“Free Trade” Treaties are for Big Corporations, not for us.

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The consequence of agreements such as the TPP and EU/US treaties, being presented as facilitators of free trade is now becoming clear – as exposed recently by Wikileaks.  Are we already in the post democratic era?  The idea that global corporations could sue future democratically elected governments seems bizarre – yet that is a possibility. These treaties would mean the end of democracy. Former Labour MP, Bryan Gould  writes on the Trans Pacific Partnership. The TPP is a blue-print for the EU/US treaty, which endangers our NHS, and more. Both must be opposed.

“Free Trade” for Big Corporations, Not For Us.

By Bryan Gould

Reproduced by kind permission

The leaked document from the negotiations over the Trans Pacific Partnership, reported in the Herald last week, shows that the fears expressed in many quarters as to the outcome of those negotiations are more than justified. 

We are constantly assured that the great advantages of extending free trade, particularly with the Americans, will more than offset any minor changes we might have to make as the price of such an agreement.  The record of the negotiations shows, however, that – exactly as was to be expected – the Americans see the supposed advantages of free trade entirely in terms of advancing the interests of major American corporations.

The inevitable result?   Since cooperative arrangements for handling both exports and imports are regarded by “free trade” zealots as an infringement of the “free” market, what is peddled as a simple free trade deal could require major concessions in the way we organise our exports – through Fonterra or Zespri – and in the freedom we have to negotiate, by using our collective purchasing power through agencies like Pharmac, the best possible prices for imports like pharmaceuticals.

The leaked document, focusing as it does on intellectual property issues like patents and copyright, pays little attention, however, to one of the main threats from the TPPA – the requirement that overseas corporations should be able to sue a future New Zealand government in a specially constituted tribunal if their trading opportunities were to be reduced by future legislation.

Foreign businesses would, as a consequence, have much greater legal rights than any New Zealand enterprise would enjoy, and those legal rights could not be altered, even by a future government elected with a mandate to do so.

These fears are in no sense fanciful.  Other countries which have agreed to such obligations in the past are now regretting having done so.  South Africa, for example, which accepted such arrangements in trade deals with the Americans in earlier years is now insisting that the deal should be re-negotiated in the light of their damaging experience of what they mean in practice.

Ecuador and Venezuela have already refused to extend trade agreements with the US containing such provisions and India has rejected an investment agreement with the US only if the dispute-resolution mechanism is changed.

Countries like these understand that granting permanent rights of this kind to American corporations would mean, for example, giving up the ability to protect the environment from the activities of mining and petroleum companies, or (as the Australian government has discovered) being sued as a result of trying to restrain tobacco companies from selling a product that is known to cause death and disease.

Our government would have to accept many other restrictions, as the Argentine government discovered when it imposed a freeze on energy and water prices, in an attempt to help hard-pressed consumers, and had to pay over a billion dollars in compensation to international utility companies.

Even the judges who sit on these specially constituted tribunals are amazed at the power they exercise; as one has commented, these provisions mean that “three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”

Concerns like these have now extended to Europe and to the UK in particular.  The Americans are negotiating a Transatlantic Trade and Investment Partnership with European countries which will contain the same investor-state dispute settlement provisions as are intended for the TPPA.  It seems likely that those countries will provide stiffer resistance to these provisions than our own government will offer in the TPPA negotiations.

What justifies such pessimism about our government, you may ask?   The first warning sign is that the negotiations are being conducted in secret and that, by the time the deal is done and announced, it will be too late.  The government’s willingness to defy public opinion over asset sales is convincing evidence of the scant regard it pays to what our citizens want when it is a question of pleasing business interests.

Even more worryingly, the government has demonstrated in the deal it has made with Sky City over an Auckland convention centre that it suffers no twinge of conscience over signing up to a legally binding arrangement that is intended to prevent future governments from altering the deal.  The granting of the licence for an increased number of pokies is meant to run for 35 years, whatever a new government – or the voters – might think.

The risk is clear – the TPPA, while presented as a free-trade arrangement, is really a very different beast.  Free trade, in principle, is undoubtedly to be welcomed, but in the normal sense is meant to remove restrictions in order to benefit the consumer and ordinary citizen through lower prices and increased opportunities.

The TPPA is intended to do the reverse – to ensure that the dominant market positions of powerful overseas corporations are immune from challenge, so that prices stay high and the interests of the ordinary citizen, and the principles of democracy, are sidelined.  You have been warned!

Bryan Gould

 

STOP the EU/US Treaty – Sign petition

From Think Left:

Are we already in the post-democratic era?

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Is TPP the post-democracy blue-print for the EU-US Free Trade Agreement?  The implications are outlined.

Before Christmas, I was alarmed to hear Nick Clegg and then David Cameron ‘rather too casually’ mention their support for an EU-US Free Trade Agreement (FTA).  It now seems that such negotiations have in fact, been going on in secret for over a year.. and secrecy is the name of the game.  The posted video clip below, discusses the nature of the massive Trans Pacific Pact or Free Trade Agreement (TPP) which Obama has been pushing for, throughout his first administration (1) There is every reason to believe that these alarming negotiations will be the blue-print for an EU-US FTA, and therefore, could act as a pre-warning for the UK/EU populace.

Since the 10-year-old Doha round of global trade talks deadlocked, the EU and the United States have been trying to sign as many bilateral free-trade deals as they can to lock in (2), to access fast-growing economies, especially in Asia (see Cameron’s smarminess in India).  But, according to Reuters, the debt crisis in Europe and elusive American growth are pushing both sides to consider knocking down the final barriers to trade. (3)  Together, the bloc and the United States account for about half the world’s economic output and nearly a third of world trade.  It is significant that the libertarian US think-tank, Cato asks the question whether some of the concepts contained in the draft EU-US FTA are appropriate for a binding international agreement on free trade  or do they turn trade agreements into a kind of global constitution?’ (4)

And that is the major problem with these Free Trade Agreements. They just don’t seem to be very much about trade.

And I have to say ‘seem’ because although 600 corporates have been participating in the negotiations, even members of Congress are not allowed to see either the draft or final negotiated TPP settlements.

Why would that be?  Why are the negotiations secret?  Lori Wallach in the video clip, says that the US Chair, in a moment of plain speaking, told a Reuters reporter that the NAFTA (North American Free Trade Agreement) was impossible to finalise because there were so many objections when they published the plans.  In other words, because the general public and politicians opposed their sovereignty being transferred to the corporates, they’ve decided not to tell them about the TPP!

According to Congressman Denis Kucinich, the leaked information on TPP indicates that it is NAFTA ‘on steroids’.  So if countries objected to NAFTA what will we feel about an EU-US FTA?

Furthermore, I would put no money on the European Parliament, let alone Parliament, being allowed access to even see the EU-US FTA negotiations.  Neither the MPs or the MEPs were allowed to know the details when the EU signed up to the 1994 GATS treaty (5) and that treaty contained all the seeds of privatizing the NHS, social security and education that we are now seeing implemented by the Tory/LDs, and across the EU.  This one would lock us in to even more stringent requirements.

The worrying aspects of the leaked TPP documents concern the outsourcing of jobs, the outlawing of domestic legislation protecting workers, human rights, food safety and the environment.  There is a particular focus working against generic medicines, on behalf of the pharmaceutical companies that rank amongst the most profitable US and UK firms – for example patents could be extended ensuring more expensive drug therapies.  A version of SOPA could be introduced by the backdoor, limiting internet freedom and internet privacy rights.  It would also shield foreign capital from domestic laws, essentially deregulating finance even further, at a point when there are calls for greater not less regulation.

But overarching all of this, is the transfer of sovereignty from nations to private corporate tribunals (6) who will be empowered to compel governments to change their laws or pay unlimited fines.  Foreign companies will essentially not be bound by domestic laws.

This begs the question as to how much of the Tory/LD programme and the changes being forced on EZ countries, under the guise of ‘austerity’ were/are, in fact, in preparation for compliance with the proposed EU-US FTA? (7)

Human rights, environmental protection and employment rights could all be contested and overturned by private corporate tribunals.  The post-democratic age will have been enshrined in binding legislation… and all of it will be done in secret! (8)

Ordinary people may have won the battle in Seattle in 1999 but globally, we’re losing the war in 2013 and just like the GATS, most of us probably won’t even realise that its happening until too late.

“For all the endless empty chatter about democracy, today, the world is run by three of the most secretive institutions in the world: the International Monetary Fund, the World Bank and the World Trade Organization. All three of which, in turn, are dominated by the U.S.’

http://escholarship.org/uc/item/56w0s261#page-5

Inside Story Americas – Will the Pacific trade deal protect workers?

Published on Dec 5, 2012

http://www.youtube.com/NewsAlJazeera
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The 15th round of negotiations for the Trans-Pacific Partnership Agreement (TPPA) began in New Zealand this week. Critics say trade is only a small part of what is being discussed. So why is the TPPA so secretive? Guests: Lori Wallach, Celeste Drake.

(1) https://think-left.org/2012/08/29/the-unfree-flow-of-information-and-cyberspace/

 Dean Baker writes in the Guardian that the TPP (Trans-Pacific Partnership Agreement, a pact that the United States is negotiating with Australia, Canada, Japan and eight other countries in the Pacific region) ‘is an effort to use the holy grail of free trade to impose conditions and override domestic laws in a way that would be almost impossible if the proposed measures had to go through the normal legislative process. The expectation is that by lining up powerful corporate interests, the governments will be able to ram this new “free trade” pact through legislatures on a take-it-or-leave-it basis.’ 

(2)  https://think-left.org/2011/09/16/the-very-design-of-neoliberal-principles-is-a-direct-attack-on-democracy-and-workers-rights/

(3)  http://www.reuters.com/article/2012/10/17/us-eu-usa-trade-idUSBRE89G0KT20121017

(4)  http://www.cato.org/blog/proposed-us-eu-fta-good-bad-ugly

(5)  https://think-left.org/2011/07/21/red-labour-must-address-the-elephant-in-the-room/

(6)  https://think-left.org/2012/03/16/the-top-10-flaws-of-neoclassical-economics/

9. Neoclassical Economics ignores perpetual increasing scale.

As a result of perpetual exponential growth, institutions in the system continually get bigger and bigger. We saw this as the economic system made towns, counties, and states irrelevant through the last century, and we are now seeing it as mega banks and corporations are now making national governments irrelevant. People are now living as tiny cogs in a machine of incomprehensible scale. Everything in life has been monetized, so things that don’t generate bank credit get devalued (spirituality, psychology, rest, joy, play, etc).

(7)  https://think-left.org/2012/06/15/brinkmanship-and-the-euro-crisis/

(8)  https://think-left.org/2012/03/05/transnational-corporations-have-not-let-a-good-crisis-go-to-waste/

 

 

 

 

A Neofeudalist Fantasy inspired by Bilderberg 2012

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The Bilderberg phenomenon is often dismissed as a ‘conspiracy fantasist’s dream.  However, there is no doubt that there is an annual three-day conference attended by members of the global aristocracy, global leaders of industry and politicians (including US presidential candidates) from around the world.  This year’s shadowy elite leaders’ conference was on May 31st 2012, so what was on the agenda? No real information is forthcoming, not even from the usually outspoken attendee Ken Clarke MP, nor from the queen of the Netherlands, the chairman of Barclays, and the chairman, vice-chairman and CEO of Shell Oil who also participated. 

Charlie Skelton reported that  ‘The Occupy movement seems … to have realised that the problem isn’t the 1%, it’s the 0.001%…..”We refuse to pay for the banks’ crisis” was the cry from OccupyLSX back in the autumn. They demanded an end to “our democracy representing corporations instead of the people.” What Bilderberg represents is the fact that our democracy IS our corporations. And politics is just the wake behind a shark fin.”

This is a possible history to fill the void.

 

Imagine a land, long ago, when people lived in small groups, gathering what they needed from the environment as they migrated from place to place ‘following’ their food.  Collecting wild hazelnuts and berries from the autumn woods; shellfish and seaweed from the shore, new green shoots in spring, grubs, roots and occasionally catching a fish or hunting for meat.

Over time, population growth, and rising sea levels, created food scarcity in the shrinking forests and grasslands.  Some groups settled down and became farmers .. a much harder life in many ways but it ensured a more or less regular food supply for the greater number of mouths.

Now, as any parasitologist would tell you, a new farming ecosystem meant new opportunities for ‘parasitism’ to get established.  And sure enough, there were soon groups of hunter-gatherers who adopted a land-based ‘pirate’ life-style of ‘raping and pillaging’ the farming communities. 

Pretty quickly, it was realised that this was disadvantageous to both the farmers and the pirates because it meant farmers dying from raping, pillaging or starvation, and the pirates having to find another farmer.

A new strategy evolved;  ‘land grab’ and enslavement of the farmers who now found themselves working as serfs to feed both themselves and the pirates.  Furthermore, the pirates left the farmers with barely enough to survive and to still keep on farming.  On the plus side, the pirates were willing to protect their assets, which may have meant that the farmers led a quieter life, free from other marauding pirates.

Psychologically, there was a terrible cost to the pirate aristocracy.  They had to shut down any sort of empathy for the suffering of the serfs… they had to make them ‘the other’, ‘less than’ and different. The pirates grew to see themselves as ‘very special’ entitled people who deserved more than their fellow human beings. To preserve this, there was a fierce sanction against marrying outside their pirate class. Inevitably, this sort of narcissism impacted on their relationships with their partners and children.

Furthermore, the narcissistic pirates became too special to do their own chores or look after their own children… or even to allow their ‘wives’ to do so.  And there was never enough being produced to satisfy the narcissistic pirates… these very special people saw no reason why they should not have it all.  And their increasing wealth came to substitute for the emptiness of their relationships.  The rules applied to other people but not to themselves.

Ultimately, there were limits as to how many of these bandits, any farming community could sustain.  At first, the expanding population of pirates could be accommodated by extending their range; by colonizing and taking over other groups of farmers.  But pretty soon, there were turf wars between rival gangs of pirates and many young male serfs were taken away from farming to fight on behalf of the pirates.  Of course, to have serf soldiers doing the dying instead of the pirate aristocracy was pretty irresistible to the pirates.

So it was, that successful pirates acquired vast empires of land with a multitude of serfs.  However, this presented a whole set of new problems … how to administer and keep control of a huge underclass?

From the start, organised religion, with different brands of hell-fire and damnation, was a major means of maintaining the pirates in their privileged position, and this control lasted for many centuries.  But, eventually, the pirates found that they could safely promote certain serf individuals to positions of authority and power without losing their overall sanction … and with that came the understanding that ‘divide and rule’ was a much more subtle and effective control mechanism than threats.  It became the strategy of choice from that time on.

Now, there was a means to divert any blame or resentment away from themselves and onto the apparent authors of the oppression, the administrators … the proto-politicians.  By keeping their lives and their wealth hidden from the masses, the pirates could not only exert ultimate control over the administrators, but with judicious paternalistic interventions, the aristocracy could induce respect, loyalty and even admiration from the unsuspecting serfs.

With colonization of foreign lands, came trade between different pirate overlords, and with trade came the need for an IOU system or money, banks, accountants and lawyers…. And the way in which the pirates stopped those professions running off with all the money was to make it ‘worth their while’ .. ‘to cut them in on the deal’.  In some aspects of banking, they found that it was particularly advantageous to employ those serfs who lacked empathy, and had all the ingenuity of the intelligent thief… the ‘anti-socials’.

So life continued over still more centuries.  There were blips of serf rebellion, but the pirates and their henchmen were always able to find a compromise which appeared to favour the serfs but in reality, incommoded the ruling elite very little.  The rentier pirates lived well – they had a monopoly on overhead charges for access to land, minerals or other natural resources, bank credit and other basic needs. They had no need to earn a living by producing anything because they received so much wealth from their inheritance and unearned income.

Then a disaster fell.  A huge war, a financial disaster brought about by the crooked bankers (that were installed by the pirates themselves), followed by another huge war.  The income of the top 1% fell from 24% of total pre-tax income to a mere 10% in the space of 20 years.  Worse was to follow.  The troops, returning from 5 years of war, were in no mood to put up with the privations of the life that they had had before the war.  A new type of government was elected which put in place a National Health Service, free dentistry, free schooling and a welfare safety net.  These were only of benefit to the serfs because the pirates had always had the income to pay for their own schools and medical provision.  On top of this, energy production, transport, utilities and communications were nationalized, and run by the government to further the national good.

The pirates were aghast .. not only were they being taxed to pay their share of services that they certainly didn’t need or use … not only did they lose the interests that would have been forthcoming prior to nationalization… but the sheer impertinence of the ‘little people’!

Who on earth did they think they were … breaking up the natural order?  It was the politics of envy!!

The fight-back had to begin. Fortunately, the pirates had allies abroad who certainly did not want to see such socialist ideas infecting their own countries.  The imperative to fight the welfare state and the mixed economy, overcame any difficulties that the narcissistic pirates had in co-operating … and doubtless each thought they might just find ways to outdo the other ‘pirates’.

One of the biggest problems, for the pirates and their fellow travelers, was that the welfare state was immensely popular with the serfs.  It was clear that any moves to re-privatise state services would need stealth.  A slow but a steady worsening, much media-undermining, and then the incremental introduction of private provision back into public services, would serve their ends.  The plan was that by the time they had finished, the serfs would go along with anything because they would think that they had so little to lose!

The pirates salivated at the idea of all those services that were going to be privatised.  There would never be a lack of demand for those assets, and payment was guaranteed by unavoidable taxation of the serfs by the government, that the serfs had themselves elected (Hee hee!).

Fortunately, the serfs had already been groomed to believe in the freedom of the press and the impartiality of the BBC.  How the absurdity of this belief made the pirates laugh!  It was almost incredible to them that the ownership of the papers by pirates, and the pirate leadership at the BBC was ignored.

The lower orders were to be deliberately distracted, and given opinion not facts.  They would be fed a diet of celebrity and sport; a constant drip-drip that politics was boring; that all politicians are the same; that all politicians are looking after number one; and that all politicians are like children needing the working people to bail them out yet again.  Active misinformation, propaganda and spin would be directed to cultivate the ‘correct’ attitudes amongst the managerial and educated middle classes. All that the pirate owned media had to do, was to label any inconvenient challenge to the pirate frame of reference, as ‘extremist’, ‘ideological’ or ‘a conspiracy theory’… and the ideas wouldn’t be taken seriously. TINA was to be repeated at every available opportunity… there is no alternative.  But underlying all of this, was the imperative that there was to be as little information as possible about the fabulous wealth and life-style of the pirates, or indeed their ownership of the assets.

There would be little difficulty in implementing most of their blueprint, given the pirate entourage of willing politicians, CEOs of corporations, the bankers and the financial sector, and these were to be the public faces of the scam. This political-corporate-financial nexus would be acting in their own self-interest so would not hesitate to keep the overall scheme as hidden as possible.

However, there was one major hurdle.  How to prevent another radical ‘out-of-control’ government coming into power and renationalizing everything?  Unfortunately, the pirates and confederates had previously miscalculated when they had allowed the serfs to have voting rights.  This was spun, at the time, as being ‘democracy’ but now it had been shown to be capable of back-firing on the pirates.  What was needed was a way of negating democracy and elected sovereign governments… the most obvious solution was another layer of government which took precedence.  They needed global governance!

But at this point, some bright young ‘anti-social’ serfs objected:

“The serfs won’t buy global government.  They are attached to their own lands and have little enough faith in their own politicians, let alone foreign ones.  Apart from anything else, they’ll want to vote for a global government and we don’t want to go down that road again!  Anyway, we don’t need a global government.  We have the tools already.”


The young anti-socials laid out their cunning plan:

“Our original inspiration was that of ‘The  Emperor’s New Clothes’ story.  The swindlers’ aim was to make a fool of the Emperor and take his money.  Your aim is to make the democratic process a joke, and take the money.   Our vision taken from the Emperor’s clothes’ story is that we require a shift in the prevailing conceptual framework … just as the people and the Emperor, in the story, were persuaded to believe that others could see the clothes.

In our case, this can best be provided by the assertion that ‘the markets know best’; and therefore ‘governments interfere with the markets operating properly’ and ‘we need to deregulate – we need to set the markets free’.  Then if, or rather when, the markets fail, we can say that there’s still too much red tape hindering the markets; that we must make it easier to ‘fire and hire’; that companies/individuals are not investing because of too much taxation; that public provision must be privatised because its ‘crowding out’ the private sector; and planning laws are holding back the economy by inhibiting very large conservatories from being built!

This is the perfect, plausible even, vehicle to achieve your goal.  Implicitly, the market knowing best means that the electorate and politicians do not … ergo ‘democracy’ becomes redundant.  In the same manner, it is implicit that government will shrink with the privatization of public services. The role of the state will be confined to being collector of taxes to pay for the privatized services, and to oversee law enforcement agencies required to protect the corporations, banks and pirates.

The first step must be to cause economic havoc in the country.. which should not be a problem for our financial friends.  This will justify our tame politicians to take the draconian action necessary to privatise the nationalized industries.  Eventually they will be able to fully dismantle the NHS and the rest of the welfare state.

The next step will be to set up some global agencies .. a WTO (World Trade Organisation), an IMF (International Monetary Fund) and a World Bank … who would have responsibility to maintain market freedom.  We need to set in place a General Agreement on Trade and Tariffs (GATT) which will be mandated to supercede sovereign government legislation.  This has the advantage that governments can sign up to a treaty without having too much discussion in Parliament.  Furthermore, the negotiations can be completed in secret citing commercial sensitivity.  Any new government wanting to reverse privatisation will find themselves hamstrung by  the terms of the GATT and subject to WTO decisions.

The universal strategy will be a pincer movement.  The financial sector will create an economic crisis which will justify draconian cuts in the welfare system, mass privatization of public services and a fire-sale of national assets. The corporations will then step in to take-over services and buy up the assets cheaply. The politicians will take on the banks’ debts and recapitalise the banks.  This way we will be able to create a low-waged, high unemployment society with high levels of personal serf indebtedness.  Then we will be properly back in the driving seat with our back-to-the-future neofeudalism.

Oh, but before we forget, it is really, really important to be able to get ‘our money’ out of the system before it crashes!  We will need to get rid of exchange controls on the movement of money, and we need to sort out and ramp up ease of access to tax havens.  The serfs can have their redistribution of income .. we’ll redistribute it upwards and offshore!

Postscript:

Who would willingly have allowed the scurrilous ‘pirates’ to turn the clock back?  But just look at the graph (1)… and they’re not finished yet.

 

“If you’re sitting in banks driver’s seat and if you are controlling the quantity of national money, than de facto you control the political situation as well. Because if government needs loans and you are not willing to lend, than you are in absolute control of that government, and that’s the situation we’re in today.” Bill Still (3)

 

As Sherrill said, without regulation, capitalism is thievery. We stopped regulating the financial system, so thieves took over. (2)

 

 

 

Related posts:

Michael Hudson  http://real-economics.blogspot.co.uk/2012/08/meta-thinking-on-political-economy.html

http://www.michaelmeacher.info/weblog/2012/09/tories-ramp-up-the-class-warfare/

https://think-left.org/2011/07/21/red-labour-must-address-the-elephant-in-the-room/

https://think-left.org/2012/08/20/has-george-osborne-been-taking-trans-atlantic-lessons-from-the-jude-wanniski-and-the-republicans/

http://www.guardian.co.uk/world/2012/may/30/bilderberg-2012-technocrats-are-rising

(1)  https://think-left.org/2011/10/14/capitalism-neoliberalism-plutonomy-and-neo-feudalism/ 

(2)  http://www.economonitor.com/lrwray/2012/07/23/why-were-screwed/#idc-cover

(3)  http://www.positivemoney.org.uk/2011/09/bill-max-keiser-show/

Transnational Corporations have not ‘let a good crisis go to waste’.

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There was precious little debate in the House of Commons, let alone in the country, prior to the Major government signing up to the 8th round of the GATT (General Agreement on Trade and Tariffs) treaty in Uruguay in 1994.  This treaty extended the scope of the previous one beyond manufactured goods to cover services, agriculture and intellectual property, including services such as health, education and other public provision, and environmental ones such as GM foods, nuclear power and agribusiness.

Implicit in this treaty was the intention to dismantle the welfare state and privatise public services; the US arguing that it was unfair trade that their private providers of health, employment protection and education had no access to European markets because of the state provision.

However, it was recognized that such a process would have to be implemented slowly and by stealth because of the popularity of the welfare state. We are now seeing the end-game of that process being implemented by the Tory/LD government.  The Welfare Reform bill, which will benefit private employment protection insurers, passed into legislation at the beginning of March. The Health and Social Care bill sets up the conditions which will eventually lead to further privatisation and a two tier US type of health provision; with private involvement intended at all levels from commissioning, insurance, private health providers, hospitals and financial devices for maximizing GPs budgets.  A similar process is in place with the little discussed changes to state education. Nuclear energy is very much on the agenda in spite of the lack of economic or environmental case, and there are murmurings again about pushing for GM crops to be grown in the UK.

Ostensibly, the intention of the treaty was to protect and regulate free-trade between nations, but its impact was designed to elevate the rights of transnational corporations above that of the participating nations; thereby diminishing democracy, human rights, protection of the environment, and preserving the wealth of those who created the organisation… those who we now call the 1%.

The World Trade Organisation (WTO) was set up to arbitrate trade disputes.  However, not only is that arbitration process secret and non-adversarial but inevitably the decisions are in favour of the corporations under the guise of protecting free-trade.  Furthermore, it is not a level playing field. The US, as the most powerful of the participating nations could, and has, continued to protect its own industries/agriculture and ‘dump’ its goods on smaller nations, undermining their home markets.  Retaliation by the smaller nation is limited to excluding the US which in many instances constitutes no great sanction. (1)

The WTO is an important part of the triumvirate of global players undermining democracy and national sovereignty, with the US as puppet master.

“For all the endless empty chatter about democracy, today, the world is run by three of the most secretive institutions in the world: the International Monetary Fund, the World Bank and the World Trade Organization. All three of which, in turn, are dominated by the U.S.’

http://escholarship.org/uc/item/56w0s261#page-5

ARUNDHATI ROY, THE ORDINARY PERSON’S GUIDE TO EMPIRE (2004).

Margaret Thatcher was instrumental in the setting up of the Uruguay round of the GATS treaty and the establishment WTO …  but it was also the Thatcher government who was responsible for creating the UK roots of the current banking crisis and recession. In 1979 exchange controls were lifted; and in 1986, with ‘Big Bang’, all controls over consumer credit were abolished and housing finance was de-regulated.  In concert with the Reagan administration in the US, globalization of the world’s trade and financial sectors was effected.

With the advent of Globalization with its fundamentalist insistence upon open markets and free access for capital without restraints, there were suddenly no regulations to bind the Financial Class, no taxes they could not avoid and no political process they could not buy. It was a freedom from any notion of obligation, care or concern for anybody but themselves. It was a perversion of the very word freedom. They could vote wherever they chose, buy citizenship wherever they felt like it and pay only those taxes they found convenient and have no loyalty to anyone or anywhere. They were ‘free’.

 http://golemxiv-credo.blogspot.com/2011/04/free-market-and-globalization.html

Michael Meacher MP writes:

The charge sheet against the banks is that they have used these powers — particularly in the neoliberal era since 1980 — recklessly and in self-interest, which has done huge long-term harm to Britain’s economy…This has been a significant cause of Britain’s long-term decline… British manufacturing, the lifeblood of the economy, has been systematically hollowed out….

The City has relentlessly driven short-termism at the expense of market share. The UK banks have used their control of the money supply to regularly generate unsustainable asset bubbles which destabilise industry and, when they crash, beggar the taxpayer. They have engineered a massive mis-allocation of global capital into tax havens which, worldwide, now shelter over £11trn of global wealth. They have exacerbated inequalities between the super-rich and the rest, the growing disparities between regions, and the crowding out of manufacturing by finance…

So what should be done? Above all, control over the money supply must be brought back into the public domain.

http://www.newstatesman.com/blogs/the-staggers/2011/11/banking-banks-credit-financial

So the Thatcher government’s policies are directly implicated in the genesis of the present situation… the intervening governments having done nothing to regulate the financial sector, and having continued the process of stealth privatisation of public services.

According to David Harvey, there was a tipping point in 1987, when even the US government realised that it was not sufficiently powerful to oppose the Bond markets. (2) The capacity of the financial markets to withdraw funds from any country and cause interest rates to rise, means that the financial elites are able to act as a ‘virtual’ parliament, able to coerce governments into abandoning legislation adverse to their interests.

It has taken only three decades of globalization, privatisation and de-regulation to bring the UK to the current parlous state:

The re-creation of the conditions of the Great depression; mass unemployment; the hollowing out of the UK manufacturing base; the north-south divide; the removal of an adequate safety net for the elderly, unemployed, sick or disabled; the recreation of a two tier provision of health and education; the lack of action on climate change or oil-dependency….and the re-accumulation of wealth back to the 1%.

Graph 1 shows clearly how the percentage of total pre-tax income for the top 1% of US wage earners is now back at 1920 level but the same graph could be drawn for the UK.

So how have the transnationals or ‘giant’ corporations not wasted a ‘good crisis’?

Put simply, there has been a great lie which has been perpetuated and maintained by a collusion between right-wing politicians and the media .. the supposed ‘mess’ that New Labour left in 2010.  (3)(4)

It is a verifiable lie to blame government spending on public services for the consequences of the global banking crisis.  It is solely the size of the financial sector debt which pushes up the total UK debt to nearly 1000% of GDP.  The debt did not result from government over-spending but from privatisation of banking profits and socialization of their losses (5).

However on the basis of that lie, the resolution of the banking crisis has been successfully redefined as a need to cut back once and for all, the welfare state and public spending.  The means of imposing such austerity is by dramatically cutting benefits and the opening up of public services to privatisation… which makes no absolutely no sense in the stated policy of diminishing the structural deficit … but just happens to be the desired objective of the 1994 GATT treaty.

‘Redefinition’, secrecy and distraction are characteristic of current global politics, and it is notable that the interests of corporate power are hardly discussed in comparison to the focus on the financial markets.

Colin Crouch describes in his book ‘The strange non-death of neoliberalism’ (6) … ‘The confrontation between the market and the state that seems to dominate political conflict … conceals the existence of this third force which is more potent than either and transforms the workings of both.’

‘At the heart of the conundrum is the fact that …. neoliberalism is nothing like as devoted to free-markets as is claimed.  It is rather devoted to the domination of public life by the giant corporation.’

 

Colin Crouch contends that neoliberalism is emerging from the financial collapse more powerful than ever, because of a ‘comfortable accommodation’ between the state, the market and the ‘giant’ corporation.  Corporate power makes it its business to bind them all together in an essentially hidden market-state-corporation triad.

Colin Crouch further argues that several factors have determined the power of the ‘giant’ corporations:

The lobbying power of firms whose donations are of growing importance to cash-hungry politicians and parties;

The weakening of competitive forces by firms large enough to shape and dominate their markets;

The power over public policy exercised by corporations whose contracts for public services deliver special relationships with government;

The moral initiative grasped by enterprises that devise their own agendas of corporate social responsibility.

Democratic politics and ‘the free-market’ are both weakened by these processes. 

The power over public policy exercised by corporations was explored by Think Left in the case of the employment protection insurer Unum’s involvement with the Welfare Reform bill (7). This example evidences the likely similar conditions for the development of government policy in health, education, energy and agricultural policies, and indicates the vested interest of those corporations.

So, Unum warns people to get insured against the cuts in benefits … of which they, Unum, were major architects …. either directly as advisory consultants, or through their funding of psychiatrists who created the intellectual framework, the funding of think tanks and academics who in turn recommend policies to the DWP, and  by offering ‘jobs for the boys’.

https://think-left.org/2011/11/22/welfare-reform-and-the-us-insurance-giant-unum/

There has been many revelations of the ‘revolving door’ whereby politicians receive political donations, directorships, moving on into employment in think tanks funded by corporations and finally to be directly employed by the corporations themselves. Similar relationships may be observed for ex-civil servants.  Corporations second employees into ministries as advisors and provide secondments for civil servants.  Vast sums are spent on lobbying, and corporations are brought in to advise ministers directly.  Specific mention should also be made of the global management consultancies like KPMG, Mckinseys and Boston Global, who advise government on how to privatise public services and who will profit enormously from providing training and commissioning for the GPs under the Health and Social Care bill. (8))

In this manner, corporations do not just exert pressure on the political process but have become major insider participants in framing the legislation according to their needs.

So why are the corporations so keen to be involved in providing health, education and public services?

Essentially, there is another lie.  The UK’s economic problems stem from lack of demand – not as we are constantly told by high tax rates, corporation tax, red tape or lack of investment:

 

The current shortfall of investment has nothing to do with high tax rates and everything to do with insufficient demand to meet potential supply. Cutting corporate taxes will simply make the situation worse as more wealth gushes upwards into the hands of the 1 per cent, and it goes to corporations that are letting it sit idle. As Shaxson points out, corporate tax cuts at this stage will be as effective as pushing on a piece of string….

British corporations are awash with cash. According to Deloitte, non-financial companies held £731.4 billion in the third quarter of 2011 – the highest ever….

”Corporations have all this cash because they are not investing: the opportunities are not there. They are hunkering down, spending less than they are earning, while the government is spending more than it is earning (and thus running deficits).”

http://www.taxresearch.org.uk/Blog/2012/03/02/economic-shibboleths-why-corporation-tax-cuts-are-insane/

This is shown by analagous US data in Graph 2.

 

 As Richard Murphy writes in his book ‘The Courageous State’:

‘.. (W)hy invest in businesses when something so much more attractive – the outsourced tax stream of a government as anxious as possible to give it away…. It is much easier to make profits from the certain commodities that people are always going to need, such as health, education, local government services, the utilities and so on that were once the preserve of government.’ (9)

Worryingly in terms of the future of UK public services, Michael Hudson writes:

For today’s financial planners the short run effectively has become the only aim. Running a corporation has become mainly a financial task whose objective is to raise the company’s stock price by mergers and acquisitions, using earnings to buy one’s own equity, arranging debt leveraging and orchestrating global intra-corporate “book” pricing so as to take profits into tax havens.

Financial managers are more likely to downsize operations and scale back research and development than to expand employment and production so as to leave more income to pay dividends and interest. The economy’s debt burden is made heavier by deflationary policies that keep expansion on a short-term leash, and to encourage, rather than tax, rentier income and debt financing.

http://www.paecon.net/PAEReview/issue57/Hudson57.pdf

In conclusion, the aim of Thatcherism to reconstitute the economic and social relations of the post-war consensus is coming into fruition under the Tory-LD coalition.

 

“Democracy has been hollowed out. We have seen in the last 30 years or so, the total demise of those occupations for those in the U.K. population who had few or no qualifications. The mining industry, the shipyards and car factories, heavy and light engineering, the merchant navy, product assembly, and so on.  We are seeing the dismantling of the welfare state … and all because the Government is controlled by what is good for big corporations and finance ..  not what is good for the people.”

Anon

Addendum:

To resist or reverse this situation, it is an imperative to cut through the misinformation and lack of information which is available. The hidden underlying agenda must be uncovered so that it can be confronted.  The Spartacus movement opposing the Welfare Reform bill evidenced the power of twitter and online research by crowd sourcing.   The virtual world can also facilitate international collaboration. In order to preserve and protect this vital resource all government/corporate attempts to control the internet must be resisted. http://aclj.org/free-speech-2/new-government-attempts-control-stifle-internet

(1) Noam Chomsky explains the World Trade Organization. http://video.google.com/videoplay?docid=5785830866015923087

(2) The End of Capitalism? – David Harvey (Penn Humanities Forum, 30 Nov 2011)

http://www.youtube.com/watch?v=EYzKsiev43Q

(3) Who pulls the strings at the BBC ? (Pam Field)

(4) Inadequacies of the BBC’s coverage of the EU’s financial crisis (Dr Sue Davies)

(5) Gordon Brown did not spend all the money-The Banks did (Dr Sue Davies)

(6) Colin Crouch  (2011)  ‘The strange non-death of neoliberalism.’  Polity Press, 65 Bridge Street Cambridge C2 1UR, UK

ISBN-13: 978-0-7456-5221-4(pb)

(7) Welfare reform and the US insurance firm Unum (Dr Sue Davies)

(8) http://www.guardian.co.uk/society/2012/feb/25/public-services-private-sector?INTCMP=SRCH

 

(9)  Richard Murphy (2011)  ‘The Courageous State – Rethinking Economics, society and the Role of Government.’  Searching Finance ltd., 8 Whitehall Road, London W7 2JE, UK

ISBN: 978-1-907720-28-4

Related articles:

Britain Under Siege (Dr. Tristan Learoyd)

The Pfink Tank: pharmaceutical industry (Dr. Tristan Learoyd)

The market has a name – it is Goldman Sachs (CJ Stone)