We often hear how ministers should be more honest about the state of the economy. How they should signal their intentions and, before announcing a policy shift, have the guts and intellectual heft to debate the expected impact in public, such that when a section of the public dislikes the plan, at least they understand why it has been set in motion.
It was a message Rachel Reeves absorbed and used as a defence for her first budget in October, only to come unstuck when she shocked businesses with a previously undiscussed change to the terms of employer national insurance contributions and an ill-considered last-minute grab at farmers’ incomes via a rise in inheritance tax.
Labour’s response has rightly been to regroup and refocus on the nitty-gritty of its “five missions”, and begin talking about street crime, the NHS, and what it means to create job opportunities, invest in green energy and promote economic growth.
These issues need to be explained to the public, and can be – in town hall meetings, television debates or even royal commissions. But what is being left out of the conversation are the seismic developments in modern capitalism that are increasingly making us unhappy, unhealthy and belligerent in the way we debate politics.
There is little discussion about how we are all paying 20% more for the stuff we buy, while share prices are higher and many of those who run the companies that made profits from the pandemic and since the start of the Ukraine war have won the battle to pocket the gains for themselves. It’s just capitalism, folks.
While we are starting to realise how the major US tech companies are capturing our minds – and fixing them on what we call a phone, but is really a new and different kind of drug – there is less discussion about how these companies defy Adam Smith’s notion of competition.
In Brussels, the EU Commission understands the monopolistic characteristics of tech firms and how their super-profits are generated.
The Biden administration has also publicised how big companies rip off their customers, and has many enthusiastic lawyers on the government payroll itching to take Google et al to the regulatory cleaners. But they have had little time to join the debate and have run out of time to implement any policy changes.
And while they had time, they didn’t really engage with the public to show how the proliferation of beautiful gadgets and monthly payment plans has become the latest in a long line of profit maximisation strategies.
The same can be said of US healthcare firms, the pharmaceutical industry and the food industry. They all have bloated marketing departments telling us that we should commit our salaries to buying their stuff, even though it costs them very little to produce once the initial investment is paid down.
The academic and doctor Dr Chris van Tulleken’s campaign against the food industry comes up against many of the same barriers. Politicians don’t really understand the issues and, when they do, they think they could be seen as denigrating those on low incomes, who are the target of much food, pharmaceutical and financial advertising.
Von Tulleken, in his campaign against ultra-processed foods, tries to see beyond this cliche to consider how food companies are using the same techniques as tech firms to lure customers in and then keep them hooked.
UK politicians have another reason to ignore how individual industries are making off with so much cash, and that relates to the UK’s reliance on some of the worst industries, food among them. The food industry is the biggest employer in the UK manufacturing sector, placing it above the motor vehicle and engineering sectors.
After the financial crash in 2008, the City regulator considered telling banks and insurers that they would need to submit their products for testing ahead of their release to make sure they did no harm.
There was an industry debate about the mismatch in information between customer and seller of financial products and how the deficit in understanding meant people bought things they didn’t need that happened to generate sky-high profits for the banks. That debate appears to have died and Labour is now about to take off some of the shackles keeping the industry honest.
The freedom to be ripped off is at the heart of liberal capitalism. Yet caveat emptor is a defence that relies on a degree of equality between the buyer and seller and what they know about the product in question.
Labour will rightly focus on its five missions. But surely it can have the bandwidth to discuss the broader problems with capitalism. There is no point lauding companies that generate growth if all they are doing is stealing the disposable incomes of your citizens and pocketing it for their faraway shareholders.
