from MWHITE (Guardian CIF)
… global capitalism has created a transnational,
corporate welfare state which transfers wealth from taxpayers to a kleptocratic
elite. It works like this:
Method 1: Taxpayers pay for not
only the infrastructure on which the private sector depends, but also the
state-funded research carried out by the military and public universities to
develop technology such as the jet engine, the desktop computer, the internet,
nuclear power and GPS. This technology gets handed over to the private sector,
which proceeds to make vast profits from it. Then, even though the last 30
years have seen drastic and worldwide reductions in corporation tax and the top
rates of income tax, the corporate kleptocracy evades taxes by hiding offshore
up to £20 trillion of its profits (an amount equivalent to almost a third of
annual global GDP), whilst governments cut spending and charities open food
banks to provide for the victims of this criminality.
Method 2: Until their private
sectors are able to compete globally, capitalist economies such as the US (from
the 1830s till the 1940s) and Britain (from the 1720s till the 1850s), reject
the free market and develop their economies through state intervention, using
protectionism, subsidies and capital controls. The ruling elites in countries
such as Japan, Singapore, Taiwan, France, Austria and Finland follow the lead
of the world’s two biggest economies. Then, as soon as they have gained a
competitive advantage, these beneficiaries of corporate welfare inflict market
liberalisation on developing countries with disastrous effects. Thus, having
increased by 37% between 1960 and 1980 as a result of interventionist economic
policies, the GDP per capita of sub-Saharan Africa fell by 7% in the years
1980-2000, as countries which borrowed from the IMF were forced to cut
spending, privatise their state-owned industries, deregulate their financial
sectors and remove trade barriers. And at the same time that they were wreaking
havoc in Africa, the free market prescriptions of the Washington Consensus were
also failing in the developed countries, where average, annual GDP per capita
growth fell from 3.1% during the 30 years before 1975 to 2.1% during the 30
years of neo-liberalism which followed.
But slowing GDP growth and stagnating median
incomes didn’t stop wealth from being shovelled upwards ever more quickly. In
the US for example, the 18 years preceding the 2008 financial crash was one of
only two periods in the country’s history when the share of total income of the
top 1% exceeded one fifth. The other was the 8 years before the Great
Depression.
Method 3: Governments have to
subsidise employers who don’t pay their employees a living wage. In the UK, for
example, the government spends £23 billion per year on the tax credits it pays
to working families. Then there’s the £4 billion per year in housing benefit
given to households with at least one person employed. And, to keep wages low
and its workforce compliant and insecure, the private sector needs an army of
unemployed – again financed by the taxpayer. As Margaret Thatcher’s chief
economic adviser in the 1980s, Alan Budd, admitted to The Observer in 1992:
“….......... the 1980’s
policies of attacking inflation by squeezing the economy and public spending
were a cover to bash the workers. Raising unemployment was a very desirable way
of reducing the strength of the working class. What was engineered – in Marxist
terms-was a crisis of capitalism which re-created a reserve army of labour, and
has allowed the capitalists to make high profits ever since...........”
Method 4: Instead of retaining
monopoly control of the money supply, governments allow private banks to create
money, which is conjured up on a computer screen and used to speculate, fuel
asset price inflation, pay bankers’ bonuses and create an endless debt spiral
as more and more money has to be printed to enable the repayment of interest.
Then, when the asset bubble finally bursts, governments have to spend trillions
of pounds of taxpayers’ money to prevent the financial system from imploding
and national economies from disintegrating. Finally, to add insult to injury,
governments have to borrow what should be their own money back from the same
banks to which they have given the power to create money out of nothing – and
pay high interest rates because of an economic crisis which the banks
themselves have caused.
And worst of all, whilst the beneficiaries of the
corporate welfare state drain the global economy at the expense of taxpayers,
the media organisations and politicians they own lecture the poor and
unemployed, endlessly moralising about their fecklessness and lack of
responsibility. In doing so, they only confirm what most people already know – that
capitalist democracies really are the best that money can buy.
5 MYTHS about welfare peddled by the right-wing newspapers, the Bullingdon
Broadcasting Corporation and the useful idiots of Tory Middle England:
Myth 1: “Benefit claimants are idlers and parasites.” Wrong. The majority of those
who claim benefits are in work, including nearly 90% of those who claim housing
benefit.
Myth 2: “Unemployment is a lifestyle choice for those who wish to live comfortably
without working.” Wrong again. Firstly, there are between 4 and 5 million
people looking for work but only half a million job vacancies. Secondly, only
5000 people, 0.017% of a UK workforce of 30 million, have been claiming
Jobseekers’ Allowance for more than 5 years. And thirdly, according to the
CPAG, after housing costs have been deducted, the UK poverty threshold is £124
for a single person with no children, £214 for a couple with no children and
£348 for a couple with two children. JSA amounts to £67 per week for a single
person with no children and £106 per week for a couple with no children. A
couple with two children would receive an extra £34 per week in child benefit
and a maximum of £109 per week in child tax credit – a total of £249 and nearly
£100 below the poverty level.
Myth 3: “The massive welfare bill is crippling the economy and needs to be cut.”
But in 1997 welfare spending as a % of GDP was 7.76%. In 2010 it was 7.26%
(www.ukpublicspending.co.uk). And unemployment benefits in the UK are amongst
the lowest in Europe, having fallen from 17% of average earnings in 1976 to 10%
in 2011. As for the proposed housing benefit cap, this will save £290 million
per year, a minuscule 0.5% of the £53 billion per year in welfare payments
given to those in the top half of the income scale.
Myth 4: “The UK is being bankrupted by benefit fraud.” More nonsense. Benefit fraud
has been declining for years and now accounts for less than 0.5% of the welfare
budget (£1.1 billion). Compare this to the £16 billion of benefits which go
unclaimed every year and the annual £20 billion plus which is lost through tax
avoidance and evasion.
Myth 5: “Welfare saps the will to work.” In which case how come post-war
unemployment was at its lowest in the 1950s, when unemployment benefits were at
their highest in relation to pay?
So The Great Tory Welfare Lie will be
parroted ad nauseam in order
facilitate a further transfer of wealth from poor to rich and to distract
voters from the disastrous effects of the government’s NHS reforms and the
monumental incompetence of George Osborne’s economic policies. After all,
demonising the unemployed sells millions of copies of the Daily Mail, is
guaranteed to improve the Tories’ opinion poll ratings and is the easiest way
to divide and rule.
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