I like businesses, but they can’t be in charge
Today a collection of business lobby groups have started an advertising campaign calling on voters to make an election issue of their election wish list: a company tax cut, ‘flexible’ industrial relations policies and less ‘red-tape’.
Before I’m accused of being ‘anti-business’, let me just state right here that I’m not anti-business. Businesses are great. They are run by innovative, entrepreneurial, risk-taking people who we should respect and admire. People invest their own money in businesses which then hire people, giving those people a chance to contribute to the success of the business, and to earn a living doing so. For the most part, employers treat their employees respectfully and give them fair and just entitlements and compensation for the work they do. But the thing is, as great as individual businesses are, they can’t be left in charge of Australia. Or, to put this more clearly, they can’t use their political arm, the Liberal Party, to control our society, or our economy, or anything really. This is why:
Individual businesses want their employees to be highly skilled, well-educated and productive, but they don’t want to pay tax to ensure everyone else’s businesses have access to highly skilled, well-educated and productive employees.
Individual businesses want their employees to be healthy so they can turn up to work every day. But they don’t want to pay tax to ensure a universal health system helps their employees be healthy enough to turn up to work.
Individual businesses want infrastructure available to help them make money, such as quality roads, well maintained sewerage and electrical systems and police and fire crews available if they ever need them, but they don’t want to pay tax to ensure this infrastructure is available.
Individual business don’t want environmental protection regulation, or worker’s safety protection, or laws about how they should keep food from going off and poisoning people, or anything they throw in the red-tape basket and constantly try to get rid of. But they also don’t want the consequences of not following these laws and regulations, such as when the environment is no longer a safe and habitable place for them to make money, or when they are sued because one of their workers is hurt or killed through unsafe work practices, or if someone is poisoned by their food.
Individual businesses need their customers to earn enough money to be customers. They need people who work on weekends to earn penalty rates so they can afford to consume stuff. They want everyone to earn enough money to have choices in the market place, to be able to buy insurance, to buy a new car, to get the latest iPhone, to have a sandwich from the local shop for lunch, to go to the movies and go out to dinner afterwards. They want a prosperous society, but many don’t want to maintain the wages of their own employees to ensure this prosperity is widespread. Many campaign against award wages, penalty rates and even the minimum wage. Many resent the entitlements that provide consumers with the time off to actually enjoy their lives, go on holidays (where they spend money), have time off to have children (children arrive with a lot of consumer spending), to renovate their homes (Bunnings does well). They expect their workers to work on casual wages, with no paid holidays or they expect salaried workers to work overtime without extra-compensation, which eats into the worker’s life and their enjoyment of their life and ultimately, their ability to consume from businesses.
I understand that individual businesses just want to make as much profit as they can, whether it be for themselves, or their shareholders, and this makes them very one-eyed and driven, some would say, blinkered, in their quest for this single-minded goal. But this individual drive to make as much profit as possible, whilst they complain about paying tax, while mostly actively work to reduce or avoid tax, when they fight against award wages, penalty rates, minimum wage and workers entitlements, when they campaign against business regulation, when they claim education and healthcare is an expense which is hurting the economy rather than helping, and when they claim a tax-cut for businesses is good for everyone, when really they know it’s only good for business owners and shareholders, they’re letting their own selfish vested-interests ruin everybody else’s prosperity, AND, and this is the crux of the matter, their own prosperity in the process. Put simply, their selfishness is bad for themselves along with everyone else.
That is why they should never be in charge of the country, and a smart country would never ever elect their representatives, the Liberal Party.
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Return to home pagethe laws that require companies to act in the interests of their shareholders to maximise ROI is EXACTLY why they need to be strongly regulated, so that while they are myopic in their focus on profit, they don’t erode the conditions fundamental to their own, and our, survival.
Global Warming is an example of this.
Excellent article. I am always reminded of Henry Ford’s approach to business, paying his employees a decent wage, and providing a safe workplace. He wanted his employees to be able to afford to buy his cars, and live long enough to buy a bigger one as the family grew! Now I wonder if Corporations and Politics are so integrated, that Mussolini and Hitler would feel right at home in today’s environment?
I have a small business and take exception to some comments in this article. I certainly do want to pay tax so all businesses have access to skilled, educated and motivated employees.
I generally do agree with the gist of the article though, I don’t believe that businesses should have the influence that they do in government, they are too self interested, especially large business. Small and micro business tend to see themselves as part of the local community and seem to have more of a social conscience.
Excellent points Victoria – business wants a prosperous, healthy, well educated workforce and a prosperous, healthy, (education probably doesn’t matter) array of consumers..they just don’t want to have to pay to achieve this, themselves.
Sandra, your intentions are excellent, however as a former small business owner myself, I would say that one of my goals was always tax minimisation..hence the reason for some extraordinarily wealthy accountants.
Great words – one sided repetitive bitching and complaining supported by the self styled, long finger-nailed “champions of business” the corrupted sellers of our common wealth/property/good, is wasting time which could be used for new ideas/innovation, etc OR perhaps they are doing so well they do not want anyone, least of all competitors and ATO, knowing how well.
It seems Victoria is not a devotee of MMT since she appears to think taxation pays for everything.
It would nice if Labor bloggers like Victoria or Trish would speak to this (part of a post from Victoria’s last post) –
2. Taxation by national governments does not fund any national government spending. Therefore, we do not need to tax corporations before we can modernize infrastructure, have universal healthcare, provide free college educations, maintain full employment by initiating a job guarantee where all who are willing and able to work can find work and fully fund all vital social programs. To do these things, it is no more difficult a task than having the national governments authorize the spending. The left desperately needs to come to terms with this reality.
Surely this issue has to be sorted before any movement forward regarding modern economic policy in Australia can take place? Where do our part-time, Labor apparatchiks actually stand on this?
Once again is remind people of Elizabeth Warren’s fabulous defense of progressive economic theory in September 2011.
“There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
Good piece, Victoria.
I’ve always enjoyed the cartoon series Rocky and Bullwinkle. They had a nicely irreverent attitude to the fundamentalist capitalist beliefs of USA. There was the nice dig at TV in an episode where one of the Moon Men unintentionally fired his scrootch gun at the TV camera and paralysed viewers in front of their TVs so the networks ceased normal programming and played back-to-back advertisements for the couple of weeks it took for the effect to wear off.
In 1982 the cast of Rocky and Bullwinkle assembled at a university campus to give a special performance before a live audience. It was recorded and I luckily downloaded it (I still have it, if anybody wants it). After the performance the cast talked about the making of the show. One of the craziest things they mentioned was that they were commissioned by a company to do an advertisement promoting the company’s snack food. It proved very successful as the company saw great rises in profits. However it seems it also increased consumption of their competitors’ products too, so the advertisements were cancelled even though they benefitted greatly from them. They just couldn’t stand that others would benefit too.
This is the kind of thinking that would rule the country if the “Business Party” (a.k.a. the LNP) got in again.
ByB: MMT requires taxes:
“I have no problem with deficit spending,” said Aneta Markowska, chief US economist at Societe Generale in New York. “But this idea of the government printing money – unlimited amounts of money – and running unlimited, infinite deficits, that could become unhinged pretty quickly.”
To which MMT replies: No one’s saying there are no limits. Real resources can be a constraint – how much labor is available to build that road? Taxes are an essential tool, to ensure demand for the currency and cool the economy if it overheats. But the MMTers argue there’s plenty of room to spend without triggering inflation.
Read more: http://www.smh.com.au/business/the-economy/modern-money-theory-radical-economics-is-winning-friends-20160314-gni5md.html#ixzz4B3lGdEMD
Follow us: @smh on Twitter | sydneymorningherald on Facebook
The problem with any theory related to ‘money’ (nothing to do with tax) is that we do live in a world of constraints that economic theory ignores but physics does not.
The reality is that the ‘well-being’ of a nation is a function of its ‘competitiveness’. Being competitive is an essential prerequisite that enables the maintenance and development of new industries, delivery of effective community outcomes, creation of new jobs, balancing trade. This is driven by the acquisition of technology which then creates ‘competitive’ or ‘superior’ (e.g. curing an illness) outcomes. This ‘process’ and ‘capability’ then determines the validity of an investment and appropriately allocates R&D, innovation, funding, etc.
If a project does not deliver a competitive or superior outcome a financial investment (1) would then be a waste of time which is what afflicts and corrupts our current system – excess debt creation, usury and malinvestment. An economy that is not competitive cannot sustainably pay for education, infrastructure, health, welfare, etc. The only way forward given our current rabble of a government would be to slash services or build up debt which is not sustainable.
Economists, business academics and politicians have zero idea how an economy can become and remain competitive. They continue to do the things that are contributing to the collapse in competitiveness and add to the malaise. The stupid ‘innovation initiative’ is just politicking smoke and mirrors and does not address the critical need to become competitive. Reducing labour rates and increasing productivity are pointless unless you have competitive products and services.
1. Banks should not own the money supply. We should have public banks
The many business owners who do their best to pay their taxes and their workers correctly need to demand that regulators enforce the laws that are supposed to prevent the dishonesty of the other businesses. Otherwise the dishonest and exploitative businesses can out-compete the ones which are doing the right thing. This can only lead to a race to the bottom.
RosemaryJ36: Did you read the comments at the end of that article in the smh? One commented that the article was mathematics when it was supposed to be news. And I couldn’t see a single mathematical symbol in it, let alone an equation!
Re: “printing money”. It is worth pointing out a few things.
1. ALL fiat money is “printed” in that it is created ex nihilo, “out of thin air”.
2.”Printing money” by itself, cannot cause inflation. Spending causes inflation, a difference that Bill Mitchell always emphasises. To understand what exactly this means, imagine that the RBA “printed” one trillion dollars overnight and then locked them in a a safe in the RBA. Would that cause inflation? No.
3. On the other hand ANY spending can cause demand to exceed possible supply of some item, and the price will begin to rise. It does not even have to be govt. spending either. Most famously, housing bubbles and subsequent crashes have been caused by private spending (GFC anyone? or the crash in Japan, or more recently in Ireland).
So the meme “printing money causes inflation” is actually meaningless, but used by the “deficit hawks” to somehow imply that all govt. budgets must be balanced, or terrible things will happen.