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/