Economic Cannibalism

 

I caught something on TV last night (showing my age here, watching linear push programming) about the mistreatment of cattle on a dairy farm here in Wales. The footage was pretty disturbing and the activity of those concerned deserves nothing but contempt; but one salient point other than the cruelty itself stood out for me. The fact is that dairy farmers are making virtually zero profit out of selling their milk.

When Doris and the UK Non-Gov™waffle on about 'levelling up' the economic disparities (between where and where, exactly?) in the UK, they talk largely in terms of capital investment in infrastructure projects such as transport links to give the hoi polloi the 'advantage' of 'commuting' to work. They miss the point entirely - almost certainly wilfully, having little care for anyone but themselves - that fundamentally our economy is broken at its heart and no amount of railway or road building alone can fix it.

Underlying this breakage are some pretty basic facts. Food is too cheap, energy is too expensive and wages on the whole are far too low. None of these fundamentals can be addressed simply by building infrastructure and expecting 'the market' to make it all work. I'm afraid 'invisible hands' do not exist in the real world - Adam Smith was writing in 1759, when such spiritual nonsense was considered the equal of the temporal plane of existence - markets do not auto-level to the common good as apologists for laissez-faire would like us all to believe.

The simple reality is that large numbers of us are being priced out of market participation by gross inequality. The market needs domestic movement of money to function, not just cut-price goods from countries with lower standards than our own, or endless credit as a poor substitute for proper wages. Government claims regarding high employment levels and increasing job availability just don't cut the mustard if the jobs people are in are poorly paid with bad conditions and the jobs on offer in the market are similarly so. We really are seeing economic cannibalism in action: capitalism slowly eating itself from the inside out.

To quote Noam Chomsky from 'The State-Corporate Complex: A Threat to Freedom and Survival' 2011':

'[Adam Smith] warned that if British manufacturers, merchants, and investors turned abroad, they might profit but England would suffer. However, he felt that this wouldn’t happen because the masters would be guided by a home bias. So as if by an invisible hand England would be spared the ravages of economic rationality. That passage is pretty hard to miss. It’s the only occurrence of the famous phrase “invisible hand” in Wealth of Nations, namely in a critique of what we call neoliberalism.' (my italics)