Tag Archives: globalisation

Globalisation and privatisation are pushing UK families into poverty

Need a miracle: this is YOU, the day after tomorrow.

Here’s a terrifying article by Brett Christophers (who?) originally in The Guardian.

The author examines the reasons rent, food and energy prices aren’t coming down, if household incomes are.

His answers can be summed up in two words: globalisation and privatisation.

He tells us:

Profits have reached record levels… [but] the cost of living crisis reflects the combination of higher prices for essentials with household incomes that are at best standing still.

Part of the reason that UK companies are generating record profits is precisely because they are successfully keeping wage costs down.

It has long been understood that across an economy at large, companies cannot simply drive down wages and expect profits to hold up in the medium or long term. After all, workers are also consumers. Lower wages mean a lower capacity to consume.

Then he hits us with the reason the big UK firms have managed to avoid this threat to their profits:

Much more than is the case in other countries, such firms tend to be distinguished by one of two key features, both of which insulate the companies in question from the potentially negative impact of UK wage stagnation.

The first is their geography. Companies in the FTSE 100 index derive less than a quarter of their revenues from the UK – a remarkably small share. In other words, domestic demand conditions are largely irrelevant to their fortunes.

That this is true of the UK’s big oil and gas companies, BP and Shell, whose profits are at all-time highs, is well known. But it is no less true of profit heavyweights in other sectors such as AstraZeneca, BAE Systems, British American Tobacco (BAT) and Unilever.

That’s globalisation – these firms operate in other countries where wages are higher and can therefore charge what they like. If UK households default on their energy bills, their lights will go out and the energy firms’ bosses won’t think twice about it.

The second key feature of many leading UK firms is less often discussed. This is the non-discretionary nature of the expenditure that households incur in consuming their services: expenditure such as loan payments, housing rent and utility bills.

Many of these companies have been in the news for their profits, too – companies such as HSBC, Centrica, Thames Water and Annington Homes. Their household customers, many (and, in some cases, all) of whom are located in the UK, are essentially captive: they must make payments, whether wages are rising or not.

In the case of the disproportionate prominence of firms earning revenue in the form of non-discretionary household expenditure, the explanation is … : privatisation. In the 1980s and 1990s, both Conservative and New Labour administrations went about privatising publicly owned assets that occasioned regular household payments – principally housing and utilities – with a gusto and comprehensiveness unparalleled elsewhere in the global north.

So successive Tory and New Labour governments have created a situation in which working households are now being held hostage by the corporations that have effective monopolies on the goods and services we need, simply to be able to live.

I lived through the period when Margaret Thatcher was privatising everything in sight, and when globalisation was the buzzword for the economy. I knew it would end badly for people like myself – and that’s exactly what is happening.

But far too many of my fellow citizens were taken in by the weasel words of Thatcher, Major, Blair and all their fellow-travellers; people who subsequently became extremely rich by forcing us to struggle.

And now, future generations will pay. And pay. And pay…

But if you ask young people today what they think, most of them will say they aren’t interested in politics and it has nothing to do with them.

Source: If UK wages are going down, why aren’t rent, food and energy prices coming down too?

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Brown’s speech – unintentionally in support of Corbyn?

Gordon Brown during his speech at the Royal Festival Hall in London. Image: John Stillwell/PA

Gordon Brown during his speech at the Royal Festival Hall in London. Image: John Stillwell/PA

At first, it seemed that Gorden Brown had agreed with Tony Blair for the first time in more than a decade – over the threat to neoliberal New Labour Blairites posed by Jeremy Corbyn.

Big deal.

Of course the other architect of New Labour was going to speak up against Jeremy Corbyn’s candidature to lead the Labour Party. Brown is almost as right-wing as Blair.

It doesn’t stop them both being on the wrong side of history.

The joy of Brown’s speech is that much of it was non-specific. He didn’t refer to any of the candidates by name, and advised that Labour must be “credible, radical, sustainable and electable to help people out of poverty, and that anger was not enough” (according to The Guardian).

Nobody would disagree with that, and Corbyn supporters would argue that the only candidate endorsed by such a statement was theirs; Burnham, Cooper and Kendall – by embracing the nonsense of austerity economics – will only make poverty worse while enriching those who already have enough.

The Guardian article continues: “In a clear reference to Corbyn, he said there was one camp whose own supporters even did not believe their candidate would win the next election” – but this is hardly a ringing endorsement of the others, whose policies (along with Brown’s own) have already lost not just one election but two.

“Brown said he was heartbroken and the party grieving after the general election defeat in May, but that it would be ‘even worse if we leave ourselves powerless to do anything about it’” – powerless as the party would be under a Burnham, a Cooper or a Kendall, whose policies would be so close to those of the Conservatives that the electorate would give up on any possibility of opposition and leave the Tories to it?

“Analysing some of the reasons people may have turned to Corbyn’s left-wing politics, he said people were feeling insecure about globalisation, which had left people ‘uncertain and unmoored’ and turned people to nationalism in countries from Greece to Scotland”. This was a clear miss. People aren’t insecure about globalisation; they know for a fact that it represents an attack on their wealth, security and well-being.

Globalisation helps the rich to get richer and pushes the poor down – the behaviour of the European Union over the Transatlantic Trade and Investment Partnership tells us all we need to know about it.

Attacking Corbyn’s foreign policy, Brown said: “Don’t tell me that we can do much for the poor of the world if the alliances we favour most are with Hezbollah, Hamas, Chávez’s successor in Venezuela and Putin’s totalitarian Russia.”

This is a deliberate attempt at disinformation. Corbyn has not indicated agreement with the views of any of those people or organisations. Instead, Corbyn is far more likely to put forward policy agreeing with Brown’s claim that Labour should form progressive alliances, especially within Europe, against “illiberalism, totalitarianism, antisemitism, racism and the extremisms of prejudice”.

Brown’s claim that it is “not an abandonment of principles to seek power” and that Labour members should see their vote not as a protest but a “public duty and sacred trust” also chimes with the Corbyn campaign.

It is only Corbyn’s opponents who paint him and his policies as unelectable. The wider Labour Party clearly sees his policies as preferable by far to the watered-down Conservatism that people like Brown, Blair, and their supporters like Alastair Campbell, Simon Danczuk and John Mann have been peddling for the last 20 years.

Indeed, the idea that a Labour vote is a “public duty and sacred trust” merely highlights the growing belief among the Labour Party and the electorate at large that New Labour, and Labour under Ed Miliband, betrayed that trust, abandoning their sacred duty to the people in order to embrace the profanity that is neoliberalism.

“The best way of realising our high ideals is to show that we have an alternative in government that is credible, that is radical and is electable – is neither a pale imitation of what the Tories offer nor is it the route to being a party of permanent protest, rather than a party of government,” said Brown, not realising that he had just written off the chances of Andy Burnham, Yvette Cooper and Liz Kendall in one sentence.

For those who do not understand: The three non-Corbyns don’t have any high ideals. Their alternative is not credible – otherwise Labour would not have lost the 2010 and 2015 elections. It is a pale imitation of the Conservatives and it has led Labour into the twilight of being a party of protest, rather than government.

Actually – are we sure Brown wasn’t supporting Corbyn? The Guardian continues: “People must vote not for the candidate they ‘like’ as they would on Facebook, but for the candidate who can make a difference, he added.” That’s resounding support for Corbyn.

In support of the policies Corbyn opposes, Brown quoted, among others, Gandhi asking: “Is what I am about to do going to help”, and Nelson Mandela saying the yardstick by which he would be measured was the ability to better the lives of all people. Against this, we need set only one of Brown’s policies: Employment and Support Allowance and its accompanying ‘work capability assessment’.

This single policy, begun by New Labour and continued by the Conservative/Liberal Democrat Coalition and now the Conservative Government, has led to more than 10,000 known deaths and possibly many tens of thousands that have been hidden from the public. Perhaps Mr Brown should be asking how that single policy was ever intended to help anybody in need.

In the end, Brown will probably be seen as having done more harm to the three stooges other candidates than to Jeremy Corbyn.

Brace yourself for a further surge in support – for the people’s candidate.