Saturday, May 21

The Guardian’s vision of Britain outside the EU: a treasure island for rentiers | Economic policy

When the UK entered the coronavirus era in March, state resources and collective commitment they mobilized on a scale not seen since World War II. Decades ago, Britain had revealed itself, partly thanks to its ability to organize the industrial power of the empire, as a formidable world power. Its economy was energized with advances in radar, atomic energy and medicine.

Although the story of the pandemic is not over yet, there seems to be no such transformation in sight with Boris Johnson. Depressingly enough, family tendencies of greed, incompetence and cronyism are reaffirming. This is bad news for an economy in which there has been a collapse of socially useful innovation. Britain’s lack of high-tech manufacturing capacity, especially in medical diagnostic tests, was cruelly exposed by the pandemic.

This country has become more of a buyer than a producer of technology. But it is notably inefficient, despite an extraordinarily high percentage of lawyers and counters in the workforce. Connections seem to matter more than inventions. How else to explain why, in the desperate struggle to purchase personal protective equipment, ventilators, and coronavirus tests, billions of pounds of contracts have gone to companies run by friends or supporters, even neighbors, of conservative politicians? , or no previous experience?

The story is not short examples where internal politicians succeeded in extracting virtually all of the surplus that the economy created. Such influential interests Molded politics to expand your piece of the pie. Greed was limited only by the need to let the producers survive. The impact of war, revolution, famine or plague provides an opportunity to fix a broken society. But if, after the pandemic, UK politicians care less about reform than retention of power, they will not be able to curb the greedy enrichment that undermines democracy itself.

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Extraordinary earnings

Perhaps the most penetrating X-ray of this phenomenon today is that of Brett Christophers in his book Rentier Capitalism. The scholar argues that Britain has become a treasure island for those seeking excessive profits from state control of natural resources, property, financial assets and intellectual property. The rent, paid by the tenants to the rentiers, is linked to the ownership or control of said assets, which are scarce under conditions of limited or no competition.

Christophers says the first sign of this new order was when Britain found black gold in the North Sea. He writes that the deputies of the public accounts committee indicated with disbelief in 1972 that “the first large areas of the sea were leased to companies with as much generosity as if Britain were a credulous sheikhdom.” After that, public assets were sold cheaply. The private sector ended up controlling loosely regulated monopolies in the supply of gas, water and electricity, and public transport and telecommunications. Customers lost and overpaid for poor service. In rentier’s paradise, windfall profits abound. Brazenly occupying the lowest moral ground was essential, as home builder Persimmon demonstrated by making a profit from helping buy state-backed giants long enough to deliver a £ 75 million bonus to his boss.

The banks, which brought this country to the brink of collapse a decade ago, are at the heart of a rentier state. France, Germany, Japan, and the US have smaller banking sectors than the UK. While the banks that earn rentals have prospered, the households that pay them, either directly or directly consumers, or indirectly as taxpayers of a debtor state or clients of debtor companies, have failed.

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The anger that such lust engenders spreads politically by making voters complicit in the theft. The municipal housing sale, Christophers says, was a privatization that gave many of those most inclined to kick against Thatcherism a personal stake in the project. Culturally, Brexit plays the same kind of role as the right to buy, insulating poorer voters from the idea that the resulting policies will suffer.

The prime minister understands that Covid can change Britain, but lacks modernizing policies. Extols the virtues of free competition, both on its own and because such freedom, he reasons, will somehow unleash the spirit hovering within a pre-Brexit Britain caged by the coronavirus. You are certainly betting that the disruption of the EU exit will be lost in the roar of an economy taking off as an inoculated population returns to offices and shops.

Weakened regulations

The gap between rich and poor in the UK is at least as high today, academics calculate, as it was just before the start of World War II. This is largely because the British state that once mediated the struggle between labor and capital has been taken over by rentiers. The weakening of regulations, the reduction in the importance of fiscal policy and the crushing of social protections have corroded liberal democracy in which an increasingly influential wealthy few have enjoyed a free career. Ultimately, rentiers want to increase what economist Michał Kalecki called the “degree of monopoly” in an economy. This allows them to limit the ability of workers, consumers and regulators to influence the margin of selling prices on costs and to defend the share of wages in production.

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The EU says its labor, environmental and customer protections are a floor, not a ceiling, and cannot be traded for frictionless market access. If we had stayed in the club, our ability to concentrate profits for monopolists would have been hampered in future trade deals negotiated by Brussels and open to scrutiny by MEPs. Outside the EU, Johnson can exchange such regulations: without parliamentary supervision – and Scrap safeguards into new technology for higher monopoly profits. Karl Marx wrote in Louis Bonaparte’s Eighteenth Brumaire in 1852 that “Conservatives in England long imagined that they were enraptured by royalty, the church, and the beauties of the old constitution, until a time of trial wrested their confession of that they were just ecstatic about the rent ”. His assessment of the conservatives of the early 19th century applies with absolute precision to the conservatives of today.

Christophers’s idea is that the Conservatives under Johnson are a party of – and para – rentiers, much more than the interests of productive capital. This explains why, after 2016, the Conservative party embraced Brexit and downplayed the concerns of productive capital about leaving the EU. It will be to this country’s great detriment if the pandemic allowed Johnson to combine current fears with a yearning for hopeful change to persuade the average person to vote against his interests in the future. But history often repeats itself first as a tragedy and then as a farce.

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