Ed – Mr Punche-Bagge has kindly sent is this article. It is Part I of a two-part series. The second part will be published on Sunday.


Big society or small society? Whatever, we seem to be moving towards Wrong Society.

Since our “representatives” in Parliament seem to be making such a hash of governing our once independent and confident country, it must be time to set about wondering what has gone wrong, otherwise, how will we put it right?

Many people tell us that they don’t vote because all politicians are cut from the same cloth. For whom who you vote doesn’t make any difference because the result is the same whichever Party gets in.

How can this be when the Parties are supposedly so diametrically opposed?

We know that our political First-Past-the-Post electoral system has over many years ingrained into the voters the need to vote for fear of the alternative – “vote for us or the monsters will get in”. This conveniently works to prevent protest parties from gaining a foothold and eventually rising to challenge the incumbent duopoly. The result we see everywhere – suppression of new or alternative ideas and the inexorable impoverishment of political discourse – to the point where it has become farcically puerile.

Loosely we might summarise the traditional differences between Socialists and Free-marketeers as the former know better how to spend our money than we do (tax and spend = less independence and less choice) whilst the latter think that as far as possible we make a better job of spending our own money than the state does (more choice and more independence). It is widely agreed that some things just have to be done by the state, some things ought to be done by the state, whilst other things are better done by private enterprise. The differences arise over where to draw the boundary line, so both are correct up to a point.

In principle, the armed forces, political assemblies, police, judiciary, prisons, and utilities that do not readily lend themselves to competition are all candidates for being run by the state (with the concomitant problem of how best to ensure good service, innovation, and value for money). Businesses that do lend themselves to competition should be run by private enterprise.

Since everyone given a choice at the personal level wants to spend their own money as they see fit in an open and competitive marketplace (the freedom to be responsible for oneself), hardened socialists exaggerate the tendency of capitalists to extort profits at the expense of the workers, by extension branding all capitalists as inherently monstrous and uncaring. To the extent that businesses are able to get away with such an approach and also choose to do so, they have a point. However, in a free market, market forces compel businesses to compete for employees by offering higher wages and better conditions, so in a healthy economy (open to innovation of new/improved products, open to new business start-ups, and with learning opportunities and good transport links facilitating employee mobility) this tendency is curbed.

In any event the solution touted by the socialists (to make the state responsible for more and more of our individual spending through ever higher levels of taxation and thus curbs on freedom of choice) has never yet been shown to lead to a happy populace; no doubt due to the innate tendency of people to want to do their own thing rather than to do as they are told and like it. Even the Chinese communists now embrace the capitalist economy in large measure (with the proviso that innovation does not spill over into politics).

So, in our “free society”, how might our greedy capitalists manage to extort profits at the expense of their workers?

  • Flood the market with imported employees, thus driving down wages
  • Control the provision of education (regulation, free or subsidised provision, dumbing down of qualifications) to restrict and impoverish learning opportunities
  • Import trained people from overseas instead of investing in training
  • Get into bed with Government in “Public-Private-Partnerships” where the state stifles innovation, sets the prices, and meets any losses through increased borrowing, taxation, or reduced product quality (NHS, national transportation services, Too-Big-to-Fail Banks, publicly regulated utilities, national infrastructure projects) whilst the capitalists cream off the profits from over-priced contracts and push the losses back onto the tax-payer.(Collusion with civil servants and/or politicians helps but isn’t strictly necessary since both have been shown to be totally lousy negotiators of contracts, being driven by short-term political imperatives rather than any desire for effective service provision. Anyway, when did turning a blind eye amount to collusion?)

NB: PPPs may be by design (eg: PFI contracts) or by accident (eg: Big Pharma / Medical).

  • Stifle smaller businesses with excessive regulation to add costs and delays, distract attention from business management, and impose dubious requirements to prevent “unqualified” market entrants, thus making independent start-ups unviable and leaving the market clear for the big boys.

So far so successful …

Crony capitalism (government + big business) is on a roll in both the US and the UK. The EU has an enormous business lobby dedicated to advising the Commission on new regulatory initiatives (just google “lobbying the EU” to see how lobbying has become a rich mine of academic papers).

To hardened socialists crony capitalism offers increased control over the market so that it can be fixed without overt nationalisation. This can produce such poor results that nationalisation can be “justified” and the capitalists can be demonized. Unfortunately, far from creating a socialist utopia, nationalisation will create monopolies that permanently elevate an unaccountable producer interest above the interests of the consumer. Us oldies have been there before; monopolies should be limited to those situations where a competitive market cannot sensibly be engineered.

To LibLabCons crony capitalism offers business donations sufficient to make them increasingly independent of grass-roots supporters and thereby mainly accountable only to their paymasters.

So back to where we came in – if our representatives in Parliament are not working for us, for whom are they working?

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