Democracy is broken.

Oct 7, 2012

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Capitalism is broken.

I didn’t vote for a government that would attack the most vulnerable in society, but grovel and smarm towards businesses.

I didn’t vote previously for a government that would pretend to look after people, but also besmirch caring parents and attempt to remove our rights to educate our children as we see fit.

I do not understand a system that has allowed businesses to go on paying insufficient wages, backing up the process with tax credits, and then starts to remove that safety net from people who rely on it through no fault of their own.

What would happen if businesses actually paid people a living wage? For starters, presumably we’d all need to pay less taxes as the benefit bill would drop hugely. So while businesses would have to pay out more, the tax burden on individuals and businesses would go down slightly?

I can kind of see all this in my head, but I can’t see what the numbers need to be. I’m not an economist. But I can see how it is all linked.

You see, the problem is that businesses aren’t controlled for the benefit of individuals. They are controlled, theoretically, by shareholders – their duty is to provide the best return on investment for shareholders. Except that shareholders are either the board of directors, who do stuff all quite frankly, or pension funds, who again have little interest in actual people. And the people relying on the pension funds have no say in the matter either – it’s the very rich, the politicians and that class who have developed a system that looks after them, and stuff the rest of us.

I think it’s time we deconstructed this. It’s time businesses actually looked after the people who do the work. I know the wail that if we raised the minimum wage we’d make small businesses uncompetitive, and big businesses would up and leave but I don’t think I believe it. Is there anyone out there who can do the facts and figures and show us what would happen if you dropped the tax bill because people were actually getting paid for the hours they put in? Maybe some of the people in the very top layers would have to take a smaller cut of the cake as well, but I bet they wouldn’t suffer all that much.

And if you put money into the paychecks and pockets of the people at the bottom and middle of the businesses, do you know what they’d do? They’d spend it. And the economy would suddenly have lots more money floating around it. Unlike when you give it to the banks and they sit on it.

Please will someone explain to me where I’m going wrong with this idea?

It’s where it is

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Comments

16 responses to “Democracy is broken.”

Ruth J
8 October 2012
The more I think about it, the more I think socially equitable capitalism is the way forward. The most successful high street retailer in 2009-10, when major names were going bust almost every day, was John Lewis. It is a worker’s co-operative – every member of staff is a shareholder, and gets a dividend payment that is directly related to how well the store has done. They vote for their own pay, and have to make choices between wages and profitability. JL has a reputation for being expensive, but for offering good service, excellent warranty and returns policies, and for being, in many cases, worth the investment.
There are very, very few workers co-operatives in this country. I suspect the law is configured to make them almost impossible to set up, and that JL only exists by virtue of its age. I think government should be channelling support and tax breaks specifically to the creation of partner-based business creation. It would empower employees, it would give them direct control over the payment of a living wage, and it would probably improve the general standard of service in most industries. Let’s stop talking about corporations as job creators, and the rest of us as a plebian underclass of job holders. We don’t have to be at their mercy.
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Jen aka The Mad House
8 October 2012
Well said and I have to say being married to an accountant there is no easy solutions, for if there was everyone would be doing it!
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1. Jax
  8 October 2012
  I don’t expect it would be easy, we’re looking at a system wide change here.
  Reply
Alison Sauer
8 October 2012
As a small business owner for some 22 years I can honestly say I have never paid anything BUT a living wage. I have taken on school leavers part time for more than the adult minimum wage and taught them how to write and spell, I have taken on single parents and paid them as much as I can afford. I have always paid sick pay even when there was no legal obligation on me to do it.
Some business owners have a heart and a conscience!
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1. Jax
  8 October 2012
  I’m glad to hear it. You also demonstrate that it can be done.
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Michelle
8 October 2012
John Lewis partners receive bonus and pay increases that are not shared by some low paid outsourced workers. So cleaners paid less than a working wage help contribute to the profitability of the company but don’t share in those profits. I think that stinks and John Lewis has a second class of employee that they have known about for years and accepted when they took the contracts (I believe cleaners used to be full employees until the cost cutting outsourcing started). An article here : http://m.guardian.co.uk/commentisfree/2012/sep/13/john-lewis-model-ethical-cleaners?cat=commentisfree&type=article
It was going to go to a vote but many partners were unwilling to incorporate these lowest paid workers as it would mean less to go round for existing partners. A good business model? I don’t think so.
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1. Jax
  8 October 2012
  I find the exclusion of cleaners from their model deeply upsetting. Somehow it’s worse than other big companies, given that they’ve got so close to a better way of doing business, but then the majority of employees/ partners/ whatever decide to victimise this small group. Really disturbing.
  Other than that (major though it is) the model of having employees as partners/ owners seems a good one.
  Reply
  1. Ruth J
    9 October 2012
    I agree. There are no perfect organisations, but there are models to aspire to.
    Reply
Alison Sauer
8 October 2012
It can be done. I do not believe in the revival of serfdom that seems to be what I consider a poor excuse for running a business. If you can’t afford to pay someone a living wage, you cannot afford to employ them at all. As for internships…..don’t get me started.
No I will never be rich but I will be able to sleep at night.
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NinnyNoodleNoo
8 October 2012
I’d also like to know, Jax. I suspect you’re not going wrong with the idea in general, but as it would eat into company profits, it’s unlikely to happen.
Also, keep people slogging away so they’re too tired to do anything aside from stick a ready-meal in the oven and watch XFactor (or whatever) on ‘telly and you’ve got a zombified low-aspiration workforce that will just keep plugging away, their highest desire being the next widescreen telly.
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1. Jax
  8 October 2012
  Don’t forget divide and conquer – make sure they’re always looking out for the neighbour who is somehow doing them out of something they should have by claiming benefits.
  Reply
Carol
8 October 2012
I wish I knew. Nothing about what our current government is doing makes any sense to me. We just seem to be getting poorer and poorer whilst the rich just seem to keep on getting richer. It makes no sense.
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1. Jax
  8 October 2012
  It only makes sense when you realise how the systems are all interconnected for the benefit of the rich and the political class.
  Reply
MetalSamurai
9 October 2012
I wonder how much the press is to blame for this.
The tabloids seem to be driving the political agenda of monstering the poor and vulnerable. In Scotland we have a majority government standing behind universal benefits, including free prescriptions and free university places as Scottish Labour (presumably driven by embarrassed bods at head office in London) join the fry that we can’t afford it and austerity is the only answer.
Interestingly it turns out most Americans, when polled, would prefer higher taxes and better public services and healthcare, but neither of their two parties can suggest this as they would be ravaged by the press. It would be political suicide.
There doesn’t seem to be any informed debate anywhere, just sound bites and ideological mantras. 🙁
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1. Ruth J
  9 October 2012
  The problem seems to lie with people who believe it, when they’re told “We don’t mean you’re the problem – it’s all the those other people.” HEors know perfectly well that when we’re the target of monitoring, etc, then that’s a big fat lie. But the tabloids seem to get away with telling people that they aren’t the target, just all their neighbours. 🙁
  Reply
Fiona (@nlpmum)
10 October 2012
Democracy is definitely broken – we have a government none of us elected. Capitalism is not (broken) – capitalism is working very well and this is the result – the rich get richer and the poor get poorer. Capitalism as an ideal doesn’t care – there is no element of capitalism which involves caring for the poor, the disabled, the old or the young.
I find myself veering towards anarchism of some kind at an ever increasing pace under this government and personally I strongly believe that we need new political models to cope with a modern world where there are still people starving, where food is still not a right and indeed is becoming increasingly out of reach of the poor, where most people seem to value spending over being happy and where modern medicine is seemingly edging us ever closer to a disease precipice (and that’s a whole other story). Capitalism clearly isn’t working, communism seems to have led to a ruling elite as well and I’d like to see us working towards greater co-operation somehow. I’m not sure what socially equitable capitalism is Ruth, it seems to be a contradiction in terms to me, but the Co-Operative movement is getting bigger and bigger and is doing some great things. I’m looking into the broader policies of the Green Party at the moment to see if I can find a politics which meets my aspirations for a better future, failing that though, we are making great strides in our community to become as self sufficient as we can……… this still leaves the big issues of health, education, transport etc to the clowns in Westminster though.
There will never be easy answers in politics, but it is certain that at the moment we are being sold a lie…… there are many ways to reduce the deficit, my vote would be on putting 1p onto tax in every band and going after the tax evaders in the tory party for starters….
*rant over*
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