The Solution

Wouldn't it be easier for the people to dissolve the markets and elect another?

Gordon Nardell

After the uprising of the 17th June
The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee
Stating that the people
Had forfeited the confidence of the government
And could win it back only
By redoubled efforts. Would it not be easier
In that case for the government
To dissolve the people
And elect another?

Bertold Brecht, The Solution, 1953

Brecht's acerbic irony came to mind after reading the umpteenth piece of right-wing post-Budget punditry justifying severe, long-term cuts in public spending and debt because otherwise – to paraphrase – governments will forfeit the confidence of the markets.

This nonsense turns democracy on its head. Decision-making by elected governments is in thrall to those same markets whose judgments have been palpably wrong for the last 20+ years: consistently marking up the value of equities, Sterling and USD on the myth of stable, unstoppable growth while the debt crisis quietly accumulated, followed by the abrupt volte-face of demanding deficit reductions that threaten to choke off such feeble recovery as some economies have managed since 2008. The analysis ought to be that the markets have forfeited the confidence of governments – and more importantly of the people who elect them. So: why can't the people dissolve the markets and – well, not necessary elect another, but replace them with democratic mechanisms for providing liquidity?

The economy, and the question of public sector deficits in particular, has been a near-taboo subject during most of the Labour leadership election so far. But when Andy Burnham broke cover recently, it was to say Labour shouldn’t be "in denial" about the need for deficit reductions. The logic of private markets infects all. The real point of this paper is this. The cuts agenda, now revealed as the price of solving a crisis in private markets, makes it no longer possible to avoid a simple choice of political position. We are either for an economic system based on the dominance of markets, or against it. And if we’re against it, then what we now need to provide is a carefully constructed, popular set of arguments in favour of something else.

Tobacco retailers hit with £225 million fine

Morning Star
by Louise Nousratpour

The competition watchdog has fined 10 retailers and two tobacco manufacturers £225 million for "unlawful practices" in pricing of cigarettes, cigars and rolling tobacco.

The fine - the largest total ever imposed by the Office of Fair Trading (OFT) - came after Imperial Tobacco and Gallaher struck "price-matching" arrangements with retailers in which the prices of their tobacco products were linked to those made by rivals.

The watchdog said that the agreements over price fixing between rival brands were "unlawful" because "they can lead to reduced competition and ultimately disadvantage consumers."

Left Economic Advisory Panel co-ordinator Andrew Fisher welcomed the OFT fines, which he said exposed "the lies in the rhetoric of big business. Far from the mythical free-market economy, big business seeks a monopolised stranglehold over consumers."

Mr Fisher added: "The value of the OFT has also been highlighted and it's no surprise that the favourite party of big business - the Tories - is calling for a 'bonfire of the quangos.' Both consumers and government revenues would be worse off without the OFT."

The retailers caught up in the case were Asda, the Co-operative Group, First Quench, Morrisons, One Stop Stores (formerly T&S Stores), Safeway, Sainsbury's, Shell, Somerfield and TM Retail - the owner of the McColls and Martins chains.

Safeway has since been bought by Morrisons, the Co-operative has acquired Somerfield and First Quench, which owned off-licence Threshers, went into administration last year.

Imperial Tobacco, whose tobacco brands include Lambert & Butler, received the biggest fine - £112.3m - but denied "categorically" that its pricing practices were anti-competitive or affected consumers.

The group plans to appeal.