Tackling monopoly power

Over the years debating fair trade versus free trade, I have come to the slightly woolly conclusion that they don’t have to be opposed to each other. But that does mean making a clear distinction between Liberal free trade (the right of free people and communities to do business with each other, or not) and Conservative free trade (the right of the rich and powerful to ride roughshod over anyone).

What makes the difference between the two, and guarantees some chance for Liberal free trade to flourish, is being vigilant against the abuse of monopoly power. This used to be a central plank of Liberal economic policy until the 1950s and 60s, then – for some reason – the party forgot about it.

This was immensely damaging because the Labour tradition wasn’t interested, regarding anything about business as anathaema, and the Conservative tradition was primarily concerned with the rights of the powerful and the economic fantasy of trickle-down.

As a result, we wake up this week to hear the miserably pusillanimous report of the Competition Commission on BAA, wondering if it was possible that their monopoly of UK airports was damaging consumers.

Well, of course it is damaging consumers. How could it not be, when the main focus of BAA is currently to keep consumers captive and in their shops and to pay off their hideous debt mountain? Where is the pressure to be nicer to the poor benighted passengers?

Why this extraordinary ignorance about the effects of monopoly? Is it New Labour ideology? Is it a naïve believe in the efficiencies of scale? Actually, having met a few of them at the Competition Commission, I think it’s worse than that – it is a massively naïve belief that if a business situation exists, then consumers must have chosen it to be so.

Either way, it is time Liberal Democrats made the issue of monopoly their own.

I feel this very strongly this week because of an article in the Sunday Telegraph last weekend about how Tesco was dealing with food price inflation by squeezing their suppliers.

This might help consumers in the short-run. But if they abuse the monopoly power shared by the Big Four supermarkets and squeeze these suppliers too far, as the article hinted, then we will lose our local capacity and will face massive inflation as the supermarkets seek out suppliers overseas.

When you think that the Big Four currently abuse their monopoly position by insisting that they can pay suppliers after 90 days, rather than the 30 days accepted by their small competitors – giving themselves a rolling interest free loan equal to two months of their entire stock – the chances of them accidentally rolling over a portion of UK agriculture is not beyond the bounds of possibility.

And now that Tesco is trying to gaol critics in Thailand, and silence the press in this country with their ferocious legal action against the Guardian – we libertarians need to keep our attention as closely on them as we do on the antics of their friends in the government.

Missing narrative

For goodness sake. Why is it that our London mayoral campaigns are so bad at projecting any kind of big idea or vision?

I’ve just watched Brian Paddick, an excellent candidate in so many ways, on the Newsnight debate. His opening statement raised a couple of problems, notably knife crime, but offered no believable solution. Even his passionate explanation at the end about what he would do about knife crime was too bland and unspecific to seep into people's minds. In fact, the kind of local partnership between police and neighbourhoods is exactly what was done so successfully in New York, and Brian should have said so far more explicitly.

Nor has there been any distinctive analysis about what’s gone wrong with London: the greedy decision by Livingstone to add another million people to the population of London, with predictable results for transport and public services.

Why is it that politicians, and Lib Dems in particular, are so naive about this - that somehow, just by mentioning a few problems, people will suddenly vote for them? Or that anyone will remember what they say when they haven't the faintest idea what they exist for?

Why Chinese capitalism is spreading to the West

Watching the events unfolding in Tibet has made me think about the strange combination of socialism and capitalism in China, where free trade has emphatically not created the conditions for freedom. I’ve been wondering – as Hilaire Belloc predicted nearly a century ago – whether there isn’t a new kind of capitalism, East and West, which is so devoted to big systems that individual freedom counts for nothing

The current trends are such that it might be time to revisit Belloc’s The Servile State – and preferably before the Beijing Olympics. Because, as he predicted, we now face a tyrannical combination of capitalism and socialism that uses the rhetoric of free trade, but is turning its back on competition – and all in the name of ‘efficiency’. This contains the seeds of a new kind of oppression: the subjugation of everything to corporate efficiency and government-sponsored profitability.

You can see it in the new phenomenon of Chinese socialist capitalism, with its brutal suppression of communities, tradition, dissent and much else besides.

You can see it in the phenomenon of Bush-Cheney American capitalism, with its $10 billion monopoly contract to Halliburton in Iraq.

You can even see it in Gordon Brown-style UK capitalism, with its consolidations, its dwindling of potential bidders for local waste contracts, where you can have anything you like – as long as it’s Tesco, with a security guard watching you from a chair by the door.

See longer version of this post on my newsletter:

http://www.david-boyle.co.uk/newsletter.html

Only connect II: this time, skyscrapers

Brian Paddick was absolutely right in his condemnation of Ken Livingstone’s insane policy to destroy London’s skyline with tall, inhuman, glass monuments to the vanity of architects and the greed of corporations.

I was pleased and relieved that he did, having wondered rather what he thought on the issue. But why do politicians, and Liberal Democrats in particular, leave themselves so open to the charge of empty-headed bandwagon-jumping?

If we just say we agree with the furore about tall buildings, will anyone remember? Of course not. If they do remember, will they believe it derives from a distinctively Lib Dem analysis? Definitely not – any more than they do when we get excited about post office closures.

Brian badly needs to explain the background, explain why we are concerned, and why Ken is making such a mistake. Because the Mayor’s policy is currently the old-fashioned socialist objective of growing London’s population by an extra million, squeezed somehow into these glass towers. That is the explanation for the enthusiasm for skyscrapers, and the constantly repeated instructions to developers to make them higher. Read the LDA’s London Plan, and you’ll see.

What we need to do is to condemn this for what it is: short-sighted, selfish sucking of population and resources into an already over-crowded city, at the expense of our sanity, green spaces and traditionally human-scale city. I queued for 20 minutes just to get out of Leicester Square tube station recently. Goodness knows what it will be like with Ken’s extra million – people don’t stay in their towers, you see.

So, for goodness sake, let’s make these connections. Let’s go for a coherent critique – on this and other issues. Let’s raise the level of debate to a higher moral plane (not just whether London looks pretty or not). Otherwise it’s all so forgettable.

The supplicant state

Simon Titley is at the very forefront of the attempt to renew the intellectual underpinnings of the Lib Dems, and his commentary in this month’s Liberator is an important contribution to this:

http://www.liberator.org.uk/article.asp?id=132304049

The real division in the party is now, he says, about what it means to be human. “Are we primarily partners, parents and relatives; friends, neighbours and colleagues? Or do we define ourselves more in terms of the things we buy?... Do the Liberal Democrats envisage a society of active citizens or supplicant consumers?”

That is exactly the right question (though I might quibble with the use of New Labour-speak like ‘active citizens’), and Simon is quite right that there is a dividing line in the party over this issue which is preventing us from articulating a genuinely Liberal narrative.

Where I take issue with him is exactly where that dividing line lies. Simon identifies the wrong-headed wing with those who subsume this human relationships within economic relationships, with the idea that people are individual consumers faced with a series of passive choices.

That is right, but Simon misses out the other side of the argument. Because that reduction of people into dependent supplicants is not confined to those can see no further than narrow consumer choices in public services; it is alive and well among those who don’t believe in choice at all – who are quite happy that people should be grateful but passive recipients of services defined by the local state.

Because, in practice, the wrong-headed idea that we oppose is not confined either the private or the public sector. It is an insidious combination of them both – the idea that people are defined narrowly by their needs, and should be administered by giant agencies part-public, part-private, by huge databases and remote call centres.

This is the new centralised supplicant state, and Simon is absolutely right that it is the heart of a new Lib Dem critique of public services. Not because the supplicant state is too public sector, or too private sector – it borrows from the worst of both – but because it is deeply alienating, deeply inefficient and deeply ineffective.

How to boost the bottled water industry

The Evening Standard’s campaign for tap water in restaurants is being given good coverage – at least in their own newspaper. It’s a good cause as well. Why should we encourage the bottled water industry to jet the stuff all over the world, when we are also paying through our water rates to clean the stuff in the taps?

But then, won’t those who sell bottled water be delighted by government plans to put fluoride in the water. I’ll be buying a lot more bottled water myself just to avoid the government’s compulsory medication.

Post offices: only connect

Why is it that politicians don’t make basic connections that make themselves easier to understand and help people remember what they’re saying?

I’ve puzzled over this for ages. Is it that their brains are shaped like government departments, with clear demarcation lines between issues? Is it that they are stuck with the usual categories of journalists?

Either way, why is it that Lib Dems are not making more connections about the catastrophic closure of post offices?

The post office issue is important on its own, but it looks like just another bandwagon campaign. Connect it to the rest and you can raise the level of debate to something more connected and crusading.

Every sub-post office that closes, according to research by the think-tank I work for, reduces money flows in the local ward by an average of £300,000 a year. That is seriously impoverishing.

Nor is it just post offices either. We are losing banks, pubs, greengrocers, police stations, playing fields and all the rest, by deliberate policy – a kind of sucking of the life out of our communities.

And there’s the Competition Commission today saying that the problem is there isn’t enough competition between identical supermarket formats, while the high streets continue to suffer from this kind of monopolistic thinking.

So for goodness sake, let’s try to stop sounding like politicians campaigning on small local issues, and make the connections to the slow impoverishment of so many communities, and their transformation into dependent supplicants to big corporations and big government agencies….