Thursday, 30 January 2014

Corporate justice?

This blog has not shied away from taking a sideways approach to economics at times, and neither has it hesistated from looking at how economic power influences other spheres of life. One of those areas has been criminal justice - from comparative approaches to fraud to the relative crimes of Barclays and naked ramblers.

Today, the Guardian reported 'Metropolitan police accused of acting on behalf of big business' - helping make arrests for Virgin to bring a private prosecution for fraud, for which Virgin paid the Met. Many people, including Green London Assembly member Jenny Jones have highlighted the apparent ability of corporations to buy justice:

Labour MP Tom Watson said: "This sounds like emerging two-tier policing where corporate interests can buy the time of the police, leaving those who can't offer remuneration losing out. This is creeping privatisation with big business hiring police powers."

Of course the law is far from equal, especially since the massive cuts to legal aid which will undermine the ability of the less well-off to seek justice.

But another aspect of this story caught my eye, and that was the sentencing of those who supplied imported set-top boxes to allow people to watch cable TV without subscription.

"Munaf Zinga received eight years' imprisonment, and two other men were also convicted. They had sold 400,000 boxes over more than three and a half years."

Eight years imprisonment: there is no suggestion violence was involved, no one was killed, and there is no suggestion that any of those prosecuted posed a threat to the public. They supplied set-up boxes to people who wanted them, made some money, but Virgin estimated the equivalent income would have been £144 million a year. For reference Virgin Media still managed to scrape a profit last year of £1,030 million.

So why then was a man sentenced to eight years in prison. For reference eight years imprisonment is the average sentence for rape. Is selling illegally imported set-top boxes (even in large quantity) as bad as raping someone? And is it worth 8 years in prison?

Sunday, 26 January 2014

Review: The Poverty of Capitalism ... but a wealth of insight

Andrew Fisher, LEAP Co-ordinator, reviews John Hilary's 'The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next'. Published by Pluto Press.

War on Want's Executive Director John Hilary has been an outspoken and radical advocate of the global movement for social justice. Unafraid to speak plainly, to step outside and even condemn the cosy coalitions and tame agendas of some other NGOs. As such, it was with much anticipation that I started to read The Poverty of Capitalism.

The book not only draws upon Hilary's encyclopaedic knowledge of the global players and the struggles they provoke around the world for social justice, but also develops new theoretical underpinnings and useful concepts to better understand the global struggle against the power of almighty capital.

Hilary's fearless analysis not only takes on the known evils of globalisation - including the big corporations, the far from objective global economic institutions and the bought and paid for politicians. But it also takes aim at the wolves in sheep's clothing: the philanthropists, aid agencies and NGOs providing a humanitarian facade for a corporate agenda (reminiscent of the role of missionaries for the British Empire).

Like any well-researched book, it contains a number of great tidbits to develop the main thesis, including the quotes from Pentagon's 2012 paper on the 'Joint Operational Access Concept' which make it clear the US will go to war for resources - as it did in Afghanistan and Iraq - stating:
"the United States must maintain the credible capability to project military force into any region of the world in support of those interests. Thus includes the ability to force both into the global commons to ensure their use and into foreign territory as required."
Another also relates to the US, as we learn that 60% of personal bankruptcies in that country are caused by medical bills.

But the most important point in the book is to detail the corrupt power structures that keep the poor poor and the rich rich. In doing so, concepts like 'popular sovereignty', 'common ownership' and 'social production' are introduced and explained in developing the case for a democratic and ecologically sustainable transition in the global economy.

This is not an abstract vision, but rooted in social movements from across many of the most developed and successful of which are from Latin America, Africa and Asia. And it is this that perhaps gives the book its power - as the reader is transported along a compelling narrative from technical analysis of the realities of global realpolitik and economic institutaions, to an conceptual outlining of alternatives to the discontented struggling and often succeeding to make those alternatives a reality.

Those realities could take us, as Hilary labels the final chapter, 'Beyond Capitalism'. I'm in.

Andrew Fisher edited 'Building the new common sense: social ownership for the 21st century'.

Saturday, 25 January 2014

The two faces of Ed Balls

During the Labour leadership election, many people were impressed by Ed Balls' apparent conversion to a social democratic economic settlement as espoused in his Bloomberg speech.

But since then Balls has committed a Labour government in 2015 to sticking with Tory spending plans for at least the first year. He has also said that Labour will not promise to reverse Tory cuts, and that Labour would have to make more in office. He has supported the public sector pay freeze, while Ed Miliband somewhat contradictorily waxes on about the cost of living crisis.

This morning the media was filled with similar tough messages, briefing ahead of Balls' speech at the Fabian Society, including the parliamentary garbage that "Balls will promise to legislate for new fiscal rules within 12 months of the general election, including a commitment to a budget surplus by the end of the parliament". Legislate for it? Really? Will the chancellor be surcharged if the target is not met? Or will a technocrat be installed to make cuts? It really is nonsense. On the upside, it should be noted that Balls is committing to a current account surplus, which allows for borrowing for capital investment - see 'Borrowing for Growth - some advice for Ed'.

Nevertheless, like any wannabe chancellor, Balls knows how to pull a rabbit out of a hat. And so the tough, 'we'll enforce austerity too' message will be overshadowed by a debate about a modestly higher rate of income tax on a few high earners. It is very welcome that Balls has committed to restoring the 50% tax rate on those earning over £150,000. It was probably the most popular policy in Gordon Brown's premiership.

What is also welcome, and will hopefully be widely reported, is that Balls also said:
"The latest figures show that those earning over £150,000 paid almost £10 billion more in tax in the three years when the 50p top rate of tax was in place than when the government conducted its assessment of the tax back in 2012"
This corrects the crap put out by the Treasury in its dodgy dossier of the 2012 Budget. Both the move to pledge to restore the 50% rate and the analysis is welcome, and hints at a return to '
Bloomberg Balls'.

However, before Labour activists start getting weak at the knees about a return to some form of modest social democracy, Balls also told the Fabian conference that Labour supported the benefit cap, the public sector pay freeze, thought public utilities belonged in the open market, and that universal winter fuel payments for pensioners should be means-tested.

We've seen the two faces of Ed Balls today in one day. Capitulating to Osborne, the financial markets and the Murdoch media this morning, while throwing a modest redistributive morsel to the left at lunchtime. Bon appetit!

Monday, 13 January 2014

House prices go further beyond reach

Prices set to continue to rise as help-to-buy scheme drive's inflation housing market

by Ryan Fletcher

House prices surged further beyond the average person's reach in 2013 with a full-year 7.5 per cent rise to December the biggest in six years, Halifax bank revealed yesterday.

Prices are likely to shoot up even further this year as a lack of new homes and the government's controversial help-to-buy scheme combine to drive inflation in the market.

Taxpayer-backed help-to-buy sees our money used to underwrite high-risk 95 per cent mortgages that banks had stopped handing out to avoid bad debt.

But Left Economic Advisory Panel co-ordinator Andrew Fisher said: "With house prices rising at nearly 10 times the rate of wages, more mortgage funding is not the solution.

"If interest rates rise, as many predict in the next 18 months, many people could end up being burned by this scheme."

He said that an urgent mass council house-building programme was needed instead.
"This would help those in most housing need, for whom help-to-buy does nothing and be a far better economic stimulus than inflating another debt bubble."

In the Commons yesterday shadow communities secretary Hilary Benn (right)called for an end to speculation where greedy investors buy land, gain planning permission and sit on it, sometimes for years, until prices rise so that they can cash in the profits.

Mr Benn said local authorities should be able to tell companies to "get on and build the houses you said you would" and slap them with a levy if they don't comply.

But he stopped short of committing a Labour government to a centrally funded building scheme.

However Tory MP Alec Shelbrooke accused Labour of planning "Stalinist tactics of land seizure" if they win the 2015 election.

This article first appeared in the Morning Star on 9 January