War Against ‘Crony Capitalism’ has Become the British Man’s Burden
Britain has spent billions of pounds of taxpayer money over the last ten years, waging a war against terror and non-existent weapons of mass destruction, freeing oppressed people from tyrannical leaders, and protecting and securing British business interests. The Iraq war has cost the UK £9.24 billion, the war in Afghanistan £18 billion and now Britain’s benevolent intervention in Libya which was initially projected to cost £260m is estimated to cost an astounding £1.75 billion by defence experts.
Whilst Britain can be proud of its ‘humanitarian’ intervention having bombed liberty into sovereign nations, the majority of British people, unfortunately have not experienced any financial reward from the corporate aspect of these burdened missions. Even when big companies have been posting soaring profits in the defence, oil and gas, and banking sectors, ordinary workers have not benefited from the illusive neo-liberal ‘trickle-down’ effect.
For the year 2010, the salaries of the top 100 FTSE company heads, increased from £1.3m to £4.5m, a record increase in nine years. By contrast, the gross average salary of a full-time worker was £26,200 at end of 2011, a meagre increase of 1.4% from 2010 was not in keeping with the CPI inflation hovering at a rate of 5%. This meant that workers actually faced pay cuts of up to 3.6% in real terms. The latest figures released today by the Office of National Statistics show that the average weekly earnings growth is only 1.9%. Again the very least, it is still not in keeping with a current CPI inflation rate of 4.2%.
The widening wage inequality, despite lucrative adventures in foreign lands, may indicate that the spoils of war booty have not been shared fairly. In 2006, a joint investigation by The Independent and Corporate Watch revealed a total of 61 British companies profiting £1.1 billion from contracts in Iraq. A similar scramble by British companies to profit from the war business is now taking place in Libya. However, if ordinary British workers were hoping for more than just moral self-satisfaction for having bombed democracy into Iraqis, Afghans, and Libyans, they must remain sadly disappointed. It must also be cold comfort to remind them of British Foreign Secretary William Hague’s, assurance that the cost of Britain’s noble war effort in Libya is a cheaper alternative than humanitarian aid.
Most of Britain has steadily slipped into economic and social decline. Prosperity seems to be limited to the likes of chief executives of energy companies and the government bailed out banks. Austerity, on the other hand, is confined to the working class and New-Labour’s pseudo-middle-classes. The upper-class and royalty, despite speculation to the contrary, have safely escaped demise as neither Samantha Cameron’s pretend-poor-wardrobe from a High Street chain, Marks & Spencer nor Princess Kate wearing the same designer outfit twice counts as austerity.
There have been huge cuts in UK public spending and it has now been announced that public debt has shot through the £1 trillion mark. There is a rising cost of living, a depressed housing market, stagnating wages, a pension fund crisis, a National Health Service crisis, more expected redundancies, inflation, and an unemployment rate of 8.4%.
The perils of a globally integrated economy mean that Britain is certainly not alone in its financial demise. No country in the world has escaped from the crisis of global capitalism. However, since the 2008 financial collapse, identifying the root causes of this worldwide misery has been a difficult task. Initially, it even left experts baffled as nobody seems to have foreseen the silent enemy approaching. Economist and ex-head of the Federal Reserve, Alan Greenspan, claims that “Everybody missed it — academia, the Federal Reserve, all regulators.”
Of course, it would have been an easier task for our leaders and experts alike to identify the perpetrator had he been a known enemy such as a dictator sitting on vast oil fields and natural resources. A dodgy government dossier could then have warned us of the imminent danger. Or perhaps even if the culprit had sent audio and videotapes of his malevolent intentions to the offices of Al-Jazeera, it could have helped avert the disaster.
Regrettably, neither the British public, nor the rest of the world were the recipient of such good fortune. Now, however, we must be thankful that the enemy has been positively identified by the British government as “crony capitalism.” Initial speculation had begun back in 2009 at the World Economic Forum in Davos and more recently with MP Jesse Norman’s paper on “Conservative Free Markets, and the Case for Real Capitalism.”
Last week, Prime Minister David Cameron, in his speech on the economy officially placed the noble cause of “moral capitalism” on the top of the government agenda. The speech was delivered in the midst of a debt crisis, Europe’s impending EU and Euro-zone collapse, political pressures at home to reign in fat-cat pay packages, demands for tighter financial regulation of the City, and of course the ‘Occupy London’ protests.
Moreover, it is not the government alone who has made a “genuinely popular capitalism” its latest mission. British politicians from all sides from both the coalition and opposition are pretty much on the same bandwagon. Cameron’s speech follows Deputy Prime Minister, Nick Clegg’s speech last month and Labour leader, Ed Miliband’s speech earlier this month along similar lines. Whilst there has been much discussion and debate on the differences in the Conservative, Liberal, and Labour vision (or arguably lack of), these differences are all but small.
All three major political parties, irrespective of policy details, believe that better financial regulation and transparency whether it means tackling fat-cat pay, publishing ratios between the lowest and highest-paid workers, placing staff representatives or shareholders on pay committees will ensure reward based fairness to be brought to the system. In this vein, the Prime Minister counsels that the economy cannot be built by “turning our backs on the free market,” but instead “making sure that the market is fair as well as free.”
These remedies represent cosmetic changes which fall far short of the reform needed for the economic system itself. For those calling on staff members to be on remuneration committees of companies, such a measure will not influence institutional shareholders to be bothered about fat-cat pay. Nor will placing shareholders in their seat, as the government has proposed necessarily have any impact considering there may be no incentive for them to oppose highly paid executives who bring the company huge profits. Indeed the wealthier shareholders would almost certainly not be willing to cut executive pay. It also fails to take into consideration the voting rights which executives themselves may hold through share options.
To add further complication, shareholders can sit on each other’s committees and influence a mutually beneficial decision. These proposals assume that all parties involved have the same vested interest, whereas in reality the “self-interest” of a worker, an executive, and a shareholder in a capitalist corporate culture over-lap and conflict. It fails to question the fundamental values on which the global capitalist system is built making it inherently inequitable.
The political rhetoric of “crony capitalism” serves to cloak the sacred intersection between politics and economics. This was clearly seen a few months ago when The Telegraph’s report “Libya: The minister, the Tory donor and a contract to supply oil” exposed the way in which corporate interests are tied to the political process of government.
It is rather ironic that the “crony capitalism,” traditionally seen to be the evil hallmark of corrupt regimes abroad has now become the British man’s burden at home. Whilst Britain had been fighting noble wars on terror abroad, little did we know that a ‘homegrown’ enemy was preying on us much closer. The war against “crony capitalism” is meant to rescue Great Britain from the misery and despair of a spiraling economic downturn, but in reality, only leads us to question the paradox “moral capitalism.”