In a on-going attempt at bringing Socialism to everyone by pointing out just how poorly treated the 99% are under Capitalism, here is another couple of examples from today's newspapers at how profit drives everything under this system and the little guy can go hang.
Firstly, the Royal Bank of Scotland. The bank has been deliberately driving small businesses to collapse by scrapping loan deals, imposing inflated interest rates and charge hefty penalties so it could buy back their assets at rock-bottom prices.
Chancellor George Osborne has described the banks actions as 'shocking' when it was revealed that firms not necessarily in immediate financial distress are 'engineered' into collapse by technical breaches of loan terms, and are then hit with exorbitant rates and fees, forcing them out of business allowing RBS to buy their property and assets on the cheap.
Second example is the utility companies who put their prices up by as much as 11% and blamed wholesale prices and green taxes while the industry regulator has discovered that they were actually making 20% more profit from each UK household last year than the previous year.
The National Pensioners’ Convention puts the total number of people who died last year from the cold due to the increase in fuel costs at 24,000 with a further 6 million in fuel poverty.
What this does is make you understand the morals of the profit making companies who put making money above everything else, including destroying peoples livelihoods through forcing them out of business or in the case of the utility companies, taking their lives as they can't afford to heat their homes.
To think that there are people who defend this system.
4 comments:
"makes me understand that the UK lacks a truly competitive market place"
...which in turn makes me understand that the relentless corporate propaganda in the US has convinced many people that their own domestic market is a free one.
It’s good you’ve been avoiding drinking the Kool-Aid during these past few decades, Q. In that case, if you haven’t already, you might enjoy reading ‘The Great Deformation’ by David Stockman. I’ts about how the US economy has come to be dominated by crony capitalism and ostensibly free markets are an illusion.
Stockman’s an anti-Keynesian who gives some credit to certain Presidents (of both parties) for at least striving to create a freer market (e.g. Truman, Ike, Clinton), while criticising others (of both parties) for not doing so (e.g. FDR, Nixon, Dubya, Obama). He was an economic advisor in the Reagan White House, even though he’s now having to concede that the Reagan ‘revolution’ – if its announced goals are accepted as being its real ones – was a complete failure, and the US is now in an era of rampant crony capitalism favouring the already-rich, and where cabals and private associations of wealthy individuals influence the market far more than the poor old ‘gouged’ consumers realise, or is healthy (i.e. the antithesis of a free, honestly competitive market). I didn’t agree with everything he said in the book, but it’s certainly an eye-opener for anyone tempted to believe that the US is a truly free economy – it’s nowhere near it, and never really has been.
Not that it’s unusual in this respect. It’s a global problem, here, there, and everywhere. If we’re considering the forces that move large markets, it’s a mistake and a distraction to think about it in terms of national boundaries at all. Unless you live in North Korea, it’s multi-national companies – and the relationships between them – and whose influence is perpetuated down the years through government-complicit cronyism – who are the main drivers.
Lucy: I completely accept that these are terrible examples of modern-day capitalism at work, but I suspect we differ on the solution. Yours is still socialism I take it?
Here’s the problem I have with that: Not many people want to do great (or even good) things without an incentive. Looking at modern history, in communist/socialist regimes (and occasionally far-right authoritarian ones) that incentive has frequent been fear of the consequences. Which have often been brutal and repressive. In market economies, on the other hand, the incentive has been to make enough money to create a better life for yourself and your loved ones.
I know which one I prefer.
The trick with market economies though, is to temper them with effective boundaries so that corruption/cronyism is kept to a minimum, individual industries don’t trend towards monopoly (a constant problem), and an acceptable minimum standard of living is maintained for enough of society’s poorest so that the social contract is maintained and economic pressures don’t mitigate towards increased poverty, crime, chaos, mass disruptions, etc, etc..… Ideally, the government should be striving for this outcome at the same time as keeping its snout out of social/moral questions that are the rightful province of individual preference.
This must be a fairly difficult trick because – in our post-globalisation age – I don’t see any place that’s managed it particularly well… (Perhaps Scandinavia have come the closest? Post war Germany in its heyday?)... and I say this with the knowledge that we’re all aware of political leaders who don’t/won’t – for whatever reason – actively pursue this kind of utilitarian ‘greatest good for the greatest number’ governance. Rather, they defend the status quo and entrenched vested interests until they’re voted out.
The problem, as i see it, is that if it is left alone, big business will lie, cheat and do anything in order to make a profit as that is all they are interested in. Capitalism makes these people greedy and in their rush to make ever larger profits, they step across the line into ethically dodgy places, like RSB and the utility companies in this example.
The solution is to regulate them so they are not profiteering but that just sees them fined which is passed onto the consumer so that isn't going to stop them for long.
Nationalisation is my answer so the 'making a profit', the cause of the problem, is taken out of the equation.
It also removes my second problem which is the profit going to the country and not to shareholders. In the case of the post office, it made £600m last year which went to the treasury, this year the £600m will go to shareholders.
I don't mean everything should be nationalised, the essential things like water, gas & electric certainly but the rest need a very heavy dose of regulation which brings the problem you mention in your last sentence, the will for the Governments who receive huge amounts of funding from these companies who are profiteering. As we saw over the recent utility price spat, Cameron and his group mumbled something and then quickly moved the story on so it is not just a question of controlling the companies and banks who have leverage over the Government, but making the Government uncorruptable. I can't see things improving until then.
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