0 Business regulation and oversight — a fundamental necessity.

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

Proponents of free markets want fewer regulations and oversight, but that’s simply wrong, like so many other things about free market policies.  As a society, we have to accept a general principle that businesses will not act ethically or morally but rather in their own financial interests (unless compelled to by law.) The greater their financial interest, the less ethically and morally they will act. Often, the larger the organisation, the less ethical and moral they are, as they have the resources to hide or defend their actions. Not all organisations can be tarred with the same brush, but generally, they can.  I know many will rail against this statement as it doesn’t paint an attractive picture of business. Yet, there is too much evidence to back this statement up. The most damning evidence is that our universally accepted business measurement standard measures financial outcomes exclusively. We cannot hold businesses accountable for anything other than their financial stewardship, yet they use three other primary capitals apart from financial capital. These three other primary capitals are People, Natural and Common Capital. The mismanagement of these three primary capitals profoundly impacts the majority’s well-being, but they are not measured or managed. Why not? So, businesses can abuse these other capitals to improve financial capital outcomes.  Now that you understand, businesses will (generally) act unethically and immorally unless restrained by regulations because their measurement and management system encourages them to do so. Thus, the importance of regulation and oversight becomes apparent, as well as the reasons why businesses fight desperately to reduce regulations and oversight.  Regulation and oversight are two functions of the control process. Regulations provide the framework by which to assess performance, and oversight is the process of assessing to see if the framework is adhered to. The smaller a government is, the less regulation and oversight it can provide. You need considerable resources to set regulations that encourage economic growth while also protecting our other primary capitals (or resources.) You then need resources to police these regulations. To see if they are working as intended and to recommend appropriate amendments.  The tiny wealthy minority fights to have small governments so we have fewer regulations and oversight so their (financial capital) interests are not harmed. With fewer regulations and oversight, they will continue to feed off the other primary capitals to the majority’s disadvantage.  One by one, let’s dispense with the myths and lies fed to us about the merits of free market policies. Like it’s in our interest to have a small government with fewer regulations and less oversight. We can all see how it benefits the rich minority but not the majority. In a democracy, the economy should serve the majority, not a small minority. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 Economic apartheid. Introduction to our dysfunctional economy.

• Economy
• by Adrian Mark Dore
• 01-06-2023

Summary Over the past four decades, the wealthy 1% have captured the state and replaced our democracy with a plutocracy.  Their control of our economy ensures it serves their needs exclusively. This is Economic apartheid, and it’s practised globally. It is supported and sustained through the Triad of Evil. These are free market policies, globalisation, and the rentier economy.  The world abhorred political apartheid, but little is said or done about abolishing economic apartheid, arguably worse than political apartheid. Indeed, it’s practised on a far greater scale. . . . Free market economics has dictated economic life for the past forty years. I'm sure you've heard the terms "free markets" and "globalisation." No doubt in a positive context, as we've been browbeaten into believing they're an essential part of a modern, thriving economy. However, the concept, including its name - "free market", is misleading. Rather than free our economy, it has trapped us. It has trapped us in a world of increasing economic inequality and insecurity, creating huge social problems. It has led to harmful and unsustainable practices, causing extensive environmental damage. Therefore, a more fitting name for "free market economics" would be "enslavement economics." Enslaving the majority through the practices, procedures, and systems of a few. Another apt name would be "apartheid economics" - an economy serving the needs of a few while excluding the majority. Free markets and globalisation are only the tip of the iceberg. The extent of economic manipulation is vast, adversely affecting every facet of our economy. Through a continuous stream of disinformation, falsehoods, half-truths, obfuscation, and political extortion and manipulation, a small group of vested interests have been able to mislead us into believing what they are doing is in our best interests. Nothing could be further from the truth. They are knowingly inflicting harm in pursuit of self-enrichment, which is malicious. We have reached breaking point where we can continue no longer. We need to change the rules of our economy. We need a new set of rules and systems that serve the many, not the few. Let's be clear, we are not trying to change the immutable laws of nature or physics but man-made laws, practices, procedures, and policies. All introduced over the past forty years to serve this small minority. Economists worldwide agree that inequality (or injustice) is not due to any economic law but to our design. They believe it's a design failure. I disagree. It's not a design failure but one of deliberate design and intention, to serve the wealthy one per cent.  We now estimate that the top one per cent globally own as much wealth as the remaining ninety-nine per cent. With this economic power comes political power. This power and influence does not end with political manipulation - it's pervasive in every respect. They use it to influence regulatory bodies, institutions representing business professions, the media - absolutely every entity which will further their cause or hinder it. They use their power to manipulate outcomes to serve their needs. They couch these manipulations in a manner and language which claims to serve the needs of the majority when it does nothing of the sort. They then try to convince us that alternate solutions are impossible and that doing things differently will inevitably harm us.  This wealthy one per cent banked on no mass involvement because that's the message they have promoted. "These are technical matters beyond the masses' understanding." Like all the things they have told us - that's simply untrue. What I write about is straightforward. I will make things clear to those unsure about what's causing the problems and clear about what to do about it. Our Imbalanced Economy. Our imbalanced economy is the result of over forty years of vested interest developing practices, procedures, policies, and systems to serve their needs, not ours. Their manipulative practices have worked well for them. Economic inequality is growing rapidly and is set to grow even faster in the coming years. Our economy is seriously imbalanced. No imbalanced system can sustain itself for long. It will crash and burn, but such an outcome serves nobody's interests. Avarice has blinded the one per cent, yet some realise it has gone too far. It needs to be brought back under control, where wealth is distributed more evenly, and we protect our environment. This is not somebody else's problem. It's a problem we must address together by speaking out and taking action based on a clear understanding of the problems. It's only through our collective demands that we can bring about change. The catalyst for change will not come from the government, institutions, economists, or businesses and definitely not from the wealthy one per cent. It will only come from those who bear the brunt of economic inequality - the ninety-nine per cent of us. We have the power to change things, but only if we act collectively to influence government action. Hiding the truth by confusing and misleading us. In response to our criticism of unsound practices, vested interests claim that our standard of living has improved, so we shouldn't complain. It's true the average person's standard of living has improved over the past four decades (as most benefit from today's modern products and services,) but our quality of life has not. Neither has our environment fared well. It's not just about improving our standard of living (although important) but also ensuring a high quality of life while protecting the environment. They deliberately confuse standard of living and quality of life, which are two completely different things, to hide reality. So, parts of what they are doing are good at improving our standard of living and coming up with innovative products and services. We don't want to lose this, so we don't want to "throw the baby away with the bathwater." We need to keep what's good and change what's bad. Many of us have felt unease about what's happening around us for a long time. We see great affluence but also poverty and suffering. Life generally is getting tougher for middle and lower-income groups. The environment is also paying a high price for our greed. Something is wrong, but what precisely? Most blame Capitalism for these problems, but it's a popular myth that vested interests want to maintain and promote, as it's a smokescreen hiding the real cause of our problems. Capitalism is an ideology; it's not a law, practice, procedure, or system which is propping up our current, unfair, and broken economic system. It's these unfair laws, practices, procedures, and systems introduced by vested interests over decades, which we need to dismantle, not Capitalism. Capitalism is an ideology. As with any ideology, it's difficult to identify problems precisely as it represents ideas, not practices, procedures or systems. These practices, procedures, and systems we use every day are at the heart of our problems, not vague ideas, or principles. Vested interests want people to waste their time chasing vague ideas because it's difficult to introduce meaningful change by accusing an ideology of our problems. However, if we identify genuine bad practices, procedures or systems and change them - that will bring about a meaningful change. They don't want their bad practices found out. They don't want the systems they have developed over decades, which intentionally manipulate the economy to serve their needs, uncovered. However, that's precisely what I do in my articles; peel back all the misleading information spread to confuse us, revealing the truth about our economy. Capitalism embodies the principles of free enterprise, which is the most effective way of improving our standard of living and quality of life. Free enterprise is not the principle responsible for creating economic inequality or for destroying the environment. Therefore, I support keeping Capitalism but changing how we implement it. Free enterprise is the baby we don't want to throw away with the bathwater. Capitalism can work for the good of all if we change our current bad systems, practices, and procedures. It's all possible, as I will explain. Business must become a social tool, a way to uplift and benefit all. It can no longer remain the means to enrich a few at the cost of the many and our environment. We want and need businesses to succeed and grow, but not at the expense of others. For a business to succeed and grow, it must make a profit, as shareholders, like others involved in the business, must be fairly and justly rewarded for their endeavours. If a business does not make a profit over the long term, it fails, and we as a society lose the means to support and uplift ourselves. So, the profit objective and making money is not our enemy but crucial for growth and development. Capitalism, free enterprise, and profit are valuable concepts, provided we do not lose sight of the end goal and end up chasing profit instead. Profit is only a means to an end. The object is to improve the standard of living and quality of life for all while protecting our environment. Together, by making the necessary changes, we can achieve this. We can achieve a balanced, equitable economy serving the needs of all. The extent of the manipulation. Throughout my articles, you will be introduced to the extent vested interests have gone to mislead us. To cover up and hide the problems they have caused. These problems are now becoming so large they are finding it more difficult to hide. You regularly hear about the problems caused by austerity programmes, stagnant wages, increasing poverty in developed economies, pollution, and environmental degradation. However, a large number remain well hidden from you. Most people are unaware of the extent of economic inequality, and neither do they appreciate its harmful effects. They also underestimate their role and that of the government in rectifying the problems. This is what vested interests want. They want people to remain in the dark because otherwise, they will become angry and demand the government make changes, which they can. People do not realise the extent to which they have been manipulated. I will expose these manipulations. As already explained, we cannot expect change to come from government, economists, academia, investors, businesspeople, or accountants. These are people, bodies or professions adversely influenced and deeply entwined in the problems. They represent the interests of the one per cent. They will not change. Change will only come from you and me, those in the middle to lower-income groups. Those most adversely affected. We make up ninety-nine per cent of the population, so we have considerable power if we act collectively. We must be the catalyst for change. We must get the government to implement much-needed change. Only by raising our voices in protest and calling for change can we achieve this. Matters will only get worse if we don’t act.  It’s frightening to think how the influence and power of a small group (the wealthy one per cent) can sway the democratic process in their favour. Surely, being in the majority, our needs should be served, not those of a small minority? Unfortunately, it’s no longer “one person, one vote” but “one buck, one vote.” This is economic apartheid, and it’s found in all developed economies, even in countries like the UK, which place strict limits on electoral funding. Money buys political influence - that’s a fact we have to live with. Those with wealth use it to strengthen their political and economic position. They use their power to reshape our thinking, to make the unpalatable palatable. They control the media - the messages we hear and, therefore, public perception. They feed us a message that serves their needs. They do this relentlessly until people accept the message as fact.  The world abhorred political apartheid as practised in South Africa in the past, but what’s the difference between it and economic apartheid? The result is the same - the needs of the majority are not served but rather those of a tiny minority. Economic apartheid must be ended just as the world pressured South Africa to end political apartheid. Economic apartheid has been hurting the majority for far too long - time to question all and to make changes. How to address our economic problems. The wealthy one per cent have manipulated our economy by introducing laws, regulations, practices, procedures, and systems to serve their interests. We start rolling back their control over the economy by identifying these and getting them changed. We must be specific in targeting problems as then our actions can be specific. Being vague, like blaming an ideology, means nothing changes, as we have failed to be specific in identifying a cause and its symptoms. More importantly, we should be clear on identifying solutions. Identifying problems alone doesn't leave us much better off. Finding solutions is the only way to improve our situation. I identify three leading causes, which I call the "Triad of Evil": free markets, globalisation, and the rentier economy. From these three evils flow numerous threads, which I also cover, providing insight into specific contributors to our apartheid economy and their solutions. As long as we know of the problems and work towards changing them, that's what matters. We need to take positive and meaningful steps to implement change now – that's what's critically important. Your involvement and that of your colleagues, friends and family will make all the difference. As individuals, we have no chance of bringing about change. It's all about collective action - standing together and using our ninety-nine votes against one to bring change. Every article introduces at least one or more problems. These represent the major problems we face, but not all. I explain the problems and their solutions in a simple, logical way. I could describe each problem in greater detail, but the idea is only to provide sufficient understanding of the problem and its solution. To provide enough information so you can stop the spread of misleading information, falsehoods, half-truths, disinformation, and obfuscation. To hold vested interests accountable for what they are doing. The truth will hurt them if we stand together and call for change by understanding the problems and their solutions.  You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 Fixing our broken economy is your responsibility.

• Economy
• by Adrian Mark Dore
• 31-05-2023

Like so many people, you are probably fed up with our economy. Wages have declined in real terms. Living costs are rising. Job security and employment terms have declined. Government expenditure on services and infrastructure has deteriorated and is now pathetic. The list of hardships goes on. Clearly, the economy is not working for you, but it’s definitely working well for the rich. The divide between them and us widens daily. This problem needs to be addressed because when I last looked, the economy was supposed to serve the majority.  You may not think this is your problem or something you can fix, but it is your problem and something you can definitely fix. However, you need to understand a few simple things to do so, which I cover in this article. I explain the problems and solutions. Your vote is an instrument of change. Armed with the facts, you can implement much-needed change through your vote. Because you have the power to change things, it becomes your responsibility to act. What makes our economy dysfunctional? In a democracy, the economy must serve majority needs. That’s its primary objective. Failure to consistently meet this objective renders the economy dysfunctional. Our economy has grown over the past four decades, but the majority's share of the economic pie has declined significantly. A small, wealthy minority has benefited from this growth. Their share of the pie has grown exponentially, while the majority’s share has shrunk proportionately. As the economy has consistently failed to serve majority needs, it’s classified as dysfunctional. How has this affected you? Wages in real terms have declined. Government support, services, and infrastructure expenditures have declined. The affordability of one’s own home is no longer a reality for many. Job security and employment terms have worsened. Quality of life for the majority is in free fall. This is the reason we have seen recent mass protests across virtually every sector of the economy. Each demanding higher wages and better working conditions. Ignorant observers claim discontent is due to the negative impact of the pandemic and the Ukrainian war. However, these circumstances are simply the final straw that broke the camel’s back. The consistent and prolonged downgrading of factors listed at the opening of this paragraph is the real cause. While the majority are getting poorer, a small minority are getting richer. Unless we change, the decline will accelerate. Life for the majority will become much harder. This is not how a democracy works. What’s the cause? Political choice. Governments choose what economic policies to follow. The policy chosen affects outcomes. The government has chosen the wrong economic policy. The government is like you in the choices it faces. Your first priority is to look after your family, just as the government’s first priority is to look after its citizens. However, to do this, you and the government need money. You cannot spend all your time staying at home looking after your family; you have to go to work to earn an income to pay the bills. The same with the government. It has to earn money to pay for all the costs of looking after a nation. You make life/work choices just as the government makes society/market choices. The more you decide to work, the less family life you have. It’s your choice. The government also needs to make choices in balancing the needs of society with those of market needs. Markets represent the means of producing wealth needed to support society. While government must encourage and grow their markets, they can’t afford to over-support markets. Society would suffer as a result, just as family life suffers when you spend too much time working. It’s a balancing act to serve the two opposing parties making up our economy – society and markets. In making their choice, government follow different economic policies. We have two extremes here - Socialism and Free Markets. Both favour one over the other almost exclusively. Socialism favours looking after society almost exclusively, and free markets favour looking after markets at the expense of society. These two extremes would represent you working all the time with no family life or with you not working and spending all your time at home. Neither of these extremes is desirable or followed. Hence, we have a mixed economy containing parts of socialism and free markets. Some governments place more emphasis on markets, and others on society. A Social Market Economy provides the perfect balance in serving society and markets equally. Unfortunately, we don’t follow this wise and balanced approach. We give markets more support, making us more of a free market economy than a social economy. By providing greater emphasis to free market policies, markets have benefited. Their owners, the rich minority, have benefited. Society (you, me, and the environment) have lost out. What’s the solution? The solution is obvious. Dial back our support for markets and return us to a more balanced economic policy that serves both society and markets equally. This is not a revolutionary step but a simple and logical one we can demand our government makes now.   It will return us to a growth in the quality of life for all and greater protection for the environment. With larger governments, we get more government oversight and control. This provides greater protection and support for the vulnerable. The wealthy cannot exploit them easily and without consequences. How did we allow this imbalance to occur? In a democracy, we serve the majority, not minorities. So, how has this serious imbalance happened? Money is power. Power is political influence. The wealthy use their power to usurp control through the following processes: - Lobbying - Corporations and the wealthy spend billions per year trying to influence politicians’ decisions. Political party funding. It’s difficult not to favour somebody who supports your political career with hard cash. Revolving door – where ex-politicians receive cushy, high-paying jobs by helping businesses while in office. Or being able to provide access to high-ranking government officials. Cronyism – where politicians help family, friends, and associates obtain some benefit(s) in return for their help. Consulting / Services. This works on the same principle as the Revolving Door. Rather than employment, the ex-politician offers services or consults at exorbitant fees. This is the preferred option of senior politicians, such as Prime Ministers and Presidents. Corruption – accepting brides, gifts, low-interest loans, or obtaining risky loans. Plus, myriad forms of other corruption. Unfair tax system - allows the wealthy to increase their wealth and thus pressure on the government to support their causes. This results in ever-increasing downward pressure on taxation for the rich and businesses. Lack of transparency – in the shadows, shady deals thrive. Political polarisation means politicians cannot agree on or implement important legislation. Media that is predominantly owned and controlled by the wealthy exerts pressure on politicians in a similar way to that of lobbying. It also influences the masses to believe the lies and misleading information fed to us by the wealthy. Loss of independent thought. Not only governments but all institutions, associations, organisations, and academia are infiltrated by similar influencers (listed above.) This has limited independent thought and opinion available for decision-makers to confer with. The accumulative effect of all these influencers, over a period of time, has eroded the democratic process. It has allowed the wealthy one per cent to influence government decisions in their favour. We refer to this state of affairs as a Plutocracy. It’s a system of governance where the wealthy exercise disproportionate power and influence over the government. They shape policies that favour their interests. This leads to a situation where we ignore or disregard the needs and concerns of the majority. As a result, the gap between rich and poor widens. Living under a plutocratic government does not mean the manipulators have complete control. They only need to exercise some control to divert the course of democracy. The control they exercise can vary across government. It may not be all-encompassing and all-powerful, but it is omnipresent, and exercises influence most of the time. The difference between plutocracy and State Capture is a fine line. State capture involves greater corruption, illegal and unethical practices. However, both share the same end game - control over government policies for their direct benefit. The distinction between the two is academic, as they are both involved in perverting the course of democracy for personal gain. To debate whether one method is more or less ethical is absurd when their shared objective is immoral. Therefore, why distinguish one from the other? Let’s lump them all together under the heading of State Capture because that’s what it is. Under a captured state, the government pushes for ever more free markets. This increases the economic imbalance between society and markets, making the rich richer and the poor poorer. Again, this is not how a democracy should work. Why do free markets cause so much harm? Free markets call for two things: -  The lifting of restrictions and regulations on businesses so they may trade more freely (hence the name “free markets”). Smaller government, as this means lower taxes on businesses and the wealthy. In return for these concessions, businesses and the wealthy claim they will reinvest increased profits to help grow our economic base, to benefit all. Our standard of living and quality of life will be much better. This may have sounded reasonable as an unfounded hypothesis proposed forty-odd years ago. However, reality has proved entirely different. The complete opposite has occurred. It has led to massive economic and social inequality and serious environmental degradation. Quality of life for the majority is in free fall. We now look at the two concessions and consider how much worse off we are for making them (points A and B.) We then look at how they have not grown our productive economic base as promised (point C) but instead used their increased wealth to bleed the majority dry. A. Restrictions, regulations, and oversight are necessary. We have market restrictions, regulations, and government oversight for good reason. To ensure fairness for all and to protect the vulnerable from exploitation. Why do you think proponents of free markets are hellbent on destroying labour unions? So they may exploit their workers. Pay them less and offer less favourable working terms. If businesses exploit their own staff, what do you think they will do to external resources to whom they have no allegiance? To protect the vulnerable, we need large governments to provide oversight of business practices. Consider what happens when we: - Have a small police force – crime increases. Have a small revenue department – tax evasion skyrockets. Underfunded environmental departments lead to increased degradation of the environment. Consumer and staff exploitation increases as a result of underfunded business departments. Controls (regulations) and oversight are instruments used to protect the weak and vulnerable. Free market proponents want these removed so they may exploit others without consequences. They cannot hide this simple fact.  B. “Big government” is good for a healthy economy. The wealthy are against “big government” as it comes with a high tax bill. Consequently, they demand a small government. However, they want the benefits that derive from having a strong, healthy low/middle-income economy. Unfortunately for them, they can’t have their bread buttered on both sides. As the two points listed below demonstrate, you only get a strong, vibrant low/middle-income economy by investing in it. B1. The government must provide high-quality services to improve the quality of life. Research has proved this. By providing good quality healthcare, primary and secondary education, affordable housing, and ensuring workers earn liveable wages. Also, providing social safety nets and good social care. There is a direct correlation between the majority's quality of life and the economy's health. Therefore, it’s equally important for both businesses and governments to achieve this objective. B2. Investing in the “commons” benefits all. Investing in infrastructure, policing, judiciary, defence, and other areas of "common good" is highly beneficial for the economy. The high investment in these “commons” distinguishes advanced economies from developing economies. Again, investments in “commons” are good for both businesses and government, just as their investment in services is. Small governments don’t benefit the majority; it hurts them. Therefore, businesses and the wealthy need to pay higher taxes to have a healthier, more vibrant economy in which to trade. The argument that tax rates need to be internationally competitive is nonsense. Businesses that want to trade in our national market need to contribute to its upkeep and pay taxes or through other means (i.e. import duties.) Either way, they must pay. To use a business phrase, “There are no free lunches.” The ugly face of globalisation, which has adversely distorted national economies, has a bearing on this argument. Its unfavourable effects are discussed shortly. C. Our productive economic base has shrunk substantially. Claiming that lower taxes and fewer restrictions would grow our productive economic base has proved untrue. Businesses and the wealthy do reinvest their larger profits, but NOT in expanding our productive economy. You see, we divide our economy into two parts. Our Normal (or Productive economy) and the Rentier (or Non-productive economy.) This division into productive and non-productive stems from Adam Smith (the “father” of modern economics.) He identified three forms of income - profit, wages, and rent. The owners of capital and labour earn their income in our normal (or productive economy.) They both do something (i.e., they are productive participants in the economy making and selling things.) However, rental income does not involve any productive activity. It involves the transfer of money from one party to another based on one party’s ownership of a scarce resource (or assets.) For example, the owners of property undertake no productive role in the economy. They receive an income from their scarce resource. Therefore, including their income in our normal or productive economy would be wrong. Instead, we allocate it to the rentier economy, as there is no productive output. The average person relies on the normal economy for their income. When we take profits earned in the normal economy and invest them in the rentier economy, the majority receive no benefit. In fact, we disadvantage them, as explained later. The rentier economy doesn’t just involve property rent. Financial services (banking, money lending), including insurance, form part of the rentier economy. Gambling, patents, and copyrights also form part of the rentier economy. It’s a massive and fast-growing economy. The reason is that returns are high and risks lower than in the normal economy. Vacuum-Up effect. You’ve probably heard of the “Trickle-Down effect”, which claims that if we allow the rich to become richer, you benefit by some trickling down to you.  This has proved to be an unfounded fallacy. What has happened is the opposite – the “Vacuum-Up effect”. This is where the rich have created services to exploit the vulnerabilities of the majority, which they have created through free market policies. These services then vacuum up every morsel from the majority’s table. For example, they hold down wages over extended periods and then provide us with “easy credit” to fill the financial void.  They reduce the size of governments, creating desperation amongst the most vulnerable, and then offer them gambling as a way out. There are many more examples of these vacuum-up services, all part of the rentier economy. The rich invest billions in these Vacuum-Up services annually to exploit the majority.  Trickle-down is a lie. Vacuum-up is a reality. Our productive economy shrinks while the non-productive economy grows. Many Western economies are becoming service (rentier) economies. (Services in the UK account for over 80% of GDP, and manufacturing is less than 15% and declining.) We are losing our manufacturing base because the wealthy have spread free market ideas worldwide for their exclusive benefit. Globalisation (or international free markets) has enabled them to produce anywhere globally, at the lowest cost, and sell everywhere at optimum profits. While businesses may win, countries (national economies) and their citizens lose out. The reason for this is that the manufacturing sector has a higher multiplier effect than the service sector. It creates more jobs and has a higher value-added per worker. According to a report by the National Bureau of Economic Research, the manufacturing sector has a multiplier effect of 1.4, while the service sector is only 0.6. If you want to grow your economy, manufacturing produces far better outcomes. However, the risks to manufacturing are higher because of higher investments and longer repayment periods. As an example, take a car manufacturer that decides not to expand its manufacturing facilities. It decides to diversify into financial services as it is more profitable and less risky. The country loses out from manufacturing’s beneficial multiplier effect. Instead of expanding the productive economy, which benefits all, we end up with an expanded, rentier economy. The expanding “buy now pay later” market offered by virtually every trader on everything is further evidence of an expanding rentier economy. When reinvestment should go into expanding the core business, it doesn’t. Who needs more financial services? The economic benefits of manufacturing are excellent. However, its political benefits are equally impressive. Covid and the Ukrainian war have proved how vulnerable we are in a crisis because we produce so little. These events are nothing compared to the problems we would face if we were unable to source from our current foreign suppliers. We are totally reliant on them. Globalisation leaves us politically vulnerable. Have a look at the table below, which highlights how the majority suffer under free market policies. Governments should sit up and take note. Free markets serve the needs of a small minority to the exclusion of the majority. Hence, it can justifiably be referred to as Economic Apartheid. Just like Political Apartheid only served minority needs, so too does Economic Apartheid. We abhor political apartheid but appear to condone economic apartheid. Yet, economic apartheid is far more oppressive. Free markets spawn two evils: - The Rentier Economy (often referred to as the Bloodsucker Economy because of the Vacuum Up effect) and Globalisation (often referred to as Gobblisation as it gobbles up all national manufacturing.)  Collectively we refer to these three evils as, THE TRIAD of EVIL.   How have they managed to hide the truth from us? For over four decades, we have known about environmental degradation and the increasing divide between rich and poor. These problems are too big to hide, so rather than attempt to hide them, as they do for less serious problems, they lie to us. They tell us these are the unavoidable consequences of a modern economy. What absolute nonsense! Through control of the media and political influence, together with their control of academia, institutions and organisations, they have quashed free independent thought. As an example, most have heard of the “trickle-down effect”, which is a fallacy and lie, but few know of the “vacuum-up effect”, which is a reality and the truth. Google the two concepts to prove my point. They lie and mislead us on a massive scale. By limiting the exposure of dissenting voices, they silence them. Change does not involve a revolution, just a change in policy. At the beginning of this article, I explained that we are in this predicament through choice. Plutocracy has forced the government into choosing the wrong economic policy. The solution is to choose one which best serves majority needs without ignoring the market. A Social Market Economy is the solution. An economic system which looks after both society and markets equally. Any imbalanced system, such as free markets, eventually crashes, but before that, it does immense damage. The key points of a Social Market Economy are: - Higher taxes to pay for a larger government. Larger government to provide better services to the majority, greater investment in the “commons”, and more business oversight and control (through regulation). The return and support of manufacturing as the backbone of our economy. The dismantling of globalisation. Limiting rentier economy expansion through higher taxation on rental income and more incentives to encourage productive investments.  You can bring about change. You must support the political party that is in favour of dropping free market policies in favour of those of a Social Market Economy. A political party with the foresight and courage to swim against the tide and return some balance to our economy. By adopting a balanced policy, they return us to a stronger, more resilient economy. Nobody wants to pay higher taxes. Why call for policies which will tax us more? Because higher taxes lie at the heart of a stronger economy when we use those taxes to improve the quality of life for the majority We all have short memories when it comes to paying taxes. We moan about how much comes out of our paycheques every month, but we conveniently forget or are blind to the enormous benefits we enjoy. Some businesspeople have gone as far as calling tax theft. Really, their ignorance is astounding. What distinguishes advanced economies from emerging economies is their substantial investment in "the commons." Commons refer to what we all share and benefit from. It includes things like infrastructure (roads, rail, sea, air), utilities such as power, water and good communication systems. It also includes social support such as health, social care, social safety nets and education. The police and judiciary are also included. The list goes on, but you get the picture. All the good things that make life easier, safer, and more enjoyable for all. All of the above requires enormous and ongoing investment to maintain and grow. We all benefit from these common investments. Foreign businesses and migrants all want a share of this. This is what big government is all about - providing valuable services and investment in commons. As well as controls and oversight, which helps protect us and the environment from exploitation.   All this creates a healthier and more prosperous middle and low-income economy, which is a magnet for all businesses. Those with access to this market have to pay for the privilege. If our middle and low-income society (making up the vast majority) was poor, as it is in developing economies, the market would be far less attractive, if at all. So, by taking from us and investing wisely in commons, we all benefit, and tax is the mechanism which facilitates all this. Time is of the essence. The ball is in your court now. You have the basic knowledge to address the economic problems we face. You have the power to act. The longer you leave it, the worse things become. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 Vacuum Up - the reality. Trickle Down - the lie.

• Economy
• by Adrian Mark Dore
• 26-02-2023

I am sure you have heard of the fallacy Trickle Down? If not, here’s a brief synopsis of the fantasy which so many believed. Some may still believe it, despite the weight of evidence to the contrary being so great as to throw the earth off its axis. The fantasy goes like this, “Allow the rich to accumulate as much wealth as possible because then some may trickle down and benefit you." The idea that you should forfeit your meagre wage so the rich may accumulate as much as possible, in return for which you may get a small portion back, sounds absurd. It is absurd. However, when the rich first peddled this fairy tale, it was couched in different words intended to mislead. It was sold on the basis that the rich were better and more knowledgeable in investing money. The more money they had would result in more productive investment, ultimately benefiting the majority by creating a bigger economic base. Benefits would trickle down and we would all be better off. There’s a shred of believability to this, except, from the outset, this was never their intention. The whole process has been highly dishonest and manipulative. It involves a two-pronged approach. Firstly, they weaken the majority, making them vulnerable to exploitation, using free market economics (sometimes called neoliberal policies.) They then develop rental businesses to exploit these vulnerabilities. These rental businesses and their exploitative business practices have been designed to vacuum up every morsel from the poor man’s table. These vacuum-up processes, together with associated practices and procedures, work well. That’s why the rich keep investing heavily in them rather than in our real, productive economy. You’ve heard of trickle-down, but probably not vacuum-up. Yet trickle-down is a fairy tale and vacuum-up a reality. This shows how well the rich hide the truth and mislead us. My article, “The truth about capitalism” describes how the wealthy create a smokescreen to hide the real problems, to stop people from digging deeper, to find the real cause of our problems.  Creating vulnerabilities. Free market economics is used to weaken labour. They break the power of unions and suppress wages over decades. As a result, real incomes declined significantly.  As part of the free market dogma, they call for smaller governments, which results in governments curtailing the services they previously supplied in sectors such as: -         Health         Education       Social services       Unemployment support        Security (Policing)      Other services (too numerous to mention.) This leaves people more vulnerable and desperate. Those fortunate enough try to plug the gap left by these reductions using their own resources if they can. This opens opportunities for the rich while lowering the quality of life for the majority. Mental wellness declines rapidly. Exploiting vulnerabilities. Having weakened the majority, they are left vulnerable to exploitation, using these rental services: - Holding wages down reduces consumer spending power. However, to ensure sales do not slip, and thus their profits, they provide the masses easy, unsecured credit. This opens up a vast and highly profitable new rental market for the rich while driving the masses into substantial debt.  Much of the lending is predatory. Preying on the most vulnerable and charging exorbitant rates. Payday loans are an example of this.   Holding wages down forces more and more people to become home renters. This opens up a substantial rental business for the rich. The wealthy compete with ordinary people to buy up houses. They force up prices, making it difficult for first-time buyers to get onto the housing ladder. Most are left behind to become life-long renters. These renters will eventually end up paying well in excess of the purchase price while the rich own the asset. This creates a potential problem for the government when these renters retire, yet rents keep escalating. Who provides housing for them, and at what cost?   As the average person becomes progressively poorer and desperate, many turn to gambling as a possible “solution”. Online gambling has exacerbated the problem while creating a massive rental business for the rich. They make the situation worse by allowing people to pay using credit.  People become more vulnerable in the absence of government support or reduced support. To protect themselves, those fortunate enough increase their insurance cover, thereby opening up a further lucrative rental market for the rich. Increased financial pressure on the majority, in combination with increased advertising hype from manufacturers, opens up greater rental opportunities for the rich. As people can no longer afford to buy things outright, rental schemes become more attractive. They roll these rental schemes up with a service and insurance agreement, further milking the poor man. This includes an ever-increasing array of products, such as: - Cars   Furniture         White goods         The drive to make the majority own nothing and rent everything is relentless as the wealthy redirect more capital out of our real economy into the rentier economy. Hopefully, this short article will remind us why free market economics and the rentier economy form part of the Triad of Evil, together with their co-conspirator - globalisation.  When we consider the reason free market economics was granted concessions in the form of reduced tax and regulation, it was on the proviso that they would invest in our real productive economy and not the unproductive rentier economy. Investment in the rentier economy hurts the majority. It does not benefit them. Therefore, as the wealthy have not delivered against their promise, it’s time to increase taxes significantly and reintroduce regulations to protect the majority and the environment, which they have exploited. It’s also time to raise taxes on all rental incomes to discourage investment in the rentier economy. You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/

0 Austerity feeds the rich.

• Economy
• by Adrian Mark Dore
• 25-02-2023

At the dawn of the Dark Age, when Thatcherism and Reaganomics were introduced, a new form of feudalism emerged. It established a new ruling class - the mega-rich, who preside over us today.  The distinguishing feature of this new era is that nothing appears to be what it is. It's all a massive lie. We are fed a continuous stream of bullshit, so the ruling class may continue to extract inordinate wealth from the rest of us while leaving us feeling that everything is just fine when it's not.  Misleading claims are made that we live in a democracy, are much better off than our forefathers, and that our planet is not dying. Sadly, we believe them, allowing them to continue their thieving practices as the feudal masters of yesteryear did. The only way this tiny minority can control the rest of us, other than by force, is to lie and mislead us.  The extent to which we are lied to and misled is breathtaking. It covers virtually every facet of life. In this article, I raise one aspect - Austerity, or Spending Cuts. It's pertinent because government deficits have soared after the COVID pandemic and cost-of-living crisis. What will follow is a lie similar to this.  "As prudent keepers of the public purse, we are left with no realistic alternative other than to look at making deep cuts to government spending." This is a monstrous lie, but to get away with it, they make it sound reasonable by comparing government and household budgets. They have us believe that governments and individuals face similar budgetary restraints. This is simply untrue. As individuals, our incomes are fixed. To keep out of trouble, our only option is to cut costs. They imply that governments are in the same boat. Therefore, cutting costs is fair, reasonable, and the only realistic option. However, this analogy is incorrect because a government’s income is not fixed like an individual’s. Their options for addressing a deficit are far greater. Cost-cutting is only one of many options. Much better options are open to them, assuming they are working in our interests. As they are not, they will follow a cost-cutting exercise despite its adverse effects on us all, which I explain below, but first… How does cost-cutting benefit the rich? Cost cutting reduces the size of government. That is precisely what the rich want. They want a government with a small tax base. Less tax for them to pay. A small government also leads to fewer regulations and poorer government oversight. This provides greater opportunity to avoid or evade tax as small governments are less efficient at tax collection. The same applies to all departments. They are less efficient at their assigned duties. Thus, opportunities abound, which the morally defunct exploit. They also encourage governments to privatise public services to "help reduce expenditure." These ventures provide rich pickings. So, the more the government cuts costs, the wealthier the rich become. The stronger their political power. Their stranglehold on us increases. We become poorer and weaker.   How does cost-cutting harm the majority? A small government means they offer fewer services or services of a poorer standard to the majority. These services span all aspects of life. When these services are cut, or the quality declines, the quality-of-life for the majority fall. See my article "Quality-of-life in freefall. The measure the rich don't want you to see" for more details. The less the state supports and provides for its citizens, the greater the cost to its citizens. They either have to provide the service themselves or forgo it. Either way, it's a cost to them. This lowers their quality-of-life.  As mentioned earlier, a small government means less government oversight and control. This situation is taken advantage of and involves a plethora of activities, from tax evasion (by the wealthy) worsening working conditions, and harmful environmental practices. It means fewer and less effective protections afforded us and the environment from the avarice of a few.  Cost cutting reduces our investment in the "commons." The "commons" represent our infrastructure and institutions, which we share and rely upon to live our lives. The greater the investment in the "commons", the stronger our economy. Investment in "commons" is what distinguishes developed and developing nations. Developing nations' investment in "commons" is not as substantial. Things we may take for granted, like reliable power supply, communications, road and rail infrastructure, and a functioning judiciary and policing service, may not exist in some developing countries. Businesses benefit from the "commons" but are reluctant to maintain and build it, despite its importance to our economy.  There is a simple fact that I'm sure few will deny. Economies are stronger when middle /lower income groups are strong. Cost cutting, as explained above, weakens them. So, by making them poorer and reducing our investment in "common" assets, we are harming the economy's medium to long-term prospects. The rich are shooting themselves in the foot through government cost-cutting.  If cost-cutting is not the best solution…  How does the government reduce its deficit? Assuming we had a truly democratic government dedicated to looking after the majority's interests, then cost-cutting should be its least favoured option. It should look at options for increasing its revenues, which it can do through the following.  Increase revenues through increasing corporate and high-end tax rates. Applying special taxes to all rental incomes and imposing import duties on certain goods to raise funds to stimulate local manufacturing.  Stimulate growth by investing directly in the economy through infrastructure projects, key strategic businesses, and R&D (Research & Development) projects. Second, invest in social support. Money invested in social support is recycled back into the economy quickly, thus providing what is commonly referred to as an "economic stabiliser." The more spent on social support, the more stable the economy becomes. That's why a BUI (Basic Universal Income) would result in a stable economy, as the economy would be guaranteed a minimum monetary flow irrespective of other factors. Third, encourage and support the return of manufacturing to create a larger, more productive economy.  Despite cost-cutting being the least attractive option, our plutocratic government will continue to serve their masters. They will ignore the needs of the majority because their masters will lose over the short to medium term.   You may read other articles by Adrian Dore on Medium at https://medium.com/@adrianmarkdore/