CommonSpace columnist and Common Weal director Robin McAlpine says that lazy economic strategy lies behind criticisms of big business in Britain
I’M not defending Liam Fox. Repeat, I am not defending Liam Fox. OK, I'm defending Liam Fox a very little bit – but only because both his 'fat and lazy' comments and the reaction to them seem to me to be important.
It's clearly not that I've become some kind of free market fundamentalist like the Fantastical Mr Fox, rather it's that he broke a taboo by criticising the British business elite. And if we can't break taboos like this, then I fear we'll just keep sticking our heads in the sand reciting over and over to ourselves that 'the fundamentals of the economy are sound'.
I'm assuming you saw Fox's comments when he said Britain's business leaders were fat and lazy and not interested in pushing themselves to increase exports and build productive businesses.
So, just to be clear, you can call the population of the UK virtually any names you want.
So, just to be clear, you can call the population of the UK virtually any names you want (shirker, skiver, lazy, complacent, uneducated – and if you want links for these things just look for dailymail.co.uk). You can even make it part of your fundamental political philosophy. But you cannot under any circumstances criticise the business elite.
Because here's the thing about the business elite – a number of them own newspapers. A lot of the rest of them advertise in newspapers (and given the current state of media finances 'advertise' and 'keep alive' are quite close to being synonymous).
Very often the thing you're not allowed to talk about is precisely the thing that it would be good to have a conversation over.
They definitely have plenty money to spend on PR agencies and lobbying companies (oh, if only the working poor could send out an army of angry PR monkeys every time the Daily Mail called them lazy scroungers). If you think there is no link between the massive amount of advertising the aviation industry pays for in Scottish newspapers (think about all those Ryanair or EasyJet ads or the expensive Heathrow ads you see these days) and the Scottish media's uncritical repeating of the aviation industry's constant subsidy demands then I suspect you're being naïve.
Very often the thing you're not allowed to talk about is precisely the thing that it would be good to have a conversation over and wealthy businessmen screaming 'I'm better than you so shut up now' should not deter us.
Our global corporations are in an obesity crisis with trillions and trillions sitting unused in bank accounts.
So is British industry fat and lazy? Well, globally it's very hard to argue that this isn't the era of grotesquely fat corporations. To extend the metaphor, if investing and innovating and pushing productivity is 'muscle' and sitting on massive volumes of profit and doing nothing productive with it is 'fat', our global corporations are in an obesity crisis with trillions and trillions sitting unused in bank accounts.
Of course, not every business is Google or Apple. But generally (as Common Weal has been trying to highlight for quite a while now) investment rates in Britain and Scotland are poor. In fact, if you allow for depreciation and population growth, they're virtually zero. We invest just about enough to stop the wheels falling off, but that's about it.
But does that equate to lazy? Here I'm not convinced. It's not laziness that has created this economy – plenty of senior people in the business sector work very hard indeed. In fact, some of them work almost as hard as a single mother holding down two jobs to try and feed her family.
It's not intent – I don't for a second believe that people in business don't want to make a virtuous success of their chosen enterprise.
It's not laziness. And it's not intent – I don't for a second believe that people in business don't want to make a virtuous success of their chosen enterprise. It's that we've almost explicitly designed an economy which is all about shortcuts.
Take a look (for example) at the latest Sunday Times Rich List. The first thing it is impossible not to note is that most of the top part of the list is made up of people who have been attracted here because of the UK's inordinately generous tax-status policies for the super-rich. They are not products of the UK economy but hang out here because we bribe them to.
The next thing to note is the following sentence from Business Insider's report on the list: “Only those who have significant property investments have seen their fortunes grow [over the last year]”.
For about 30 years now UK government policy has pursued a 'financialisation' strategy for the UK economy.
Who is surprised any more? For about 30 years now UK government policy has pursued a 'financialisation' strategy for the UK economy. The fastest way to appear to grow the economy was not to invest in innovation or productivity but to speculate on financial 'products', property, business mergers and acquisitions or other rent-seeking activity.
Another key source of their growth and wealth is massive state subsidy. In fact one respected calculation puts the annual value of gifts from the public purse to the business sector at £93bn. If the government was taking £3,500 from every household in the country and giving it all to you, you'd be tempted to be a bit lazy too.
But this isn't really laziness – its cynicism. I mean, honestly, why the hell would you spend years building up a business committed to creating real new products and selling them to real new customers when instead you could borrow money ridiculously cheaply, invest in property and then ride on with government subsidy in the knowledge that all government policy at any cost will ensure your borrowing rates stay low and your property portfolio will increase in value?
Why the hell would you spend years building up a business committed to creating real new products and selling them to real new customers when instead you could borrow money ridiculously cheaply?
Another leftie, anti-business rant? No such thing. One of the underlying purposes of the very first Common Weal project was to begin to retrieve the mantle of competent economics from the free market stormtroopers. You can be as socialist as you like but we still live in the era of capitalism and unless we get our economy right then it is very hard to fix other parts of our society.
That was the Blair delusion – let rampant neoliberalism reign but tax it to protect the victims. And what do you know? It only works (a bit) when the bubble is inflating and stores up the suffering for when economic reality hits.
The outcome? Most economists accept that Britain has a productivity crisis. No-one disputes that we have the largest balance of trade deficit since the Second World War. The private sector investment picture places the UK at 33rd out of 35 OECD countries. No-one argues that we're in a good place on rates of innovation. The only OECD countries with a worse problem with low pay than the UK are the US, South Korea and Ireland.
The only OECD countries with a worse problem with low pay than the UK are the US, South Korea and Ireland.
Productivity, international trade and balance of payments, investment, innovation, incidence of low pay – surely these are the fundamentals of the economy? How are they sound? We may have structured an economy where they're normal. And yes, we've structured an economy where they may be survivable. But this is not an economy that provides a firm foundation for a 'good society'.
So no Liam Fox, I don't believe that Britain's business people are in any way inherently fat and lazy. I do believe that they often behave in cynical and short-term ways, but in large part that's because of Britain's economic strategy. The thing which is fat and lazy is that strategy, not (generally) our business people (though the behaviour of multinational corporations leaves an awful lot to be desired).
There is lots and lots we can do about this. Common Weal would start with an investment strategy centred around a Scottish National Investment Bank and an industrial strategy designed to focus on building up productive businesses and strengthening all sectors of the economy.
The thing which is fat and lazy is that strategy, not (generally) our business people (though the behaviour of multinational corporations leaves an awful lot to be desired).
If we could have this debate rather than running scared from the Scottish Chambers of Commerce (and if you just had a vision of being chased by a large, flabby, jelly-based entity shouting loudly about how dynamic it is, that was my reaction too) then we might get somewhere. But generally we don't.
It's about Scottish-owned businesses growing to stay here, not to sell out and leave. It's about market access for Scottish producers and challenging cartel control of access to customers. It's about long term investment and innovation. It's about smart specialisation (working out the specific things you do well and doing them really well). It's about production for export – but it's also about production for consumption and reducing reliance on imports.
It's about seeing infrastructure as an enabling mechanism for the economy you want to build and not a sneaky way to give money to corporations to create a temporary surge in employment. It's about recognising that economics is about place and focussing on Scotland's towns and their decline.
It's about recognising that economics is about place and focussing on Scotland's towns and their decline.
Recently I spent a really inspiring day at the Scottish Urban Regeneration Forum's annual conference. These were people dealing with the sharp end of the failures of the economy in real and direct ways. There was nothing fat or lazy about it. I noted how the conversations we had there just don't sound like one of those letters signed by a dozen 'leading business figures' which so dominate the public discussion of our economy.
I don't think business leaders are fat and lazy but they have benefited from fat and lazy policy – and frankly I doubt it's doing anything for their long term health (never mind the long term health of the economy as a whole).
One day a visionary progressive government minister is going to say what Liam Fox nearly said, to challenge the lazy status quo in our economy. When that happens, it could be the start of a really industrious Scottish economy.
Until then, politicians will keep trying to avoid criticism from the PR-heavy business establishment – and we'll all be condemned to pretending that everything is fine. When it definitely isn't.
Picture courtesy of Chatham House
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