Killing Capitalists, Idiomatically?

Well now, is this not a surprise? One of those events that have a irritating inclination of arising out of nowhere, well not exactly nowhere, this was inevitably going to occur at some stage in the 21^st century although it is not the ‘Big One’, one of the five probabilities (1). There were ignored warnings that there was something afoot festering in China however this event has taken over most political agendas and this incident has direct implications on what one did intend to write at the start of the above heading. One was winding up to have a general seethe, as is ones wants, at the continued failure of governments to be considerable more aggressive in the forums like G7 and G20 to put in place curtailing step on the gratuitous greed of finance markets to extract unjustified financial returns at the same time doing all it can to avoid / evade, by any legal or duplicitous means, legitimate taxation that supports the whole civil structures. A corporate tax revenue take which has become remarkable historically low at the same time all the financial sectors keep expecting growth to be always increasing and unfettered by unhelpful legislations allowing intensification of the gambling machinery of  – stocks, shares and currency speculation etc.

As an un-renowned expert in saps cultured ignorance in its own fallibility; it (saps) assume that in times of plenty, affluence, peace, good governance with popular legitimacy and global interrelatedness stability; that when ‘things’ become easily manageable and continually dependable; then unnecessary expenditure that does not serve the extraction of wealth for distribution to the holders of superior capital, can be retracted for use ‘elsewhere’. 

There is, inescapably, a major problem with global economics just now based on why productivity is so low, interest rates are flat-lining, ‘recordable’ unemployment in the UK is low but higher elsewhere (Europe) and instilled in certain age / skill  sectors. Consumers’ spending is discretionary cost sensitive and selective, with personal borrowing high again and commercial property asset values and yields are suspect. Income levels have not increased nor regained anything like the losses that have occurred since 2000, this some right wing economist say, is due to over supple of labour and inabilities of the labour to price itself into the ‘markets. The boom in the gig, low pay, and insecure jobs would seem to show it can (has) been done albeit this disregards the labourer’s living standards, a feature comparable with slave labour which is always beneficial to the rentier markets. In some respect this overall economic problem is taken as a result of the CC in 2007/8 giving the drag on economies over the past 12 years. In view of this one has looked to find any pronouncement from bullish economist that are willing to expound a view that everything is as it should be; market forces rule OK, supply and demand are invincibly correct and will re-establish ‘normality’ after shaking out of all the zombie businesses that clough up the economic system by locking up or hoarding capital that should be put to better use elsewhere. One may be not looking in the right areas and perhaps not appreciating the erudite technicality of the science (2) behind the usual right-wing economist but the clear indications of support for rampant right-wing capitalist economics for the start of this new century is not obvious. On the contrary the masters of the universe are helpless to explain satisfactorily what is happening to the developed nations economy (it is the famous “why did no one see this coming scenario”) and one assumes they are trying to redraft suitable logic for why continued optimism in some form of sustainable economic buoyancy, should be apparent but if there are erudite reasons for confidence, it is indistinct. Even the laissez faire economist of young or old like (3) may have difficulties in presenting sound sensible ‘economic’ propositions reflecting socially rational acceptable realities to keep their form of capitalism alive during market chaos.

There are a number of light readable books that take a stringent accusatory look at the failures of governments handling of the financial sectors, constructed bad policies, politically dogmatic driven ideology and the impacts from those actions that are rolling through the decades being inflicted onto an ignorant populations. As an example, if interested, try any of one’s selection but there are plenty of others on shelves (4) and the book ‘Going South’ is particular interesting in so far as what it covers is still very pertinent now and for beyond 2020 yet to counter all this you may have to dig deep to locate any recent optimistic economist to convince ardently, that everything is as it should be and all for the better, at this stage of the “economic cycle”. Although it is a difficult read / comprehend, unless you are into stats try David G. Blanchflowers’ book “Where Have All the Good Jobs Gone”? This like others may offer a view as to why the financial game is stalled but more importantly with the factual numerical details, the damages being done to social fabric, health, peoples living standards and ‘prosperous’ expectations.

The continuation of created compounded degradations, caused by bad governments’ policy just on its own, might eventually lead to dire events (1). Is this being too alarmist? Only if one ignores the existential dangers the world is to cope with now and its blossoming forces, which it is largely unprepared for and to which, to use the phrase; “No-one seen it coming”, just proves “events” are an unscripted nuisance, yet another one to add to the “ides of March”.

And here comes one of those events Covid19, (5) a nice short memorable term to describe the cause of the 2020 pandemic. As the hazard unfolds there are some people of the population that retain a certain amount of secure arrogance on the basis that they think, thus far, with assumptions, that they and their own will not be affected, taking the view that the Covid19 is little more than 'general' seasonal flu, (it is winter/spring after all) on this basis they assume they are not greatly at risk. Perhaps being young, healthy, well nourished and somewhat affluent may create a sense of casual bravado to such a hazard and after all “only” on average some 8k people die each year to flu, these being older people with underlying issues. But this attitude is probably derived from not having had really bad flu in the past and as is the case there is often (an assumption one makes here) that many people confuse the common cold from which they get some recovery after 48 hrs, whereas flu is a 7-14 day or longer recover phase. In any case this virus of flu, its symptoms and prognosis is more perilous with those with compromised established health but to think that efforts just now aim to limit deaths to an estimate of 20k, to be reluctantly acceptable, is a little short of the wholly unacceptable 250k plus scenario quietly played down.

There was a certain laxity in response to this outbreak caused by China being suppressive, dishonest and with an initial view countries took that this was just another form of flu, albeit it was a new variant. But to which there was no global population immunity. It soon had countries scrambling put in place controls but from December to March it had reached every part of the developed world, with, it is clear, much more to follow. From this came a degree of a disparaging sense against those they consider 'panicking' and acting to take steps to ensure a degree of safe, healthy, comfort; overlooking the fact that mindless unconstructive panic is indeed unhelpful but useful directive panic is possibility a better and natural response to uncertainty in dangerous situations. It calls for action based on personal experience and knowledge to minimising risk, and aiding self-help-preservation, this action is more noticeable in a spectrum of people that may have had experience in ancient shortages, although they are possibly better prepared to adapt than a younger generation who are use to everything on time and instant, they are not endowed with ‘essentials’ to have restraint, they do panic.

One can detect that the government has panicked given the prognosis of deaths. It has thrown into harsh focus the straightjacket of austerity the HNS has been forced into and the lack of sufficient flexible resources required to cope with such volume emergency and it takes time to replace the lost intensive care units, hospital beds, medical and social care etc. Even with new legal emergency powers, it will take a month or more to build up necessary facilities, hence the call for containment, isolation and delay, with curtailment of personal liberty and shutdowns likely to last months. Action being taken under the said euphemism of fighting a war; the analogy with war is excessive, is where a great deal of productive ability is swapped to defense and attack, when it is and was ,equally important to keep as much normality with all pub's and shops etc open. But this is not such a war it is prejudiced with slow selective closures, indeterminate and confusing timing constraint, conflicted economic demands, panic buying, queuing for access to what is allowed to be available by people waiting outside an hour or more some tens of dozens meters long, offers more exposure  risk and raises psychological social damage. This ought to have been foreseen given JIT shopping and stock replenishment habits. As an aside one recalls a discussion with an emergency planning official involved in civil defuse exercises of the past. Everything was put in place, the scenario, the emergency services, the actors, the rescue / recover, the aftercare. All went well, “it was a great success”. “Lessons were learnt” based on one major city! ‘But, if it were to happen on a number of cities some of whom were reluctant then to run exercises and use up limited financial assets and resources, to  compared with today’s local authorities resources being considerably less; systemic collapse’. The country is not there yet and this may not be the Big One but it does give clear indication of the extensive life threatening, personal and economic damage that is taking place now and has to be tackled. It is a salutary experience on the range of interrelated ramifications that are exposed, which this government was and is blindly unaware of.

Who would have thought that a CDUP would have to adopt the sort of extraordinary measure that are counter to their long standing political philosophy of governmental laissez faire economic non-intervention. An absolute reversal in the idea that The Market can provide and handle anything to now see the government implementing a safety net for employees and business to the cost of £1trn? Recall the support intercession to the financial sectors, the CDUP initially refused to agree to and derided steps during the CC, preferring when gaining power to implementing unnecessary austerity. However here we are with BoJo leading the way with others like Gove, Mogg, et al supported by experts, which they previous castigated, imposing business and personal liberty restriction, of 3 and 12 week isolations and shutdowns, taking special powers and shaking the "magic money tree" for all its worth for the fighting fund. The special powers the government wants should not be an opportunity to slide through, as dictatorial governments tend to do, extensive long lasting controlling powers and they must be limited by a form of “sunset” parliamentary scrutiny provision, we will see. It is probable that the remedial actions required were slow react to the crises  in January with the delay in taking action, probable had more to do with saving treasuries’ financial resources to support the Brexit outlay and the subsequent cost of making it work towards the termination date and afterwards. Nothing was to interfere with “getting Brexit done” but as February progressed the prime worry was what will it do to Brexit plans? By March it was starkly clear that without sufficient HNS resources to call on, there was little choice but to gain time while a build up of capacity took place and identify ‘vectors of hot spot spreads. That the right decisions are belatedly being made, one can have little doubt even if there was a degree of the pressure to ‘copy cat actions’ driven by the evidence of Italy and Spain.

No democratic government could survive if it allowed unnecessary death to occur due to its own historic policy failure designs and if deaths can be kept to at or below 5% of compromised infected persons, or around season flu average of 2K – 8K, or limited to the higher assumed expected 20K (< >) deaths, it will be rightly assessed a great success; perhaps. But the astounding resource efforts required to tackle the disease, the initial financial outlay cost of £1.5Trn (?) to support individuals and the private sectors and the long term economic damage meshed into a ‘No Deal Brexit’? Will this give cause for all policy planners to “pucker up” for a very tempestuous outlook for thing to move back to normal after having impacted in many ways the assumptions of continuous stability on all dependent workers? This may be the only time when the CDUP Prime Minister, Cameron and sidekick Osborne’s insincere past call of “we are all in this together” might actually mean something now, as it is taken up by BoJo.

  

It does seem like an opportune instant to take a look at the effect that the current newly declared ‘pandemic’ is having on the sense of a stable continuum as it relates to the assumed steady progression of development for a culture, in so far as the stability of normal existence and its ongoing reliability is concerned with saps grasp of peaceful civilisation.

Not that this is any attempt to be vaguely prescriptive or prophetic as an indication of where the saps are going but it does show the weakness of many assumptions upon which they base their expectation of manageable reality, rather it gives a casual insight into the consequences of assumption and ill-considered action taken as a result of ingrained dogmas that serve the need of a selected powers and beliefs. The solution to the CC in 2007/8 was the creation and injection into the financial sectors of £500bn+. It did nothing for the underlying popular economy, was not invested in productive capacity, aided wealth creation for asset rich, subsidised the stock/ shares, bailed out banks to offload their bad lending practices, promoted austerity, made many people poorer and penalised savers. This time the money is going where it will do what is required, it is essential given the impact of the emergency action being enforced, inflicting the loss of employment, social dependency impact of the population and damage to small businesses. This financial rescue has to be done; grants, loans, taxes holiday/ deferment. Into this mix also look at the financial markets, stocks / shares taking fright, bank interest rate down to as near zero hitting savers (the country does not want savers) rewarding borrowers (yet again), smart money taking flight, (and finding it difficult to land) and banks yet again likely to gain bail-outs via credit guarantees that bank will push (seeking personal security for it, offloading their risk and eventual the scheme will fail) for which few business will be willing or able to afford when possibly looking into a future long recession and a Brexit effect post Jan 2021.

It is no mystery that at some stage question will be asked of this period after spending what might amount to overall £1.5trn; was it money well utilised? It may later be compared to the “Millennium Bug” that cost commerce £xbns worldwide to fend off a ‘computer date change danger’ that never happened. Now in this case if the death rate outturns to only the low ten thousand with prolonged unbearable business and social damage, will that be seen as a success or not value for money? Was the government panicked into ‘knee jerk’ reaction by the actions of China, Italy, Spain, to be seen itself to be doing something but hesitant due to the economic damage/cost as it would deflate their dream Brexit plans. After this massive ‘investment’ into supporting the extensive operators within the UK economy how can any future government be absent from similar strong intervention or avoid taking action on rouge market trading or continue to pander to the continuation of liaise faire economics and continue to privatise the public resources. It has become absolutely clear that businesses are not self sustaining and superior to any form of oversight, as with the banking sector, it is ultimately reliant on the backstop of the public purse and the spending capacity of the proletariat. The government will have to become ferocious on all business usury, tax avoidance, speculative market manipulations and the exportation of profit extracted from the UK economy avoiding UK tax, putting extracted profits into low tax havens.

The post recover cost required to be pulled back from all tax payers is going to very difficult and of course the emergency fiasco is only going to add to the travails of CDUP government plans but it is a very useful salutary experience in case the Big One comes and it is most unlikely that rescue package of similar nature will be done again. The idea of the uncontested free markets in all things and the robustness of capitalism to respond unbidden to calamity, on its own, is exposed for what it is, an illusion. Much of what has been done to mitigate the fear of substantial hardship within civil structures is to counter the construct of the rapaciousness of capitalist actions. Capitalism is ultimately dependent on the governments use or misuse of powers, calling on the tax payers public purse extracted as “guarantor of last resort”; the proletariat is the bedrock of the capitalist, it is this and what capitalism derives from their public expenditure that it depends on. They are backbone of all the economic forces and without them the whole system collapses. This current fiasco shows how important people's economic stability, financial resource capacity and buoyancy is paramount in a capitalist system (6) It is reliant ultimately on consumers to consume at a cost it can afford but they are continuously being exposed to usury by governments timidity in controlling excesses of business and the financial sectors.

So the opening phrase heading above, may be a simplification of what is occurring, capitalism is being massacred as it pleads for a Lazarus revival with the intensive care of the government largess; portentous perhaps pointing to the demise of laissez faire economics. From now on the wealth and health of people must now come first! To do so will require many states-wo/men to have a damascene-conversion of their long held right-wing dogmas, but will this shock do it? One would have said, not just on this matter but of other situations in the past that we see and have the arse end of donkeys pontificating on matters they hardly grasp, extolling on the marvels they have performed to save their economy and now there are still, probably too many, ready to proclaim to also save the world and health of a nation, as we are all (not) in it together.

(1) Economic collapse, Extensive Social Fragmentation, War, Irrepressible Pestilence, Systemic Environmental Shock, or Unidentified ELE.

(2)    It is not a science; there is no proven replication in volatile economics.

(3)    Rightwing economist Freidman, Hayck, Minford, Clark, Mises, Lucas.

(4)    Breadline Britain: by Stewart Lansley & Joanna Mack.

 (4)   And The Weak Must suffer What They Must?: by Yanis Varoufakis

 (4   Them and Us: by Will Hutton

 (4)   Injustice: by Daniel Dorking

 (4)   Chronicles: by Thomas Piketty

 (4)   The State We’re in: by Will Hutton

 (4)   Whoops: by John Lancaster

 (4)   Going South: by Larry Elliot & Dan Atkinson. “Why Britain will have a third world economy by 2014”

 (5) https://www.nhs.uk/conditions/coronavirus-covid-19/

 (5) https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/

(6) Capitalism: The two contending economic forces that challenge against any competitor, may for condensed sake be explained as:-

a) Classic Economics - Supply and Demand: (Invisible Hand) classical theory is that the economy is self‐regulating and markets function best with minimal government interference resting on supply and demand; the variable tensions between scarcity and abundance of consumables and price determinates. This is often boosted with Laissez Faire Capitalism that calls for it to be trade and commerce free from government intervention such as regulation, privileges, tariffs, and subsidies.

b) Keynesian economics: Keynesian economics promotes government monetary and fiscal programs intended to motivate business activity and increase employment, especially during recessions or were private investment cannot serve the common good or private infrastructure ventures have stalled.

In both these theories there is an assumption that individuals will act and respond rationally to derive the best outcome, primarily for themselves but also meeting the requirements of whatever activities they are engaged with; accordingly adjusting their actions as a reasonable person would and by extension such activities, in competitive markets with this amalgamation of individual rationality directives, also aims to produce the best market outcomes, thereby markets, as a whole being of itself rational and self correcting. 

Conclusions?  

What has one observed through this period? It is a massive assumption one makes here with little actual evidence to call on however it does seem strange that given that there was a suspicion, noted by some Chinese doctors back in November / December or earlier(?) that there was a rise in unidentified flu like infections, the information of which was self selectively suppressed. It was not until doctor Li Wenliang publicly raised the issue in late December that eventually it was identified as the new flu strain. During that hiatus period the disease may have already been set loose into the travelling world and drove subsequent infections or some deaths which may have been addressed as the usual seasonal flu. But once it was identified in China with statically localised numbers being infected, it was only then that it was looked for specifically in other external population; then even in December it was probably too late to seriously contain it. The world health organisation may have already been aware of the potentiality earlier than January but could not make a convincing public statement to alert all countries to take measures quickly? Is it likely that many more uncounted people were infected prior to the deaths within a noted age group and many may been overlooked? So here we are, now knowing what to look for. Shutting down civil activities, while allowing businesses to continue, is not a solution to a national / global pandemic. Such action may slow a spread but creates sectional infections and is unlikely to eradicate reservation pools. The expanding damaged to an economy is extraordinarily difficult cope with only a government not capitalist capable of doing so. To cover all activities that demand help or recover from the damage of a shut-down could break an economy; in any event a recession is likely as people nurture limited financial resources and rack up more personal debt followed by inflation circa 2021/2. Shutting down an entire economy in this interrelated world cannot be done; the market will seek to circumvention to make transferable gains; to stop opportunism stronger control is required perhaps a 100% tax on unscrupulous deals? Capitalism may learn nothing from this event and as with the CC which the world has not recovered from, this period may be the foundation of something worse. One mitigation to the fragmentation of who / what to restrict in pandemics may be to it make compulsory everyone going out or needing travel to work must wear a mask and gloves and consistent public education in hygiene is needed because hygiene care knowledge most people are ignorant of for: ‘nil by mouth for MEN’ (Mouth Eyes Nose).Yes there are issues with supply just now but items like sanitises, mask and gloves should become a stand-by emergency pack for every household in the future. Might it happen again? Possibly yes but not so sure it could be economically sustainable to repeat regular £1.5trn+ splurges. Governments love emergencies in which to take exceptional powers that they do not want to relinquish, just in case and this will be a future problem.  

The response in recognising the threat was overall possibly too slow, tracing and tracking’ carriers’ was impotent. The example of London shows how not to do it. Shutting international travel should have been considered or tightly restricted with personal testing to lead to infected persons immediately being isolated. But how fast can a test kits be made up, it is unlikely? Human nature has shown the best and worst of people especially when they are fearful, lack a source of reliable truthful information and many survive on a thin edge of destitution. Many people are under-resourced and reliant on just in time cash and food replenishment, hence naturally many panic creating shortages and business profiteering. Media apps, their main source of information, predominate and spread fake news, an official app on all mediums is needed. Well what does one know about any of this?  

© Renot

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