We live in a free market world. Whether it’s privatisation of our public services, the death of your local store or the depressing certainty of seeing a Starbucks on every high street, the corporate takeover of our world is almost complete.
The triumph of the new right has been to institutionalise the dogma that (big) business is good and anything that ‘burdens’ business, unions, taxes, regulation or a decent wage for your workers is bad. To question the wisdom of this approach, to argue that these ‘burdens’ are in fact valuable checks and balances on corporate power is to invite McCarthy-like opprobrium.
Corporate greed and excess has, until recently, been routinely overlooked because of the inherent, unquestionable belief that society should submit to the will of market forces. Responsibility for mass redundancies, fat cat pay, golden goodbyes and even dubious ethics is externalised to market pressures, rather than being part and parcel of the corporate decision making process. The free market imperative has over-ridden all other concerns, brooking no argument that economic growth should go hand in hand with social responsibility.
Until the market becomes unfavourable. In that case government intervention, to ‘support’ the market is presented as a responsible course of action. The airline industry in America went cap-in hand to the US government when times got tough. In the UK, Railtrack (the national rail operator) lobbied hard for, and got, government bailouts to the tune of several hundred million pounds when it got into financial difficulty. This was despite the fact that it had made large profits and paid large dividends to shareholders at a time when its management of the railways was poor. When it became insolvent and went into administration, its big institutional shareholders, the major finance houses, demanded compensation from the government. Without the slightest hint of irony, the same companies that had been the cheerleaders for unfettered capitalism, rewarding companies that cut jobs and lobbying against government support for failing industries, went wailing to the government for help when their own jobs were on the line.
The infuriating hypocrisy is that protecting workers and jobs seems to have been the last concern of the corporate world over the last 20 years. Instead there’s been the drive towards ‘flexible working practices’. The phrase is standard Orwellianism for an attack on workers rights: longer hours, less pay, fewer benefits and reduced job security. A recent UNISON survey found that one in four employees now works six days a week or more. Despite the introduction of the European working Time Directive in 1998, nearly four million people in the UK work more than the weekly 48 hour limit, a figure that’s rising.
Yet look at the furore over the government’s latest attempt to give people the right to ask their employers (not have a right to) for flexible working hours. There have been squeals from the business world that the legislation is a mandate for the work shy and that businesses will buckle under the cost. The argument seems to be that we should have flexible working practices, but only those that favour business. Asking for some commensurate level of flexibility for workers is derided as anti-business lunacy.
The same free market fundamentalists who are casting their toys from the executive pram over flexible working legislation are the same ones who argued ferociously against the introduction of a minimum wage; against the notion that in 21st century Britain, people should be guaranteed a minimum, living wage. Business couldn’t afford it. It was economic suicide. Five years and steady falls in unemployment later, these arguments seem a little hollow.
The singular travesty of these arguments is that they have been made at a time when executive pay has become grossly excessive. The top executives at American Airlines last week discovered to have awarded themselves lucrative pay deals at he same time as negotiating a $1.8 billion reduction in pay and benefits for their workers. In 2001 FTSE 100 executives awarded themselves average pay rises of 17% in the year when the combined value of the companies under their control dropped 30%. The rewards for failure in corporate life now seem as generous as those for success. Just imagine the reaction if the government had pushed for a 17% increase in the minimum wage or unions had demanded similar pay increases.
The same double standards are apparent in workers benefits. A recent survey by Labour Research has shown that twenty-nine of the FTSE100 companies have closed down their final salary pension schemes to new members, but company directors are still retaining generous pension rights. BT recently closed its final salary pension scheme to new members. However, Sir Peter Bonfield who managed the company to a series of disastrous results is receiving a guaranteed pension of £321,000. LloydsTSB has also closed down its final salary scheme but CEO Peter Ellwood will receive a guaranteed £336,000 pension on retirement. JP Garnier, the head of GlaxoSmithKline, who has presided over a 30% fall in the company share price and a 25% drop in profits, will be receiving a pension of nearly a million pounds a year.
The defining image of business in 2002, was of once powerful executives being caught with their hands in the till. It was the time when the graceless failures and excesses of militant business came into sharp focus. After many years of frantic effort to meet the increasingly fanatical demands of big business, we may have just reached the watershed. The first signs of movement are there, if the recent revolt by institutional shareholders against boardroom pay is anything to go by. The feeling is growing that big business has had it all it’s own way for too long and that it must be brought to heel. Progressive politics is all about advancing the general good against the private good. Under the relentless assault of militant business it is a dream that we have nearly stopped chasing. But not quite.