In the last few Monday posts, I’ve defined the local economy. Before I move on I want to ask whether it is possible to rebuild the local economy.
On Saturday 4 October 2014, the Guardian newspaper ran an item on its front page, “Outcry as Osborne rails against ‘anti-business’ charities”. The chancellor of the exchequer addressed the annual convention of the Institute of Directors and said,
“You have to get out there and put the business argument, because there are plenty of pressure groups, plenty of trade unions and plenty of charities and the like, that will put the counter view. It is, I know, a difficult decision sometimes to put your head above the parapet, but that is the only way we are going to win this argument for an enterprising, business, low-tax economy that delivers prosperity for the people and the generations to come.
There is a big argument in our country … about our future, about whether we are a country that is for business, for enterprise, for the free market.”
I doubt the Chancellor would recognise a free local market even presented to him on a golden platter with watercress tastefully arranged around it. So, let’s deal with some of the myths in his statement.
Deregulation
The Institute of Directors are hardly equipped to make the case for small businesses and the local economy. They are not primarily pro-business in the sense of free trade and a level playing field for small businesses. The corporations skew the economy to the interests of the 1% who accumulate wealth and so take it out of the economy. They are not behind the parapet; they are the owners of the big guns that over the last few decades have blown the parapet away.
The Chancellor mixes all manner of things together. Of course we need enterprise and business and we need a government that allows businesses to develop on a local scale. The great corporations are not businesses as we know them locally and his eliding of economic imperialism with entrepreneurship is not honest.
The low-tax economy again betrays the prejudice against the entrepreneur who builds wealth for the economy and not personal gain. Why should we not pay taxes? Why shouldn’t the success of my business benefit others? There was a time when business owners genuinely saw their role as benefiting wider society. Granted they exploited their workforce but they also aspired to be public benefactors. I think they used the wrong means to the right ends. They exploited their workers because they believed they could benefit society from their own efforts. It was the mutuals that actually built the institutions that created modern Britain.
Whilst we need to be for business and enterprise, the idea of the free market is the get out clause for the corporate world. Their watch word is deregulation because their free market allows them to extract wealth from the economy. All the major political parties in the UK support deregulation, as an unquestioned good. It shows the rhetoric of national sovereignty, beloved of the new right, is a sham. Why care about sovereignty when you’ve sold the power to regulate to the corporations?
Mutuals
A regulated economy, creates the spaces where small business can thrive. Mutuals for example need regulation, so that the work of their members builds wealth for the members together.
Which brings me to the point: can we rebuild our local economies? In the middle to late 19th century, the co-operative movement, a grass-roots movement did it. I’ve written about how so many of the institutions, now owned by corporations, originated from working people who built them as expressions of mutuality.
We know it is possible. The question is whether modern corporations are too powerful. The answer lies in the self-destruction at the heart of their practice. They’ve built their world on debt and we are it seems a hair’s breadth away from a second collapse of the global economy. The Chancellor has not learned the lesson (nor the opposition) but the people sense something is wrong. The popular answer in the UK is UKIP who, whilst identifying some of the issues, have not found solutions that can possibly work. They are fixated on Europe, where the local economy has many allies, and do not understand the UK government has lost far more sovereignty to privatisation than it has ever lost to Europe.
We will get the politicians we need when we understand the economy we need. This will arise when we have entrepreneurs whose values line up with a new vision. And it is to values I’ll be turning next.
