Wednesday 4 February 2015

Clinging On for dear life: what to do about it

I must say, I feel like a Liberal today.  I spent yesterday being criticised by a Conservative councillor for my book People Powered Prosperity, and last night being criticised by a Labour councillor for pandering to middle class educational angst in my Radio 4 programme Clinging On (now online).

This pattern of argument isn't logical.  Being criticised by right and left simultaneously doesn't make me correct, but it might constitute evidence in that direction.  Personally I'd settle for Gillian Reynolds' verdict on the programme in the Telegraph this morning: "Rivettingly pertinent".

In fact, she was talking not just about my programme, but also Robert Peston's programme on gross inequality that went out the same day, and asking similar questions.  And the question you can't help asking in this context is - what can be done?

I've set out an approach to rescuing the middle classes in my book Broke.  It involves an economic strategy - building a new entrepreneurial niche to replace the middle management niche which supported the middle classes in the last few generations.  It also involves a political strategy to support the radical anti-trust and entrepreneurial support that will be needed.

But what about the underlying problem: we have built an economic system based on corrosive and controlling debt - just as the Romans did in Palestine, the Spanish did in the New World and the British did in India: saddling people with debt is a way of making them work more frenetically.  The system also funnels wealth upwards to the masters of the universe.

What can be done?

Thomas Piketty has suggested an international asset tax, which will not be simple to negotiate.  Tackling tax havens will help, but not while the next generation of ubermenchen - the internet platforms - are knitting bags for our heads like Madame Lafarge.

Other international tax systems, like the Tobin Levy or Robin Hood Tax may also have to wait for an international consensus that may never emerge.

The pathetic failure of the developed world to shape an effective banking system, especially in the UK, after the 2008 debacle, is a symptom of this same problem: there is no alternative that is being discussed effectively in the mainstream.  They remain locked in the world shaped in 1980.

That alternative will emerge over the next five years, but there is a Liberal solution I will be talking about during that period.  It isn't sufficient.  It does not quite encompass the promise of the phrase 'pre-distribution' coined by Ed Miliband Mark I (sadly forgotten, like so much else, by Ed Balls).  But it is a start.

We need that radical anti-trust movement.  No company should have more than 20 per cent of a national, regional or international market.  The new emerging internet tyrants - I can't think of a better word - need breaking up, and we will need to remain in the European Union to have the clout to do that.

But for some reason, these issues - the demise of the middle classes, the mega-rich, the emerging monopolies that will rule us - hardly get a look in to the mainstream political debate.

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