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Twin Track Europe: The Solution to Brexit

The British people have spoken. Three times. In 1975 to confirm whether to remain as a member of the common market, or more precisely the European Communities (Iron and Steel, Economic and Atomic Energy), that we had joined 2 years previously – 67% voted to stay in. The 2011 referendum was to decide whether to change the electoral system to the alternative vote system. Genuine proportional representation was not on offer, presumably because it might have been accepted. 68% voted against change. The 2016 Brexit referendum whether to remain or leave the EU resulted in 52% for leave, around 37% of the electorate. The British people had spoken, but not with any very clear message.

At least one sample post referendum survey (albeit non-scientifically sampled) suggested that over 11% of the leave voters did so because they were ‘so fed up with David Cameron, George Osborne and Nick Clegg’. There was no mention of Boris Johnson, Michael Gove, David Davis, Ian Duncan-Smith and the rather well spoken Jacob Rees-Mogg, though the 11%, all Labour supporters, would no doubt have included them as also influencing their vote.

That narrow vote to leave was muddied by the simple fact that, since no negotiations had taken place, it was not possible to define what leaving the EU would entail. The validity of the leave majority was further undermined by the revelation that the Brexit campaign was fraudulent, not just by its aggressive promotion of fake news and claims that leaving the EU, would help make Britain great again (to borrow a Trumpism). It was also guilty of targeting voters online with fakery as confirmed in evidence to the all-party digital media, culture and sport (DCMS) committee by former Cambridge Analytica employee, Christopher Wylie. The Vote Leave campaign has also been fined £61,000 and has been referred to police after the Electoral Commission found it had broken electoral law, exceeding its £7m spending limit, passing £675,315 through the pro Brexit youth group, BeLeave, whose founder, Darren Grimes, was also fined and referred to police for further investigation.
Continue reading Twin Track Europe: The Solution to Brexit

Interesting Times

We live in interesting times. The First Industrial Revolution used water and steam power to mechanize production establishing the factory system supported by new transportation systems (canals and railways) for people and freight, which was the source of unprecedented economic and population growth and a newly contested way in which its gains might be distributed.

The Second Industrial Revolution used electric power and the internal combustion engine to create mass production and new forms of transportation, multiplying the effects of the First. It also included some democratic progression in contesting how economic gains should be shared among the people. It also saw the revolutionary creation of socialist states aimed at returning power to the people.

The Third used electronics and information technology to automate production and computerise calculation, accelerating the speed of change in areas such as molecular and genetic engineering and enabling the coordination of physical, digital and biological developments to produce exciting new products and processes, demand for which now appears to be maturing. That revolution coincided with the collapse of the socialist experiment which had mutated into totalitarian communism. It also signalled the takeover of the world by the neoliberal witchcraft and institutional truths – the lies people are persuaded to buy into in order to prosper in their chosen careers.
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Threats to Democracy

President Trump appears contemptuous of the great American contribution to democratic government: Lincoln’s ‘government of the people, by the people, for the people’.

It is an ideal which is never easy to achieve and maintain. That is because ‘the people’ is not a coherent whole, but the summation of a lot of disparate entities. The stated intent was that all people should be treated equally without differentiating between sub-groups of the population, defined by race, religion or any other classification. Should a sub-group be excluded from such equality they should have access to remedy. Should a sub-group be enabled to circumvent those principles and in so doing, exploit the rest, it would be a clear democratic malfunction in need of correction.
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The Simple Truth about Progressive Taxation

We live in an interdependent world, both within and between nation states. We all need clean air and water, safety, security and defence, the rule of law and justice for all, plus public highways (free from pot-holes), plus, in a civilized society, health and social care, education, and access to the commons such as libraries, museums, art galleries, parks, rivers and the seaside, all free at the point of delivery. But they all have to be paid for.

In the past it was thought ‘not very unreasonable’, as Adam Smith put it, ‘that the rich should contribute to the public expense, not only in proportion, but something more than in that proportion.’ Such progressive taxation seemed to be regarded as simply a matter of fairness. But the mainstream economic belief system which now rules, has effectively outlawed the very idea of progressive taxation. Today it is rarely ever mentioned. A low single flat rate of income tax is regarded as the ideal.

The world is run by what Roosevelt referred to as organised money, which comprised the leaders of the finance sector, financialised business, the media and relevant strands of academia and politics, all lubricated by the revolving doors, enabling migration between all these sectors and government itself.
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More Damage by Organised Money

The sell off of UK’s manufacturing continues with the £8.1bn hostile bid for GKN from so called ‘turnaround specialist’ Melrose, turnaround being defined as asset strip, break up and sell off. According to GKN CEO, Anne Stevens, shareholders such as hedge funds ‘could not give a crap’ about the engineering firm’s future. Melrose is part of the predatory, financialised sector, beloved of free market ideologues such as Philip Hammond, which is destroying the real economy and its component firms such as GKN.

The logic of such deals is based on a ridiculously out-dated economic ideology going back a hundred years and more which can be summarised in three simple statements from cold war days.
Continue reading More Damage by Organised Money

In Praise of Free Markets

UK is covered in evidence of free markets. Almost every town has a market place or square, where local producers have for centuries brought their crops and wares on market day to sell to local people. If any producer of potatoes, for example, tried to charge a higher price than the going rate, they would probably have to take their unsold produce back home with them. Unless, that is, there was some unique and desirable characteristic about their particular potato variety. The market was competitive and the market price would emerge as a result of that competition. That was how the free market, Smith’s ‘invisible hand’, worked for the great benefit of customers.

The neoliberal conception of the free market is not quite like that. It conflates the market with international trade. The mercantilist system Adam Smith confronted was one of government imposed tariffs to protect home markets from imports and the provision of subsidies to encourage exports. In so doing it interfered with international competition, keeping prices on the home market artificially high, clearly against customer interests. Such protectionism limited the overall size of markets and therefore the economic gains that might be made by the division of labour. That provides perfectly reasonable grounds for the crusade against protectionist government interference in markets, though other globalisation issues are also relevant.

A market that is free from government tariffs and subsidies is not necessarily free in any other sense. In fact, most markets which are free from government interference, tend to become uncompetitive, if not monopolistic, and so not working for the benefit of customers. That is the result of the perfectly natural process of the most successful competitors increasing their market share, a process which continues till monopoly, or some monopoly inhibiting cartel, has been established. Such monopolisation proceeds unless arrested by government imposed regulation to protect competition. That lesson was learned in the 1930s, but has long since been disregarded and most regulatory protections set aside.

The neoliberal doctrine multiplies the destructive effects of monopolistic markets by asserting the dominance of shareholder interests above all others. The monopolist, or cartel member, is therefore taught it is their duty to ‘make as much money as possible for stockholders’ and adopt a default strategy of market plunder.

That is where we are now as revealed by the many markets dominated by ‘the big four’ or ‘big six’ which include the recipients of public sector privatisations that now mercilessly exploit their market power. Something of the extent of criminal exploitation by the self perpetuating organised money establishment has been revealed in the Panama Papers and more recently the Paradise Papers, even tarnishing the reputations of H M the Queen & Son.

Genuinely free markets, where producers and providers compete for custom, are not just the best means of delivering value where it is most needed, but also the nudge for further innovation and development, such as an even more desirable variety of potato.
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The World’s Greatest Crimes?

As an academically qualified neoliberal economist and management ‘scientist’ employed as a corporate executive with strategic management responsibilities – ie what Milton Friedman referred to as a corporate official – J Brigham (forgive this degree of anonymity) is presented with all sorts of exciting decision opportunities. They include possibly fraudulent dealing that could be tremendously beneficial for shareholders. The whole purpose of her job is ‘to make as much money for stockholders as possible’ to quote Friedman again. So how should those decisions be made?

The analysis for such decisions aims to calculate the net present value resulting from proceeding with a deal, compared with the calculation of not proceeding. Typically, Brigham admits, the more the net gain, the greater its apparent illegality. But such decisions need to be assessed clinically, without clouding its measurement with qualitative adjustments such as ethical values or what Brigham refers to as ‘religious considerations’.

If the deal could be shown to be fraudulent, then the company would risk being fined, but only if the fraud is uncovered. So the calculation of net present value of going ahead needs to be adjusted by a calculation of the anticipated fines, reduced by the probability of discovery, as well as taking into account the considerable number of years between gaining the benefit and paying the fines. Having carried out all those due calculations, decisions to go ahead would, according to Brigham, almost invariably be persuasive.

But what if she were to be held personally responsible for the fraud and punished accordingly? Would that change her decision? ‘Well, of course it would, but the decision was actually taken and implemented by the company, which is a legal person in its own right. It’s the company that must pay.’

That argument is worth consideration. Continue reading The World’s Greatest Crimes?