THE SATURDAY ESSAY: The sovereign shareholder vs citizen contentment

Although LloydsTSB were mainly in the news yesterday for yet another of those glitches that seem so common these days, I was sampling some of their online ‘service’ while it was going on. There were glitches galore, but none of them were technical. The main problem was that the service was poor per se, and the people on the ‘Help’ lines were robotic to an almost worrying degree.

The automation of customer ‘service’ remains one of the great cons of the 21st century, but because the British people are so averse to activism in any shape or form, the risible level of online supplier responsibility continues…no doubt to the sound of raucous laughter in their boardrooms. Such behaviour also gets a big thumbs-up in the City, where knee-jerk neocons quote increases in productivity, falling costs, rising profits and happy shareholders as the reason why doing this makes sense.

It only makes any economic sense in a culture where most customers are so supine, some of these bandits could get away with anything; and the “whatever” culture we have right now in the UK is close to that level of indifference. But in a social sense, the cutting of jobs to make higher profits makes no sense at all. Today I want to try and explain why I think this – without leanings towards either Left or Right.

If you cut bureaucracy costs in the government/public sector of an economy, our experience to date shows that quite a large percentage of those laid off find work very quickly – and (if the economy is in reasonable health) they will almost all be absorbed into the private sector in due course. But we’re not talking about that – either in the UK or the US. Indeed, neither nation has done anywhere near enough to slim down some ridiculous levels of over-staffing in the public sector. What we are faced with today is neocon private sector economics using the spurious ‘efficiency’ argument to justify an approach likely to backfire on every level. To take the process stage by stage, using service automation as the example:

* Making service increasingly remote also increases the corporate temptation to display less customer responsibility, and has within it the potential to keep quietly and gradually over time making the service more and more skeletal in its nature.

* Automation of private sector service means jobs are lost that will never be replaced. They will never be replaced because the mercantile globalist model insists on non-stop cut-throat competition. These are lost jobs, period: and those laid off as a result of it will, in the end, lose hope – as Ben Bernanke has already articulated, despite President Obama’s disgraceful attempts to hide that reality.

* Lost hope has three results: increased welfare costs, increased policing costs, and community/familial breakdown. One can, in fact, interrelate all three factors by using the words dependency, alienation and innate criminality. Other unhappy byproducts include falling property values and rising extremism.

* As the cost of welfare and policing rises, so too do taxes. As taxpayers balk at this, police and welfare levels are cut. Not only does the social degeneration therefore increase, consumers paying higher taxes on less disposable income are less and less able to kick-start an economy in trouble. So QE is required to do that for them.

* It is at this point in the process that the Romneys of this world rail behind closed doors against the idle poor, while at the same time demanding more tax cuts to restart the economy. Convinced that they’re paying more and more for less and less, high earners turn to aggressive tax-avoidance schemes. Then when they run for President to keep this insane vortex turning, they try to hide how much they have stashed away, out of the reach of government.

* QE will, in the end, at first compromise and then destroy the currency’s value. Another vortex now swirls into view, in which rising raw material costs increase the price of added value exports, while increasing the cost of imported and home-made goods to the consumer, who therefore has less real disposable spending power, and thus is even less likely to restart growth. So we need more QE – and the killer-twister gets increasingly vicious until, in the end, it can’t be stopped at all….and hyperinflation ensues.

* More and more jobs are lost offshore, more and more draconian welfare and social order laws are created, more and more credit is taken on by the sovereign, producing higher and higher bond yields, and more and more unbelievable annual deficits. But squeezed-middle taxpayers become increasingly likely to vote for neocon snake-oil salesmen.

There is only one way that sort of blood, toil and sweat is going to end up: in tears.

I would be reassured if I felt the factory-standard Keynesians and Socialists in our varietal political elites had the answer, but they don’t: as blinkered in their own ways as the Friedmanite disciples, their ‘solutions’ are guided not by empirical analysis and the changed structure of our economies, but by polemics that should’ve been deemed archaic forty years ago.

I was asked by a long-standing American friend three months ago exactly who I would like to see running for President. Without much hesitation I answered “Elizabeth Warren and Ron Paul”. Not on the same ticket, but against each other. He laughed, obviously thinking the answer a confirmation of arch contrarianism. But to my mind, I’d be happy if either won, for these simple reasons: they are infinitely more concerned with the contentment of the populace, a life of personal responsibility, and the analysis of policy success than they are with the empty rhetoric that always accompanies ‘Party loyalty’.

Above all, they are both scrupulously honest and dedicated to the practical idea of a fair society.

There are several ways to stop the dystopian vortex process I outlined a pew paras ago, but unfortunately they all sit in the ‘difficult to very difficult to do’ spectrum. And as we all know only too well, that place is a stranger to the current crop of pols beneath whom we toil pointlessly. But to Hell with that, because at the very least we need to have some reasonably clear idea of what we’re going to demand of them…as and when things get desperate enough to radicalise every type of responsible citizen.

So taking the most difficult bits first, the underlying reasons why the West can’t get out of its spiral at the moment are as follows:

1. Monetarist global mercantilism is seen as the only game in town, and there is no powerful (or socio-commercially relevant) opposing view being put.

2. The idea of diversifying the means of financing capitalism away from near-total bourse dependence isn’t on anyone’s radar screen, and is too complex an issue for most voters to understand.

3. Sovereign government is busy selling out to the banking/multinational maniacs, because it lacks both the balls and the money to rebuff them.

And most crucial of all:

4. Everything that used to happen is seen as incapable of adaptation. Yet everything going on now is presented as the only possible alternative. But nobody has any creative ideas at all about how we can take the best of the past, reject the worst of now, and adapt to a future where nothing will be as it was. (I’m not being patronising, but you may well need to examine this summary of the adaptation/rejection/invention construct carefully and slowly. It took me five years to get to it, so I don’t expect everyone else to catch on immediately).

Let me give you a simple example of the last points there at 4. above. Any ideas about self-sufficiency for a sovereign or local community will be ‘framed’ by neocons in boo-terms such as siege-economy, open-toed sandals, retards, radical Greenpeace, and Piscean-dreamer bollocks. Whereas in reality, the idea adapts the agrarian economy to reduce import costs, rejects the idea of production-volume global price competition, and thus invents a new construct in which trade is important, but not deadly – or indeed highly likely to start World War III. (It would also, I might add, get a shedload of otherwise idle labour back on the land and out of the urban sprawl).

In the more immediate term – and some of these may sound longer term blue-sky stuff, but they needn’t be if we start a serious debate rather than getting bogged down in the ‘news’ headlines – here are some practical suggestions for the UK:

5. Stop immigration dead, right now – today, without exceptions. Tough and unfair, but vitally important. Withdraw from the EU entirely.

6. Slash Whitehall and local government headcount by 50% at least. Put a time limit of three months on its achievement.

7. Devise a headcount-to-profit formula for all banks and multinational businesses based in the UK. Lay out a level of personal (remote) service for any large organisation dealing with the public. Make it illegal to offer any mainstream internet service without clearly giving the option of talking to a human voice by phone or skype.

8. Do a ‘Domesday Book’ on every available square metre of land in the UK viable for dairy, wheat or vegetable farming, and bar any access to it for property developers.

9. Mutualise the NHS, and remove its management entirely from central or local government.

10. Offer massive tax breaks to any company of any size that trains a formerly unemployed person and invests in new plant and/or new product development.

11. Exempt every SME from local taxes.

12. Cut off any and all contact between monied interests, the police, and politics. Fund all political Parties through the State: this last I know sticks in every craw, but if you don’t want more of the same vile corruption forever, it has to be faced.

13. Make obliteration of Britain’s trade gap the sole focus of economic policy until such time as the country is earning a net living in real time.

*   *   *   *   *   *   *

Three interrelated considerations apply to all of these thirteen changes in policy direction: self-sufficiency, cutting unproductive costs, and withdrawal from global volume trade. For an island of our size that has foolishly cut itself off from Commonwealth goodwill over the last 42 years,  they all represent what The Slog continues to call Radical Realism – in the absence of a better encapsulation.

I spent 35 years advising and guiding on marketing and brand communications. For anyone with even a third of that experience, it is obvious what the product brand ‘Britain’ needs to do: create an export niche for itself, and employ its spare population capacity on doing things at the moment done by those not of these islands. The exact remedy for the US is different in scale, but the same in essence.

What both countries suffer from is a tendency in recent years to believe in the smoke and mirrors of accountancy and finance, and the impracticality of cutting government-sponsored employment.

My answer to neocon and socialist critics of radical reappraisal is this: never, ever let blind belief override the need for real relief. Don’t let the ramblings of Marx convince you that nationalisation is good; and don’t let the largely untried theories of Friedman persuade you that wealth will trickle down. Instead, go off somewhere quiet and the results of seventy years of social anthropological study.

Our goal should not be the love of a convenient human trading invention called money, nor indeed the chimera of equality. The name of the game for sane human beings has to be the contentment of our species – alongside the survival of those familial, social, and planetary dictates that can enable such contentment.

 

 

39 thoughts on “THE SATURDAY ESSAY: The sovereign shareholder vs citizen contentment

  1. Agreed totally John.

    My question is: How on earth are we going to shift the people whose interest is currently served by maintaining the status quo? Common sense tells me that if they won’t go voluntarily they will be turfed out violently, and even this old soldier shies from the consequences of that…

  2. Can I add a 14th point:?
    A mechanism for the population to veto our representatives mid term.
    Whether the Swiss model, or something wildly different (rioting aside), I care not.

    A party could easily come along, say they will fulfil all your other 13 points, get elected, and deliver a half-assed version of one of their pledges, and claim on reviewing the others they are now unobtainable, and do the opposite.

    • Excellent point!

      Real Democracy only works in small communities – the Swiss model of many small communities is an excellent start.

  3. Wow,what a plan,creating a New Great Britian. Just in its audacity, my hat is off to you J.W. Much food for thought in your plan and I hope it leads to MUCH COMMENT.

  4. The very idea of self sufficiency has been progressively jettisoned by successive governments for more than 50 years in favour of the illusion of perpetual economic growth. Unrestrained consumerism, the greatest of all opiums for the masses and a magnificent opportunity for those who would control them, has seduced us away from a basic fact of life, so ably encapsulated by Muddy Waters thus: you can’t spend what you ain’t got and you can’t lose what you ain’t never had.

    • Or the modern, but still as old as the hills, more openly polarised and long winded version: they can’t spend what we ain’t got on the back of what we ain’t never going to have.

  5. Kill free trade if free trade is to import unemployment because the cost to produce is far cheaper elsewhere in the world. Putting in place the food and energy supply first then you tackle it so if any other country doesn’t like it tough. You are going to be treated as we are treated.

    A measure of Keynes will be needed but “only to counteract increasing technological efficiency”. If the previous point on free trade is done then it is all it would need to contend with anyway.

    Yep to the halting of immigration, more to nail the population level down and give a stable value that needs to be supported. Born here whoever you are this is your country of birth period and it is your future that is being sold out on a daily basis unless you were born with a silver spoon in your mouth of course.

    Streamlining of all tax, VAT removed so the base level is 0 tax VAT or on income below a threshhold. Not because I think those in such a position should not pay taxes I cannot be bothered with taxing the poorest who then have to be given more to pay the tax back. It is bloody pointless.

    Lets put it this way if it don’t happen the alternative is war or slaves in the end take your pick and the politics is crap that only seeks to divide the population.

    Do not get conned by other political wannabees because they have an ideology they follow that is no bloody different. Fundamentally the world has changed and no political parties ideologies are going to work on their own. Note on this and UKIP preech convincing words but it still wants to be top dog all the same.

    They want your vote to obtain power not to make a population content. Conent means you do not get everything but enough but you got a chance for everything if you put in the effort and hard work.

  6. Not a criticism – would like to know the key differences between this and Carswell/Hannan’s “the Plan” ?

    On some of the points, we would have to bend a little. Stop all immigration today, now would not be possible. (Absent a well run civil service and authoritarian border controls) We would probably have to admit people in the lasr stages of application or on their way here. But current applications – yes – stop these.

    Commitment to have human contact on Skype/phone – well yes – but without regulation that could be easily done by a phone number for Mrs Smith in Lewis – just might take a while to get an answer – so there you need civil servants etc to police the law.

    Stopping development on any green field – I can go with that – it would alos drive an increase in employment for civil engineers, better architects etc to modify and adapt the brown field sites – but again there is the the thorny legal issue of what to do with existing projects and those in the pipeline. And what about essential infrastructure improvements – they may need some greenfield..?

    For me , part of the root of the problem is a lack of social cohesion, founded on lowered education standards, or at least, lowered knowledge of who we are and where we have come from.

  7. John not having a alternative is a advantage,it makes it stand a better chance of success,a quick change of attitude of the populace more likely
    And therefore possibly more peaceful change,won at the ballot box

  8. Can agree with 95% of that……the present lash up is all going to end in tears ……we have to try something different……..if only for the soul!

  9. With call centres…..this is an excellent analogy…….why does bussiness not recognise that they are a complete failure…….
    Largely their purpose is to supplement the inadequacies of the internet however the enquirer is just met with another less efficient robotic version of the internet ‘with attitude’ …….the only way it can perform its purpose is with sufficient numbers of capable authorised people who are able to communicate properly……there are very few that can be categorised thus……
    From this I can only conclude that the corporate world has ceased to accept that providing a service is a necessary part of their bussiness model……
    Why are they so slow / reluctant to react??

  10. You raise some excellent solutions here – implementing them would no doubt kindle a cacophany of objections from different quarters as ever, but that is half of every problem that we have today.
    Universities need to teach students what is actually required in tomorrows world. Foe example UK Energy policy is a disaster, even though we all know that Tidal Energy would solve all of our needs forever.

    • “though we all know that Tidal Energy would solve all of our needs forever.”

      I presume this is supposed to be satirical? I for one did not know that tidal energy could be used to power airplanes – amazing…

      • @ Hysteria
        Pound for pound, hydrogen contains almost three times as much energy as natural gas, and when consumed its only emission is pure, plain water. But unlike oil and gas, hydrogen is not a fuel. It is a way of storing or transporting energy. You have to make it before you can use it — generally by extracting hydrogen from fossil fuels, or by using electricity to split it from water.

      • …implementing them would no doubt kindle a cacophany of objections from different quarters as ever…

  11. The basis of all our financial and social problems is money. Specifically the means by how that money is created. The UK Govt, via the Bank of England only creates 3% of our money, by the issuance of currency in paper and coin, ( QE is a very rare and desperate measure and is a form of welfare for banks).
    The private banking system creates the remaining 97% by issuing loans with interest attached. That mortgage on a house was money created by the bank , and guaranteed by the borrowers deposit repayments. That credit card in your wallet is money created by your guaranteed repayments.
    There is confusion about money. Money is a means of exchange, a token, a tool to enable trade and industry, in itself it is not wealth. It is given its worth, because the Govt accepts it as taxes and enforces, using the powers of the Law.
    Too much money in an economy, drives up the price of assets. Asset price ,rises and money de-values.When asset prices get beyond the point that loans cannot be repaid, we have a financial crisis. This is the point we have now reached.

    The Banking cartel have suborned Govt by the formation of Central Banks, such as the Federal Reserve in the USA and the Bank of England. They have ensured that the creation of credit money is by the private Bank cartel. ( aka; the markets).
    Sovereign Governments, have a sovereign currency. The US Dollar, British Pound, Australian Dollar, Mexican peseta etc. The EU does not have a Sovereign currency, and Euro nations cannot issue their own currency. This is the root cause of the Euro crisis
    A sovereign Govt can issue credit, interest free, to finance its industrial development and generate jobs and wealth . This currency will be cancelled on the return of this money , via corporation and income taxes.The surplus taxes generated are channelled to the social development of the nation, hospitals, schools etc.
    At present Govt borrows its own money from the private banking sector by issuing bonds. The interest payable on these bonds is enormous , estimated £50 billion per year in the UK alone. The bond is a burden of tax on the future earnings of a citizen. It is also a sum that could and should be invested in the infrastructure of a nation, were it not diverted to the banking sector.
    This borrowing is unnecessary as the Sovereign Govt can issue its own debt free credit, ensure full employment and create a surplus to fund their social programmes. As long as a Govt has the ability to claim tax in its own currency it can issue that currency debt free in a controlled manner to Industry for wealth development.
    The private banking system has failed spectacularly. They have run up enormous debts and are now holding nations to ransom to reclaim those debts. They are not concerned about the social chaos created by this blackmail, as we witness the likes of Greece and Spain spiral into poverty, anarchy and chaos.
    There is a solution to our present Financial crisis, but we require politicians with real power to enact these changes.
    The power to create money must be removed from the private banking cartel and reclaimed by an apolitical Treasury panel. Banks must be restricted to 100% reserve banking to prevent these recurring crisis in the economies.
    Unrepayable sovereign debts must be defaulted on. This last was known to the ancient Babylonians and Sumerians 3000 years ago. Under the Code of Hammurabai, Debts that cannot be paid ,will not be paid’

  12. I am a stubborn, contrary, opinionated SOB. Read your article twice and was bitterly disappointed to find nothing that I disagreed with. I will try harder next time and may even resort to nit-picking.

  13. I’d add this:

    Reduce salaries for MPs to something like the salary of an NHS doctor.

    Make a requirement that a young politician (up to age 30) needs minimum 5 years real world job experience to run for office; up to age 40, 10 years; up to age 50, 20 years; age 60, 30 years. This can be consecutive, or in parts of 5 years each.

    Remove any parliamentary immunities from prosecution.

  14. The ONS (Sunday Times) notes that 53% of families receive more in benefits than they pay in taxes, up 10% since 2001 and that 20% of taxpayers contribute the vast majority of funds. Now whilst this is a bit like the Dilbert cartoon with the pointy haired boss being outraged that “40% of all sickies are taken on Mondays and Fridays”, it does highlight another issue. To pay for the state (which in my view is bloated but you should try France) needs the top 20% to drive the economy. There is a huge difference between the top 20% and the top 1%. The continued attack on this group by a rapacious taxman is wholly counterproductive. The latest lunacy is that HMRC are targeting people with over £1M in assets and a foreign bank account – ie a house in London and a euro account for holidays? I’m not suggesting that someone who earns more should not pay more tax, even a higher marginal rate. Someone on £20K a year will pay about £3000 tax and NI, someone on £100K about £36K – ie twice as much proportionately and 12X as much. I would say that someone contributing this amount of money deserves respect not vilification and targeting. I don’t expect things to change and my advice to any young aspiring person these days is to leave the UK and go somewhere where your hard work and efforts are appreciated – and not be seen as one of the “rich” who is able to be soaked to pay for a broken system.

    • At last some reasoned analysis. Will undoubtedly go down like a bucket of cold sick here, but then given people seem to think a siege economy is the way to make people wealthier, thats not surprising.

    • “53% of families receive more in benefits than they pay in taxes”

      Be honest, mate. It said that they receive more in SERVICES (i.e health, education etc.) and benefits (including Working Tax Credits) than they pay in DIRECT taxes i.e not including all the other taxes we pay like VAT. I always knew that in raising the tax threshold this argument would come into play sooner or later. Just as in the end, taking child benefit from the better off will mean they cease to give a shit if it exists at all for others.

      If people were paid a proper wage they wouldn’t be dependent on working tax credits to get by. If rents weren’t so ridiculous and we had a rational approach to housing we wouldn’t have the Landlord Subsidy that is Housing Benefit.

      I don’t know who is vilifying those on £100k. I’m a socialist and I’m not vilifying them – top surgeons earn maybe ten to fifteen times what I do and I say good luck to them! Ditto judges handling extremely complex cases, scientists developing new medicine or engineers building new infrastructure.

      The politicos lack the will to go after the real tax evasion by the multinationals and global elite and so set HMRC on the easy targets. And stories like that in the Times play those easy targets off against the rest of us. It’s a con. It’s a con on them, it’s a con on us.

      • “There is a huge difference between the top 20% and the top 1%.”

        Sorry I didn’t see that the first time. In principle I agree with what you’re saying there. HOWEVER if you are earning £40k a year you are actually in the top 10% of earners in the UK. And the top 1% starts at £150k per year.

        So it is clear that we are all seriously mistaken as to how wealth is distributed in this country. It is a tiny tiny number of people and a relatively small number of (huge) businesses which are fundamentally distorting our economies. I don’t agree that the answer is to move abroad but to stay here, fight for a more equitable distribution and stop allowing ourselves to be played off against each other.

  15. Pingback: Lagarde list: Greek investigation swings into action. | A diary of deception and distortion

  16. Tesco’s stock figures apparently show that the UK population is already 70million. Another statistic I have heard is that there is only two weeks supply of food stockpiled in the country. If the supply of imported food was severely curtailed, what would happen? Would people starve? Yet these things are surely unsustainable in the current economic climate, with our AAA rating teetering on the brink.
    None of our gutless politicians seems to want to address these problems, but I see that the former Archbishop of Canterbury would obviously like them to, from what I read in the Mail today.
    No one will take any notice though, they all hope the problem will go away if we just don’t talk about it, & they have been doing their damndest to make sure we don’t, for the past 40yrs.
    Good article, JW, if you’re forming a party, you’ve got my vote(that’s if I had one, of course).

  17. Hi John,
    Another excellent article on i intend to pass on to my local MP, it might scare the S##T out of him, but that is about all.
    Elizabeth Warren, to be honest i have not heard of her, so i resorted to Google, which led me to UTube. A very ineresting Lady, here is a link well worth the 10 minutes spent listening to it.

    Some good points especially about our balance of payments, but how we are going to balance imports with exports will be a hard act to do, especially if Mo is correct. Or the £ plummetts.Then again we could enforce a rationing system and conscription to a Land Army to help grow and harvest food and maintain the Land. [paid for out of Land Tax @ 1%]

    It might even reduce the population, those with dual nationalities who leave the country to avoid conscription to the Land Army would automaticaly have their British Nationality rescinded [with no right to appeal]

    • “a Land Army to help grow and harvest food and maintain the Land.”

      Do you have any concept of how ludicrous that statement is?

      • No, if we cannot afford to import Foodstuffs, Never mind the oil etc to run our Economy, what do you expect to do with a lot of hungry unemployed people. Plus it would show were your loyalties lie?

      • We had a ‘land army’ during the war. Haven’t you heard of the Land Girls?
        Perhaps you’re too young…….?

      • Of course I know what the Women’s Land Army was during WW2. While I’m not old enough to have experienced it, its a fairly well known part of our history.

        My point was simple: food is not produced (by and large) by labour intensive methods any more, as with most primary and secondary industries, mechanisation has replaced labour, because it is a) infinitely more efficient, and b) a lot easier work. Anyone who has spent a day, let alone a year, physically labouring on a farm will swap a scythe for a combine harvester any time. And said combine harvester will do the work of 100 men in a day.

        So unless you want food to cost many multiples of what it costs now, mechanisation is here to stay. And food production in this country could easily be ramped up quite considerably, with very little new labour requirement, and what would be required would be skilled labour, not the manual kind.

        So the idea of having millions of people ‘working on the land’ is the most ludicrous fantasy, straight out of Chairman Mao’s Cultural Revolution.

  18. John, sir, didn’t the Luddites advance in part an argument similar to yours?

    Also, if we, by some miracle, could build a massive plant, pour into it the half a dozen soft, half a dozen hard commodities that constitute the bulk of what’s needed to produce what’s on offer now, the plant was operated by a dozen or so staff only, it doesn’t necessarily follow that the non employed masses would have to starve, it would be then a question of re-distribution. One has to examine the construct we live in from two angles, one where each of us is a part of a production process, another where we act as consumers. History has shown that in order to satisfy the needs of the latter, competition, cost efficiency, lower labour input costs in the former is the best way to achieve it.

    • Exactly. This whole ‘pulling up the drawbridge’ concept is running contrary to the whole of human civilisation. Its harking back to a rose tinted past that never actually existed. Life in the past was harder than it is today, and the further back you go the worse it was.

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