0 A bad investment culture just got worse.

• Economy
• by Adrian Mark Dore
• 17-10-2023

Our current investment culture is dysfunctional. It no longer serves the majority's needs. Yet it has taken a turn for the worse with a huge increase in Private Equity investment. A bad situation has just got worse.  First, let’s turn our attention to our current dysfunctional investment culture to see just how bad it is before considering how Private Equity (more appropriately referred to as Pirate Equity) has worsened the situation.  Most of us understand the term ”invest” to mean, among other things, a commitment to the long haul. We invest time, money or both in our education and careers because we know that, over time, the rewards justify the investment. Therefore, it might be strange to learn that we need to call on the “investors” in our economy to return to the basics of investing. For them to understand the businesses they are investing in, to believe in them, and to invest over the long haul, sticking with them through good and bad times. To stop treating shares as commodities, which does not serve the economy well. Today, shares are nothing more than commodities, where the name of the game is to “buy and sell” and make as much profit from these transactions as possible. They are not investors, as an investment requires thought, understanding, and a willingness to persevere through thick and thin in pursuit of long-term objectives. Trading is about buying low, selling high, and doing it as often as possible. To this end, stockbrokers have developed sophisticated algorithms and have super-fast computers to do the trades for them based on share trading trends. It has nothing to do with the principles of investment whatsoever.  Just think what a screw-up this is, where the fundamentals of investment are not followed and where the so-called “owners” of business are no more than transient holders of share certificates, interested only in short-term profits and dividends. A system which couldn’t care less about the long-term prospects of the business and its stakeholders, most of whom have substantially more “invested” in the business than its share certificate holders. This system serves a small, elite group of investors and their stockbrokers. The whole system is a complete screw-up unless you are an investor or stockbroker playing the system. For the rest of us and the economy itself, it's a screw-up.  Let's face it - despite the illusion created by stockbrokers, where you see offices filled with rows of computers and brightly coloured charts and graphs adorned across their screens, there is very little “investment” going on. All this paraphernalia and their systems are there to support trading, nothing else. They have software using super-fast computers which trade with other computers using sophisticated algorithms based on trading data. They transact billions in minutes without human intervention. The system analyses trading data and predicts future prices. Based on this alone, the system decides to buy or sell. None of the decisions are based on any understanding of the business's underlying ability to create long-term value, the most fundamental investment criteria of all. It's about trading, not investing. Shares are a commodity which they trade in. It's about making small percentage gains on massive transactions; nothing to do with investment. Trading, rather than investing, does not help grow the economy; it hinders it. The two major reasons for this are trading creates market instability and ensures there is no long-term commitment, or drive, by shareholders for the prosperity of their investment. Trading represents an easy and relatively safe profit venture. On the other hand, investment involves long-term commitment and risk, as the future is always uncertain. However, it generally provides far greater long-term rewards. Effort and commitment are eventually rewarded like most other endeavours. Trading represents “take what you can now, don't worry about the future” and Investment means “commitment and hard work to grow something worthwhile.”  The investment community has a vested interest in maintaining their short-term, manipulative trading practices rather than pursuing long-term growth. Financial capital traded freely in an open market is highly volatile, moving quickly and frequently to achieve the best returns. Fortunes are made through only minor shifts in share prices, which traders continually seek or create. Rumours, quarterly results, trading announcements, dividend announcements, and other minor market activities are all short-term, insignificant events when compared to the business's long-term prospects. These market “blips” allow brokers to profit and ownership to change like the wind. These minor market activities have little or no influence on true investors, who are in it for the long haul.  We need to go back to basics, where business owners become owners in the true sense. Where they believe in and are committed to its long-term future and are prepared to stick with it when things get tough, and not transient holders of share certificates who can divest themselves in the blink of an eye. True owners take great care and responsibility for the well-being of the many facets of their business’s long-term prospects, not just its financial well-being.  However, in the absence of long-term owners, share certificate holders have shifted their responsibilities onto “proxy owners” - professional managers. Unfortunately, these proxy owners don’t have the long-term interests of the business at heart (just as their owners don't because they are also on short-term tenure.) Their objective is to optimise short-term profits and maximise dividend payouts, as this is what their transient owners want, and reward them for. The consequences are managers denude the business of its underlying value to generate profit. It's easy to make a profit while stripping value from other stakeholders. Most people will be unaware that managers are “robbing Peter to pay Paul.” If they are, or suspect, managers of it, it doesn’t concern them as they aren’t interested in the long-term either.  The short-term tenure of share certificate owners and proxy owners encourages the reckless disregard for business’s other primary capitals in favour of financial capital. Predatory proxy owners are driven to extremes through absurd remuneration packages paid to them by transient owners hellbent on short-term financial results as well. All this does is seriously impair the business’s longevity, which owners can divest from at the drop of a hat, leaving others to carry the can.  This is the sad state of affairs we find ourselves in, but to top it all, in steps another more devious predator – Private Equity.  Over the past two decades, we have witnessed a big growth in Private Equity. Why is this? Greed. The rich aren’t satisfied; they want even more. Private Equity provides the opportunity that traditional investing channels cannot.  The key features which Private Equity offers are they face fewer regulations and are far less transparent. This allows them to increase trading risks and trade in the shadows, producing better returns. They leverage businesses but ensure their exposure is limited through careful financial engineering.  Private Equity has exacerbated an already poor investment culture and made it much worse. They have grown by being more predatory than proxy owners and their transient owners, who are positive angels in comparison. They are ruthless in their pursuit of improved financial results, protected by fewer regulations and a lack of transparency. They ruthlessly pursue short-term practices such as: - Job losses Reduced employee benefits Asset stripping Reduced investments Excessive debt burden Their predatory practices conducted from the shadows justifiably earn them the title PIRATE EQUITY.  To remedy our dysfunctional investment culture, we need to slow the rate at which money flows. To make shareholders act like true owners taking care of all facets of running their business over the long term. No easy out after having stripped other stakeholder value from the business.  To ensure this happens, we need an integrated measurement and management system, which will provide them with an accurate overview of the entire business and its prospects (i.e. the ability to measure and manage the value creation potential of all four primary capitals, not just financial capital.) You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 The loss of manufacturing hurts you.

• Economy
• by Adrian Mark Dore
• 14-10-2023

Over the past four decades, our economy has lost much of its manufacturing capacity. Manufacturing contributes less than 10% to GDP in the UK, whereas services contribute over 80%. We are told not to worry as services are a good replacement. This is not true. It’s a monstrous lie. It’s like telling somebody, “Don’t worry, I’ve replaced the gold in your safe with rocks. All’s fine.” Yes, it’s fine for the thief who took your gold, but not for you. Losing our manufacturing base is terrible news for the majority. Good news for the wealthy elite. This article explains why.  The rich foster a belief that it’s a natural progression for developed economies to move from being manufacturing-based to service economies. This is not true, despite it happening. It has happened not because it’s a “natural progression” but through deliberate design and deceit.  The design has been to entrench free market policies nationally, then implement them internationally, establishing global free markets (commonly called globalisation.) This enables them to produce anywhere in the world where production costs are low and to sell everywhere at maximum profit, with no limitations or restrictions. This decimates manufacturing in established economies where wages are high. As a result of vastly expanded markets and lower production costs, their profits have soared astronomically. The vast wealth they generate allows them to invest in and rapidly expand the service sector. To a large extent, the service sector comprises rental services (such as financial services.) Its growth is harmful to the majority. The rentier economy is often referred to as the “bloodsucker economy.” It has justifiably earned this name as it extracts wealth from others through no productive output. Simply through the ownership of assets, they extract wealth.  What I’ve described above is called the “Triad of Evil”, comprising free markets, globalisation, and the rentier economy. They are evil as their implementation is harmful to society and the environment. The loss of manufacturing helps them spread this evil. The return of manufacturing will be an important step in stopping the spread of this cancer.  The above introduces you to the broader adverse implications of losing our manufacturing. However, you need to be aware of other equally critical specific issues, such as… We are huge consumers. These products have to be produced somewhere. As we’ve lost our manufacturing base, most have to be imported. Because we import more than we export, we incur a deficit in our balance of payments. More money leaves the country than enters. This has to be funded. A sustained deficit leads to increased borrowings, which leads to increased costs and a lowering of the quality-of-life for the majority, as governments implement spending cuts to reduce expenditure. Higher borrowings also mean lower investor confidence in the economy, which puts the economy in a downward spiral, again, to the detriment of the majority. This wouldn't be such a big problem if services were as easy to export as products, but they are not. According to 2021 UK data, the service sector, which makes up 80% of GDP, only exported 49% of total exports. That means manufacturing which only makes up 10% of GDP, exported 51%. That's over an 8 times better ratio. The manufacturing ratio would be much higher if you remove travel from services figures.  The more we produce locally, the more money remains in the national economy. The more the economy grows, creating more work. Manufacturing jobs have what is called a "multiplier effect." For every manufacturing job created, it creates more jobs in other businesses. Other businesses need to supply them, and in turn, these businesses need to be supplied. This affects businesses from a broad cross-section of the economy. The more technical the job, the higher its multiplier effect. In some cases, it can be as high as 1:13. That means one technical job creates 13 jobs elsewhere in the economy. Service jobs also have a multiplier effect, but it's very small, often 1:.25. That means that four service jobs create only one additional job in the economy. Obviously, the more technical the service job, the higher this ratio, but it's seldom above 1:1. The lowest manufacturing jobs have multiplier effects higher than this.  When manufacturing jobs are created, service jobs spring up to support them. However, manufacturing jobs do not spring up to support service jobs. This shows the fundamental relationship between manufacturing and services. Manufacturing provides the economy with its leading edge and always will. Manufacturing encourages economic activity across a broad front. Services don't. When manufacturing closes, support jobs are lost.  Manufacturing also encourages greater innovation and knowledge development. Most R&D (Research and Development) is invested in manufacturing to gain a competitive edge. If manufacturing is done elsewhere, they take on this responsibility and benefit from the rewards. When you have a thriving manufacturing sector, greater knowledge and experience are built around these industries. This knowledge and experience can be exported (as a service) to other countries. Without this manufacturing, we lose all this knowledge and expertise. We become lazy renters, sitting on our backsides twiddling our thumbs.  All the economic arguments to return manufacturing to our shores are compelling, but of equal or perhaps an even more compelling reason is one of security and self-reliance. When the pandemic struck the UK, we couldn't even provide the most rudimentary PPE (Personal Protective Equipment) or paracetamol. We make virtually nothing in the UK. This security vulnerability, in light of current political events, highlights just how weak and exposed we are, thanks to the greed of a few.  Of course, there is a counterargument to globalisation. The rich say, "you never complained when you got your cheap replica from China." The thing about price is that it's always relative. If we had to pay a slightly higher price at the time, and there was nothing to compare it to, you paid the price. They created this false reality by sourcing from China or elsewhere when there was no need to do so, considering that the obvious long-term, big losers would be society and the environment. So, this argument is null and void.  Let's take a closer look at the service sector. As mentioned earlier, it cannot fill the trade deficit left by a loss in manufacturing. In fact, service exports will decrease shortly because of increased competition from other countries and the growth in AI (Artificial Intelligence.) This will mean poorer exports, a higher balance of payment deficit and borrowings. A balance of payment deficit limits the country's ability to import technologies, enabling it to compete more effectively and leading to slower growth.   Manufacturing lends itself to mechanisation and, therefore, productivity gains, whereas improving service productivity without losing quality is difficult. For example, a waiter may serve five tables well but ten poorly. Productivity is gained at the loss of quality. The same applies to exportable services. Markets require productivity gains with no loss in quality. This is difficult to achieve for services. Consequently, when an economy becomes dominated by the service sector, productivity growth will be low, and the whole economy will slow down.  Remember that the service sector comprises a large rental market (the unproductive economy.) Therefore, a large portion of this sector cannot achieve productivity gains.  When it comes to globalisation, there's a lot wrong with it, which I cover in another article) but bear one thing in mind for now. The ecological and sustainability factor of transporting goods worldwide has never been adequately factored in. If done correctly, it would be totally unviable.   So, to claim it's good for us and a natural progression (in developed economies) to move from a manufacturing to a service-based economy is not wrong; it's a barefaced lie. They paint the picture that manufacturing is a low-level endeavour (dirty, mucky, unsophisticated) better suited to developing countries, not modern, sophisticated countries. Nothing could be further from the truth. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 Who is addressing economic injustice?

• Society
• by Adrian Mark Dore
• 14-10-2023

We are all aware, either explicitly or intuitively, that our economy no longer serves the majority, only the rich. This is a serious problem. Given its seriousness, who’s addressing the problem? You presume some capable and knowledgeable organisations have picked up the baton on our behalf. True, some organisations are tasked with this objective, but are they making any progress, or are they part of a plan to mislead us? Are they helping or delaying our progress towards a more equitable economy?  It all sounds a bit far-fetched and conspiratorial to suggest there’s a plan to mislead us but first consider this.  We all know economic inequality is growing exponentially. The rich are particularly aware of this and of the difficulty of concealing it from the majority. Therefore, what can they do, considering they want nothing to change but don’t want the majority alarmed by their massive wealth increase? They form organisations to “champion greater economic justice.” They point to these organisations and say, “you see, we acknowledge the problem and are investing in making changes.” This, of course, is just a PR programme to mislead people into thinking the rich and influential are concerned and addressing the problem when they are not.   This is how the wealthy tackle obvious problems that can’t be denied or brushed under the carpet. They create organisations with false agendas and publicise them as “working towards a solution” while doing nothing. They used the same approach to hide the fact that the Accounting Model as a business measurement standard is inadequate and inappropriate. (See my article “Economic Apartheid is caused by the Accounting Model” for more details.) They set up numerous organisations tasked with finding a “solution.” These organisations make a pretence of being busy while doing nothing. They hold annual conferences, calling on the rich and powerful to attend while talking nothing but rubbish. It’s similar to the World Economic Forum’s annual Davos meetings, except these organisations focus on their particular subject. Davos sprouts general economic rubbish. It’s all based on the same PR platform of “talking the good talk while doing nothing.”  Returning to economic inequality and the organisations supposedly "fighting for change," I will present you with certain facts and let you judge whether or not they have done anything.  Our economy is run (mainly) following the principles of free markets, based on Milton Friedman's "Shareholder Theory". This states that the sole purpose of business is to create shareholder value. You now know why the rich have everything and the majority struggle.  In 1984 Edward Freeman proposed "Stakeholder Theory." Stakeholder Theory argues that businesses perform better over the long term when they serve all stakeholder needs - providing a balanced approach to development. However, thirty-nine years later, we are no further forward in adopting a more balanced approach than the day Freeman announced his beliefs. This shows the abject level of greed and short-sightedness which exists. When somebody holds the purse strings, they will not let go of them, despite knowing somewhere in the recess of their brain that a fairer and more balanced approach will be better for everybody in the long run.  Some argue that I am wrong and that many businesses have adopted a "Stakeholder" approach. This is entirely incorrect. The only businesses which can afford to adopt a stakeholder approach are privately owned and funded businesses. This is because Shareholder Theory is institutionalised into our economy through our measurement standard. Our business measurement standard is based on financial measures, which place short-term profit creation for shareholders at the core of everything they do. All other measures are ignored because they are not universally comparable. They are valueless. All listed companies and those seeking external investment and credit must produce strong financial results to attract investment and borrowing. To improve their financial results, they rob stakeholder value to attract investors and get the lowest borrowing rates. Therefore, only businesses not seeking external financial support or not already reliant on it can adopt a stakeholder approach. That means very few businesses.   Therefore, if you are going to change from Shareholder to Stakeholder Theory, you will have to replace existing measurement standards with a fully inclusive, balanced, and comparable measurement standard. This will stop businesses from robbing stakeholders to bolster shareholder results, as a complete picture of business performance will be presented and audited. Not a partial and one-sided picture.   With the above understanding in mind, are any organisations "fighting for greater economic equality" calling to replace our inadequate and inappropriate measurement standard. This is the most fundamental issue facing them. These organisations know Shareholder Theory is institutionalised into our economy through our business measures. Therefore, introducing more balanced measures is the only way to address the problem. Measures that look after all stakeholder and shareholder needs, and are universally comparable.   I pointed this out to two of the most prominent "economic equality" groups - "Inclusive Capitalism" and "Conscious Capitalism" some years ago. However, this does not appear on their agendas in a clear and unequivocal way, such as, "We require a complete revamp of our business measurement standard as the most critical step in ensuring a balanced economy." You can only make business more "inclusive" or "conscious" of another stakeholder's needs when you measure and manage them effectively. If any organisation is serious about addressing inequality, they should plough all their efforts and resources into looking for an alternative measurement framework. Unless we change what we measure and manage, nothing changes. If they are not doing this, I can only assume they are not looking for a solution, only pretending to do so. You be the judge.  Where does that leave us? On our own, but at least we are no longer deluded about who is supporting and misleading us. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 The New Face of Economic Corruption

• Economy
• by Adrian Mark Dore
• 13-10-2023

The scope and nature of Economic Corruption has changed and is now the major contributor to our socioeconomic and environmental problems. Yet its role remains cleverly hidden from us. It often masquerades as “good business practice” while many other practices remain unobtrusive and unchallenged. Let's go back and start at the beginning.  In a democracy, the economy is supposed to serve the needs of the majority.  When it consistently fails to do so, favouring a tiny minority instead, we can say that the economy has been corrupted.  Its consistent failure to achieve its objective while consistently serving a tiny minority is proof that it has been corrupted in their favour.  However, they will claim that the economy has served the majority, and that, therefore, the economy has not been corrupted.  Well, that’s an easy matter to settle and one that goes to the nub of the problem.  Who has benefited the most from economic growth over the past four decades? The majority of the rich?  Statistically, it will be difficult for the rich to worm themselves out of this corner. The facts are - the rich have been the beneficiaries of economic growth by a long shot. The majority, on the other hand, are on a slippery slope going backwards fast.  Statistics are one thing; the unease the average person feels about their future is the true measure of their concern. To what degree are they worse off than their forefathers? Considerably. Things are not right, and they are getting progressively worse.  Wages have declined in real terms. Living costs are rising. Job security and employment terms have declined. Government expenditure on support, services, and infrastructure has deteriorated and is now pathetic. Homeownership is a dream when it was a reality in the past. Quality of life for the majority is in free fall. The list of hardships goes on. Clearly, the economy is not working for the majority, but it’s definitely working for the rich.  So, there is no question about it - our economy has been corrupted. Not by the largest stretch of the imagination can anybody claim majority needs have been served over the past four decades, compared with those of the rich. Neither has the environment fared any better. Environmental issues are of little concern in a world focused on serving the interests of a tiny minority. This blind obsession with serving the rich has also created adverse long-term economic conditions.  Hence, the premise of this story is that ECONOMIC CORRUPTION is the major cause of our socioeconomic and environmental problems.  However, before going any further, let’s be clear on the meaning of economic corruption. The current definition is narrowly defined in political and economic discourse as being the misuse of public resources for personal gain by individuals or groups. It typically involves illegal or unethical behaviour. This type of economic corruption is small and inconsequential when compared to the scale and extent of the economic corruption I’m talking about. The new form of economic corruption (while still incorporating the old definition) involves changing the policies, practices, and procedures of all or most economic activities to serve a small segment of society rather than the majority. Majority needs are best served when all primary capitals are served equally (more on this later.) This new form of economic corruption corrupts policies, practices, and procedures to serve only the interest of financial capital (the rich.) This imbalance causes our socioeconomic and environmental problems.  The size and extent of this new economic corruption is breathtaking. It involves the entire economy, where policies, practices and procedures are deliberately changed to serve financial capital rather than the other three primary capitals - namely Human, Natural and Common capital.  Let’s be clear, we are talking about corruption, which is a crime. We acknowledged in my introduction that in a democracy, the economy is supposed to serve the majority and that the majority are best served when all primary capitals are served equally. This is based on empirical observations of natural systems. If three out of four primary contributors in a natural system are poorly served, the system will face major change and possible collapse. Our economy is a prime example of an imbalanced system in crisis facing possible collapse.  Consequently, policies, practices and procedures should be formulated to serve majority needs, not minority interests (i.e., serve all constituents equally.) This ultimately leads to the best long-term outcome for all stakeholders. Implementing or amending policies, practices and procedures intended to serve the needs of the majority by altering them to serve a specific interest group (i.e. corrupting its intended purpose) is a crime. It is as much a crime as me stealing cash from you because that’s the net result - you have suffered a loss. The rich have used their power and influence to distort outcomes in their long-term favour.  While the size and extent of this new economic corruption are breathtaking, the methods, techniques, and practices used to pull off and sustain this level of corruption are on an equivalent scale. Breathtaking.  Some of the corruption we will uncover in this story is not seen as illegal but as “good business practice.” For example, good financial management is seen as good business practice, yet this may be achieved at the expense of other primary capitals such as Human, Natural or Common Capital. We have no idea if this is so because we don’t measure or manage these other capitals. Let’s assume they have abused these capitals to achieve good financial results. Good financial results have covered up the abuse of the other primary capitals. So, good financials on their own are no indication of good business management - they are a front for poor resource management. It encourages and supports poor resource management for the benefit of financial capital (in other words, the rich, as they own the financial capital.)  There are many and varied ways they hide crime in plain sight, which people don’t see as malpractice, and thus don’t challenge. Our inadequate and inappropriate measurement standard is only one example, although an important one. They use every dirty trick and deception to mislead us into believing they are acting in our (majority) interests when they are not.  For their malpractices to thrive and prosper, it’s critically important for them to have a small government. This means less regulation and oversight, which provides greater scope for malpractice to thrive. That’s why the rich call for smaller governments. They do this under the guise that it reduces the need for higher taxes, which (obviously) benefits them, but the big payoff comes through corrupting the system in their favour.  Economic corruption, as we used to know it, as straightforward theft, dates back to time immemorial. Its transition to corrupting policies and practices to serve a tiny minority started evolving five decades ago. Political, social, and economic changes at the time led to its progressive growth, propelling it to new heights, or should that be new lows?  My awareness and thus the start of this story of economic corruption came about when I realised our business measurement standard, which I had been researching, would never be changed, despite it being a primary cause of our socioeconomic and environmental problems. Three decades ago, I started investigating and researching improved business measurement standards as it was apparent (even then) that our measurement standard was inadequate and inappropriate. It favoured financial capital over the other three primary capitals - People, Natural and Common Capital. By failing to account for these other primary capitals, it’s responsible for causing massive financial bias in our economy. It ignores other important primary capitals. Failing to manage all four primary capitals has contributed hugely to our socioeconomic and environmental problems.  The problem was widely known, particularly among accountants. Workable solutions such as the one I proposed were available but ignored.  That’s what confused me all those years ago. Given the seriousness and enormity of the problems and that we had workable solutions, why did we do nothing to implement them?  In my naivety, I thought we would all be keen to implement the solutions we had. How naive and stupid I was. The owners of financial capital (the rich) aren’t interested in what is right for the majority. They are only interested in what’s right for them.  If they applied this type of thinking to one aspect of the economy, surely they would apply it everywhere. And so, I started investigating further to test my hypothesis.  Very quickly, I uncovered the sickening reality. The problems we face are by design. They are a result of them corrupting our systems to work for them rather than the majority.  This left one big burning question - how big was this problem? I carried on digging further. The hole soon became much deeper and wider than I had ever imagined. The analogy I like to draw here is that it’s like a person, unbeknown to them, standing on an old, covered municipal rubbish dump, trying to find where the smell is coming from. The first hole they dig is dirty and smelly. They dig a little further and realise that they are standing on an old, large rubbish dump. The smell and dirt come from every square inch of the dump - just like our economy. Every part of our economy has been corrupted. The loss and damage incurred by society, the environment, and our economy over the past four decades is astronomical. I write about this story of economic corruption, explaining: - What methods they use to corrupt the economy. What parts of the economy are most seriously affected? What policies and practices they use to benefit themselves. How they hide what they are doing from us all. How they mislead people into believing their actions benefit the majority.  How bad these practices are. How we reverse their poor policies and practices and return us to a balanced economic strategy. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

1 Blowing the lid off free market lies.

• Economy
• by Adrian Mark Dore
• 13-10-2023

A cornerstone of free market policies is low tax and small government.  They argue that this provides businesses with greater resources and freedom to trade, ultimately benefiting the majority.  This, of course, is a bare-faced lie, which this article proves.  Statistics don’t back up their lies either, and neither does reality. Who do you think the economy has served over the past four decades – the majority or the rich? The proof is everywhere – the quality of life for the majority is in decline. So much for the wisdom of free market policies.  The low tax small government lie is as stupid as their trickle-down lie, which has now been utterly denounced as a lie. Low tax and small government is soon to follow.  The proof I alluded to is based on our understanding of the four primary capitals, which every business uses to trade successfully.  One of these primary capitals is common capital – but you’ve never heard of it.  You’ve probably heard of financial, human, and even natural capital; the other three primary capitals business depends upon. So, it’s weird that you’ve never heard of common capital, the other primary capital?  Perhaps it's not that weird when you think that one of the other three capitals – natural capital was only recently entered into the business lexicon. It was only reluctantly acknowledged when environmental issues and concerns about sustainability raised their head. Otherwise, businesses would have ignored it as well.  Businesses would have ignored human capital if its role in business was not so blindingly obvious.  You see, businesses are only interested in financial capital. Reluctantly, they have had to acknowledge there are other equally, if not more important, capitals (or resources) involved in business.  That does not mean they have formally acknowledged their existence by including them in an integrated measurement standard (based on the principles of the value creation causal model.) Until then, they only pay lip service to the existence of other primary capitals.  They deliberately exclude them from measurement and thus management because their only interest is financial capital (the resource they own.) Measuring and managing the other resources would entail a fair and equal distribution of value amongst all capitals, which is out of the question for them. They want it all.  They deliberately hide or mislead us on important matters. They have kept very quiet about the role of common capital because it blows the lid off the idea that small government and low taxes are important to business success – a cornerstone of the free market (neoliberal) bullshit we have been fed for years.  So, what is common capital? As already mentioned, there are four primary capitals used in business. Two are internal capitals (financial and human), and two are external (natural and common.) Some people claim there are more than four primary capitals, but that’s untrue. There are sub-categories to the four primary capitals, and the combination of two or more primary capitals leads to the formation of other capitals, but subdivision and combination don’t create primary capitals. There are only four primary capitals.  Common capital is the investment in the things that facilitate the effective and smooth functioning of business, which leads to strong and buoyant markets. They are investments made by, or supported by governments, which we all share, hence the name “common capital.”  The size of a country's common capital investment distinguishes it either as an advanced or emerging economy. Advanced economies have large, well-developed common capital. It’s easier to trade in these economies, and their populations are generally more educated, affluent, and stable because of their investment in common capital.  Let’s now look at what common capital includes (this is only meant as a cursory list to give an indication of its scope): -  Infrastructure             Road, rail, harbours, airports             Power – electricity, gas             Water             Communications, distribution Education             Preschool to higher education             Technical and academic Security             Judiciary             Policing             Defence Borders Democratic principles upheld. Social Support             Unemployment benefits             Care Community services Health             Availability and affordability Housing             Availability and affordability Social housing Employment             Workers’ rights/protection             Minimum wage             Standards             Availability             Manufacturing base Research & Development             Support             Business Development Regulation, Oversight and Control             Business practices             Effective tax controls.             Every business benefits from trading in economies with high common capital investment. The average person has a high quality of life and a secure decent income. They are educated and healthy, living in a society which provides adequate social safety nets. The infrastructure and other support services allow business to be conducted securely and seamlessly in a strong, buoyant economy.  We all benefit from common capital investment, although it is seldom given a single thought. It’s something in the background, out of sight, yet constantly used (and abused.)  This requires big government and high taxes. Reduce either, and you move the country closer to an emerging economy where businesses and people find life more difficult.  This just shows the shortsightedness of free market (neoliberal) policies. They advocate reducing taxes and government size, which directly undermines our common capital. But they don’t care because they are not interested in anything other than financial capital. This just shows the rank stupidity of free market policies.  They hide the importance of primary capitals in business, focusing only on financial capital, thus making the long-term achievement of prosperity for all an unattainable dream.  What I’ve said above doesn’t even take into account that free market policies don’t grow our productive economy but rather shrink it, leading to the growth of the Rentier Economy and Globalisation. These are two seriously harmful developments and justifiably classified with free markets as THE TRIAD OF EVIL. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/