Rupert Murdoch presents what former UK Prime Minister Edward Heath once called “the ugly face of capitalism”. The present day number of corporate giants to which that epithet applies is too many to record. The interesting fact is that Heath was a Conservative! In fact, he represented, along with Harold Macmillan the “wets” in the Tory party which “dry” Margaret Thatcher overthrew and mocked during her “reign”, an apt word, don’t you think?
I’m a supporter of “free enterprise” and indeed served five years in cabinet in a “free enterprise” government. I believed in the market and scorned the often “loony left”. For until 1989 and the later break-up of the USSR, it was easy to be an unquestioning “free enterpriser” because of this “loony left” which delighted in bankrupting local councils to make whatever the point it was they were trying to make. “Capitalism” was, by comparison, the only sensible way to go.
Then the Wall came down followed by the break-up of the Soviet Union and it was clear that Communism had failed and Capitalism was the Heavyweight Champion of the World. Democracy, Freedom, and Capitalism had won – and won big time.
Or had it?
A strange thing happened in Russia. From a society that had no private business community there were scores of billionaires (Forbes Magazine has identified more than 100) holding onto what once were common assets. A Russian Mafia emerged and the place began to look like Chile under Pinochet! To the victor go the spoils and how else could it be? Hadn’t President Reagan boasted that Capitalism had destroyed the “Evil Empire”? There were no shades of grey – it was undemocratic thoroughly discredited Red or undiluted capitalism. The sad result was that there was only dark “blue” and the discredited “red” to choose from – and dark blue was “in”, big time.
It’s taken more than two decades but now it’ capitalism that’s under the magnifying glass as it takes over the world – the buzz word is “corporatization”.
Corporate power is immense. President Obama may lose the next election because he has brought in a universal health care system. “The Tea Party” element of the Republican Party, which represents raw undiluted capitalism, not only condemns any sort of public healthcare system – something most western countries take for granted – it blames President Obama for trying to clean up the fiscal mess they left behind which was the consequence of Republican de-regulation of the money markets…
As I write this, the president has just signed the compromise legislation allowing the government to pay its bills.
How more idiotic can it get? Here we have a powerful clique of right wing loonies in the Republican Party supporting the policies that got the US and indeed the entire world into a huge and ongoing recession (I believe that it’s only begun) and demanding that taxes be cut for the rich! And all but getting what they want!
I live in a village of 1600 that contains three billionaires; the “pub” style restaurant Wendy and I frequent is owned by another. They made their fortunes in discovering diamonds in the Northwest Territories of Canada.
How can four prospectors find diamonds and become billionaires? What was their contribution to society?
According to Forbes Magazine, there are 1020 billionaires in the world with Russia having the largest number. Mexican Carlos SlimHelú leads the pack with $74 billion followed by Americans Bill Gates $56 billion and Warren Buffett $50 billion.
Let’s put some perspective on this. A billion is one thousand million dollars. If you live in a town we’ll call “SlimHelú ville” of 74,000 people, every man, woman and child is a millionaire! How can one person have that much money? What did they do to deserve it? Develop a serum that cured millions of sufferers? End several droughts? Find a way to shelter the world’s homeless? Invent a better mousetrap? Bring peace to the world?
Billionaires to a man will tell about their charitable works but a local Vancouver billionaire demonstrates the double edged sword that often is. He financed a new wing of a large Hospital.
Three things happened (four if you count the naming of the wing after himself) – one, the billionaire can write ½ his donation off his taxes, second the government, which must make up the remaining ½ of the project even though it wasn’t in their budget, and, third, the Health Ministry is forced to shunt aside other priorities. The plans of the Health Ministry are of no concern of the man getting his name on the building. Capitalists, easing their consciences in public, seldom give money anonymously.
Another question, how can heads of publicly owned corporations pay themselves scores of millions a year plus huge pensions and stock options? And how can they take this money out of a society that has huge unattended social costs?
The super rich pay a pittance in taxes, proportionally, compared to ordinary citizens. They have skilled lawyers and accountants hide their money and find loopholes the public cannot find. Most of all, corporations control the politicians by funding them.This must change – people must not suffer because corporations don’t pay a fair share.
Jean Baptiste Colbert, finance minister to Louis XIV, said “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” The trouble with Colbert’s maxim today is that the geese are running the system. And we must find ways to bring in fiscal fairness.
What to do? We can start with a “Tobin Tax”.
In 1978, James Tobin, a Nobel prizewinning American economist, proposed a very small tax on foreign exchange transactions to deter short-term currency speculation recognizing that currency speculation wreaks havoc on national budgets, economic planning and allocation of resources. It has two advantages – it’s very small per transaction and though he might hiss like hell, the goose hardly has its feathers ruffled – and it brings in large sums
We must then reduce consumer taxes which hit hardest those who can afford it least, and shift a fair share of the burden to the wealthy.
During World War II, Canada imposed an “excess profits” tax which could go as high as 95%. I see no reason why a CEO making $25 million a year shouldn’t expect to have most of that, after, let’s say, the first million, taxed very hard. If that means he doesn’t take the money, presumably it stays in the company to either attract more corporate taxes or becomes taxable income to shareholders, or both. To say that no good executive will work for that kind of money is nonsense.
The wealthy say that their huge salaries and bonuses “trickle down” to the masses. I leave the answer to that to the eminent economist John Kenneth Galbraith who observed "Trickle-down theory – the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”
In forcing capitalism to have a conscience and pay their “fair share” we will shed “capitalism” and replace it with a “free enterprise” system that contributes fairly to public social costs while leaving room for a fair return for risks run.
The goose may hiss a little louder but the public is much better served.
