The problem of Etonians

The public’s approval of politicians is at an all-time low. Most people think that the elected representatives of all parties are simply self-serving and money grabbing, mainly interested in looking after their own narrow band of supporters while cramming as much corporate funding and expensive claims into their pockets as possible.

The Tories are especially singled out as being the party of vested interests, of making life easy for the wealthy while cutting benefits. Symbolic of this is the number of Etonians in the cabinet and on Cameron’s personal staff. Recently Michael Gove has labeled the number of Etonians in Cameron’s inner circle as ‘ridiculous’. However the problem is more widespread than this, 45% of all MPs are privately educated compared to 7% of the population. This is true of the opposition as well as the government. Labour has made great strides in women and minority representation but there is still a problem of the over representation of MPs from wealthy backgrounds with private educations. All parties are as bad as each other in this regard.

The country should not be run by a private school educated elite. Our government cannot be made up of MPs out of touch with the problems faced by most people. Problems like trying to buy healthy food for a family on a tight budget. Problems like trying to give your child the best start in life when state school is the only option. Increasingly, people have the problem of having choose between food and heating. As a country, we will struggle to deal with these important problems if none of our leaders have any experience of them.

It is no wonder that the current government wants to stop benefits for the under 25s. When they were young, their parents lived in houses with spare rooms for unemployed children to stay in between jobs. It honestly has not occurred to the members of cabinet that some parents cannot financially support their children up to the age of 25. It probably has not occurred to them that a 24 year old can have a family and a career, be made unemployed, lose their house and then be forced to move their entire family in with their parents. These are not circumstances that occur to the children of the wealthy, so it is no wonder a government of such people has not taken this into consideration.

The political principals of all leading parties are guided by the ideology of the wealthy. Their creed is competition, self-reliance, hard work brings rewards – but these too only benefit the wealthy. Competition seems like a good idea when your children begin with a head start in the race. Self-reliance is fine if your expensive private education allows you walk into any job of your choosing. And whilst hard work may well bring rewards for them, to most politicians the hard work of an office cleaner is not worth a living wage.

Poor people have to play by the same rules as the wealthy and they lose out. When they vote for someone else, the guiding principle behind our economy do not change. Meanwhile the rich get richer, the gap between rich and poor widens, class mobility decreases and safety net which most poor people rely on is being dismantled.

There are currently more working people in the UK claiming benefits than non-working. This is because wages have stayed low while food, heating and rent bills have soared. Still the government is cutting from the welfare bill. Wealthy MPs with private education have little need of the safety net benefits offer so they view it as unnecessary expenditure. If there were more MPs for poorer backgrounds then the benefits poor families rely on might not be under such threat.

Related to this problem is the fact that too many politicians have only ever worked in the Westminster bubble. There is a dire lack of MPs who are former teachers, nurses, police officers, office workers and shopkeepers. Most rising star MPs worked for think tanks or as special advisers before being elected. This has created a disconnection between the problems of the outside world and the problems of Westminster. Case in point is the low importance most voters place on EU membership (either in or out), but this debate still dominates Westminster.

Parliament is becoming increasingly abstract from the real world issues which affect most people lives and the root cause of this is the rising number of MPs from privileged backgrounds, who are privately educated and have only ever worked in Westminster. This is hurting our democracy as more people become disaffected with politics. Faith can only be restored in politics when politicians take steps to change this overrepresentation. All parties need to take action to stop this trend and have candidates which reflect the income and educational background of their constituents. In short, fewer Etonians and more people who have experience of the everyday problems most  people have to deal with.

No One Likes Tax Avoidance

You would be hard pressed to find someone who supports tax avoidance. We all agree that at least some tax must be collected for the police, fire service, the military, etc. Only an extremely libertarian inclined individual would suggest that it is acceptable for multi-billion pound companies to only pay tax on a tiny percentage of their income. However, I believe that it is not enough to oppose tax avoidance and that only radical change to our economy can prevent large companies from dodging their responsibility to society.

There is little political will to tackle the problem of tax avoidance – the government would much rather spend its time exaggerating the problem caused by poor people. Whenever anyone suggest that a stronger line be taken with large companies, their apologists argue that if we are not nice to the wealthy people and let them get away with whatever they want, then they will take their money elsewhere. As recent tax probes have shown, if rich companies do not pay tax when we are very nice and accommodating to them, then I am not certain what we have to lose by compelling them to pay more tax.

A political and popular desire to tackle the entrenched privileges of wealth is needed to stop tax avoidance. Whenever a particular gross piece of excesses is uncovered, we as a nation simply tut disapprovingly but nothing ever changes. We are currently going through a phase of rumbling and groaning when people have to grudging admit that the perhaps the wealthy do treat their social obligation as a wall to urinate against. Still even if new laws are passed and loopholes closed, tax avoidance will still continue on a grand scale, as you cannot prune neo-liberalism into something fair or compassionate. This is what most people (including a lot of lefties) would like to believe, partly because it conveniently avoids questioning the wider implications of tax avoidance. If companies treat their social obligation to pay tax something to be wriggled out of, how do they view health and safety or even employees’ wages? If you think the idea that a company would try to avoid paying its staff is ridiculous, then look at McDonald’s attempts to do just that in America.

An economic system which concentrates wealth among the few, as opposed to distributing it more evenly, will always have the problem of these few wealthy individuals taking advantage. They hold the greater amount of power and thus cannot be compelled to pay their fair share of taxes. What we have seen recently with Starbucks, Google and others is an indication that taxes which are supposed to be inescapable (remember the old adage) can be avoided by the wealthy as our wealth based system will always create an incentive for the rich to avoid paying their fair share of tax.

The solution to wanton tax avoidance is to change the way we think about wealth completely. We need to stop thinking about wealth as a goal in itself, but more a by-product of success in another field such as science or art. Wealth (much like fame) is a life goal in and of itself, one which we acquire through cynical self-interest, the proof for this is that no small child ever said they wanted to grow up to be a hedge fund manager when asked what they wanted to be in primary school. We also need to stop respecting people purely because they are richer than us. Being wealthy does not necessary mean you are a more creative or intelligent human being, it more likely means that you had a bigger leg up in life than others. Mainly we need to think about the global plutarchy of the ultra-rich as a different sort of person who transcends national identities and inhabits a world so different to ours it might as well be alien. The idea that people whose existence is so far removed from the pressures of normal life know what is best for the average person is laughable. We need to stop bowing down to the extremely wealthy and living in fear that they will take their money else where - that fire sale has already happened. We need to remember that social obligations are for everyone, and it is grossly unfair that wealthy companies pay a smaller percentage of tax on their income than the average private citizen who earns a lot less.

Only with radical change will the excesses of greed and wealth be stopped. Small, incremental changes will not stop tax avoidance, sweeping reform of our entire political and economic system is needed. If we are all so disapproving of tax avoidance then it is time we face up to what the underlying causes are and accept what the solution is.

How fair is fair-trade?

Ethical consumption is at an all time high. Never before in the history of the world have people been so unaware of how their goods reached them, but also curious to know, hence ethical consumption. In the past, we would know who had made our clothes and where the wool had come from. In the more recent past, we would not have known, but also we would not have cared. Now we want to know and we want to care.

Fair trade and other forms of ethical consumption are ever present in today's markets. Once the preserve of specialist shops, they are stocked by supermarkets alongside goods made in sweatshops without a hint of irony. The fact that even Nestle, that old boycotter’s favourite, now sticks the fair-trade label on some of its confectionary hints that fair-trade is part of the mainstream. It scratches an itch some people have about their spending habits. However, there are people who knowingly consume unethical goods or are aware of a dubious moral track record of certain brands but continue to purchase them anyway.

Why does this happen? There is a degree to which unethical consumption is a reaction to pressure to consume ethically. Some feel a knee jerk reaction to what is perceived as left-wing pressure, political correctness or interference in their daily lives. These individuals continue to consume unethically in order to resist social pressure to consume ethically. This attitude is selfish and a result of culture which emphasises individual gratification above collective good. There is a degree to which advocates of ethical consumption are their own enemies as applying pressure to change consumer habits can drive people in the opposite direction. We can see a similar phenomenon with advertising; many people avoid the Go Compare website simply because their adverts are so annoying.

Worse than callous disregard for the suffering that unethical consumption causes are those who believe that unethical consumption is good for the world’s poor. There are those who generally believe that sweatshops and exploitative labour improve the circumstances of people in poorer countries. For some this is simply a desire to justify their spending habits and a way of intellectualising rigid brand loyalty. For others it is somewhere between blind faith that capitalism will solve the world’s problems or genuine belief in the libertarian free market, a point of view which can only come from a position of privilege. Just as capitalism’s greatest defenders are those who have lucked out and currently sit on top of the heap, unethical consumption is defended by those who value cheap produce above all else and cannot see beyond the end of their garden. Only someone who has never stitched T-shirts continuously for twelve hours for only a few cents could ever suggest it was a route out of poverty.

Just because someone consumes ethically does not necessarily remove the impact of their consumption on others. It’s not that buying a Fairtrade T-shirt or jar of coffee isn’t preferable to a non-Fairtrade version. It’s just to say that these consumers aren’t just paying for a product alone. Ethical consumption is just another level of service. People who have more than their fair share feel guilty and want to know what effect their excess income has on the world. Purchasing Fairtrade products is a way of assuaging this guilt, whilst essentially maintaining the present system by those it benefits, albeit whilst also acknowledging its obvious flaws. If you are rich, you are hardly likely to seriously challenge the economic model that made you rich. It is however difficult to deny the problems caused by inequality on a global scale so a certain section of the wealthy have come up with ethical consumption as a means to relieve their guilt without having to threaten their position within the established economic system.

There are those who question the rights of ethical consumers to have a larger income than average and believe that this inequality is part and parcel of the system which lead to ethical consumption differentiating itself from unethical consumption. In short there will always be unethical products until we radically reconsider how the market place is constructed. Only substantial change to every aspect of our economy will remove unethical products.

Leaving this complex issue up to anything as simple as consumer choice will never resolve the problems caused by unethical consumption. Offering ethical alternatives from the same companies which created the problem in the first place alongside their unethical counterparts is not a solution and will never be. If you worried about unethical produce then ethnical consumption will not resolve the problem. Only radical change to the economy will suffice. However, in the absence of a strong movement for radical change, ethical consumption is preferable to ignoring the problems consumption creates, or choosing to believe that exploitation will rid capitalism of its contradictions.

Bankers! Bankers! Bankers! Out! Out! Out!

The death of Thatcher has opened up a lot of old wounds and a lot of old debates. The news narrative was dominated by North Korea and IDS claiming he could live on £53 a week, then all of a sudden we were dragged back to the 1980s to debate the miners’ strike and the poll tax riots. Again and again, I have heard the same justification for Thatcher's actions: that the unions controlled the country in the 1970s, and that they used collective bargaining to bring the country to a standstill.

Clearly there was public outrage following the Winter of Discontent, which Thatcher effectively harnessed to pursue her own political agenda. Even many of those who disagreed with her cure for the problem agreed that ‘something had to be done’. Most politicians are opportunists and this was a once in a generation chance to change the agenda. Thatcher's success leads me to ask: why are we so bad at this on the left? Could we not use the banking crisis in the same way to achieve our aims?

Anti-banker sentiment is at an all high. Bankers are derided across nation, from cartoons in broadsheet newspapers to Carling commercials. Their popularity is located on the scale somewhere below politicians and above benefit claimants - firmly near the bottom. However no-one is making a strong attempt use this anger to effect any change, unlike the Thatcher government was able to in the early ‘eighties when it capitalised on anti-strike sentiments.

Essentially, the main reason for this is the entire political establishment is broadly in favour of letting the banks off the hook. Neither side wishes to be publicly viewed as in the banker's pockets, but the general consensus in Westminster is that we need the elitist, tax dodging money swallowing black hole that is the City of London more than it need us. This is of course not true, and will remain untrue until the Square Mile takes off and flies above us in a disgusting parody of a Douglas Adams novel. Britain isn’t the Isle of Man. We have an economy that exists outside the Square Mile and anyone who works in chemical engineering, software development, games & high tech arts, aerospace or any of the other industries in which Britain is a world leader should be greatly offended by the idea that we dependent on the bankers.

It doesn’t have to be this way. ‘Bashing the bankers’ is just tabloid stuff – in and of itself, rhetoric doesn’t achieve much. What it could do, however, is provide the ground work for creating a broad consensus for more intelligent regulation, and above all an end to the morally redundant idea that rampant inequality is somehow good for everyone. Anti-banker sentiment could be a starting point for a debate challenging the assumptions of our pro-greed, anti-collectivist consensus, just like Thatcher challenged the political consensus of the post war era. It’s a debate we badly need to have, but neither the Labour Party nor anyone else in mainstream politics seems willing to have it.

Thatcher, for all her innumerate faults, stood for a clearly defined ideology. She had a vision for what society should be liked and set about making it so, manipulating anti-union sentiment and patriotic feelings over the Falklands war whenever public confidence in her plan faltered. Thatcher genuinely believed that the whole country would be better off if labour markets were less regulated and the unions were less powerful. At the time most of the country did not believe this as strongly as she did (although now it is now an almost universally held political opinion) but popular anti-union sentiment allowed her to pursue her ideological objectives. The reason the same thing is not happening to the bankers today is that it is no longer consider appropriate for politicians to have strong ideological view points. Instead both sides tend towards varying degrees of acceptance of the neo-liberal hegemony.

The Conservative Party under Thatcher’s leadership were not united in their support for her policies and she had to fight off a few leadership challenges before eventually be ousted in 1990. Still to most people she stood as a strong unifying figure bringing together a diverse movement around a single set of goals. This is something the left sorely lacks. After the banking crisis the left is more divided than ever. This is especially true when discussing how we respond to the problems presented by this new era of capitalism. The left has always been fractious and divided but there is no consensus on how to best use the popular dislike of bankers to achieve any political goals.

Thatcher was an astute politician who used the public’s anti-union sentiment to great advantage in order to accomplish her political goals. The Left could learn a lot from her in how to respond to the banking crisis and in finding a way to snap out of this ideological paralysis we find ourselves trapped in. The public hates the banks almost as much as they hate benefit claimants. This is because most people who work hard resent people who they feel have got something for nothing. The Right is expertly using this feeling to roll back the welfare state. The left should be thinking the same if they want to make a dent in the power of international banking conglomerates.

Internships and Wealth Inequality

Internships have long been blamed as a means by which wealth remains concentrated amongst the upper classes. Most of the positions available at some of the UK’s largest and most prestigious firms to young people starting out on their careers are unpaid or come with a bare minimum of transport fees reimbursed. For young people looking to gain the vital experience necessary to secure a job, an additional source of income is needed to pay their cost of living during an internship which could last for several months. Firms expect an intern to be present during normal office hours which rules out most forms of employment and the long hours and demanding timetables frequently placed on interns also makes evening employment difficult. Generally interns rely on what has become known as ‘the bank of mum and dad’ meaning that only the children who have parents wealthy enough to pay their way can afford to take up an internship.

To a firm, having an internship is not only a desirable characteristic in a prospective new recruit but is increasingly become essential. In a government survey, one third of British firms said they would only hire a new recruit who already worked for them. The most obvious illustration of class perpetuation through internships is an annual Conservative Party fund raiser to which Mayfair based capital and equity firms donate internships which are then bid for by part donors, the proceeds going to the party. At this event, those who can afford to spend several thousand pounds to secure their child an internship at a top finical firm (as well as paying their children’s living cost during the internship itself) spend their money to guarantee one of their children will have a well-paid career.

The incentive for parents who can afford this for their children is clear. Not only is it a good way to give your child an advantage over the competition in beginning their corporate career but by ensuring your child has a well-paid position, parents are preparing for the retirement by providing their children with financial success. The net effect of the recruiters relying on internships to vet candidates at the beginning of their careers is the concentration of wealth amongst the privileged class. Only the wealthy can afford to furnish their children with the internships that are necessary to secure well-paid jobs.

Recently Nick Clegg and the coalition government have announced plans for major companies to offer more starting positions to people from less well-off backgrounds and to offer payment or living expenses to interns while they are working. Although this is noble in intent it fails tackle the root of the social inequity caused by the internship system. It is impressive that Nick Clegg has managed to convince so many large companies to agree to a scheme which offers firms little more than a PR boost, but by making the proposals opt-in rather than legally binding there is no incentive for most firms to alter their behaviour at all. An outright ban on internships would force firms to at least offer minimum wage to those gaining work experience which would go some way towards leveling the cost barriers to most young people taking up internships.

The plans are welcome news to those with an eye on becoming a senior corporate executive but hint at a fundamental flaw in the collation government’s approach the issue of wealth inequality; in that they expect private business to tackle the issue with government only very gently prodding the companies in the directing of socially conscious capitalism. Making internships more accessible to those who dream of vast corporate wealth is one thing but the issue at the heart of capitalism is the fact that regardless of how level you make the playing field, the majority of people will end up owning a small percentage of the wealth mean while a few people will own the majority. The question is what can be done about this and the answer the government suggests is ‘nothing’.

Reforming the internship mechanism may make it easier for those from poor backgrounds to get internships but will do almost nothing to tackle wealth inequity. It will also have a negligible effect on social mobility as there will remain a finite number of internships and even smaller number of people who reach the higher echelons of the corporate hierarchy. The people at the top of pyramid may vary slightly but this does nothing to comfort those at the base or those who question the virtues of a pyramid structure.

Hinting to large companies that they should be more socially aware will not solve the problems of a widening gap between the rich and the poor. Most of the coalition government’s austerity program is cutting the services that the poorest members of society depend upon. The government needs to do more to tackle wealth inequality rather than smoothing off the edges or implying that large firms should be readdressing the wealth balance themselves.