The National Complex

I’ve written recently about economic neurosis, but the psychiatric metaphor doesn’t end there. There is also the problem of national complexes.
It was President Eisenhower who coined the term ‘military-industrial complex’ and warned of its threatening nature. Those very serious and potentially terminal threats still exist of course both in terms of weaponry and distortion of the economy. But there’s another continuing threat from colluding forces in western society that endangers our quality of life if not our very existence.
The last few decades have hit western productive industry and ordinary people so hard, particularly in this country, have seen the rise of a powerful, destructive and anti-democratic complex – the politico-business complex.
This is the compact that has heedlessly extracted exorbitant profits – financial, political or both - for themselves and, relentlessly seeking more globalisation, that has eviscerated productive industry in this country.
The politico-business complex has destroyed millions of jobs and exported others - and often the equipment that went with them. It has presided over the closure of household-name firms and seen others sold off to foreign bidders and uncertain futures. And it has, as intended, profited the super rich immensely - aided and abetted by tax avoidance schemes and loopholes that have remained unclosed by successive governments.
There are two interlocking mindsets that have developed. It is not simply the business elite who are responsible for destroying western industries and quality of life but the political class across the major parties who have been fellow travellers and deluded beneficiaries in this process. The political elite have seen it as in their interest to curry favour with powerful business elements – and not just the manipulative and threatening owners of the press.
The politicians have been enthralled by rich and powerful business interests and of course in the continuing absence of reform in party political funding, have been financed by them. There is no such thing as a free-of-cost democracy. The choice is between having a substantial element of public funding with the cost up front and in the open or having a much greater cost, both financial and human, hidden away behind ruinous and partisan economic policies and disloyal industrial management practices.
Governments were deceived into thinking that importing lower cost (superficially) versions of goods formerly produced at home and so keeping down inflation in the short term was good in the long term. The productive gap would of course be filled by wonderful financial services – we know all too well where all this led. It is doubly unjust that people in the communities destroyed by these policies and others over the past 30 years are facing further benefits cuts while the destroyers are given a tax break to add to the loopholes and ease of use of tax havens.
And we are so often told that there’s no alternative, that we are all victims of markets. But in so far as this is true, it is only so as long as countries continue to act separately rather than in concert and so long as ‘free-marketeering’ and austerity based economic theories are given the time of day.
Economics has been described as ‘the dismal science’ - dismal, certainly in the variants invoked in an attempt to justify the destruction of western industry and subsequent austerity. But ‘science’ - much less so in any of the senses of its meaning from simply ‘knowing’ to being rigorous, demonstrable and testable. And in the context of austerity it is worth noting that the word ‘economise’ means not ‘to cut back on’ but ‘to make best use of.’
The original name for economics itself, ‘political economy’, is a very good fit for the age of the politico-business complex. Never has this older description been more apt, although ‘partisan economy’ could be a modern update - as we are seeing to our cost.
High time then for disassembling the politico-business complex and beginning the lengthy task of building a virtuous economy that operates in the interest of the common good.

A Case for Dr Freud?

In my last posting I suggested that there’s a case for investigating the lack of vision, ruinous, mean and unjust policies of the government (I decline to use a capital ‘g’). But more than good detective work is needed – there will have to be therapy too. So perhaps we need the insights of the renowned Dr. Sigmund Freud as well as Detective Superintendent Foyle.
There has been much discussion by politicians, economists and financial analysts of the economic and financial woes of the country, which seem to make a suitable case for treatment. But the debate amongst the elite and privileged and all that is taken for granted in it, doesn’t seem to have made much, if any, difference at least so far as positive changes to government policy are concerned. So perhaps it’s time for a different sort of analysis.
Some time on the psychoanalyst’s couch would be well spent if we got to understand the reasons for the government’s obsession with punitive austerity for the less well off and the continuing money-grasping neurosis in banks and markets. All this of course supported by wealthy right wing acolytes.
The Chancellor of the Exchequer should be the first patient and this neurotic Government as a whole could do with treatment to ease their addiction to misery and their fantasies with the not-so-dynamic private sector, various abilities to ‘self regulate’ and so-called ‘free’ trade.
The psychoanalytic metaphor is revealing, as neurosis involves hiding things from yourself (such as miserably failing policies) and often springs from unstable relationships - with partners for example. There’s way too much fretting about disloyal ‘wealth creators’ or companies threatening to take away their bat and ball and change countries.
The cure involves finding out the truth about yourself, changing your behaviour and valuing others – the poor for example – instead of exploiting or haranguing them and thinking beyond the impact of your actions merely on yourself and your rich friends.
It also involves permanently removing the deeply ingrained habit of self-deception and the culture of greed and deceit that is so evident in marketing driven business and parts of society today. I like the description I saw recently – the ‘feral rich’.
Many neurotics also exhibit a high level of dependency. Business executives should be less driven by avarice, and depend less on big bonuses, lavish entry and exit payments and pay rises way above inflation. We consumers are already seeing the need to depend less on the ‘must-have now’ mentality. The financial dependency cultivated by banks and grasping, usurious moneylenders has taken its toll and if not locked up they should be eased onto the analytical sofa.
Neurosis also involves anxiety - for example the fear of having to admit that government policy is ineffective, illogical, divisive and cruelly unfair, not meeting ludicrous and arbitrary targets and the impulsive lurches and outbursts of aggression that such anxiety breeds.
Lack of self-restraint - greed in particular - is an infantile trait that is found in many neurotics, banks and boardrooms. Corporate owners should mature to moderation and patience in a culture of commonality that also includes their customers, locality and country. Qualities such as fairness, trust, commitment and loyalty define a healthy frame of mind for businesses as well as individuals.
There is a need for neurosis-free government and business psychology - as well as an effective industrial strategy to curb the prodigal coarseness of the culture of greed and disloyalty that has brought the country low.
And it could even be worse if the aggressive selfishness and hierarchical tendencies so much to the fore in certain quarters are, in a neurophysiological sense latent in the primitive parts of our brains that have come down to us from our ancient reptilian predecessors. But tempting though it is to see particular politicians and bankers in this way, I do not believe that this defines ‘human nature’. Human society, and our economy are what we make them and we must accept full, conscious responsibility for this and not deceive ourselves - so back to neurosis.
All the therapy needed would be a lot to ask even of Dr. Freud. But the gains from having a virtuous and neurosis-free economy as against the mean and socially barren version of capitalism with which we are now afflicted go well beyond an improved economic performance and extend to rebuilt national morale, social justice and the furtherance of the common good. Rewards well worth the effort of self-analysis.

A Case for Mr Foyle?

I’ve recently been enjoying the new series of our favourite detective drama – Foyle’s War. The latest episodes are set in the post WW2 context of the start of the Cold War. It was a time when most people had little money and few possessions and there was a much higher level of public debt than there is now.
So what was the response of the then government to this? It was to create the National Health Service and invest in the nation’s depleted infrastructure, lifting public spirits with public service. If our present government was transported back to those days, what would we have seen? No doubts there: “More austerity, another round of deep cuts right away except for lower taxes for the wealthy”.
Of course they would have expressed confidence that the private sector would rush in and fill the gap, having been so badly ‘crowded out’. And if this didn’t work, then clearly another round of austerity for ordinary people would be needed. And so on.
Clearly viciously counter-productive, yet that is the mindset we see today. And what is the result? A flatlining economy, an ever-widening gap between poor and rich and negative penny-pinching, instead of inspirational views of the future all round.
And this mindset has infected the opposition, so timid and over-cautious in their approach and nowhere near bold enough in their policies as far as we know them. It seems you can hardly get a tissue paper between the political parties these days which in my view accounts for much of the disillusionment and low turnouts at elections.
The cutting and negativity is not confined to this country of course as the continued misery in the Eurozone reminds us, culminating most recently in the theft of savings in Cyprus.
What we are seeing are policies so bad that they suggest some kind of communicable mental health issue in governments. I’ve suggested in earlier postings some of the measures that could be taken in this country if the will and courage were there, but at present they are not.
I’m not sure of what Mr Foyle would have made of all this beyond the sure perception that it’s all downright criminal!

A Municipal Bank Would Radiate Happiness

With my wife Vivienne I recently attended an open day at the former Municipal Bank headquarters in Broad Street. This was an interesting event being the initiative of local artists who used the still fine premises as the basis for showing their work. While the upstairs rooms were not accessible on this occasion, the main banking hall with its improving mottoes (e.g. ‘Thrift Radiates Happiness’) was still splendid as was the safe deposit area in the vault.
Whilst there we met people who have still retained their deposit books and former staff who used to work there. All remembered those better financial days with much fondness and would be delighted at the prospect of a re-opening.
So I was very pleased to see Cllr John Clancy’s article in this week’s Birmingham Post commending the re-establishment of the late and much lamented Birmingham Municipal Bank. Both Cllr Clancy and myself have been long term proponents of this possibility and I’ve made numerous postings on this blog to this effect.
There seems to have been a partial awakening at national level that some kind of regionalism in banking might be a good idea. In my view any such developments if they came about should not – repeat not – be left to the tender mercies of the private financial sector - to which political parties have been so wedded over the years - and which of course is primarily responsible for the fine mess that the country is now in.
These people simply cannot be trusted. There needs to be a simple and reliable service to ordinary people – especially savers. The former Municipal Bank with 40 or so branches throughout the city also issued mortgages at reasonable rates that didn’t need switching every ten minutes.
Any re-creation of this noble and thoroughly trustworthy service could also extend to the provision of finance to small businesses and supporting the issuance of municipal bonds so that local people can be part of the regeneration of our infrastructure (as was the case with the original construction of the Town Hall).
Also of course, the bank’s work should include support for manufacturing industry which was the main remit of the banks founded in Birmingham which shall be nameless now morphed as they are into unrecognisable, useless and globalised entities.
It would be entirely acceptable if a re-established Municipal Bank cast its net more widely throughout the region as suggested in Cllr Clancy’s article since ordinary people and small businesses throughout the West Midlands have been just as ill served by the bonus brigade as folk in Birmingham. If so I would suggest the name: ‘The Greater Birmingham Municipal Bank’. That really would be great and would radiate happiness more widely, but bearing in mind earlier false dawns – don’t start holding your breath just yet! 

The Virtuous Economy, Respect and an Approach to the Common Good

As a follow on to the previous posting (In place of Austerity) I’m making available as a pdf the full article from which this was drawn. If you would like to see the item in full, email me as MWi8327963@aol.com and I will send you a copy (it does not seem possible to upload a pdf on blogspot).
The article is a study of the present state of the economy and society, what would be the characteristics of a Virtuous Economy, the importance of restoring respect for ordinary people, the relation of these desiderata to the Common Good, and how each might be achieved.
The contents of the paper are:
1 The State We're In
2 The Virtuous Economy
3 Restoring the Balance
4 Well-being in the Virtuous Economy
5 Virtuous Exemplar Institutions
6 An Economy for the Common Good
7 The Virtuous Economy and the Good Society
8 Regenerating the Economy
9 Getting There
10 Towards the Common Good
The proposals are radical and undoubtedly challenging and I hope that you will find something with which to agree.

In Place of Austerity

Isn’t it amazing – some senior politicians not on the tea-party right are now suggesting that austerity may impede economic growth! Would you credit it? Who would have believed that deep cutting in a protracted recession could have such an effect?
In many postings on this blog I’ve mentioned particular policies and actions that I believe are needed to remedy our current parlous condition and move towards the common good. They differ very sharply from current policies and orthodoxies. In this posting I draw them together and add others in a similar vein.
Taxation:
 Flat rate National Insurance – all income levels above the minimum wage 40-hour income.
 Increase the top rate of income tax to approximately 53% to a total 60% with National Insurance contribution.
 Re-introduce a starter rate of 10% for income tax.
 Two higher bands of Council Tax.
 Introduce a financial transactions tax along with other European countries
 Introduce a windfall tax to deal with excessive profits and bonuses.
 Simplify the tax code removing loopholes and increasing penalties for evasion.
International:
 Take the lead in dealing with tax havens.
 Form an international group to identify ways to eliminate cheating in trade, abusive working practices, use of child labour, environmental damage etc. and start winding back adverse aspects of globalisation.
Public Expenditure and ownership:
 No further cuts to benefits with some restoration.
 No further cuts in grants to Local Authorities with some restoration.
 Greatly increased infrastructure spend especially transportation and power with some public ownership.
 Reform public sector purchasing with awareness of external effects and constructed to favour domestic suppliers.
 Renationalisation of and major investment in rail transportation.
 No further privatisations.
Governance:
 Introduce a well-resourced and proactive industrial policy.
 Vigorous decentralisation of Civil Service with relocation to regions.
 Return powers to Local Authorities and allow a much freer rein in terms of enterprise and income generation.
 Reform party political funding to reduce influence on policy and including an element of public funding.
Financial Sector:
 Allow Local Authorities to re-establish Municipal Banks.
 Break up the major banks to separate out retail banking.
Respect and Ethics:
 Produce agenda of respect and ethics to run throughout all organisations.
 Get business commitment and training with incentives if necessary.
Pay:
 Legislate to deal with excessive executive pay and bonuses to achieve similar extent of control as in public sector. This to include windfall taxes.
 Give incentives for companies to adopt a uniform pay structure across all levels and worker shareholding and board representation.
General:
 Clearer identification of goods made in England/UK.
 Have a ‘state approval’ scheme for food suppliers and promote use of domestic producers.
The above are examples intended to illustrate the scope, range and type of initiatives that I believe are needed to reform the economy, restore balanced growth and equity and enhance the common good. They are extracted from a lengthy tract I’ve written entitled ‘The Virtuous Economy, Respect and an Approach to the Common Good’. Much analysis would of course be required on details, levels and the projection of overall impact. But take heart my friends - it could be done if the will was there!

The Horsemeat Scandal

It’s been quite some time since my last posting while I considered what to say – or how to contain what I say - about the still ongoing horsemeat scandal.
It is an unmitigated outrage of course and totally appalling in its impact on ordinary people. And so is the way that the companies involved tried to play down their negligence and culpability by hiring PR consultants to use terms like ‘inconvenience’ and ‘labelling issues’ and how the profiteering outfits really had the personal interests of their customers at heart and that there were no ‘safety’ concerns - as if these were what preyed on people’s minds. We know that it is ‘safe’ to eat horses – or dogs and cats for that matter – but in this country we most definitely choose not to do so as the culpable, negligent and couldn’t-care-less companies involved know full well.
I read one article saying that ‘it beggars belief’ that this could have occurred after the BSE/CJD outrage. Well, no, it does not beggar belief. Those who think that it does still don’t understand the fundamental factors behind BSE/CJD – profiteering and pressurising, lack of moral values, contempt for the public, disrespect for nature and totally inadequate inspection and enforcement to name but five.
I seem to recall a government minister of that time forcing his child to eat a burger in front of the press – a clear case of paternal coercion that should have precipitated a bye-election. Did he know something we didn’t i.e. no beef in there anyway?
The reluctance of ministers of this wretched government to engage with, let alone take charge of the response to the horsemeat scandal is another disgrace. So desperately inconvenient to have to get back to Westminster! The ducking, weaving and buck-passing (‘a matter for the industry’) is contemptible especially following the government cuts to testing, their love of ‘light touch’ regulation for their friends and the neutering division of responsibilities for food safety.
What are ministers for? Who are governments for? And why do they think it’s OK to test on the basis of passing over up to 1% horse in a ready meal?
And what are today’s capitalists for – perhaps to enhance the well-being of ordinary people or just possibly line their own pockets? Let them sail away on their yachts to pirate waters fat on the bonuses from their job exporting, eviscerated, deregulated, lowly taxed and globalised corporations.
Hmmm. Just as well I didn’t let myself go in writing this piece!