Labour’s challenge to fight inequalities and rebuild democracy rests on addressing Britain’s ‘finance curse’
by Nick Dearden Re-posted from openDemocracy 10.09.15
In just a few weeks, the Labour leadership contest has substantially shifted the political debate in Britain, challenging the policy of austerity, raising inequality as the defining issue of our times, highlighting the erosion of democracy.
Fighting inequality and rebuilding democracy depend on breaking the stranglehold of big business and finance on politics in this country. And this means reassessing Britain’s role in the world, because the prestige of this country is based upon London as a financial hub and a corporate HQ.
We live in an offshore centre for corporate interests, and this has not only fuelled poverty and inequality around the world, it has done so at home too. Britain’s prestige has not translated into benefits for ordinary citizens here. Despite this, political leaders have for decades failed to tackle the vested interests that have captured this country.
If they want to really change Britain, top of the list for the next Labour leader is the dependence of our economy on finance. We have a ‘finance curse’, in the same way oil-rich nations can develop a ‘resource curse’. Far from harnessing resources to build a fairer society, finance’s dominance has undercut other sectors of our economy. Today, governments of every shade jump to the tune of finance, as we experiment in ever greater forms of deregulation, allowing the banks to transform everything we value into a derivative to be gambled on.
Britain has been captured by financial interests, which use this island to avoid taxes globally, to unsustainably inflate debt bubbles, and to speculate on the air we breathe. There is no path to rebuilding democracy which doesn’t involve an almighty battle to ‘tame the City’ – with robust mechanisms to make companies pay their taxes internationally, levy taxes on speculation, restrict stock market listings, cancel unjust debts and reform the Corporation of London.
But finance is only the most obvious case of corporate capture in Britain. In fact big business has a stranglehold on our politics. On the one hand our government is aggressively pushing forward a ‘new generation’ of trade agreements like the EU-US investment deal known as TTIP. TTIP threatens to water down social and environmental standards across the board, seeing such regulations as little more than ‘trade obstacles’. TTIP will even give multinational corporations a special ‘right’ to sue our government for passing laws which threaten their profits.
On the other hand the British government is obstructing attempts by Latin American countries to hold multinational companies accountable for abusing real human rights, meaning that people have no access to effective legal redress for harm done to them by British-based corporations. So far is the British state in the pocket of corporate interests that even our aid budget is used to privatise and deregulate economies in Africa, Asia and Latin America. Aid money is thrown at free market think tanks to privatise energy supplies; agribusiness conglomerates get a helping hand to control seed markets; education multinationals find new markets in some of the poorest countries on the planet.
The rule of multinational corporations, which places a higher value on profit than human rights, is a key factor driving inequality. Combatting inequality means the next Labour leader needs to be prepared to use the British veto in Europe to halt TTIP and its sister deals, limit the influence of multinational corporations over the UK political process, establish a commission to tackle corporate abuse of workers’ rights and environmental sustainability, and overhaul the aid budget as a form of redistributive taxation which can help countries across the world develop decent public services.
These proposals form part of a manifesto of policies which we launch today, the first step in beginning to rebuild our democracy and properly fight inequality. It also includes reducing carbon emissions and giving substantial reparations to help developing countries build democratically-controlled energy systems in low carbon economies. And supporting small scale, organic agriculture, rather than industrial farming.
If we really want a fairer society, there is no alternative to taking on vested interests. We can’t just decide to exercise a ‘nicer’ form of global power, because our power is built on a base that necessarily erodes democracy. A powerful financial sector, unfair trade practices, ideologically-driven privatisation, and many other policies, which we inflict on the world, also serve to make our own country more unequal. So these policies must be changed not just for the millions of people around the world affected, but for the British people too.
True, it may make our country less ‘important’ at the top table, but that is a price well worth paying for a fairer world, and a happier society
This article is cross posted from Global Justice Now and appears here.