Thursday, 8 May 2014

Slaughtering the capitalists

Reading Allister Heath on Thomas Piketty was interesting, especially the last bit where he says  “supporters of capitalism need to get their act together. They are being slaughtered on the intellectual battlefield by opponents who are finding sexy new justifications for their old arguments. We need more and better defences of the free enterprise system, and we need them now.”

Poor Mr Heath. The problem he and every other supporter of capitalism in the liberalising, free-markets for everything mould face is their refusal to accept there is a ruling class and that what a ruling class does, wherever possible, is structure a society to suit itself so as to get and keep a disproportionate share of wealth and power (see fer instance the Chinese Communist party, Putin and the Oligarchs and those lovely people who sit on the boards of investment banks in Britain).

So while Heath and Piketty are essentially both challenging the same ruling class privileges (from differing positions), Heath's worldview leads him to try and defend the rich - rather than the ruling class - by justifying inequality as being for the good of us all (wealth creation, rewards for risk takers, ya de ya de ya da), whereas Piketty’s supporters are free to challenge the monolith, by tearing down some of the shibboleths.

Theory aside, facts are the other reason supporters of capitalism are getting slaughtered right now. We now know superstar investment banker bonuses frequently resulted from breaking regulations governing money laundering and every kind of price index imaginable, that our banks privtised gains and socialised/nationalised losses, that outsourcing can lead to fraud, that the Post Office privitisation fiasco benefited a mate of George Osborne, that much of what goes on in finance is simply tax efficient financial engineering not wealth creation, that celebrities and multinationals led by multimillion pound CEOs dodge taxes with impunity and so on and so forth at the same time as FTSE executive pay continues to grow faster than the economy i.e. the rich and powerful keep taking a bigger slice of the cake in exchange for less and less.

To Heath calling this out is “envy”. Except,  its not, its simply pointing out how the British ruling class actually behaves in all its smug, arrogant, fiver-grasping, self-serving, greedy, cheating, fraudulent and - most importantly of all - profoundly incompetent glory. And the reason I reckon Picketty’s book is finding such a wide audience is because in these austere times, with mainstream political debate barely acknowledging the way things are in any meaningful ways, ordinary people have fewer things distracting them from the pro-ruling class shite people like Heath are paid to rain down upon their heads.

P.S. Here's a few practical proposals even Mr Heath might agree with
1) The investment banks that advised on the Post Office sell off don't get any more government or government related work until they compensate the taxpayer.
2) The investment bankers getting done for the libor fiddling etc., - any found guilty also get done under the proceeds of crime laws i.e. their bonuses get taken off them along with their salaries and other assets.
3) private equity and multinationals start getting taxed fairly
4) executive pay is disengaged from company size, benchmarking takes European companies into account (in this global war for talent), total compensation is made a multiple of average company pay and golden parachutes are unpacked/got rid of.
5) Rather than tax amnesties i.e. discounts, for coughing up what's owed, the threat is prison and being barred from any roles with any meaningful responsibilities

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