Blessed are the Meek

I have to say that there are few things I find more depressing than working-class Tories. People voting for their own oppression; turkeys voting for Christmas.

When car stickers started appearing on fairly modest Fiestas calling for an end to Inheritance Tax and I noticed the Daily Mail campaign to the same effect my heart sank. How can it be that the relatively poor have been conned into campaigning against a tax designed to share the wealth of the rich when they die, to prevent them from continuing to exercise their power from beyond the grave?

This has now become the headline-grabber from the Tory Party conference: only millionaires will pay tax in future. It has been packaged as a victory for the little guy. In reality it is a liberation from the oppression of taxation for those whose estates are worth hundreds of thousands of pounds which should rightfully be redistributed to the dispossessed who inhabit the wildernesses of run-down housing estates.

Even the Telegraph admits that only 6% of estates pay inheritance tax (http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/09/24/nwealth124.xml), so this policy will benefit the richest sector of our population and disadvantage all those Mail readers who are being hoodwinked into supporting it. Inheritance Tax is not a left-wing wheeze growing out of the politics of envy. J. S. Mill was in favour of all wealth reverting to the state on death, and right-wing economists regret the passing on of wealth through the generations, which saps younger generations' entrepreneurial zeal.

A few years ago I attended a seminar organised by the Fabian Society--a well meaning attempt to 'modernise' Inheritance Tax to prevent just this sort of campaign to abolish it. The conclusions were fair, simple and obvious. The most helpful, which is also Green Party policy--hence my invitation--was to make the amount of tax paid relate to the wealth of the inheritor rather than the inheritee. Thus people including more relatives and friends, and especially poorer ones, in their wills, could effect distribution according to their own choice of beneficiaries.

An old friend used to say that where there's a will there's a relative. The disheartening conclusion to the media discussion of Inheritance Tax is that where there's a Tory spindoctor there's an ill-informed toady willing to believe him.

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"Free Burma!" Tweet

Mitigation, Adaptation, or Manipulation?

The official version of the agenda resulting from climate change is that we must have 'adaptation' and 'mitigation'. Mitigation means changing the way we do things so that we don't make the problem worse; adaptation means building the best defences we can to protect ourselves against the negative effects of past behaviour.

For the discourse analyst this is an interesting turn of events. We are being encouraged to think that there are just two options, limiting the political space and the territory over which we make claims. This is the strategy proposed by Supernanny when she offers the child the blue jumper or the red one, neatly avoiding the fact that s/he really wanted to carry on watching TV in pyjamas.

Essentially the debate becomes framed in terms of balancing spending between flood defences and renewable energy, or between changing travel methods and making our homes capable of withstanding higher-strength winds. The framing of the debate in this way rules the big questions out of the debate. Questions like what it is about our economic system that has ended us up in this mess. And what a sustainable economy might look like.

Academics refer to this discourse move as 'ecological modernisation': the suggestion that we can come up with an appropriate response to climate change without fundamentally changing social and economic structures. This is why, instead of moving towards low-impact rural development, the governments approach to eco-building is to push the concept of 'zero-carbon homes' and hand the problem on to the private sector, in spite of considerable evidence that they have neither the expertise nor the flexibility to respond in time.

In the days before The Ecologist was edited by a prospective Tory MP it's tagline was 'Challenging Basic Assumptions', something I can recommend you practice daily. When offered a simple choice in a tight spot always remember Supernanny.

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Dramatic Demise of King

Journalists who are referring to the appearance of Mervyn King before the Treasury Select Committee later today as 'theatre' are for once not over-dramatising. His inevitable humiliation by the bankers can be seen as the culmination of the second act of a tragedy we all share in. The end of the first act was the appearance outside No. 11 of Chancellor Norman Lamont in 1992.



The ashen hero, brought low by his hubris, enacted a classic moment from Greek tragedy. He had overestimated his power and faced humiliation. His efforts to prove that the British government was in control of the British currency in fact proved the reverse: since financial deregulation and the globlisation of currency trading the large players in the markets are more powerful than governments.



So what can we expect to happen to Mervyn King today? He appears to have become a victim of his own economic theories, failing to see that phrases such as 'moral hazard' have always been merely fig-leaves to cover the political manoeuvrings of the dominant forces of capitalism. It is the owners of capital who really control the economy not the espoused objective and neutral forces of the market. When King refused to allow the banks the extra money they demanded surely his fate was sealed.



The agent provacateur of this drama appears to be another former Chancellor, Kenneth Clarke, who has been sharing his avuncular opinions across the range of media outlets. Views on why him, and what his game is, would be welcome.



Meanwhile focus on the need to change the 'tripartite' regulatory system is misplaced. Rather we need a system where politicians have the courage to take back political control over the monetary system, and to replace money creation by banks, as debt, with a system where government spends money into circulation for the public benefit. A truly creative solution would link this to carbon rationing and both a business and individual carbon trading system. Tweet

Bursting the carbon bubble

The government hopes it has now stopped the decline in the asset base of Northern Rock by offering guarantees that all savers' deposits will be repaid in full. Let's enquire a little further into this guarantee. Where is the money coming from? The Bank of England, the government's bank, will supply it to the Northern Rock but it will be government money, or rather our money. Cash haemorrhaging across the counters of the bank will be replaced by a steady transfusion of public money, money that might have been spent on better hospitals or schools.

The most obvious problem with this is that it is transferring money from the poor (e.g. those who shovel chips or sweep streets and pay their taxes) to the rich (those with money in hedge funds). It also provides a huge incentive for the gamblers in the global financial casino to continue their high-risk strategies, knowing that when they fail it will be the working people of this country who will bail them out.

Since giving away the power to regulate financial markets with Big Bang in 1986 the government has irresponsibly left the management of the money system we all rely on to city speculators. The ideology behind this was essentially the Adam Smith doctrine of the invisible hand: if lots of players act with individual selfishness the outcome will be to the benefit of all. But it hasn't been. It has been to the benefit of those with more knowledge of, and power in, financial markets.

But even if any politicians who is accorded air time were to argue for the taking back of political control over the fundamentally important monetary system of this country how could that be done without precipitating exactly the sort of collapse that causes such social distress as witnessed in Russia frollowing the break-up of the Soviet Union?

The ideal would be to manage the descent in the consumption imbalance between rich and poor, whether we are thinking of individuals or nations, in conjunction with the managed decline in the production of carbon dioxide. This is entirely consistent with evidence showing that there is a close relationship between wealth and behaviour which causes climate change.

The debt bubble in the international financial system is funding by the purchase of US government debt by the booming Asian economies. The Contraction and Convergence model (http://www.gci.org.uk/contconv/cc.html) offers a mechanism for equalising carbon dioxide emissions on a global per capita basis and thus a means of rebalancing this relationship. Introducing the TEQ or tradable energy quota in the UK might be one tool to reduce consumption: if it could be linked to a managed withdrawal of debt from the national economy we might move towards a future that is financially, as well as ecologically, stable.

You might like to investigate this online petition: http://petitions.pm.gov.uk/NoCityBailout/

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Solid as a Rock?

Rumours about the likelihood of a financial crisis are swirling and it is difficult to ascertain exactly what is going on. Especially since now is precisely the time when we are least likely to be told the truth. Our job is to act as ignorant punters and keep playing the game: shut up and believe what we are told by our superiors.

The key objective of spokespeople from the financial casinos is to reassure us. If we really thought about how unstable our financial system is, we would instantly take fright and the system would fail. This is why we have Angela Knight, Chief Exec. of the British banking industry, explaining in calm and measured tones on the Today programme that we have nothing to fear.

Ms. Knight, former Tory politician and Economic Secretary to the Treasury in the last years of the previous Tory administration, exemplifies the way politicians and bankers collude to back up a financial system that enshrines inequity and instability. For more on her activities check out this profile by the Independent: http://news.independent.co.uk/business/analysis_and_features/article2300459.ece

Nowhere are the metaphors of economics as myth and catechism so beloved of green critics more apt than in the arena of finance and banking. While we might imagine that the cited value of banks and building societies relates in some way to their holdings of property or real assets, in fact the only support they have is our faith. Without confidence, investors will recall their money and the financial institution will be unable to pay. Risky lending may have enabled the banks to create cash and boost their profits, but if debtors begin to default the gap between the banks' assets and their ethereal value will become clear and bank failures will occur.

The problem for Northern Rock is that those with more inside knowledge than we are privy to, in this case other banks, are refusing to lend it money to conduct its business. Presumably they feel that the building society's recent huge expansion of mortgage lending has not been prudent. If too much of its asset base is made up of grossly over-valued houses, a small fall in the housing market could lead to insolvency. The intervention by the Bank of England as 'lender of last resort' to plug this liquidity gap has not happened since the oil price shocks of the early 1970s.

So we should listen carefully and watch the manoeuvrings of the high priests as they intone their incantations and weave the myth of security and stability, a myth encapsulated in the name of the very institituion that is wavering: the Northern Rock. What we have seen this morning is the government and the banking industry working together to convince us of the solidity of the system. The black knight and the Scottish darling clinging together as they glimpse the potential disaster of the whole financial system, and then the whole unstable economy they believe in, hitting the rocks. Tweet

Beware the Blandishments of the Tescopolist

Capitalism is threatened by climate change and it is responding. I offer as evidence Tesco's endowment at Manchester University of a Sustainable Consumption Institute. You will have heard arguments recently that New Zealand lamb or Kenyan cut flowers are actually more sustainable than locally grown alternatives. It is in order to produce data to support claims such as this that the Institute is being funded. Its existence proves not only that our higher education system has now become the prostitute of globalised capitalism, as Thatcher long ago intended, but also that capitalism is adapting to the strictures climate change brings.

Tesco is getting extremely good value for money. They are investing a mere £5million in return for which they will divert the energies of a sizeable group of leading UK researchers to justifying their own corporate ends. They are also using this to repair their tarnished media reputation, including by claiming magnanimity in sharing the research findings with others. So you should think yourself lucky that you will be able to use Tesco's figures to justify the globalised economy without having to pay them for the privilege.

But can capitalism ever make itself sustainable? As an economic system it relies on the extraction of the surplus value of workers and the planet to pay for all the various parasites who do no work but live from ownership and investments. As such it is a system that meets the needs of the majority in an inefficient way, because the needs of the greedy minority must be satieted. As Gandhi put this so eloquently, 'the earth has enough to satisfy every man's need but not to satisfy the greed of some'. The very nature of this unfair system of distribution puts pressure on the planet as well as on those who sell their labour.

In the globalised capitalist system most work is done in the countries of the Global South, translated from de jure into de facto colonies, their resources and their labour power still stolen by the rich West, but these days through the less unsightly mechanisms of trade treaties and financial organisations, and with armies reserved for extreme situations only.

Globalisation represents the ultimate victory of the notion of 'economies of scale' that economists love so much. Now the scale is that of the planet as a whole, with corporate barons organising who shall produce what where and fixing the prices. Failing to respect Nature's scale has led to the huge imbalances of wealth and well-being we see around us, as well as creating climate change through the unncessary production of transport-related carbon dioxide emissions.

Finally, the way capitalism creates money, through debt-based bank money, requires the constant expansion of the economy without regard to natural limits. I have blogged about this elsewhere: it is really the most fundamental explanation of the link between capitalism as an economic system and planetary destruction.

I have been in this game for a while now so I have become fairly experienced at spotting a corporate scam. Hence I was intrigued by the arguments about the distribution system of globalisation being more sustainable, not to mention more supportive of our brothers and sisters in the South. I was also depressed to notice how many good people I interact with were swallowing this line.

Sadly my own resources for investigating the assumptions on which the justification for buying New Zealand apples in the UK in September are limited. And I don't suppose Terry Leahy will be offering me money to explore my proposed alternative of bioregional distribution systems any time soon.

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