Vol.3 No.6, 16 February 2003
It's all Happening in the UK too
By Margaret Legum
A brief visit to the UK makes two things clear. First, the British suffer much the same socio-economic afflictions as we South Africans. Second, that is because we are all subject to the same skewed economic system. Unfettered market forces ensure that unto them that hath shall yet more be given; and that is a recipe for a declining economy and lowering of all standards in public life.
You only have to remember an unsupervised playground at school, or a situation in which law and order have broken down. Who wins? The strongest and the most ruthless. The fact is that rules and regulations are not simply about limitation; properly used they are about strengthening the weaker so that they are not run over by the stronger. Naturally the rules are resented by the powerful, who lobby for what they call 'freedom from bureaucracy and the nanny state'. The global market in capital and trade is the product of the success of that lobby; and the results are seen worldwide.
Over one weekend in Devon I read two national newspapers and saw one local TV programme. Iraq apart, here are some main stories.
Britain is suffering a serious recession - 'Worst slump since 1991 - with a 4% drop in output in 2002, a 15% rise in insolvencies and announcement of 10,000 job losses to come. This is despite an 'emergency' interest rate cut, bringing it to the lowest rate for 50 years. Some 70% of the reduction in output comes from the hi-tech sector - generally touted as the future for British enterprise.
This will have an impact on profits. But not on top people's pay. While the pensions for some five million people holding policies lost a quarter to a third of their value, the Chief Executives of the companies concerned got higher pay, bonuses and pensions. Thus Robert Gunn of Royal and Sun Alliance will get an annual retirement income of nearly £330,000, upped by about a quarter in 2001, while pension payouts from his company dropped by over 30%. Peter Ellwood, of Lloyds TSB, which owns Scottish Widows and some other worst performing pension companies, got his bonus of some £40,000 in 2001, giving him an annual retirement income of about £335,000.
And so on. These men's bonuses are based presumably on their success in insulating shareholders from the effects of stock market price falls - while clients of the companies bear the loss alone. Top people's bonuses are based not on profits, but on the share prices of the companies, because that is what interests most investors. And shareholders can move their money instantly, thereby ensuring that their interests will be placed above those of clients, who are generally trapped by small print regulations.
In the public sector top people ensure that their pay rises by linkage to each other's remuneration - even as they argue that less elevated public servants must justify pay rises by productivity. Thus the Lord Chancellor got a rise of 12.6%, which amounts to about £22,000. This is more than the total annual pay of top firefighters - refusal of whose pay demands has led to a series of strikes. The Lord Chancellor's rise - which takes his salary to over £200,000 - is based not on any claim to have increased his productivity, but on the idea that the Lord Chancellor's salary should be higher than that of the Lord Chief Justice and the Cabinet Secretary. And both those gentlemen had had their salaries upped this year.
Shamed by outcry in the media, the Lord Chancellor decided to postpone accepting his rise. Meanwhile teachers will get a rise of 2.9% - the rate of inflation only - comprising on average about £16 a week or £800 a year. Britain is short of teachers, but not of applicants for the Lord Chancellor's job. So what price supply and demand? Or indeed the theory that salaries are about value added?
Then there is the story of xenophobia as expressed by the unhappy capitulation by Prime Minster Blair to public resentment of asylum seekers. These unfortunate people - already traumatised by having to flee their homes, often under fire - have been thoroughly demonised in the tabloid media. It has whipped up an hysterical fantasy that asylum seekers are the Trojan Horse for Osama Bin Laden, are bearers of AIDS and drain the British Exchequer of funds through welfare benefits.
Blair's response has been to feed this 'swamping' image by pledging to reduce the number of people applying for asylum by half in six months. His concurrent support for war against Iraq is hardly consistent with an expectation of fewer people requiring asylum. In practice the way it is done is to remove all rights or benefits from asylum seekers while their application is being processed, so that starvation or death by exposure follows their arrival in Britain unless Churches and other NGOs help them.
Meanwhile the appalling condition of illegal immigrants (often failed asylum seekers) is illustrated by the story of the prosecution in America of Tyson Foods, whose $23bn annual turnover in the chicken business has allegedly been based on the use of illegal workers. These workers are paid a pittance, receive no benefits whatever and can be instantly sacked - because they dare not complain. Anyone familiar with the lower paid end of employment in 'Fortress Europe' will be able to replicate many times the fate of Tyson Foods employees. I know a smart restaurant that employs a Nigerian medical doctor to wash up. Meanwhile unemployment among legal workers also encourages disgraceful conditions of work: it is called 'flexible' labour.
What about crime? In Devon recorded crime rose by 30% over the past nine months - only partly because of new methods of recording - to over 110,000. The number of violent crimes tripled. Papers daily report 'vicious' and 'motiveless' street murder especially of young women and children. Domestic abuse? In Britain as a whole two women are killed every week by their partners. Social provision? About 4,000 elderly people are in hospital because they have nowhere to go if they leave.
These are all signs of the disintegration of 'social capital': in other words human decency. Perpetrators of horrors do not descend the birth canal as vicious and motiveless killers. They are socialised that way. The way the economy works has a large influence on that socialisation. Britain's dismantling of social provision to support parenting - childcare, for example, is now the most expensive in Europe - has created a loutishness, cynicism and callousness on an individual level that will take generations to reverse.
South Africa's apartheid progressively destroyed social capital among Black populations. Sadly, just as we moved to a new potentially compassionate dispensation we were required to comply with this most harshly competitive economic order, based upon the enrichment of the already most powerful.
© South African New Economics Network 2006. Page generated at 17:10; 24 September 2006