Wednesday, 22 February 2012

'Free market' capitalism is just a racket

As the 'free' market fundamentalists of the neoliberal right continue their class war mission to drag us all back to nineteenth century conditions its becoming clearer that the 'economic policy' they support is little more than a racket. Before I describe this, its worth considering one of the central problems of capitalism - the falling rate of profit. In the nineteenth century many economists accepted that there was a tendency of the rate of profit to fall over time and Marx explained how that worked in Capital. Of course, Marx's theory has since been disputed, but not disproved. Nevertheless, by the 1970's, after the post WW2 boom profits were beginning to fall. The solution? - neoliberalism. Neoliberalism works by screwing workers, including middle class workers, harder, and reducing their living standards. Quite simply capitalists take a bigger slice of the cake, leaving ever fewer crumbs for the rest of us.

That is why our pensions, wages, and working conditions have been under attack for the past 30 years. The politicians who have been doing this to us have invented a series of plausible 'excuses' for doing so. In the case of pensions the 'excuse' is demographics, people are living longer, and so they are, but decent pensions are still affordable, the real reason they are being removed from us is to increase profits for corporations.

This is also the reason why our current reactionary neoliberal coalition government are so keen on privatising the NHS and public services - guaranteed profits. The corporations know very well that public services are an easy risk-free way of making guaranteed profits and they have long wanted to take control of them. With austerity and the most reactionary government in half a century in power their chance has come. In the UK this privatisation drive began with Thatcherism in the 1980's well before the current government, with the 'excuse' that the private sector was more efficient and would deliver better services. We have seen what has happened with the railways and energy. Large corporations making vast profits out of the taxpayer and customers (who used to be stakeholders) with none of the promised improvements. The economic crisis we are in, created by neoliberal 'economic policy' has now enabled the whole project to be pushed further and harder than it ever has been in the past 30 years.

We have reached the stage whereby public services are being handed over by our politicians to profit makers without any regard for supposed efficiency. This is nothing more than the imposition of 'free' market ideology and has become a racket, with guaranteed profits for the corporate winners. Here are a couple of examples I have recently come across, but there are many more. In the USA corporations are 'offering' to take over publicly run prisons as long as there is a minimum of a 90% occupancy rate. Just think about that. That means that the public bodies are going to have to find more prisoners to fill those jails! I guess they will just have to search harder for lawbreakers, and find sympathetic judges.

Meanwhile, in the UK A4e, a company which is supposed to help people back into work, is now under investigation for fraud, for allegedly fiddling its figures to get taxpayers money. The founder, Emma Harrison, paid herself £8.6 million last year. But this person is the darling of government, held up as an example of entrepreneurship to us all. A4e is built entirely around government contracts, that is taxpayers money, at least £8.6 million of which has been wasted in my view. That money could have been used to create jobs.

As long as our politicians are hand in glove with the corporations, we can expect more corporate welfarism and cosy deals carving up public services to continue. No risk-taking and no efficiencies -  except for lower wages and worse conditions for the workers who are expected to deliver. Even Tory MP David Davis has condemned 'crony' capitalism, but In fact, this is barely capitalism, its more akin to a form of neo-feudalism where the political barons and capitalist kings conspire to keep the rest of us in perpetual wage serfdom.

1 comment:

Eric Indiana said...

Capitalism creates and exasperates structural inequality that leads to unequal education & opportunity, thus reinforcing the inequality. We can reform it, and we do from time to time, and then the people who gain the most from the system push back with the mantra of "free enterprise." It's really hard to foresee any meaningful change, since Capitalism is like a religion in this country. Here's how poverty, intertwined with racism, perpetuates unequal education: