Saturday, 15 July 2017

Isn’t Profit a Tax on Workers?

The people of a country generate its Gross Domestic Product with the support of the nation’s infrastructure, judicial protection and public services, and a part of the overall revenue is channelled to fund the maintenance and development of the state’s capability to discharge its duties to the people. That is taxation.

The people in a company generate its turnover with the support of those in charge of the company putting in place effective systems and investment, and a part of the returns is diverted to cover what those who own/run the corporation believe are necessary to keep them doing what they do. It is their profit from the enterprise – it is in essence also a form of taxation.

Taxing people to pay for important support that would not otherwise be forthcoming – be it a deduction for the work of the government, or one for the input of corporate chiefs – makes sense, so long as the deductions are set at an optimal level.

Obviously if the people in charge are taking too much from those with whom they are meant to be working as a team, misspending the money on ill-conceived projects, or keeping large amounts for their own gratification with scant regard for those they have taken the money from, then the arrangements need to be challenged.

In the case of a country’s government, the closer we get to a democratic system of accountability, the more likely citizens can scrutinise how much is being taxed and choose through electoral contests the tax/spend options that make the most sense to them.

In the case of companies and those who control them, despite parallel arguments having been made about democratising corporate governance, most workers have no say at all how much of the revenue they generate together is taken away as profit. And if the amount taken away satisfies those with power, but leaves the company in question less viable or the workers more insecure, not much can be done under an autocratic regime.

It is ironic (though hardly surprising) then that the plutocratic elite complain incessantly about being taxed by a democratic government that citizens can freely play a part in electing, scrutinising, and removing; while at the same time they tax the workers of organisations they preside over without any form of democratic input from those workers to ensure that the proportion taken out as profit is fair and good for the business’s own future.

Of course, there’s the familiar retort that workers can move to another firm if they’re not happy with too much money taken away from them as profit for those in charge, whereas citizens cannot escape from their country and its taxes. In reality, economic conditions make all the difference. Workers, with unions’ negotiation powers curtailed and social security slashed, have little choice but stick with companies that treat them with scant regard. Wealthy citizens, by contrast, can set up a few homes abroad or hide their money off-shore, and avoid paying taxes.

But the plutocrats will no doubt point out, it’s their company, they can take out what they want as their profit, and they can’t see why anyone else should have a say about it. Just as the autocratic rulers of old used to say, it’s their country, they can take whatever they want, and they laugh at the thought that anyone else should have a say about it.

Let’s see how long the reign of corporate dictatorship lasts.

Saturday, 1 July 2017

From Russia with Brexit & Trump

After the disintegration of the Soviet Union in 1991, the threat of a military attack from Russia was diminished. Many in the West were nonetheless concerned with two aspects of the successor regime. The democratic critics believed that, despite its move to multi-party elections, Russia still retained many illiberal traits in how it treated dissidents, the media, opposition leaders, and neighbouring countries such as Ukraine. The plutocratic detractors, by contrast, were mostly worried about the extent to which Russia might continue to get in the way of big businesses from the West making money there because in place of anti-capitalists, they were now facing oligarchs who also wanted to make money by all means necessary for themselves.

Putin had a choice. He could fight on both fronts, or he could flip one set of opponents and get them to inflict damage on the other. Given his illiberal nature, it is hardly surprising that he chose to woo the plutocratic-minded. It did not take him long to work out that those who would be most susceptible to his overture would be those with three core characteristics: (1) illiberal with little respect for human rights; (2) wanted money for their own ambitions; and (3) enthusiastic about promoting a brand of ‘nationalism’ that targets immigrants, refugees and Muslims, but not antagonistic towards Russia.

As to the specific individuals he would get on side, that was determined by the thorns he wanted to remove: first and foremost, the US-EU alliance that was on his back about his support of Syria, invasion of Ukraine, oppressive treatment of dissidents, and cyber intrusion against the West. To achieve that, a systemic weakening of the EU, coupled with the rampant destabilising of the US would be the priority.

Against this backdrop, moves were swiftly made on the geopolitical chessboard. People who could seriously damage the EU by promoting its disintegration and a candidate who would threaten the democratic foundation of the US if elected President (i.e., Farage, Le Pen, Trump), all came out in unison to say how reasonable Putin was, why they could all do business with him, and no one should criticise his foreign or domestic policies [Note 1].

In return, they were all helped, by one means or another, to pursue what they (and Putin) wanted. Investigators will in time tell us more about the widely suspected Russian interference in aiding the Brexit vote [Note 2], and helping Trump win the US Presidency [Note 3]. In the case of Le Pen, the chaos engendered by Brexit ironically persuaded the overwhelming majority of people in France to back the pro-EU Macron, irrespective of what Putin could do to help the Front National [Note 4].

The question is not what favour Farage or Trump would do for Putin, but how the destabilisation they have caused has already played to Russia’s advantage. The EU has to divert attention to negotiate with the UK over Brexit. A united front to challenge Russia’s oppressive stance at home and abroad is less likely with Trump’s unilateralism and the UK unsure what position it should take with its imminent departure from the EU. The US, instead of having a consistent, critical stance against the illiberal and corrupt practices of Russia, has itself come under an administration that is proudly illiberal and increasingly sued for corruption [Note 5].

The game-changing moves coming up? Special Prosecutor Mueller’s investigation, and UK’s Brexit negotiation. Either Trump continues to wreak havoc and UK goes into self-destructive ‘no deal’ mode, to Putin’s delight; or the Russian links are fully exposed, the UK reaches a sensible agreement with the EU, and Putin’s advance would at last be checked.

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Note 1: On Trump’s, Farage’s, and Le Pen’s admiration for Putin, see: http://www.france24.com/en/20161115-why-west-right-wing-admires-putin-le-pen-farage-trump

Note 2: On Brexit and Russian interference, see: http://uk.businessinsider.com/labour-mp-ben-bradshaw-suspicious-russian-interference-brexit-2017-2?r=US&IR=T

Note 3: On Trump and Russian money, see: http://uk.businessinsider.com/trump-russia-probe-follow-the-money-mueller-2017-6?r=US&IR=T

Note 4: On Le Pen and Putin: https://www.theguardian.com/world/2017/mar/24/putin-welcomes-le-pen-to-moscow-with-a-nudge-and-a-wink

Note 5: On Trump’s use of the Presidency for his own financial gains, see: https://www.theguardian.com/commentisfree/2017/jun/14/trump-ushering-kleptocracy-why-being-sued

Sunday, 11 June 2017

National Alliance for Brexit

If Theresa May persists with an exclusive deal with the DUP and continues to keep other party leaders in the dark about her approach to Brexit, then she has clearly learnt nothing from her failed attempt to win a large majority in Parliament. She has been rightly criticised for making vital strategic and tactical decisions within a small, closed circle. The result is there for all to see. She shuts out others who are then unable to point out her errors, and when things go wrong, she is left floundering and isolated.

And when it comes to Brexit, it is not just about the ramifications for one political party, but the serious effects on the whole country. Brexit is inextricably linked with British people’s concerns with getting jobs with decent pay, ending austerity, and having a fair and sustainable economy. If the Brexit plans adopted actually make things worse on all these critical issues, they would spell disaster for the country. To get it right, a different approach is urgently needed.

Why

It is time political leaders accept that the Brexit challenge calls for a national alliance. Just as leaders from different parties came together to steer the UK through the First and Second World Wars, a cross-party approach for Brexit is essential. May, flanked by a DUP supporter, waving a document that is supposed to give us ‘Brexit for our time’ will not do.

At this juncture, we need a shared strategy to deal with the challenges posed by Brexit. The 2017 election results tell us that the people are not willing to give the mandate to any single party to reach an agreement with the EU.

What

The National Alliance for Brexit should comprise the Prime Minister (Conservative), Leader of the Opposition (Labour), and the Commons leaders for the SNP, Liberal Democrats, DUP, Plaid Cymru, and the Greens, plus the First Minister of Scotland (SNP), First Minister of Wales (Labour), and (given power sharing) both the First Minister (DUP) and Deputy First Minister (Sinn Fein) of Northern Ireland. When the group meets, both the Brexit and shadow Brexit Ministers should also be in attendance.

The emphasis will be on consensus building, and decisions will not be taken on a majority vote basis. If no agreement can be reached, the Prime Minister can decide if an issue is to be parked for a revisit later, or take the decision after others have expressed their views. Members of the alliance will meet to discuss what they should prioritise, what concessions may be considered, and what suggestions or reservations they may have about on-going tactics and long term strategies. They will decide on the frequency of their meetings and how the agenda for each meeting will be shaped. All discussions will be confidential to those present, and can only be shared with specific personnel on the unanimous agreement of the whole group.

How

The alliance can be convened through an invitation from the Prime Minister; or if the invitation is not forthcoming, the Leader of the Opposition can request the Prime Minister to initiate the process. Once it has been set up, the group should operate on a collaborative basis. The Prime Minister must not regard the others as merely being present to get updates and provide the appearance of unity. The others for their part must recognise that they are not there to put numerical pressure on the Prime Minister but to help inform discussions with wider perspectives, advise on pitfalls to avoid, and point out opportunities that may otherwise be missed.

In negotiation with the EU, the Prime Minister and the Brexit Minister, knowing where they stand with the other political leaders of the UK, will be able to speak confidently and authoritatively. With the UK Parliament, instead of adopting a ‘take it or leave it’ confrontational approach, they can assure MPs and members of the Lords that while they cannot share with them the evolving details, a consensus approach for the interests of the whole country, and not just a single party, is guiding how the deal is to be reached.

Once the Brexit deal is concluded with the EU, the alliance can ensure that, rather than being shocked by the revealed deal or getting bogged down by political point-scoring about what should have been done differently, all parties can rally behind the deal and work with the British people so that it can be implemented as effectively as possible for the sake of our United Kingdom.

Friday, 9 June 2017

Gambling with the UK’s Future

To lose one gamble may be regarded as a misfortune; to lose two looks like carelessness; but to lose three is surely utter incompetence.

In June 2016, the Tory Prime Minister, David Cameron, declared that the best thing for UK’s prosperity and stability would be for the UK to remain in the European Union. He had a mandate to run the country and that was his considered judgement. But instead of running the country accordingly, he opted to tackle the party political threat from UKIP by arranging for a referendum on the UK’s EU membership. He thought a victory would minimise future challenges to Conservative seats from UKIP candidates. By his own admission, he was convinced that withdrawing from the EU would be bad for the UK and cause serious uncertainty. But for the sake of securing party political advantage, he gambled with holding the referendum anyway, with no contingency plan, and he lost.

Cameron resigned, and was succeeded by Theresa May, who thought that the best way to endear herself to the ardently pro-Brexit xenophobic press would be to rush ahead by triggering Article 50. She had no plan for what agreement to seek or how to obtain it. But in March 2017, she went ahead anyway, knowing that once Article 50 was triggered, the UK would be out of the EU in two years’ time, and if no deal had been reached with the EU by then, the UK could be in serious trouble in terms of the negative impact on trade, security and scientific cooperation. The clock started ticking, uncertainty began to mount. May’s bet was that her pushing Article 50 would rally the country behind her as the trusted negotiator. As it was, it caused such alarm that more and more people became intensely concerned with her approach to Brexit.

So a year on from the EU referendum, Theresa May decided to double down and call a snap election. She had inherited a slim majority from Cameron, and thought she could win a landslide with the Conservatives far ahead of Labour in the opinion polls. Like Cameron, she did not for a moment think that the country’s stability should come before her party political gains. With an atrocious campaign, during which the self-styled tough talker refused to engage in public debates, May’s gamble fell flat. Instead of winning a much bigger majority, she ended up with no majority at all. Like an annual ritual, a Tory Prime Minister had once again sunk sterling and pushed the country into deep uncertainties and economic instability.

The Brexit process is still counting down. The country is more divided than ever as to what deal we should strike with the EU. But it is hard not to agree that the worst possible deal for Britons would be to leave our fate in the hands of clueless gamblers.

Thursday, 1 June 2017

The Rules-Freedom Symbiosis

For too long the rant against rules as barriers to ‘Freedom’ has gone unchallenged. Playing on people’s instinctive yearning to be free from restrictions, charlatans have manipulated public opinion and turned it against rule-setting in any arena that might have obstructed the pursuit of their own vested interests.

We hear of the ‘free’ market being held back by business legislation; the ‘freedom’ of the press being threatened by proposed regulation; or our country’s ‘liberty’ being constrained by rules imposed by the European Union.

But imagine a world without rules – people can cheat, rob, maim you and your family without any penalty. You have no safety, no prospect of building on anything because the unscrupulous can come along any time and wreck your life.

To be free to live a life without constant fear, we need rules to protect us. And to make sure those rules are appropriate, we need to be the ones in control of how those rules are set. Rules are not the enemy of freedom. The eradication of rules so the callous can trample on the rest, or the imposition of unfair rules that ignores our concerns, they are the nemesis of our liberty.

If we are to enable the Rules-Freedom symbiosis to flourish, we must be better aware of what kind of activities may affect us, what rules are necessary to safeguard our wellbeing from infringement by others, and above all, how we can have a reasonable say in the formulation and enforcement of those rules.

Activities by business organisations and other European countries are two major types of activity that can substantially impact on our lives. Even self-styled libertarians would concede that having no rules to govern these activities would open us up to deception, exploitation, and even enslavement by ruthless transgressors [Note 1]. Not surprisingly, there are rules put in place to deal with them. Unfortunately, many of these rules are being altered by plutocratic politicians doing the bidding of irresponsible corporations, or removed altogether at the expense of ordinary citizens. Worse still, those of us in the UK are being pulled out of the EU where cross-border rules are set. There will still be countless trade, scientific, and security activities that affect the UK and the rest of Europe alike, but the UK will no longer have any representation at the table where the rules governing these activities are drawn up.

Getting rid of rules, or giving up the opportunity to shape them, is not the way to secure freedom. Often such a move will only lead us to greater vulnerabilities, and we become much less free as a result of others not being constrained anymore from depleting our options in life. If we truly want to be free, we had better start engaging fully in the vital process of rule-setting at the national, European, and indeed global level.
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Note 1: Human trafficking and modern slavery are real problems that are still not sufficiently prioritised for government counter-action.

Monday, 15 May 2017

Left, Right, or Optimal?

Whenever a label causes more disagreement about what it is supposed to mean than helps to identify what is on offer, it is time to discard it.

‘Left’ and ‘Right’ have had a good run, but what do they really mean anymore?

Who seriously thinks that more nationalisation or privatisation is always a good thing regardless of circumstance? Is it more in line with the ‘Left’ to want to protect jobs in the nuclear or fossil fuel business, or to press for withdrawal from those sectors on environmental grounds? Won’t most people be concerned when they learn about vulnerable people suffering without help, or when they hear that the economy is faltering because businesses are hit by unfair competition and systemic instability?

Some on the ‘Right’ may still want to keep shrinking the state, but many are unhappy that the shrinking has gone too far, especially when it affects policing and military budgets as well. Meanwhile, few among those who champion freedom as the overriding value are at ease with being bombarded with demands to curtail the freedom of people on grounds of their race, religion, gender, or sexuality. Some feel that a nation should look to itself and ignore other countries’ conflicts, while others believe a strong country will always make its presence felt all over the world.

Instead of squeezing disparate outlooks into ill-defined boxes, would it not make more sense to see what people’s views are in response to, not one-sided presentations of an issue, but accounts of problems with the relevant facts?

For example, most people are inclined to agree that government should leave people to it if they are managing fine by themselves, but ought to step in when there are problems that will get a lot worse without state involvement. Few would object to the government using the necessary powers and resources to keep us safe from terrorism, crime, squalor, disease, and other forms of debilitating insecurity; provided there is democratic oversight and proper accountability. Hardly anyone believes that all must bow down to a single rigid code of worship and behaviour, and fewer still think that people can do whatever they want regardless of the harm they can cause to others.

Rather than arguing what ‘Left’ or ‘Right’ position should be, perhaps we should just focus on working out what the most optimal approach is to dealing with the problems we face. Why assume benefit payments must be higher or lower, when the question is how can people get a job with at least subsistent pay, and what safety net would actually be adequate? Why insist on harsher or more lenient punishment, when the issue is what sentence would be proportionate to the injustice caused, protect society, and improve future behaviour? Why press for an arbitrary level of immigration, when the numbers allowed in should relate to the needs of existing residents? And why assume state regulation must be good or bad, when what matters is whether the proposed regulation will help or hinder our safety and prosperity?

It can be difficult at times to let go of tribal colours or totemic symbols. But when it comes to the wellbeing of our society, we’ll all gain if we can push aside unhelpful labels, and concentrate on finding out what the most optimal solutions are likely to be.

Monday, 1 May 2017

To Share or Not To Share

How is wealth shared out amongst the people who have worked together to produce it?

According to a survey of the FTSE 100 companies, the average pay gap between top and bottom is 262:1. In one company, a major retailer, it is in the region of 656:1 [Note 1]. No wonder the wealthy few keep getting richer while others are left further behind. Oxfam has found that the richest eight people in the world now have as much money as the poorest 50% of the planet’s population. The gap is widening ever more between those who have to endure hardships every day and those who have a hard job working out what to do with their vast fortune.

But is this because there is no alternative? Actually, better options are in front of us if we care to look. Worker cooperatives enable those who work in them to share more fairly the responsibilities and rewards associated with their collective endeavours. Everyone has an equal vote in making the key decisions. In hard times, they all take reduced pay rather than jettison those who are the easiest to make redundant. In good times, everyone has a say in how to divide the growth in revenue. Worker cooperatives have been found to be more resilient and more productive than conventionally structured companies. There are lower absentee rates, fewer internal disputes, and higher job satisfaction [Note 2].

Social democratic governance is another way to bring about healthier economies and more stable societies. For example, the cumulative impact of the ‘let the rich get richer at the expense of the poor getting poorer’ policies of three successive Republican Presidents that led to the Great Depression, were rectified by the New Deal approach of Franklin D. Roosevelt. The vast debts and gloom of post-war Britain were overturned by the Attlee Government that established the National Health Service, provided the welfare state safety net, increased affordable housing for all, and boosted people’s purchasing power to sustain a social and economic equilibrium. Such policies were pushed aside by the New Right since its ascendency from the 1980s on, but they can be re-formulated to meet today’s needs, provided they are effectively explained to the electorate and we back them with our votes.

One last point to note is that as technological advancement is accelerating, there is no reason to stick with the fallacious assumption that the rich owners of such technology must inevitably take an even greater share while more people are made redundant and left with nothing. The truth is that technological achievements can be made as an endowment for everyone, not just a privileged few. This is not a fanciful wish but a way of life for many of our greatest innovators.

Alexander Fleming’s research led directly to the discovery of penicillin and the development of antibiotics. Norman Borlaug invented new crop breeding technology that would substantially increase food supply, which has been estimated to have helped save a billion lives around the world. Tim Berners Lee devised the ultimate global information sharing platform we know as the World Wide Web. None of these people extracted any profit out of their discovery or invention. Instead they allowed the world to share the immense benefits that have flowed from them.

Next time we hear someone saying that sharing is for impractical dreamers only, we can start by sharing with them the above facts [Note 3].

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[Note 1] A Third of a Per Cent (2011), report published by the One Society.
[Note 2] What do we really know about worker co-operatives? (2016) by V. Pérotin, published by Co-operatives UK.
[Note 3] For practical advice on converting to a worker co-op, contact:
Coop UK: https://www.uk.coop/the-hive/buyouts-and-conversions/employee-buyouts ;
FairShares Association: http://www.fairshares.coop/