Tag: ttip

How the establishment have engineered the NHS crisis

By Daniel Margrain​

A century or so ago, the Russian Marxist Nicolai Bukharin understood that the growth of international corporations and their close association with national states was symptomatic of how both aspects hollow out the parliamentary system. It is now widely recognized that the power of private lobbying money draws power upwards into the executive and non-elected parts of the state dominated by corporations. Consequently this leads to a reduction in democratic accountability and public transparency.

Internal markets, market testing, contracting out, privatization, encouraging private pensions and all the rest, are mechanisms that are intended to depoliticise the process of social provision, so making it easier to refuse it to those deemed not to deserve it on the one hand, and to clamp down on the workers in the welfare sector on the other. This ethos became established in the late 1980s under Margaret Thatcher during her third term in office.

Removing the foundations of the welfare state

Following the advice of the then chief executive of Sainsbury’s, Sir Roy Griffiths in 1987, the Thatcher government set about removing the foundations upon which the welfare state had been built. Camouflaged in the language of ‘public-private partnerships’, Tony Blair’s New Labour took this one stage further as a result of his envisaging the state as the purchaser rather than direct provider of services. Whole entities within the public sector have increasingly been outsourced, health and social care services privatized and competition and the business ethos introduced into public services in the form of managerialism and New Public Management.

Thus, within residential care, patients have been recast as customers. The aim is to ensure the domination of the market by a small number of very powerful multinational corporations whose primary concern is not the welfare of the residents in care homes which they own or patients in hospitals but with maximizing profits.

The carving up of the NHS opens up one of the worlds biggest investment opportunities. Indeed, its exploitation by private interests is proceeding at a pace. This is hardly surprising given the 2014 revelation that 70 MPs have financial links to private healthcare firms while hundreds of private healthcare corporations have donated to Tory coffers.

There exists a symbiotic relationship between privatization and what Noam Chomsky refers to as a policy strategy of “defunding”. In line with Chomsky’s notion, the aim over the last three decades has been to shrink the NHS and bring it to the point of collapse as the basis for then claiming the only solution is more privatization. In Orwellian terms, health under-funding is portrayed in the media as “unprecedented levels of overspending by hospitals and NHS trusts.” 

Health and Social Care Act

The 2012 Health and Social Care Act removes the duty on the Secretary of State for Health to provide a comprehensive health service and requires that up to 49 percent of services can be tendered out to “any qualified provider.” As early as 2013, between a quarter and a half of all community services were run by Virgin Care. Three years later, the corporation had won £700m worth of NHS and social service contracts.

The retreating by the state from the principle of universal health care provision, free at the point of delivery, can be pin-pointed to 1988 when Tory politician, Oliver Letwin, wrote a ‘blueprint’ document called ‘Britain’s Biggest Enterprise’ where he set out the stages governments’ would have to go through to achieve a US model of health care without the public noticing. The New Labour government under Tony Blair adopted Letwin’s principles. But prior to the 1997 General Election, Blair had to disguise the strategy by using dissembling language in order to get elected.

Once in power, Blair took several steps towards privatization. For example, he broke up the hospital network into foundation trusts which are essentially separate business entities. He also deliberately saddled hospitals with Private Finance Initiative (PFI) liabilities which involved the government borrowing £11 billion from private banks and financiers in order to justify the sale and breakdown of the NHS further down the line.

This culminated with the New Labour government introducing in 2009 what was termed the “unsustainable provider regime” which is a fake bankruptcy framework to justify closing hospitals. The £11 billion of PFI public money borrowed from the banks and injected into the NHS is, in the words of ‘Save Our NHS’ activist Dr Bob Gill, intended to “set up the infrastructure for the whole scale hand-over of our NHS to American corporations.”

Simon Stevens

Arguably, the most influential individual currently working in the NHS is former Labour councillor, Simon Stevens, chief executive of NHS England. After having served under the Blair government, Stevens went on to work for the US private health care provider, United Health, where he campaigned against Obama Care prior to campaigning for the Transatlantic Trade and Investment Partnership (TTIP) to be included within the UK health care remit. Those encouraged by the election of Jeremy Corbyn are still waiting to hear something from the shadow health team about this troubling development.

Controversially, Stevens introduced NHS England’s ‘Sustainability and Transformation Plans’ which form part of the annual HHS Planning Guidance. ‘Sustainability and transformation’ is Orwellian-speak for the move towards the total reorganization of the NHS predicated on more privatizations and cuts.

Two years ago this month, Dr Bob Gill attended a meeting to get some insight into what the position of the then Shadow Secretary of State for Health, Heidi Alexander, was in relation to the direction NHS England was moving in under Stevens. What he heard were narratives that fitted into the ongoing privatization agenda. According to Gill, Alexander expressed support for Simon Stevens, despite his appalling track record. There is no indication that neither the Labour leader, nor current Shadow Health minister, Jon Ashworth, intend to take Stevens to task.

This is extremely worrying given that Stevens appears to be less committed to ethics and patient care, and more concerned with perpetuating the notion that medicine is a profit-based ‘conveyor belt’ service. Could it be the case that Corbyn has underestimated the extent to which the corrupting influence of corporations and the power of lobbying money have hollowed out the parliamentary system as outlined by Bukharin a century ago?

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The Government’s Deliberate Destruction of Our NHS

By Daniel Margrain

'Humanitarian crisis' in NHS hospitals, warns Red Cross (Getty) Royal Sussex County Hospital, UK (Photo by Universal Images Group via Getty Images)‘Humanitarian crisis’ in NHS hospitals, warns Red Cross (Getty) Royal Sussex County Hospital, UK (Photo by Universal Images Group via Getty Images)

Pictures that emerged last week from the Royal Blackburn hospital that showed mothers and babies being held in corridors for 13 hours and 89 year old Iris Sibley spending more than six months in a hospital bed because a care home place could not be found for her, are the kinds of incidences that are now becoming the norm in the NHS. Figures from the BBC suggest that nine out of 10 hospitals have unsafe numbers on their wards.

Health Secretary Jeremy Hunt’s comment on Friday (February 10) that the treatment of some patients was “completely unacceptable” in response to the worst A&E waiting times on record, was uttered as if he was absolving himself of all responsibility for the chaos. The reason why he gives the impression that he has no intention to do anything about the unfolding crisis enveloping the NHS, is because the chaos is a by-product of government policy.

The government’s objective is to move more healthcare to people’s homes and the community which will involve the merging of NHS and social care budgets that largely have already been privatized. This will lead to contamination and the entry-point for patient charges and co-payments. Given that the overall framework for such a system within the NHS already exists, it’s just a matter of time before such payments and charges are put in place.

Health & Social Care Act

The stated referencing for NHS funding is a deception, as was the assurance in 2010 that there would be no top-down re-organization of the service. The 2012 Health and Social Care Act undermines this assurance since it removes the duty on the Secretary of State for Health to provide a comprehensive health service, while the act requires up to 49 percent of services can be tendered out to any qualified provider”. Already between a quarter and a half of all community services are now run by Virgin Care.

Since the late 1980s during Margaret Thatcher’s third term in office, whole entities within the public sector have increasingly been outsourced, health and social care services privatized and competition and the business ethos introduced into public services. Following the advice of the then chief executive of Sainsbury’s, Sir Roy Griffiths in 1987, the Thatcher government set about removing the foundations upon which the welfare state had been built. One study suggests that “the privatisation of social care services is arguably the most extensive outsourcing of a public service yet undertaken in the UK”. 

The aim is to ensure the domination of the market by a small number of very powerful multinational corporations whose primary concern is not the welfare of the residents in care homes which they own or patients in hospitals, but rather with maximizing profits. In line with Noam Chomsky’s defunding notion, the strategy of successive governments’ over the last three decades has been to shrink the NHS and bring it to the point of collapse as the basis for then claiming the only solution is more privatization.

Britain’s Biggest Enterprise

The retreating from the principle of the universal provision of free at the point of delivery health care, can be pin-pointed to 1988 when Tory politician, Oliver Letwin, wrote a ‘blueprint’ document called ‘Britain’s Biggest Enterprise’ where he set out the stages governments’ would have to go through to achieve a US model of healthcare without the public noticing.

The New Labour government under Tony Blair adopted Letwin’s principles. But prior to the 1997 General Election, Blair had to disguise the strategy by using dissembling language in order to get elected. Once in office, he took several steps towards privatization – for example, breaking up the hospital network into foundation trusts which are essentially separate business entities. He also deliberately saddled hospitals with Private Finance Initiative (PFI) liabilities which involved the government borrowing £11 billion from private banks and financiers in order to justify the sale and breakdown of the NHS further down the line.

This culminated with the New Labour government introducing in 2009 what was termed the “unsustainable provider regime” which is a fake bankruptcy framework to justify closing hospitals. The £11 billion of public money Blair and Brown borrowed from the banks and financiers ostensibly to invest in the NHS through PFI (a sum that has soared to £80 billion which the NHS is duty bound to pay), helps further this eventuality in two ways.

Firstly, financing hospitals through PFI displaces the burden of debt from central government to NHS trusts and with it the responsibility for managing spending controls and planning services, thereby hindering a coherent national strategy. Secondly, the high cost of PFI schemes has presented NHS trusts with an affordability gap. The financing of these legally questionable PFI contracts, which has increased the public’s liability by a massive £69 billion, cannot be examined because they hide behind strict confidentiality rules.

Nevertheless, the Labour party under Jeremy Corbyn appears to be reluctant to raise the issue surrounding the alleged inadmissibility of the contracts despite the high probability that best value and cost effectiveness criteria were unlikely to have been adhered to in this instance.

Simon Stevens

The most powerful and influential individual currently working in the NHS is former Labour councillor, Simon Stevens, chief executive of NHS England. After having served under the Blair government, Stevens went on to work for the US private health care provider, United Health, where he campaigned against Obama Care. Stevens then argued for the Transatlantic Trade and Investment Partnership (TTIP) to be included within the UK health care remit. Those encouraged by the election of Jeremy Corbyn (myself included) are still waiting to hear something from the shadow health team about this troubling development.

The latest controversy to have emerged from NHS England led by Stevens is the proposed introduction of its ‘Sustainability and Transformation Plans’ which forms part of the annual 2016-17 HHS Planning Guidance. “Sustainability and transformation” is Orwellian-speak for the move towards the total reorganization of the NHS predicated on more privatizations and cuts. As Mike Sivier puts it:

“We’re told the project is about ‘strengthening local relationships’ and building on ‘local energy and enthusiasm’ to achieve ‘genuine and sustainable transformation in patient experience and health outcomes’. But in fact, the Guidance contains some very specific requirements that will test these new collaborations to the limits and usher in a new wave of privatisations and huge cuts.”

Last January, activist Dr Bob Gill from the Save Our NHS Campaign attended a meeting to get some insight into what the position of the Shadow Secretary of State for Health, Heidi Alexander, was in relation to the direction NHS England was moving in under Stevens. What he heard were narratives that fitted into the ongoing privatization agenda. According to Gill, Alexander expressed support for Simon Stevens, despite his appalling track record.

Concerning

This is deeply concerning for people who see in Corbyn somebody who might be willing to take a man who appears less committed to ethics and patient care than to ensuring medicine is a profit-based ‘conveyor belt’ service, to task. Unfortunately, there is no indication that he is the man who intends to do it. On the contrary, the narrative of the shadow health team appears to be one of support for both Simon Stevens and the existing regime of privatization that he is overseeing.

A year down the line since Dr Bob Gill’s revelation and with no action taken by Corbyn against Stevens, it’s now a matter of urgency that activists exert political pressure on Corbyn’s team to address the rightward direction Stevens, in conjunction with the Tories, is taking the NHS. Prior to the last election, David Cameron promised to “protect the NHS budget and continue to invest more.” This promise has been broken. According to the Nuffield Trust, “government spending on the English NHS is falling as a share of UK GDP – from 6.5 per cent of GDP at the end of the last decade to 6.2 per cent in 2015-16.”

Research by the Kings Fund indicates that the UK is ranked 13th out of 15 original EU members. In Orwellian fashion, health under-funding is portrayed in the media as “unprecedented levels of overspending by hospitals and NHS trusts.”Under-funding has inevitably impacted on staffing levels. The shortage of nurses within the NHS has reached dangerous levels in 90 per cent of UK hospitals, and the amount of doctors per capita is the second lowest among eleven European countries.

Overall, on six out of nine measures of varying sorts – five year survival rates for breast cancer; the same for prostate cancer; the number per capita of MRI scanners, CT scanners, angioplasty operations, hip replacements and knee replacements; waiting times to see a specialist and the OECD assessment of outcomes compared to money spent – Britain did worse than any other advanced country in the world. Under both Stevens and the Tories every aspect of the NHS is under attack.

At the time of writing, Virgin Care is in control of well in excess of 200 contracts across the UK while administration for the new NHS market alone, costs tax payers £1 in every £10 the NHS spends (4.5 billion). The carving open of the service for exploitation by private interests is proceeding at a pace and the government shows no indication of wanting to reverse the process. This is hardly surprising given that 70 MPs have financial links to private healthcare firms while hundreds of private healthcare corporations have donated to Tory coffers.

The erosion of the principle of a free at the point of delivery service also undermines what Sir Michael Marmont refers to  as “the optimal allocation of resources.” This, in part, explains why a country like the United States where the marketization of its health care system is long established, is ranked 44th in the world in 2014 in terms of efficiency compared to 10th for the UK. Given these figures, one might reasonably ask why the government appears to be insistent on dismantling something that, despite its faults, essentially works, and then restructuring it in the image of a system that doesn’t?

The US model we are moving towards

During his recent trip to America following Trump’s inauguration, it is likely that UK Health Secretary, Jeremy Hunt, took the opportunity to discuss with US financiers further moves to carve up the NHS in order to bring it closer to the US insurance-based model. The requirement of the US Affordable Care Act (which was signed into law in March 2010 but is actually unaffordable for large swaths of the US population), is that people are forced to buy private health care insurance if they fail to qualify for public health programmes, namely Medicare and Medicaid. However, the insurers have created plans that restrict the number of doctors in hospitals.

These “ultra narrow networks” have resulted in the reduction of at least 70 per cent of health facilities within communities throughout the US, thereby restricting access to care for people with serious health problems. This means that increasingly Americans are paying higher premiums but are not getting sufficient access to services they need. They are, therefore, having to find the money upfront, largely because their insurance policies do not provide adequate cover for their injuries or illnesses.

So America is still seeing high rates of people who are either delaying, avoiding getting access to the care they need, or are being confronted with medical debts. Research shows that tax-funded expenditures account for 64.3 percent of US health spending, with public spending exceeding total spending in most countries with universal care. Yet, 33 million people in the US do not have access to health insurance cover.

When Obama came into office in January 2009 there were approximately 15 per cent of American’s who had been uninsured for at least a year which meant that unless they had access to a significant amount of money, they could not go to a doctor when they or their children fell ill. During this period, surveys showed that two-thirds of all Americans favoured a single payer health plan (ie a publicly financed system of universal health care provision free at the point of delivery for all, similar to the NHS) but Obama rejected it outright. This was despite the fact that war veterans and senior citizens have a variation of publicly/privately delivered and funded arrangements already in place within the existing system.

These limited single payer systems have also proven to be cost effective with good outcomes. In addition, Obama was riding high on a wave of popular support following his election victory. Not only did the Democrats control the White House and Senate but they also commanded a majority in the House of Representatives. It would appear that the $20 million Obama received from private health care companies during his election campaign helped sway his decision not to introduce the single payer system across the board despite the fact that nearly 80 per cent of Democrat voters support the introduction of such a system.

Obama, in other words, had the democratic mandate to introduce the extremely popular single payer system universally but instead he turned his back on the people who elected him into power. The conflicting interests that American presidents like Obama face relates to the close relationship they have to members of Congress who need to get reelected. If Congress speak out against the interests who are funding their campaigns, they’re not going to get that funding. Commenting on a report from the National Journal, Ashlie Rodriguez wrote:

“Health care interests have given $46.6 million in campaign donations since 2005 to [the] 21 lawmakers” at the bipartisan healthcare summit, including Senator Max Baucus, Senate Minority Leader Mitch McConnell, House Minority Whip Eric Cantor, and to the summit’s host, President Obama.”

And Citizens for Responsibility and Ethics in Washington found that:

“health professionals, political action committees, hospitals and nursing homes, pharmaceutical and health product companies, health services firms, HMOs and accident insurers have given heavily to all summit attendees.”

Dysfunctional

Tiny efforts to try and patch together what is clearly a dysfunctional system is further undermined in as much as that patchwork involves another obvious paradox. This is highlighted by the origin of the Obama Care Plan which has its roots in the Heritage Foundation, a conservative Think Tank, which came up with the model of forcing people to buy private insurance and to use public tax dollars to subsidize the purchase of this insurance. In other words, as a result of a process of publicly funded corporate welfare, billions of funds are shifted into the hands of private insurance companies.

Nevertheless, this was passed into law in Massachusetts under governor Mitt Romney who was Obama’s Republican opponent in the race for the White House. Almost exactly the same plan was passed by Obama at the national level. This led to the insane situation in which the Democrats were essentially championing a Republican plan in which the latter subsequently distanced themselves from. Instead, the Republican policy under Trump is for everybody to pay privately with no public provision and no safety net of any kind in place.

America’s health care costs are the highest per capita of any country in the world with some of the worst outcomes. Attempts to reform the US system are undermined by the insurance companies whose only function is to be middlemen between the patients and the health professionals.The U.S government’s treatment of health care as a commodity instead of a public good is out of sync with the rest of the developed world and illustrates the extent to which, more broadly, the giant corporations have usurped democracy in the United States.

As things currently stand, the US is the only industrialized nation on the planet that has used a market-based model for healthcare. Alarmingly, whether people want to admit it or not, this is the direction of travel both the Tories and NHS England under Simon Stevens are taking the system of UK healthcare provision. In other words, we are heading for a potential nightmare.

COPYRIGHT

All original material created for this site is ©Daniel Margrain. Posts may be shared, provided full attribution is given to Daniel Margrain and Road To Somewhere Else along with a link back to this site. Using any of my writing for a commercial purpose is not permitted without my express permission. Excerpts and links, including paraphrasing, may be used, provided that full and clear credit is given to Daniel Margrain and Road To Somewhere Else with appropriate and specific direction to the original content. Unless otherwise credited, all content is the site author’s. The right of Daniel Margrain to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

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Why the travails of Apple are symptomatic of a much wider problem

By Daniel Margrain

In the wake of the democratic decision of the British people to exit from the EU, it would paradoxically appear to be highly probable that the UK government will give away the kind of sovereignty the ‘Brexiteers’ claim to covet by signing an unadulterated TTIP deal with the United States government. At a point in time in which the UK government appears set to extricate itself from the ‘bureaucratic and unaccountable’ EU, the multinational conglomerate Apple is availing itself of Ireland’s tax system, the most favourable national tax regime in Europe.

However, the European Commission ordered Apple to pay the Irish government £11bn of back-dated tax that it has avoided. The Irish Cabinet agreed to appeal the European Commission diktat. Irish PM, Enda Kenny, ordered his ministers back from their summer holidays after the European Commission accused Ireland of breaching state aid rules.

But Independent minister John Halligan initially said that the Irish government should take the cash owed by Apple in order to fund hospital services in his constituency before eventually agreeing to the decision to appeal the ruling. The European Commission alleges that Apple’s effective tax rate in 2014 was a mere 0.005 per cent which means that someone earning £30,000 a year at an equivalent rate would pay just £1 a year in tax.

Meanwhile, the reaction of the British government to the impasse, was not to support the EU in its noble endeavor, but rather to remain on the sidelines in the hope that the situation would play out to their advantage, thus providing them with a potential opportunity to entice Apple with a ‘sweetheart’ ‘investment’ deal. Meanwhile, as Alex Callinicos  pointed out “Apple is playing the EU and the US off against each other over which gets the taxes it hasn’t been paying.”

It’s precisely the logic that overrides these kinds of shenanigans that explains one of the reasons why wealth inequality continues to rise to stratospheric levels, and why governments are witnessing a backlash against globalization. Over the past 40 years, the productive capacity that capitalism has engendered, allied to the ability of successive governments to transfer assets and capital from the public to the private sphere, has created an enormous concentration of wealth at the very top of society.

Britain is a country where armies of lawyers and accountants sift through mountains of legal paper work in order to justify on a legal basis those at the very top paying as little tax as possible. This has happened as a result of the restructuring of rules and regulations which provide corporations with legal loopholes with which to jump through.

In the case of Apple, profits are funneled into a ‘stateless company’ with a head office which, according to EU Commissioner, Margrethe Vestager, “has no employees, premises or real activities.” In other words, Apple’s resident European office for tax purposes doesn’t exist. It has no staff and no location so it doesn’t pay any tax on most of the money it earns outside the United States.

Ireland has been told that it must claw back the £11 bn of back taxes from Apple even though Ireland’s ruling politicians say they don’t want it. This is money which could be spent for the benefit of an electorate who these politicians supposedly represent. Irish finance minister Michael Noonan intimated that individual states, not the EU, are responsible for individual taxation policies. “It’s an approach through the back door to try to influence tax policy through competition law.”, he said.

But what use is a tax policy if it is not intended to benefit human kind? If tax havens like Ireland behave in a way that negatively affects the well being of humans by reducing the resources available to fund services and infrastructure of which the functioning of civil society depends, then such a tax policy is not worth the paper it is written on. Does Ireland look like a country that doesn’t need £11 bn?

Apple’s billions worth of profits generated in Europe and the Middle East are transferred to Ireland where the company pays tax on just 50m euros worth. The rest is sent to their non-existent ‘virtual’ head office. As of 2015, the company’s lightly-taxed foreign cash off-shore mountain of $187bn is the biggest of any U.S multinational.

 

How can Apple defend this state of affairs whilst simultaneously maintaining the moral high ground by claiming that any attempt to prevent such an immoral situation will be bad for the societies in which they operate?

The activities of a virtually non-existent tax-paying company like Apple is already bad for these societies. The reason the masses, as opposed to companies like Apple, are subject to tax at a fixed rate, is because the former, unlike the latter, are not in the financial position to be able to avoid it. Those who are least able to pay taxes are the ones who have it deducted from their wages in full at source.

It’s not the overreaching arm of the EU ‘interfering’ with the tax laws of individual member states that’s the problem, but the fact that multinationals pit one country against another to avoid paying as much tax as possible while availing themselves of everything the rest of us pay for. The ‘race to the bottom’ is one in which corporations are constantly on the look-out to ‘up-sticks’ in the search for ever cheaper tax havens.

The end goal is a scenario in which the corporations pay no tax at all, while the masses pay for civil society because corporations like Apple, Google and Starbucks don’t have to. The upward spiral of money from the many to the few is increasing at a rate of knots due to a form of state-managed capitalism that perpetuates it. Moreover, it is happening to the detriment of the whole of the human race.

Widespread public anger towards this kind of systemic corruption is stymied daily as a result of the distractions associated with TV light entertainment and sports programmes. All this is aided by a largely uncritical corporate-based journalism. The ability of the rich and powerful to lobby governments in support of their own economic narrow interests, often to the detriment of the environment and society at large, exacerbates the problem.

Shortly before becoming the UKs unelected PM, Theresa May, intimated that the Tory government she would go on to lead would instigate greater transparency between government and big business and that she would no longer tolerate the undue influence of corporate power on domestic UK politics and the corruption through the power of lobbying that this implies. However, less than two months later, the Guardian revealed that a £3,150 payment to the government will buy business executives strategic marketplace influence.

The privileging of a tiny minority of the wealthy and corporations in this way, can be regarded as nothing less than the usurping of democracy. The mass of the working poor whose exploited labour creates the wealth from which the rich benefit and who often vote for corporate-funded politicians diametrically opposed to their own interests, is indicative of the propaganda power of a corporate and media-dominated political and economic system.

With a corporate tax rate levied at just 12.5 per cent, Ireland is effectively prostituting itself to Apple who can legally say that legally they are doing nothing legally wrong. The conventional argument goes that if Ireland failed to attract corporations like Apple, then it would be places like Belize, Bahamas or any of the British tax avoidance dependencies who would. But this zero-sum game means that while this situation is great for the CEOs of the corporations and their shareholders, it’s terrible for everybody else.

Because of the unfair competitive advantage the multinationals are able to lever, shops close, factories shut down and local businesses go under. Companies like Apple not only have governments on their side and can buy and manufacture on a vast scale, but they are not subject to the relatively higher rates of tax small businesses are forced to pay.

This situation is compounded by the fact that the typical consumer will tend to look for the cheapest goods and services available which, as a result of economies of scale, the big corporations will be most likely to provide. In such an eventuality, the role that corporations play in society becomes more prevalent at the expense of the small business.

The logical corollary to this is that eventually everything will be sold by a few giant multinational corporations who will come to dominate the marketplace resulting in less choice for the consumer, as well as its monopolization by private capital. This process was predicted by Marx who understood that capitalism was an inherently contradictory system.

In order to gain a competitive advantage over their rivals, capitalists either need to introduce mechanization to speed up the production process, reduce wages or replace their existing workforce with a cheaper one. Here’s where the contradiction comes in: If all capitalists are engaged in this process, their workers will have less and less money so they won’t be able to buy what the capitalists are producing to sell.

The capitalists, therefore, are effectively ‘creating their own gravediggers’ as a consequence of there being less demand in the economy. How has the system managed to have kept going when people don’t have money to buy things? The answer is the emergence and widespread availability of credit. However, the problems of capitalism are now so severe, so systemic, so global, that many people are wondering whether the system is coming to an end.

The EU referendum: the case for ‘staying in’

By Daniel Margrain

David Cameron’s (failed) attempts at diplomatic arm twisting of European leaders’ was made with a view to appeasing right wing Europhobe factions in order to strengthen the pro-EU position within his party and, by extension, satisfy others outside such as the Henry Jackson Society who lobby it. Any EU concessions offered to Cameron on economic or social policy in return for continued EU membership would undermine whatever vestiges of power the EU has in terms of protecting ordinary people from the rapaciousness of corporations.

Also, in terms of immigration policy, any concessions to Cameron by the other EU member states would play into the hands of neoconservatives and other far right figures like Douglas Murray, associate director of the Henry Jackson Society and the openly racist Stephen Yaxley-Lennon (aka Tommy Robinson), co-founder and former spokesman and leader of the fascist English Defence League (EDL). These figures, and similar within mainstream media circles like Melanie Phillips and Nick Cohen, deliberately conflate immigration with Islamist terrorism in order to pander to the prejudices among aspects of the electorate which Cameron responds to in kind. The implications, we are told, are clear: for as long as the country is part of the EU, “the swamping” of the indigenous British population by alien migrants from the other EU countries cannot be halted.

Unfortunately, this is the neoliberal context that is the dominant narrative shaping the British EU membership referendum campaign terrain. Politically, this is being marked out by the right wing eurosceptic Tories and by their outriders in the UK Independence Party (UKIP). The British electorate has been told in increasingly strident terms that British “national sovereignty” is at stake without informing them what the alternative to national sovereignty could potentially entail.

Everything that has been positive about the EU over the years appears to be in retreat while everything negative seems to be accelerating. Already the EU has ceded a great deal to corporations at the expense of people and this is a process that seems to be ongoing. It’s simply wrong and immoral, for example, that subsidies for the richest landowners in Europe continue to increase apace. It’s also wrong and immoral for the EU to have attempted to negotiate with the United States in secret the Transatlantic Trade and Investment Partnership (TTIP) which effectively represents the undemocratic transfer of power from parliaments to corporations.

Another unwelcome consequence of the direction the EU is moving in, is the way the most powerful countries within it, most notably Germany, have used their economic leverage to weaken the democratic will of the less powerful such as Greece and Portugal. There are many more compelling reasons – including environmental and ecological ones – that can be justifiably argued as to why Britain should pull out of the EU.and why it is not functioning in the way that many on the left think it should. But are these arguments sufficient enough reason for the UK to abandon the project altogether?

Campaigning for the broadest possible opposition to neoliberal EU austerity policies as well as a different, socialist Europe, seem to me to be perfectly compatible with voting in favour of continued EU membership. As John Palmer argued:

“Socialists will want to use the debate about Britain and the European Union to build the widest possible campaign to force a break with the prevailing austerity policies of the euro-area powers. They will want to defend parties on the left—such as Syriza in Greece and possibly Podemos in Spain later this year—from further strong-arm policies designed to undermine their democratic credentials. If the socialists, including Syriza and Podemos are to succeed in radically changing the direction of European Union policy, the left will need to develop much more integrated, supranational forms of political organisation at the European level. This will require profound changes to the almost exclusively national framework in which such parties have traditionally thought and acted. Big capital, for its part, ­certainly understands this.”

For the tide to shift in favour of a different kind of Europe requires a corresponding shift in the relations of political power throughout the countries of Europe that are sympathetic to the ideals of Podemos and Corbynism, both of which are gaining traction in Spain and Britain respectively. This will, in practical terms, mean that the left will have to win arguments on key issues such as the protection of EU social legislation and human rights. This is most likely to be achieved as the result of an organized Europe-wide movement in favour of the kind of workers’ rights and protections’ that the neoconservatives want to opt out of. There can be no doubt that if Britain leaves the EU many European regulations restricting working hours and other employment and social reforms will be scrapped.

The left will also have to argue against the attempts of the anti-EU right to roll back the powers of both the EU Court of Justice (ECJ) and—more urgently—of the European Court of Human Rights (ECHR). The Tory establishment has objected to some of the humane rulings of the ECHR that, in particular, includes the protection of the human rights of immigrants at risk of being deported by the UK. The ECHR is itself outside the remit of the European Union. But the ECJ is bound by the overarching decisions of the ECHR when ruling on matters of specifically EU law. The Tories want a “British” convention on human rights to replace the European convention which if achieved, would further seriously undermine civil liberties and human rights in Britain.

Much of the Tory austerity drive has to do with the systemic and structural limitations associated with state power at the national level. The dual concepts of national sovereignty and the “pooling of sovereignty” are incongruous. The latter implies greater European integration and federalization which is the visionary concept of the EU envisaged by the former president of the European Commission, Jacques Delors. This is no bad thing. Pooling sovereignty that benefits a greater number of people than would otherwise be the case represents a move in the right direction. It seems to me that we need greater European integration, not less.

But this point of view is saddled by the argument – no matter how unfounded it is – that the case for greater European integration is undermined by the lackluster performance of the Euro. In truth, the national schadenfruede that exemplified the British government’s reaction to the problems associated with a currency union viz a vie the Euro was a red-herring. The problem is not currency union, but the lack of any fiscal union. The one is not feasible without the other. The economic argument for the alleged failure of the EU as an economic project, therefore, can not be made on the basis of the relative weakness of the Euro, but rather on the lack of any implementation of a fiscal union.

Despite it’s many faults, I principally view the European Union as an historically progressive project that can, through effective political organization within the EU, be re-orientated to benefit the many as opposed to the few. Any political derailment of the unification and integration process would likely lead to the ‘Balkanization’ of Europe. This would increase the risks to humanity in terms of conflict and war in the nuclear age which is arguably greater now than during any other epoch in history. On balance, the only rational and principled way for progressives on the left to vote in the forthcoming referendum is Yes to stay in.

 

The Benefit Sponging Elite

Last night another row erupted after it emerged that hedge funds rushed to gamble on RBS shares falling in value after government plans to start selling its stake were leaked last week. (file image)

I was in my local cafe earlier today and nearly choked on my bacon sandwich at the sheer audacity of the banksters. I happened to glance over at the adjacent table at the copy of the Daily Mail somebody had left open. I generally detest this rag, but have to admit that every now and then it does come up with the occasional nugget.

The paper does appear of late to be on a mission to undermine Osborne and the Tories. As I alluded to in post on August 4, it was clear that the Tory Aristocrat had garnered some insider knowledge prior to the part sell off of RBS thus providing the opportunity for his mates in the City to, once again, pillage the public purse- this time to the tune of a cool £1bn (1).

This was money which no doubt could have been better spent on bailing out a non-taxable status charitable organisation like, for example, Kids Company run by Camila Batman (and robber?) ghelidjh. Maybe an extra billion added to the £3 million Cameron nodded through to the bankrupt charity would have saved it?

But anyway back to the latest banking scandal. With her insider knowledge and connections as a former City banker, it’s highly conceivable that Treasury minister, Harriet Baldwin. who defended the sell-off, would have advised Osborne on the matter.

The Daily Mail’s Banking Correspondent, James Salmon, revealed that hedge funds rushed to gamble on RBS – a ploy known in the market as ‘shorting’ – “may have generated profits of more than £10 million, This is because the bank’s share price fell in the days before the government sell-off.” (2).

Labour MP John Mann, a member of the Treasury select committee, said: “Yet again hedge funds and bankers are making money and the public are losing out.” (3). A few days ago former City trader, Tom Hayes,was given a 14 year sentence for his role in rigging the Libor interest rate. (4). But he is merely the sacrificial lamb for a much wider and systematic corruption that begins at the very top. The fact that these kinds of abuses are allowed to continue in the context in which people struggling on benefits are jailed for stealing food (5), is the scandal of our time.

The former Republican analyst Mike Lofgren, disgusted with what his party had become, said the following about the economic elite in the United States:

“The rich disconnect themselves from the civic life of the nation and from any concern about its well being except as a place to extract loot. Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it ” (6).

He might as well of been talking about the UK, which is basically little more than the 51st state. Osborne and Cameron identify more readily with a transnational elite than with the other people of this nation. The proof is in the pudding. On behalf of this elite, the government gives away a staggering £93bn a year in corporate welfare – a sum bigger than the deficit.(7). It champions the Transatlantic Trade and Investment Partnership; a graver threat to the interests of this nation than Islamic extremism.

And yet there is a iron-cast consensus between the Tories and the Labour hierarchy in terms of their unwillingness to tackle the problem. This explains why the latter distance themselves from the populist Jeremy Corbyn who wants to put and end to this kind of revolving door political cronyism.

The real benefit spongers are not those who feature on low brow documentary programmes, but rather they are the elites who occupy the corridors of the plush buildings within the City of London.