Our society
has been denuded of the respectful and proven values on which it was based. As
a result the powerful, along with similar elements in other countries have
squandered our industrial inheritance and our nation has lost its way in both
economic and societal terms – to the material betterment of the few and the
detriment of the many. Also diminished are national self-sufficiency and
self-respect, the contentment of citizens and the expectations of people for
the future – for themselves and their children. This is the state that domestic
and foreign corporate ‘culture’, the self-serving economic policies of the rich
and powerful and fellow travelling governments have brought upon us. And it is where
we'll remain so long as the moral foundations of individual and corporate
behaviour are not rebuilt because the state of the economy and society is as
much an ethical problem as an economic one. Without decent values, the financial
crisis will be revisited following the mild and unequal recovery and ordinary
people will continue to be exploited and treated harshly and with contempt. These
values once internalised by organisations as well as individuals, were taken
for granted, largely unspoken and made operational in the public sector, much
of the private sector and in economic and social policy.
Much has
been said of the adverse consequences of financial de-regulation and rightly so
– they are severe and continuing. But even more important is the ‘moral
de-regulation’ that has spread through commerce like a virus. Modern day business exploits the individual and lacks a sense of
service, loyalty, integrity and perception of the public interest. The burdens
of protracted austerity are unequally distributed and fall heavily on those who
gained least before the crisis and who were not responsible for it. And those
who through their avaricious actions brought the crisis about suffer least and
benefit most – unreformed as they are. This infantile behaviour – self centred,
demanding and dependent on responsible authority for rescue will not abate of
its own accord. Furtherance of the common good also requires the empowerment of
citizens to enable them to contribute to the full. It will not be achieved
through the exhausting wage slavery of the many.
There's
been an obsession with economic growth - or rather the numbers that purport to
measure it - regardless of how these are calculated and heedless of the
distribution of well-being. Further increases in economic scale without equity and
sustainability may not be in the interests of society. If further economic
expansion is to be sought, it must relate to the common good and what the costs
are for present and future generations. Not all growth is desirable,
particularly if the fruits are maldistributed, and not everyone would agree as
to what, if any, of the growth is sustainable.
The
relentless corporate drive for more profit and less financial cost (at almost
any cost to welfare) has replaced a deeper, more considerate and responsible
side of human nature. The burden is reflected in the stresses on the
environment, individuals, families and communities and the losses sustained by
them. In all of this the people have been rendered compliant through corporate,
media and political propaganda and as a result have become prey to the slippery
wealth of a rootless, asocial plutocracy. Rampant materialism ravages the
natural environment, breaks down social bonds, divides the country and
stultifies the human spirit. Confidence is eroded between individuals, between
people and firms and between the state and the people from which it draws its
legitimacy. The push for high statistical measures of economic growth can be
inimical to the quality of people's lives and vital social structures such as the
family. So it is not a case of ‘It’s the economy, stupid’ so much as ‘It’s the
stupid economy’ that we have now inherited.
There is a
vain quest amongst deluded individuals for emotional well-being gained through
extravagant, even dissipated consumption. As Lord Sacks so vividly put it ‘The
consumer society is the most efficient mechanism ever devised for the creation
and distribution of unhappiness.’ ‘Consumption’ is a word that was once used to
describe a state of serious ‘ill-being’, a wasting illness, ironically still
appropriate in a different context today. Consumerism is a social disease that
leads inevitably to a state of disappointment. As long as the sales promotion tide
generates wants we didn't know we had, people will be tempted to borrow more
and waste more.
Prosperity
is by no means an ignoble goal, but it is a condition rather than a value and
is not an end to be achieved at all costs. We have become richer in worldly
goods at the price of being self-centred, self interested and self absorbed. We've
also become increasingly dependent on countries with less than desirable governments
who have little regard for the conditions of their own people and environment.
Casino
capitalism and rampant and permissive globalisation rot the links within
communities. Some large companies and household names instead of being sources
of national and local pride as they once were have, in the hands of feckless
and often incompetent management become profit monsters and creatures of
globalisation.
No sectors
have suffered more from this avaricious and extractive attitude than
manufacturing and engineering. The lamentable decline from a position of
historical strength reveals an appalling lack of responsibility, grasp and
vision, for not only is there no more creative activity than making things,
manufacturing is an important cultural activity. Manufacturing reveals whether
or not the nation can 'cut it as a country' and the long decline is a sign of
cultural as well as economic malaise. It is telling that corporate types bent
on the extraction of quick profit not only don’t take on - but appear no longer
to want – the responsibility of making things. But there are signs that this
negligence is at last being recognised, but there is no short term fix and
effective policies, rather than exhortations, will be radical.
When
manufacture stops, tools are often sent overseas and loyal employees, soon to
be redundant, are even obliged to train the foreign staff who will be taking
their jobs. In allowing these things, we lose national self-respect as well as
self-reliance and a sustaining part of our national culture. All these things
have been sacrificed on the altar of ever more profit for the private owners of
social assets. These are social aliens be they domestic or foreign in so far as
they can be identified at all.
The trust
that is so much needed in society today is undermined by selfishness in this
and other forms. We need fairness, service before self, loyalty to friends and
family of course, but also to colleagues, compatriots and country. Not only do
we as a society now lack a common code of core values, there are no longer
universal standards for honesty and decency - nor are there norms of respect.
In the
leery eyes of much of the privately owned press with its partisan agenda,
government, both national and local is often equated with incompetence and even
vice and, we are told, there should be less government, no doubt allowing even
freer reign for extractive capitalism. In fact good government is essential to
further the common good, aiding and abetting the achievement of society’s goals
and having the commitment to involve itself actively in this process.
The economy
is not a series of balance sheets or projections of quarterly returns on which
you should, in that awful phrase, ‘do the math’. It works only as a joint
endeavour. It is workpeople more than executives, communities more than
shareholders and the state providing support, security and development more
than the multinational beneficiaries. The profit extractors, asset strippers
and bonus builders need to be tackled via effective taxation, a revitalised
public sector and by other means, for example a reconstituted 'National Service'
which should start at the top.
Economic organisation
in this country at best represents an amoral economy and, as evidence suggests,
in many respects a downright immoral one. In contrast, a 'virtuous economy'
would, by design, operate in the general interest and is an essential factor in
ensuring the achievement of the common good. It would consist of an economic
system and philosophy in which individuals, private companies, the public
sector, voluntary organisations, charitable and religious institutions and
government have a shared vision of the welfare of the nation and its citizens.
Accordingly, in their public, business and private lives they operate in that
interest.
This need
not be to the exclusion of other compatible interests of which there would be a
wide range - including purely personal benefit. No particular form of economic
organisation is implied although a social market mixed economy would be a good
place to start. The key requirements are a ‘citizenry of good intent’ and a
means by which these good intentions are imbued in society, particularly
amongst those with economic or political power, and the achievements sustained
for future generations.
There would
be mechanisms to ensure that the 'external effects' (collateral damage) of
major corporate decisions (such as factory closures, off-shoreing and sending
abroad jobs and machine tools) are minimised
or avoided altogether. The extensive damage we've seen in communities in the
last few decades is totally unacceptable, cannot continue to be ignored and
must be reversed.
The
virtuous economy also operates on a basis of greater self-sufficiency. The
current account deficits we run are not sustainable and will be another burden
for future generations unless we do something about this globalisation-related
dependency. The accountants' 'bottom line' and the common good will rarely be
in full accord. Indeed they will be jarring opposites much of the time.
There has
been a struggle between social and moral values and a rampant, advertising
driven market where commercial sales, frequently promoting useless financial
‘products’ or yet more imports and the extraction of more and more profit rule
all. We are a debt laden and wasteful society, and we are unhappy as a result.
Adverts are designed to create in people a mood of restless dissatisfaction
with the goods and services that we, or our children, already have. We need a
different vision of ‘the good life’ where values rather than commodities are at
the heart.
The concept
of never-ending geometric economic growth cannot be sustained indefinitely - as
we should have known. We are not above the natural order of things in which
exponential growth can be halted by catastrophe. And it should be understood
that the ‘market’ is not part of the natural order, it is a human conception.
The
virtuous economy is one where individuals and organisations (for example
private companies, public bodies, voluntary organisations or charities) act in
manners such that satisfactory responses are given to the following questions in
commercial life, the life of individuals and families and the provision of
public services:
What
is the effect of actions and policies on individuals as people and not as
exploitable economic or political units? What are the possible effects of
economic conduct on the natural environment? What will be the benefit for or
impact on policies and decisions for future generations? What are the effects,
positive and negative, on communities and the country? What are the effects on
the quality of life of ordinary people and the common good?
Agents in a
virtuous economy do not engage in excessive risk taking or usurious conduct.
Rather, the emphasis is on fairness, moderation and balance, taking the longer
and broader view and seeking self-reliance both in terms of individual people
and important productive sectors such as agriculture and manufacturing.
A virtuous
economy will have relatively flat pay structures and an absence of privileged
payment schemes. Equality of opportunity amongst citizens cannot be achieved
where there are, as at present, extremely large differences between the
resources available to individuals. For example, all employees of a company
should be paid according to the same scheme including profit sharing, pensions,
severance payments etc. differing only in the scale of remuneration. In all of this,
the value of co-operatives (run on proper co-operative values rather than
infected by commercial greed) and not-for-profit enterprises is underlined.
This
economy operates in a manner consistent with the twenty four dispositions of
moral conduct rather than the 'twenty four / seven' lifestyle of often
pointless or even damaging work - for example the sales of useless and unwanted
financial ‘services’ and sometimes dissolute leisure. There is a pervasive
economic morality. Respect is afforded to small firms and to individuals not
just within organisations but also to those who interact from outside as
customers and traders, particularly those with little market power. Values
rather than greed are the overwhelming drivers. Self-interest is a much wider concept
than the possession of objects and embraces the benefits of living within the
realm of the common good.
It is one
where there is concern for the long term national interest, self-reliance and
security of supply and which ensures industrial survival and that worthwhile
jobs are available at all levels and for all ages. This, and not sending abroad
jobs, machinery and equipment for increased profit. True employment levels not
boosted by the partly employed, the self employed and those on zero hours contracts
rather than statistical GDP are targeted, for example by ensuring that
infrastructure work is intensive in labour rather than machinery.
National
economic policy would reflect these objectives and government would take the
initiative internationally to ensure that competitor countries such as China
observe comparable rules and standards. This would also apply to globalised
corporations using the free reign that has been allowed to China and other
countries to increase their private profits. For example there would be the
requirements that exchange rates are set on the same basis as for western
countries, the implementation of comparable anti-pollution requirements,
similar work safety regulations, respect for intellectual property and the
withdrawal of export subsidies.
There is a
case for supporting a genuine free and fair trade system – a balanced and
reciprocal free trade that is – something distinct from laissez-faire
globalisation with its exploitation, profiteering and couldn’t-care-less working
conditions. The virtuous economy would not be bound to 'free trade
fundamentalism'. Being doctrinally holier than the rest serves neither the
interests of the country nor the common good.
The
'market' should be a social market and it should be understood that while
benign capitalism can serve a country well, it will only do so if, as Keynes
pointed out, it is governed by 'gentlemanly codes of behaviour'. This in
contrast to the extractive and predatory system which in recent times has
served the people ill. The pursuit of wealth should not be an end in itself.
The end, as Keynes expressed it, being to live 'wisely, agreeably and well' -
qualities which, if not wholly describing it, are consistent with the common good.
While it is
taken for granted that 'the market' must be bowed down to, in fact market
forces are not sovereign unless, by creating permissive legislation and
standing aside we choose to make them so. And much of what are passed off as
'market forces' - for example in justifying grossly excessive executive pay and
bonuses - are nothing of the kind. These are contexts that are not truly
competitive and which can bear more resemblance to a private club than an
economic bazaar.
The banks
provide a dreadful example of a defective 'market'. Competition between banks
exists to the extent of how much they can extract from ordinary customers and
gullible governments. These do-nothing administrations have no recourse but to
use one or other such profit grabbing bank in what is at best an oligopolistic
structure or more realistically an informal cartel. These ‘cartels by
convention’ are devoid of morality but self-righteous nonetheless with an
arrogant sense of entitlement.
Regulation
on its own will not change this behaviour be it by banks or drug companies. The
immoral, secretive and disrespectful conduct has become too deeply ingrained as
scandals and lax supervision repeatedly show. One possibility that would bring
genuine and valuable change and offer real choice to ordinary people would be
to create 'exemplar institutions' with public service values. One example would
be the re-establishment of municipal banks. In Birmingham there were branches
of the Municipal Bank in every ward and a culture of thrift, beginning at
school level was encouraged. Mottoes such as: 'Thrift radiates happiness' and 'Saving
is the mother of riches' expressed its ethos - so distant from that of commercial banks
today - and its overall watchwords were 'Security
with Interest' - in which we note the ordering.
Present social
metrics have serious limitations and are open to misinterpretation,
manipulation and changes that further political objectives or make comparisons
difficult. The problem is fundamental, as Robert Kennedy observed over four
decades ago, economic statistics measure everything except what makes life
worthwhile. Any measure of the level of achievement or the ‘satisfaction’ of
the population should have a multiplicative character, the central point being
that if any one individual or group in the society has a very low well-being
score, that will result in low value overall for the measure and should
indicate a change of policy direction. Today's gross inequalities would thus be
avoided. Taking such action is an essential factor in the operation of a
virtuous economy and in the achievement of the common good.
The Common
Good in a society is the overall well-being of all its citizens. This is
related to the concept of ‘the greatest happiness of the greatest number set
out by Jeremy Bentham in 1839. The common good includes social, psychological
and moral components as well as material goods and services, the environment
and expectations about the future. In its material aspects it includes what
ought to belong to everyone by virtue of their common humanity.
But the
common good goes beyond questions of ownership narrowly defined and, for
example, includes non-possessive attachments such as those which were felt by people
for the Royal Mail or a historic firm such as Cadbury's with long engagement
with its workers and the community. The common good therefore has as important
elements of both local and national pride and so relates to both individual and
social fulfilment. It good includes together people and the environment, the
present and future generations, their temporal, cultural and emotional needs,
the legacy that one will leave for the other and the well-being of the body,
mind and planet.
An action
unambiguously enhances the common good when at least one of the above elements,
as decided by judgement rather than numerical targets, is improved with none
being diminished. The common good is unambiguously degraded when one person is
diminished with none being improved. Partisan monetary gains made at the
expense of other citizens may degrade the common good, with the outcome being
dependent on whether the redistribution is from poor to rich or vice versa.
Our
political system should be at the service of the common good but what we have
at present is far away from this. Also serving the common good should be businesses
and other major social institutions such as voluntary and cultural
organisations and the faith communities. Some, of course, do just this and all
are valuable and honourable professions or vocations if operated with all of
society in mind - making their decisions in 'the reasonableness of the common
good'.
Attempts to
enforce decent behaviour on profit driven companies, particularly globalised ones,
through compliance with external rules is doomed to failure – as we repeatedly
see with the banks. It is impossible to supervise everything, let alone what
goes on in people’s heads. In place of cunning, there has to be the cultivation
of moral character throughout economic activity, a character that willingly
adopts internal values and lives by them. A profound cultural renewal is
essential to achieve this in a western world that needs to rediscover basic,
acceptable values.
This can be
done. People are alienated by a ruthlessly selfish society. They want to belong
to a world in which people respect and care for one another and so are cared
for themselves. Instinctive habits of behaviour need to be developed that
reflect real respect for others and a desire to enhance the common good -
behaving virtuously should become second nature.
A 'good society'
has a vision shared by all citizens that is founded on social and moral values
endorsed individually and collectively. It operates through a virtuous economy,
enhancing the common good for all citizens, present and future. And in their
turn, each generation considers anew and acts on the question: “What is
required of us to promote the common good?” The good city in a virtuous economy
is a city with restored values that enable it to enhance the common good and
the harmonious common and sustainable life - and where there is a citizenry of
good intent.
The good
society is cohesive and where there is a spirit of mutual respect and openness
between individuals and organisations. People work together for understanding,
respect, justice and peace, for a clean environment and sustainable
communities. It values people, their innermost aspects and their relationships
one with another. The good society is one where it is realised that 'no man is
an island', it being understood that people are mutually interdependent - all
are responsible for all.
The good
society is one where each individual can make a difference, in the present or
in the future, through their own abilities and personality and is encouraged
and enabled to do so. Everyone, can make a difference every day by the way they live, recognising personal responsibility
and the ability to affect beneficial change through their personal
interactions, their conduct as consumers, through lifestyle changes, and by
being active and engaged in their communities and in society as a whole.
A spirit of
good citizenship, imbued and accepted on the foundation of common values, will
bring forward the offers of time, energy and resources that will make these
differences possible. Clear roles exist for the family, cultural, educational
and religious institutions in this process.
People may
be deterred from acting because they think that what they can do as individuals
is but a drop in the vast ocean of need. But in terms of this demotivating
metaphor, it should be remembered that without the drops there would be no
ocean. We underestimate the importance of what we are engaged in every day. Small
service is true service and what matters most in enhancing the common good is
what individual people do in their communities and in their daily lives. There's
too much talk of ‘changing the world forever’. It falls to few of us to do this
– fortunately.
An action
is virtuous if it unambiguously enhances the common good. There are many
virtuous characteristics, but in this context they include the following:
Living with integrity and being honest and truthful in private and public
conduct; sharing and being generous; seeking harmony and consensus, striving to
unite rather than divide; being loyal and respecting loyalty in both everyday life
and business; showing understanding and respect for all individuals and
communities; being regardful of suffering and working to bring healing; acting,
where possible, to give meaning and purposefulness to people's lives.
The good
society is concerned wherever possible with the conservation - or indeed the
generation of - natural resources rather than the current focus on their
exploitation for immediate profit and their depletion regardless of the human
or environmental cost. In this it is important to recognise that the earth and
its bounty does not belong to humanity – least of all to a particular
generation. It is hardly likely that globalised corporations will voluntarily accept
this precept.
For their
part, the major religions should interpret their traditions to create an
‘autonomous space’ for the common values of our society. Secularists (the
benign variant of secularism rather than aggressive atheists) for their part
should appreciate that religious sensibilities can give moral depth to enterprises
and direct them away from perilous private adventures and towards communities
and the common good.
Good government at national, regional and local levels is
a necessary virtue, aiding and abetting the achievement of the goals of society
and involving itself proactively in this process. It aids the replenishment of
social capital, but this also requires the relearning of personal
responsibility, the principle of service before self and a multi-generational
perspective.
We hear a
great deal of talk about ‘leadership’ (usually from privileged and
self-interested individuals who see themselves as uniquely qualified to fulfil
such a role) and its claimed merits. We hear very little about its many risks
and demerits (and the adverse consequences of the willingness to be led)
although history, some of it very recent, is laden with examples.
A new model
of leadership is needed, one that does not lose sight of the fact that
leadership assumes its authority from other people and which seeks to develop,
change, or preserve things on their behalf. These should be the goals rather
than seeking the leaders’ own aggrandisement, the enrichment of their donors or
the enhancement of the self importance of their advisers.
But given
the regrettable experiences of recent decades in business and government, it is
clear that when it comes to the common good, the concept of stewardship brings
out a more important quality than ‘leadership’. Prudent stewardship is
essential for the common good and is something every member of a society can
engage in every day, for example by taking care of our local environment,
looking out for each other, safeguarding what is left of our industry and the
values which have served our society so well. Stewardship is one of the many
ways in which individuals at all levels can not only be a part of the common
good but can, to echo a thought, contribute towards it according to their
abilities and receive from it according to their needs.
To achieve the highest level of the common good,
future governments will need to have the well-being of the whole population,
rather than the favoured few, at the centre of their attentions. This requires
transformative change rather than marginal adjustments and dubious promises. The
key social values and arrangements that foster the optimum common good should
be the focus of all the people, the public authorities and private and foreign
institutions operating here.
All individuals can contribute to the common good
and have a responsibility to do so. What is needed is a changed social
architecture and a transformed national psyche. Existing power and influence
relationships, often hidden, need to be broken down. It will involve prioritising
individual social morality, equality, fairness and ways of living and working where
respect replaces contempt and exploitation and where trust, integrity and
loyalty to individual people, community and nation are re-embedded.
Similarly, creating an economic system fit to advance
the common good rather than increasing inequality requires new objectives. This
is so not only for governments but also for large enterprises (public or
private) and those who own them, run them and take profit from them. There will
need to be changed approaches to economic management and new concepts of national
well-being. Achieving all this requires sustained radical action over a
generational timescale.
We must begin this change here at home and there
needs to be a re-evaluation of how we conduct ourselves in society and where
the country stands in the world. There should be less foreign adventurism and
more attention to domestic and local concerns as repeatedly voiced by the
people. There needs to be more leadership by example and careful stewardship of
good institutions and qualities in society and its lasting values while conserving
the natural environment and husbanding scarce resources. There must be ethical and
exemplary conduct by national leaders, both political and in business, whether
in private or public ownership. Programmes should be set up to achieve this
re-education, particularly in finance and big business. ‘Human nature’ is not
an excuse, it is what we make it and how we ourselves choose to behave.
I envisage a kind of National Service applying to
everyone but particularly to holders of wealth, power and influence, for
example corporate executives government ministers and senior civil servants. Trainees
would, outside moral re-education classes, perform simple tasks such as
cleaning, preparing and serving food, providing personal care, taking night
shifts at random intervals and working on a zero hours basis. Food and
accommodation would be as affordable on the national minimum wage. University
courses and research into business ethics should be scaled up rather than down
and in schools citizenship and religious education should be re-cast to
increase the ethical dimension. All this would make our own Cultural
Revolution.
There also needs to be a widespread change of
perception and re-education on what constitute desirable occupations for young
people to aspire to and on the respect in which work at all levels should be
held. There would be enhanced status for careers in engineering and
manufacturing and, in a remodelled economy, the real and lasting jobs to go
with them, and an end to the siphoning off of valuable young talent into the
banking and finance morass.
Voluntary organisations with the common good at
heart need encouragement and restored levels of funding with net increases following
years of cutbacks, discouragement and distraction from their proper objectives.
Political parties should be less tribalistic and confident in presenting bold
and constructive alternatives, including furtherance of the common good, to the
electorate.
A government for the common good also requires a fit-for-purpose
democratic system that is less easily manipulated by the political
establishment. It should not be slanted
towards rich and powerful vested interests that require their bidding to be
done. This would contrast sharply with the dysfunctional, unrepresentative and
biased model we have put up with for so long and which is so deeply indebted to
party donors and the policies that the paymasters require for their continuing
advantage.
Young people, who are yet to be shorn of their
ideals and who are much less ingrained in their ways could take the lead in
much of this, taking full advantage of modern technology with its freedoms and
demonstrated possibilities for organisation. Citizenship programmes should be
expanded and recast in terms of enhancing the common good – again with a major
input from young people. All this and more should be sustained for many years.
Alongside the societal changes there is a great deal
that needs to be done in terms of re-casting the economy. A much longer view
needs to be taken that is not constrained to the typical three years or less
now usual in western businesses or five years or less in government. I have
criticised China and other countries but you cannot fault them for long term
vision and setting national goals for the future.
There has been talk of economic rebalancing, but
nowhere near enough action or long term planning to this end. Just as it took
decades to destroy manufacturing industry and throw away the country’s
engineering heritage, so it will take a similar time to restore this sector of central
importance to optimise the common good. But this restoration and much else that's
required could be achieved if the will and commitment were there, if
fashionable and convenient theories were set aside and a stop was put to the
kow-towing to plutocratic, media and lobby interests.
What the country has now is a dire version of
extractive capitalism and the ethical vacuum, greed, exploitation and deceit
integral to it. This dysfunctional economy bore its most poisoned fruit in the
banking catastrophe and the subsequent punishment of austerity meted out with
callous unfairness by a government of similar persuasion. People have a lower
sense of well-being and for all but the very rich, less wealth. This is partly
because of a GDP made worse by austerity but also because of higher population
since it is real GDP per capita that is the true measure of material
prosperity. So what should future (hypothetical) governments of principle do to
move towards a system that will further the common good?
Government must undertake a proactive, comprehensive
and long-range economic policy to regenerate manufacturing industry,
engineering and the industrial sector more widely. In the restoration of
manufacturing the focus should not simply be on final assembly but on
rebuilding the all-important supply chain too. This emphasis would not only to
benefit the economy as a whole, but also create satisfying full time jobs for
forsaken young people throughout the country, particularly in the formerly
industrial Midlands and the shattered North. London and the South East should
not be so favoured nor allowed to continue drawing off so much investment and
hoovering up most of the job opportunities going. As part of the policy, there
must also be increased and sustained investment in scientific, engineering and
medical research.
The foundations of this economic policy should be
pro-actively Keynesian. This means that major infrastructure and energy
projects would be established, and often delivered, by government. It should
also involve setting up public sector ‘exemplar institutions’ with a public
service rather than a profiteering ethos. There is no better example than
municipal banks, to introduce some real competition in the interest of ordinary
citizens and to force recalcitrant elements in the private sector to reform
their ways to the benefit of the common good. Movement of enterprises between
the public and private sectors should be two-way traffic rather than the doctrinaire
one way system we have suffered from in recent decades.
And future governments must escape from the thrall
of so-called ‘markets’ which are so often nothing of the kind, being at one
extreme clubish, at the other herd-like and at either end uncompetitive and rarely
operating in the public interest. The exemplary public service institutions
should be set up wherever needed – such as in finance, rail transport and
energy supply as steps towards the option of renationalisation.
Corporate governance should be reformed root and
branch to deal once and for all with the grotesque executive excesses and bonus
culture and bring in flatter pay structures. As part of the reforms there
should be increased worker and community share ownership and mandatory employee
representation on company boards and ethical training for directors.
In reducing the fiscal deficit, both objectives and
timescale should be revised as the benefits of sustainable and balanced
economic growth are realised. This will allow productive investment and active
economic management. This done, the present cuts dominated timescale could be
improved on and harsh and unequal austerity ditched. Increased emphasis should
be placed on taxation and less on cutting expenditure, leaving room for
industrial investment. There are several reasons for this.
Reducing public expenditure on projects reduces
employment, income tax, National Insurance, VAT and other tax receipts. It also
increases government expenditure under different heads of account - such as
unemployment benefit – which are not always considered. In Keynesian terms the
cuts will also produce a reverse multiplier effect - the knock on negative
consequences of people having less to spend.
The bulk of the burden of present government
policies is born by young people and the less well off either seeking work, in
work of some sort, 'employing' themselves or, through no fault of their own,
unable to work. This is wrong both morally and in economic terms. There should
be a mandatory living wage that isn't also a maximum wage. A living wage would
also have a positive multiplier. Zero hours contracts should be abolished -
except possibly in the boardroom. Why do companies need a CEO on hand all the
time? Just bring them in for an hour or two to make a couple of decisions when
needed.
The loopholes deliberately left in the tax system
encourage tax dodging and should be closed. Tax ‘havens’ both close to home and
further afield should be shut down. Those who can afford to pay more in direct
taxation should do so. Socially responsible rich individuals here and abroad
have already declared their willingness to pay more. This contrasts with the
partisan picture of a mass executive exodus and a decline in entrepreneurial
activity. These are just self-interested cries of 'wolf!' We can scrape along
with fewer corporate executives and institutional leaders on bloated salaries,
bonuses, golden hellos and padded out retirement packages.
We should encourage public-spirited attitudes in
corporations and begin a return to loyalty to country and community. There is
little or no historic correlation between entrepreneurial activity and taxation
of income at higher levels. Perceptions are dependent on the direction of
travel and fade over time. For example, there was unrestrained joy amongst the rich
when the top income tax rate was reduced from 83% to 60% in the 1980s. In any
case, most top rate payers are internal promotions in large firms and not
entrepreneurs, whose motivation is not driven solely by money.
A government seeking the common good should work
towards an internationally operated financial transactions tax rather than
working against it to favour the City and its locust financial institutions and
frustrating the efforts of other countries. A government for the common good
should also take the lead on a revised international approach to the
foundations of trade, working at first with like-minded countries in a
co-operative grouping of nations. Globalisation is not free trade, far from it,
rather, it is a license to exploit, extract, print money, export employment and
destroy communities and the future of the younger generation.
There should be an inter-governmental push to shut
down the tax havens, open up secret banking, particularly in Switzerland, and
expose the vast ill-gotten gains harboured there. It should rein in the
globalised corporations and their tax dodging, grasping and unprincipled
owners. There should be less willingness to accept excuses from these
self-serving individuals and companies or from countries with unsavoury
economic and social practices and tax regimes where vast profits can be parked.
Taxation, and policy on interest rates and money
supply should foster sustainable and balanced demand. Wider policies should
involve major capital projects implemented by domestic sources and where full time
and proper employment and on-the-job training of younger people is to the fore.
An example would be the construction of a Severn barrage that has again been
allowed to fall through because government will not invest or become directly
involved but which would satisfy 7% of the nation’s electricity demand. This,
and other estuarial schemes along with a nationwide and a properly resourced
drive on domestic insulation should have received government support long ago -
in place of useless tax cuts or loan schemes.
In the unlikely event that further cutting is needed
there are prime areas where this can be done without diminishing the common
good. For example, slashing the widespread government use of private sector
consultants at outrageous cost, not engaging in ill-considered government IT
schemes, putting an end to colossally expensive and incompetent outsourcing, purchasing
and PFI-like contracts, reducing the number of nuclear-armed submarines and
cutting the number of senior civil servants and political officers.
The Keynesian concept of the ‘balanced budget
multiplier’ should also be used. This means that if the taxation of richer
people is increased and there is a corresponding reduction in taxes of less well
off people, then overall demand increases because people on lower incomes spend
a higher proportion of any additional income. This results in an economic
stimulus and an improvement in tax revenues as the knock-on consequences of the
extra spend work through.
As we know, the ‘quantitative easing’ (printing
money) so beloved of the Bank of England and the Chancellor and Treasury
(because it does not require them to be direct involved in industry) is of
little use in getting funds to the productive sectors of the economy. Mostly
soaked up by the wretched banks, it is nowhere near as effective as major
capital projects on a regional or national scale would be.
Governments have become doctrinally opposed to
direct engagement in infrastructure investment and management. High speed rail
(and its exaggerated business benefits) may be a partial exception, but there
are more productive ways to invest the colossal sum involved to the benefit of
the economy, the reduction of regional inequality and the betterment of the
common good, either within the transport sector, particularly in the Midlands
and North, or the industrial sector beyond it.
The benefits to manufacturing and engineering
investment of low official interest rates are exaggerated. They are modest in scale
and damped and lagged at best. This is because demand and profitability are
what matters most to businesses, although lower interest rates should result in
some increase in investment if the conditions of lending are right. But as
smaller firms know only too well, this is not the case. And lower rates mean
less income for savers, thus lowering demand.
To this can be added appropriate overall levels and
forms of taxation and public spending. I use the term ‘appropriate’ rather than
‘low’. For example in the case of deductions from income, the present
irrational structure of National Insurance contributions should be replaced
with a flat rate covering all income levels (but starting at a higher level
than at present) with no exceptions for the rich. This would mean a top rate of
overall deductions from income of around 56% once the 50% income tax rate is
restored, so it would still be below the euphorically greeted 60% and would also have a positive balanced
budget multiplier effect. Greater use should be made of windfall taxes,
particularly in respect of finance and fuel. Taxation of advertising (aside
from the printed press) would improve the look of our cities and reduce junk
mail.
A pro-active and properly resourced environmental
policy far from hobbling industry could provide economic stimulation as, for
example, with determined drives on insulation and flood protection and support
for firms making environmental products. It is false economy to cut
environmental protection as the inundation of the Somerset Levels and extensive
flood and coastal damage clearly demonstrates. Environmental standards achieved
in advance of other countries but which are likely to be followed, would also give
domestic suppliers a competitive edge.
Government should help make industrial winners and
widen its support in productive areas where we still have an edge. I resist the
term 'comparative advantage', a dubious concept that has been abused to justify
retreat from manufacturing. The view that the relatively few and often small
scale industrial ‘winners’ that we happen to be left with at some point should
determine the future prospects of the country is passive and flawed and has worsened
economic imbalance.
Comparative advantage was once defined in terms of
national physical endowments such as land and natural resources, but this
convenient concept has also been linked to intangibles such as commitment to
long term investment (an advantage we could also secure), managed exchange
rates, absence of regulation, labour force ‘work ethic’, dire working
conditions, lax environmental policies and even time zones.
Trade in manufactures is far from free, a fact that
benefits our commercial rivals. Our leaders are the only ones still spouting
discredited economic theories while other countries with more sense tilt the
trading ‘playing field’ in their own favour. This is not 'protectionism' but
safeguarding. ‘Free trade’ also benefits tax dodging globalised corporations
and their political friends at home and abroad. There is a fundamental
distinction between globalisation and its many ills and the daydream of 'free'
trade.
Governance to optimise the common good also means active
and properly resourced Local Government. Local government financing has been
dominated by formulae that at best are fudged and at worst driven by partisan
spite and regional bias. No wonder things don’t always work. The core cities
have extensive local knowledge and should be allowed to compete and provide
services to the public (such as simple and non-exploitative banking) and to
not-for-profit and voluntary enterprises.
Local Government should be allowed to introduce two extra
tiers of Council Tax. The government should make one-off payments to cover the
costs of the equal pay legislation that it introduced. There is enormous scope
for more local authority house building and government constraints on this
should be lifted. Local Government could also facilitate self-build on small
plots of land that it would not otherwise use. Private developers should be required
to use genuine brownfield land (instead of the more profitable greenfield) and
made to stop hoarding land to increase their profits. The larger towns and
cities could direct their purchasing power more locally (with a multiplier of
four) and be resourced for action to complement existing initiatives.
It is also as well to be aware of strategies that won't
work. For example, over reliance on the services sector and the policy of
trying to shift the economy towards “higher value added” activities, as if
these were somehow inaccessible to the countries that have been gifted so much
of the rest of our industry. If we continue as we are, we can be sure that
these supposedly superior activities will go the same way as their lower value
added predecessors. To imagine otherwise is at best wishful thinking or at
worst smacks of an ignorant and false superiority.
The proponents of this approach of trying to keep
one step ahead of those countries who've taken so much of our industry by
moving up a hypothetical line assume that this is an ever-rising straight line.
But what is actually involved is a rising curve but of declining slope - and it
is also one of limited length. So the adverse consequences of this attempt to
“move up the curve”, in other words more retreat, are all too clear.
Steps need to be taken nationally and
internationally to retrieve industry already lost. It is not enough for
government passively to welcome the odd bit of self-interested company
‘re-shoring’ of production. The country's manufacturing and engineering sectors
must be comprehensively rebuilt. This industry, along with agriculture,
fisheries and mining, represents the productive base of our economy. In the
austerity-induced struggles of the Euro, it is notable that those countries
that do well, continue to manufacture. Those countries that now make little,
continue to suffer.
In economic policy the simple truths must be
realised that in the absence of demand, there will not be production and in the
absence of production there won’t be the creation of worthwhile jobs. It should
also be realised that the meaning of the word 'economise' is not ‘to make
minimum use of a resource’ but to make the best use of it.
The advancement of the common good requires the
provision of good public services. It also requires the provision of simple and
trustworthy other services that have been given over to, and monopolised by,
the private sector, the worst of many instances being banking with energy
supply not far behind. Services such as these could be provided by the public
sector, as many once were, or by not-for-profit organisations operating with
public service values.
Economic actions on a robust and active Keynesian
basis should bring good early results and will help enormously in the enhancement
of the common good. The much needed ethical changes will take a lot longer to
bring about and embed but they are equally important if we are not to revisit,
time after time, the recent near catastrophes.
Is all of this an impractical dream? I maintain that
it's the least that's needed. It is only a dream if you take the view that a
country should not operate on the basis of ideals. It is just very different
from what we have been told we must put up with and to which, we are also told
‘there is no alternative’. Well, there most definitely is. It is rather like
the current situation with climate change where there is an abundance of
evidence but where there some influential and self-interested right wing
deniers.
Some of these measures (and many more besides) will
take considerable time, possibly generations, to have their full effect but it
is none the less urgent to start to enact the changes soon because the
consequences of never taking such actions will be protracted and severe. If the
country is to have the hope of a more secure and protected future, these or
equivalent measures must assuredly be put in place.
The country is faced with choices that cannot
indefinitely be postponed. Those in authority may not wish to make them but, to
deploy their own slogan, they should ‘embrace’ these changes. If, in the longer
term, we wish to put an end to austerity, exploitation, grotesque inequality of
wealth, health and opportunity, corporate greed and megalomania and restore our
national, community and personal self-esteem, then this is the path we must set
out upon.
Such is the road to the realisation of the common
good - and to true freedom from globalised economic despotism and extractive
capitalism, the tyranny of financial markets, relentless, driven and useless
consumerism and cycle after cycle of partisan political manipulation. It is
undoubtedly true that the going will be hard, but I for one believe that we as
a nation are up to it. In the words of the Jean-Paul Sartre inspired song ‘La
route est dure, mais je suis forte.’
