ability to repay, without even checking if they had a job with some regular income?
Greece can’t repay its debts and the more austerity is enforced, the less able will Greece become. Unemployment already stands at 26% with youth unemployment around 55%. More austerity will only increase those figures reducing Greece’s capability. Martin Wolf suggests the loans to Greece were made recklessly, without due diligence, because the purpose of the loans was not to help Greece but to protect the Euro [‘Greek debt and a default of statesmanship’, Financial Times, 28/1/2015]. Greece exiting would be an example others might follow. So, while exit could be damaging for Greece, for the Euro it would be disastrous, reducing it to the category of an exchange rate peg, rather than a solid currency.
In the aftermath of the 2008 crash, there was much debate as to whether stimulus or austerity would be the best way to return economies to health. The 1930s experience, addressed by the application of common sense and common humanity, saw economies revived by the stimulus exampled by Roosevelt’s New Deal. This hard-learned lesson has been highlighted before at http://gordonpearson.co.uk/2014/10/22/a-new-new-deal/#more-1127
Continue reading The Greek Example
For a short while on 11th January 2015, an estimated 1.5 million people were brought together in Paris as a homogeneous entity, along with a further estimated 2.5 million elsewhere in France. They represented huge diversity of race, religion, age, ability, interests and political allegiance. What brought them together for that brief moment was their common protest against the violence meted out to individuals who in these post-enlightenment times, had not broken any law, but had merely exercised their right to freedom of speech. Though few of the protesters might agree with the Charlie Hebdo line, the protest was in defence of their right to express it, and the shared horror at the premeditated violence visited on them.
That spontaneous moment of universal protest is now complete. But the mindless abuse of Muslims was almost immediate. Those aggressive reactions could well seed equal and opposite responses. So the world might continue its progression in the wrong direction, refusing to learn any lessons from the simple minded ‘war on terrorism’ declared by George W Bush after 9/11 and supported by our very own Tony Blair. The time for simplistic generalisations is surely over; the struggle must begin for some deeper understanding on which to base action.
Continue reading Je Suis un Humain
The corporate leviathans which oppress the real economy and bully its participants are no longer industrial firms concerned with customers, technologies and people. They are merger and acquisition deal making financial entities. Their oppression and bullying is justified and encouraged by a discredited neoclassical economic ideology which is accepted and promoted by political, media and financial system establishments. The core of that ideology is that economic prosperity is achieved through the individual pursuit of self-interest. Greed is not just good, but a duty, and a social responsibility for the wealthy to fulfil both as individuals and as members of the financial establishment.
According to that ideology, the limitation of greed, especially by statist intervention, must be resisted. The redistribution of its resulting excesses must be prevented. Only the most inhumane resulting poverty and distress should be moderated at public expense. The free working of markets must be allowed to produce the optimum allocation of all resources. Because markets work.
Continue reading Taming Corporate Bullies: Supporting Real Enterprise
Our children and grand-children are facing a far less fair and equitable society than the one people grew up in 30 or more years ago. The wealthy are far richer and the poor both poorer and more numerous. But yet the three main political parties all seem to accept that state of affairs, despite the overwhelming evidence that it is truly bad news for the well-being of both rich and poor alike. Britain is in danger of becoming a permanently divided society.
One of the main causes is the mainstream economic theory that the current elite were all taught to believe. The theory teaches that money paid to the wealthy will be invested in enterprise and the resulting benefits will trickle down to the poorest sections of society so that everyone gains. Therefore government should reduce taxes on the wealthy. It also teaches that privately own companies are much more efficient than publicly owned. Therefore state owned activity should, where feasible, be outsourced to the private sector for everyone to gain. There’s a whole raft of such arguments justified by the theory.
Continue reading A High Velocity Economy