For those who like a summary instead of wading through text:
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a) capitalism is only successful and prevalent because it best mirrors our human condition – namely that we have a tendency to knowingly let others suffer more - if it means we get to individually suffer less. Us or them. Dog eat dog. Individuals, collectively, *are* capitalism - so *we* are the boogyman.
b) the bankers are only doing what all the greedy consumers (that’s us lot) have rewarded them for doing: helping companies lower prices to the consumers, and increase returns on savings. The reason they get such massive bonuses is only because there isn't enough competition in their market - because the entry barriers are too high for new competitors.
c) Time vs Money: how our own self-interest, through capitalism, keeps us too busy to do anything except making and spending money. That's why it's a brilliant mass population control device.
c) Consumer power: how, finally, it is still in our collective power to make a massive difference, legally, without even doing very much - by playing the system at its own rules.
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On Capitalism
Capitalism is not a thing with its own mind and an odd shaped body, like the fabled Haggis that roams scottish highlands with legs shorter on one side than the other so its body can stay flat when walking cross-slope.
Shell, the oil company, shafted the Ogoni people of Nigeria (never forget Ken Wiwa snr, and well done jnr). But OOH look Shell petrol was at the time 3p cheaper than BP, so let's not think about that too much. Tesco and Primark (and the rest) exploit Indian child labour for clothes manufacturing. But WOW look how cheap their jeans are, so let's not think about that too much. McDonalds burgers. Nike shoes. Etc etc. Tiny, individual, self-preserving decisions taken by all of us, played out 60 million times every day in the UK. There's your problem: the sum total of all that activity by us individuals IS 'capitalism'.
The 'system' doesn't go off and do bad things all by itself. We are capitalism. Every time we put price over ethics we are the BEAST. Every time we buy luxury goods instead of giving to charity we are the BEAST. Fair trade tea is more expensive than other unfairtrade teas. Do you buy fairtrade tea? If you regularly criticise the ethical impact of capitalism, I hope you do buy fairtrade tea. Do you check the procurement chain of clothes that seem oddly cheap (Tesco, Primark, etc etc)?
On Bankers
OK so that's capitalism. Now for the bankers. Let’s have a little look at what an investment banker (IB) does, and for whom, and why. The two main activities I’d like to talk about (simplistically) are :
a) helping companies buy eachother in order for the new merged company to cut costs and prices whilst making more profit; and
b) helping companies raise money for expansion, so they can increase turnover.
If an IB does her job properly, the client's company will become more profitable because INDIVIDUALS will buy their cheaper, more easily accessible, products more than before. INDIVIDUALS will notice that their FTSE rating is soaring and they will buy shares in that company for a good personal investment such as a pension. INDIVIDUALS will get better products, for less money, and those lucky enough to have savings will get higher returns. None of that would have been possible without the hated IBs.
I am hoping that some of you are starting to feel a bit hypocritical in your loathing of IBs and 'the system' by now.
On Bankers' Bonuses
OK so we understand that they are doing a vital job in the machine that makes us more wealthy as individuals (either by growing our investments or lowering our shopping bills)...but still we feel the need to hate them because they get huge bonuses while children are dying in the third world and people are unemployed in the UK. Well, I agree it doesn't seem right does it. Beyond an amount of money, more money seems meaningless, vulgar, unfair.
But here are some balancing thoughts:
a) If a banker gets a £2million bonus, the UK government gets £800,000 in tax. Goody.
b) If a banker employed by an american investment bank gets a £2million bonus, the UK gets £800,000 in tax paid for by another country and possibly 1.2million injected into UK economy! That's like selling two million £1 "I love London" t-shirts to tourists (assuming they were made in UK). Goody.
c) If there were more IBs, there would be more competition, each Investment Bank would make less profit as the market saturated and bonuses would be lower. But starting an investment bank is a bit harder than opening a nail salon. You need a LOT of dough up front, you need all the network contacts (time to learn to play golf), and you need some very niche and closely-guarded knowledge. Taken together this is called 'high entry barriers'. So if you want them to get lower bonuses: start up an investment bank and undercut their fees. Oh and you'll get really rich too and of course you will donate ALL your surplus cash to charity right?
So how much is enough to live on? Read on:
On Greed and Need
I saw a facebook post once complaining that the current system is based on greed, not need. Umm… that's right! That’s not just the current system - it is what it was founded on, that’s what it has always been based on. You could say that capitalism should just be a mechanism for allowing people to get what they 'need' at the lowest price... but over time a large part of the economy became the provision of what people 'want' (see previous post on socially sustainable capitalism ).
Need is domestos, a roof, food. Want is nintendo DS, £200 trainers not used for sports, sky tv, luxury items like designer watches etc. Inbetween is some hard to defines that are kind of both. But there is a clear section of the UK GDP accounted for entirely by WANT. Take my personal 'little problem' with radio controlled flying machines...I think I would not die or be a lot less happy without them - but I dearly love them, tinkering with them makes me happy. So that's kind of a need...but really we all know it's a want.
The self-reinforcing brilliance of today's retail culture is this: the media have convinced us (and we have convinced ourselves) that because we work so very hard all the time, we 'deserve' or 'need' a bunch of things that are blatently 'wants'. Physical needs are easy to define - but psychological needs are open to manipulation...want can morph into need! They also convince us how to look. They consistently sell an image of acceptable appearance, and then sell a product to help us move from our self-hating reality towards that ideal: http://i.thisislondon.co.uk/i/pix/2009/12/twiggyOlay500.jpg
So these days we 'need' an expensive hobby to help us 'relax' - because otherwise we will become too stressed by the pace of work... but the only reason we work so hard is to pay for the expensive hobby (that went on the credit card). We need nice clothes and eye-cream to feel better about ourselves, to boost our self-esteem...but the main reason we feel low is that we live unfulfilling self-centred bean-counting lives...or because our parent(s) didn't give us high self-esteem because they were too busy pleasing themselves and deservedly relaxing after a hard week's work. We are the system! And no-one is teaching kids how to spot this manipulation and defend themselves against it psychologically.
Joseph rowntree foundation had a crack at sizing 'need' here (note: these are AFTER TAX and housing is NOT included): http://www.jrf.org.uk/publications/minimum-income-standard-britain-what-people-think. It came out at about £8K for a lone adult - let's say £14K including a £500/month apartment - and £30K for a couple with 2 kids in a £1,000/month house. So in theory a couple earning more than £50K before tax is fine. So if a charitably-minded couple earns £100K then they should give £50K per annum to charity in one way or another. No Sky TV. No anti wrinkle cream. No happy-hour pissups with old friends. No holidays to speak of. No new curtains every year etc etc.
Where am I going with this? Well it's the same theme again. I am trying to get the blowers of hot air, the trumpeteers of anti -capitalism, to recognise the reality of their professed belief system. Until you drop some of the trimmings of a need-satisfying consumer life and spend it on improving the lot of other people, don't you dare criticise anyone else, nor criticise the system that meets your consumer 'needs'.
On Time vs money: how can we do something about it?
Back in the day we had more time but less money to spend on activities to fill the time. Now we have the money for the activities, but we don’t have the time, because we use it all up earning the money. We used to be soul rich but money poor, now we’re money rich but soul poor.
Consequently, people have less and less time to spend on anyone but themselves and their immediate families (if the families are lucky). Cost of living is so high now (driven up by our own purchasing and speculating, please don’t forget, not by some cloaked enemy) that it is nigh on impossible for a family to live on a sole income (which used to be the norm). And even then childcare is so expensive the average mum spends 95% of her after-tax income on childcare (childcare price driven up by excess demand from not-single-mums queueing up to go back to work and earn extra money for the ‘want’ side of the economy, and by increasing numbers of single mums who have no choice but to work, on the ‘need’ side of the economy).
So when we tell eachother on web forums and in the pubs “we need to DO something, not just talk about it’, the question that springs to mind is “and WHEN will we do this magic activity??”
Lunchbreaks? No, have to meet ex-colleague for burger and wine (want), or the boss won't let you out for lunch. Evenings? No, too tired after working all the hours god sent, and cleaning the dump the kids turned your house into.. Weekends? No, that’s the only chance we get to go to the shops cos we’re at work all week, or that’s when the dedicated parents among us spend time helping shape their kids into responsible healthy and approximately sane citizens for the future. (Or we're too busy getting smashed at the football game). OK then, let’s work for a charity, or start up a charity!! Hmm, the pay isn’t so good over there, and the job security is dodgy as it depends on competed-for funding... tough to take a paycut.
So WHO can make a difference? We’re left depending on:
a) non-parents who put others’ needs ahead of their own desires,
b) parents who use their tiny bits of spare time,
c) people who work for, or start up, charities/social enterprises,
d) that group that USED to represent the most politically active group on the planet, STUDENTS. Where have the students gone? Where have Bob Dylan/Marley lyrics gone? Now we have that prat Burke singing about how she's strangely drawn to bad boys, gee that'll really help.
Capitalism keeps us quiet and dumb
Can it be a coincidence that the era that has seen a massive increase in general wealth levels in the UK has been accompanied by an era with the most political apathy? Capitalism, for a governing body, is the most fantastic construct for limiting civil unrest (as long as the economy is growing…). It means people voluntarily trap themselves, through debt, in such a busy life that they have no time left for protest or political engagement. By getting ourselves in debt to the absolute max, we are left needing to work flat out to service the debt, no time for anything else. What about those without debt?A wealthy man has got the most to lose and so is the least likely to rock the boat.
So a healthy economy means a quiet, submissive population. By that measure however, those with the least to lose in the UK should be the most politically active. Capitalism's killer flourish has been to silence even the poor by convincing them that if they work harder, smarter, they can earn more in today's meritocratic society. They are sold a story that there are no limits, no prejudices anymore: nothing to protest against. You are what you do, life is out there for the taking: just work more hours (and sign up for another 0% credit card).
Consumer power: it's up to us!
That’s right kids, we are lying in a bed that our country has made. I was going to say ‘we all made’ but then I suspect/hope that rather a lot of the readers of this post are the few who are finding time to make a difference, whilst sipping a cup of fairtrade tea... After all why would you be swotting away on political/idealist posts when you could be watching sky tv or polishing your mercedes? As for me, I'm a bit of both. By the time I 'woke up' (despite my parents' warnings) I was knee-deep in debt (but not waist or neck deep mind you). So that limits the amount of 'difference' I can make for now. But I'm working on it.
To quote Michael Jackson - start with the man in the mirror.
- Pay more for your clothes if you pity the sweat shop employees,
- pay extra for free-range meat if you pity the battery hens,
- pay more for your fairtrade tea.
- Research the fuel suppliers and boycott the inferior players.
- Pressure your company to improve its diversity profile - or go and work for a better company
In the grand scheme of things, modern global capitalism is incredibly young. It makes people fabulously rich but it is incredibly vulnerable and fragile. In a facebook era, in an era of enlightenment following increased personal financial wellbeing, all that remains is for us to manipulate the capitalist framework in order to achieve our goals. If we are furious at the European grain mountains while whole nations starve to death, then an entrepreneur needs to find a trade solution that taps into this steep gradient. We can blow all the hot air into forums that we can manage, but I believe only finding a way to make people rich will provide the fuel to solve large global problems. Basically, I think we should accept global capitalism as inevitable, and on the large part beneficial to many, whilst working on making it serve more people by redistributing the money from the top of the tree. Not all of it - the top dogs need fat pay to drive the machine - but just make it work better for more people.
One problem is that mass boycotts fly in the face of consumer choice. Let's say I could prove that Shell was the most un-ethical and un-green of all the UK petrol suppliers. Assuming we could spread the word via t'internet, it would require several things:
a) people to fill up elsewhere even if less convenient
b) people to pay more if Shell is cheaper (it isn't)
c) people to get their milk and eggs elsewhere if Shell is the only petrol+supermarket model (it isn't)
It doesn't seem too much to ask.
One of my pie-in-the-sky pipe dreams is to set up a large-scale labelling system/website that informs consumers which brands are the most this or the most that, to suit their 'thing'. Hot on climate change? Particular about child labour? Prefer companies who invest profits in charities? My website would tell you who to buy from. If it got big, it would actually drive change. If we all ditched Shell petrol for 2 straight months they'd be badly dented. One small problem: they might lay off loads of UK staff in redundancies - but in theory they should get work in the other brands as they grow to accomodate the new surge in business.
It won't always be dearer
My closing thought: the bigger the fairtrade market gets, the lower their prices will become. If we all switched to fairtrade tea, the prices would drop and we wouldn't have to face the hard decisions any more. The prices are only high because not enough of us buy their products! Catch 22 that only requires some faith and mass will-power to break. Want to make a difference? Go out and shop intelligently (and tell your mates). Remember - the mass action model is vital: if one or two do it, they will pay more money for their beliefs, and not make a difference...but if we can make a movement, the dream can come alive.
