GUEST BLOG: Bryan Bruce – Capitalism needs to serve the State

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I’m reading Nicholas Shaxson’s excellent new book The Finance Curse. Here’s part of a paragraph that jumped out at me yesterday:

“..corporate bosses …and the financial sector have moved away from creating wealth FOR the economy and towards extracting wealth FROM the economy”

It’s true. But is also just one (albeit very important) aspect of the continuing legacy of greed and entitlement that is the spawn of neoliberal economics and the politics of selfishness.

Yes neoliberalism has a softer face in the current Labour led Coalition Government ,but as I posted the other day the obsession with driving down an already low public debt while ignoring the pain of rising household debt means nothing’s really changed. – And it won’t until the policy of letting the market do -whatever- the- hell – it -likes is changed.

The takers are still getting rich at the expense of the poor .The pre-election Labour/Greens “fiscal responsibility” accord has made sure of it.

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Nothing “responsible” about that policy in my view.

A Progressive government would look to turn such inequality around, but the interim report of current tax review chaired by Michael Cullen reveals that there will be no change to the company tax rate and GST – which proportionally affects the poor more than the rich is to remain.

Meanwhile the rampant consumerism that this form of capitalism has encouraged is taking from the planet rather than returning what we have borrowed from it .

What would be truly “fiscally responsible” would be for capitalism to be made to serve the State and the Planet … and not the other way around.

 

Bryan Bruce is one of NZs most respected documentary makers and public intellectuals who has tirelessly exposed NZs neoliberal economic settings as the main cause for social issues.

8 COMMENTS

  1. Agree that the Tax Working Group is not addressing inequality and a complicated capital gains tax some time in the future wont turn things around.

  2. The lawmakers are still woefully out of touch.

    Wanda Sikes – “nothing good ever trickles”
    Cory White – “oh, golden shower economics…”

  3. Nature creates wealth -trees, foods, minerals etc.

    Humans use energy to extract natural wealth and use energy to convert natural wealth into stuff that gives them an advantage over other humans…either a physical advantage (e.g. a weapon) or a psychological advantage (e.g. fancy clothes, a large car).

    Since the invention of steam pumps, Industrial Civilisation has extracted natural wealth at an increasing pace, and has generated increasing amounts of waste.

    The modern (capitalist) financial system facilitates the extraction of natural wealth and facilitates the concentration of digital wealth in the hands of a tiny minority.

    It is worth noting that whereas in the distant past actual capital was required to set up a business, that has not been true for centuries, and in the modern world money created digitally out of thin air is now the basis of the financial system: hence burgeoning debts.

    Several aspect which will demolish Industrial Civilisation in the not-too-distant future need to be considered:

    1. Most of the easily extracted wealth has already been converted into stuff and waste, and we are rapidly moving down the quality slope.

    2. Wastes that are generated by industrial activity are accumulating to the point of causing ill health and disruption of natural systems.

    3. Extraction of humungous amounts of fossil fuels has resulted in massive, totally unsustainable, human population overshoot.

    4. Biodiversity has plummeted, and ecological balance no longer exists.

    5. So-called natural disaster are on the increase, both in frequency and intensity as a consequence of overpopulation and overconsumption.

    6. We are trapped in the system and have no real opportunity to leave it or modify it.

    7. Nature will either rein us in and may well eliminate us as a species

    Sadly, governments continue to act as agents of banks and corporations (as they have for well over a century), and will not permit necessary change to the industrial-financial system, even though the industrial-financial system will eventually render much (or all) of the Earth uninhabitable for vertebrate (including human) life.

    We are living in the Age of Consequences but most people still think we are living in the Age of Entitlement.

    ‘Rescuers begin the task of scouring the wreckage of the most destructive fire in state records, in search of remains of the dead’

    https://www.theguardian.com/us-news/2018/nov/11/california-wildfire-toll-paradise-recovery-effort

    • Everything you say here is 100% correct. At best we are rearranging the deck chairs on the Titanic, at worst we are strapping explosives to it. The notion of borrowing money to yourself (like what the US, Japan and Europe do), and then leveraging that interest that you’re paying to yourself as an asset that you can then use as collateral for even more borrowing, obviously can’t work long-term. None of this is going to end well.

  4. Sorry. A bit long so you might want to pop the kettle on. But beware the tea pot.

    Money can buy anything except Class. ( And a transmission sensor switch for the gear box of my old car, so it seems. )
    And when was the last time you saw a classy, self made bazillionare? My guess would be never.
    Meet The Queen of Versailles, for example.
    https://en.wikipedia.org/wiki/The_Queen_of_Versailles
    I especially like Christmas time and when they had to ride in business class instead of their very own Gulf Stream. Poor little lambs.
    Ok? Remove all class, grace and style and you have a hungry pack of jackals hunting amongst us. ( No disrespect to actual jackals ) To fight them on their own terms is to become one of them. No one’s immune to being bought. I’d love a car that would jump into overdrive and I would get all biblical in a paula bennett/judith collins sandwich if one of them could cough up that switch. Of course, I’d get the car going then run them down with it, but that’s just a personal thing of mine.
    Returning NZ, to pre neoliberal NZ, is like trying to stick the handle back on the family heirloom tea pot. You can stick it, but it’s never quite the same and as the pot of boiling water is passed about the dining table one can never be sure of when the handle will drop off again.
    I think ‘the thing to do’ is to go way, way back to the very Dawn of Swindles and learn the ways of the Kiwi vampires of yore and report back. Understand how they parasitised our primary industry, convinced us all that hard work and living on little was next to Godliness and, on-topic coincidently, of why our kids should head off to war and kill the beastly Gerry for God, King and Country. And profit, of course. ( But bags not me, Old Boy. Too busy shagging the mistress in Collins’ Family Hotel, later named the Occidental, after myself and a few fellows fell upon an idea to make fortunes without breaking a sweat. “Unlike my mistress what!? Baw haw haw haw…!”)
    Here’s a nice wee read for you @ BB.
    WOOL. A history of the NZ wool industry by Bill Carter and John Macgibbon. Ngaio Press.
    If you would like? I can loan it to you. I’d be happy to send it up.
    Perhaps I should explain further…
    The money those few scum bags deprive us of while they swim in the stuff? The resources and assets they swindled from us? The fortunes enjoyed by those select few while there are homeless people living on card board boxes in the streets?
    You might ask yourself, where’d that money come from?
    And they might ask themselves, after LSD or mushrooms? My God! What have I become!?
    ( Talking Heads inspired. )
    The money everybody likes to pretend they’ll get a little of …? “We just have to wait until after a change of government…”
    But, that never eventuates. Promises are made then disappear like the suns shadows up the wall. “ Lets do this!?” has turned into a warm little family keeping its head down while pulling in six figures plus entitlements and expenses.
    There’s just one last hope and it’s in that terrible can worms who live in fear of the can opener. You know how to kill parasites in the bedding? Hang the dirty laundry in the bright light of day. That’s two metaphors!
    Jacinda Adern should saddle up a tractor and head out into turnip country, where our primary industry is, and see where the money comes from. Meet the people. Shake a few wretched, hard-physical-work-worn hands.
    This would be a great little project. Watch a sheep have a lamb. Did you know, a sheep in labour screams like a poor woman giving birth might without the spinal tap? It’s the most horrible sound. In the dead of night during lambing season I can hear such blood curdling bellows, howls and shrieks of agony coming from often cold, rainy, windswept, inky black paddocks…
    Follow the new born ewe lamb. It grows up, grows wool, makes babies… The little ram lambs are somewhat more lucky. They get fat, are killed and are eaten as teenagers. Saved from a life of breeding, pain, hunger and cold.
    Follow the wool. The wool is bailed, sent to an auction building where it’s spread out for all buyers to look at , feel, test for breaks in the lock etc. ‘Assess’, is the technical term. It involves a lot of tutting and down the nose looking. At the best wools in the world. Any Italian suit maker will attest to that.
    The wool is then sent to be processed into yarn which is spun into fabric and it’s at that magical, almost mythical point, that wool morphs from being worth a few dollars a kilogram to a high falootin Ponsonby fashion statement worth the price of a bungalow on a 1/4 acre in Winton. I’ve seen ‘hand knitted’ jumpers for sale in The Guardian fashion features for £700 pounds. That’s $1344.00 NZ. For a few hundred grams of wool. I just talked to Kevin. Kevin is a wool buyer. Kevin told me that cross bred wool, on the courser end of the wool scale and traditionally used as a carpet fibre was buying in at around $1.40 to $2.00 a kilogram. Finer, Marino wools were getting much better prices at around $18.00 to $30.00 a kilogram.
    A kilogram. $30.00 a kilogram? Fancy fashion wool jersey in UK at around £700.00 pounds? For a few grams? A struggling fourth generation high country sheep farmer might ask? “But where’s the other $3360 a kilogram?” I say! Work it out? Look it up? Get together, form a compulsory Union movement, weld yourselves ( Metaphor ) to your down-stream service industry then go on strike until a Royal Commission of Inquiry airs the laundry as they sharpen the can opener.
    ‘Odds’ of wool, that is leg wool, necks, crutchings etc were at around .50 cents a kg. That’s what The Warehouse socks are made from. Selling at what? $10.00 a pair? That’s why those cheap socks look like an elephants condom after one wash and a few despairing slouches to WINZ. ( No disrespect to people who must go to WINZ. )
    And the only time farmers are mentioned by the MSM, politicians and even here, in TDB. The bastion of media enlightenment, is when there’s a shortage of someone to hate on.
    But move along, right? Nothing to see here as we ‘ do this’. We’re certainly fucking being done alright.
    BTW. [It’s] not just wool that we’re getting fleeced on. (Pun) It’s our dairy, fruits, timber, fishes etc too. And you might ask yourself? How come [it’s] so pandemic in NZ? A simple answer is ; ‘They’ changed laws by acts of parliament to make the otherwise illegal, legal because they could see an opportunity to make fortunes without lifting a soft pudgy little finger. Carpet bagging grifters infected our government years ago and we’re still trying to spot the scum who live rich, wealthy, healthy lives right under our noses. They’re so obvious, they’re all but invisible. Except, for example, micky fay. He can be seen flying over the homeless living in the gutters below the Casino in his private helicopter.

  5. Capitalism serves capital. It will never serve the state. Thats what Socialism is for. Shame there are few if any parties left that embrace that notion.

  6. Capitalism serves capital. It will never serve the state. Thats what Socialism is for. Shame there are few if any parties left that embrace that notion.

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