Posts Tagged ‘Party Conferences’

Ha-Joon Chang on the Japanese Solution to Information-Sharing between Government and Business

May 19, 2016

Ha-Joon Chang Pic

Ha-Joon Chang also discusses in his book, 23 Things They Don’t Tell You About Capitalism, the Japanese solution about the tactics the Japanese have adopted to the problem of sharing information between the government and business. It’s in the chapter ‘Thing 12 Governments Can Pick Winners’. In this chapter, he explodes the myth that governments cannot run industries successfully by showing just how many extremely profitable and efficient industries have been set up by the state. Like the Korean steel mill. This was set up in the late 1950s and 1960s, when the only thing Korea exported was food, mainly fish, and cheap clothing, and when the country generally was one of the poorest in the world. Its first boss was an army general with extremely limited business experience. It looked to be such a risky venture, that the head of the IMF or World Bank refused to lend Korea money, and advised other potential investors not to do so. So no-one did. Korea now has the fourth largest steel industry in the world.

Chang states that the Neo-Libs could argue that Korea is somehow the exception to the rule, and that his countryfolk are somehow more intelligent than everyone else. He says while he finds this flattering as a Korean, it ain’t true, and lists the various other countries that have had similar successes with the state running of industry. He then goes on to tackle the underlying assumption behind the Neoliberal dismissal of governments’ ability to manage industry. They argue that government departments simply don’t have enough information to manage industry well. He argues that in fact, they do, and that quite often it is far better than those of the industrialists themselves. And he states that governments also draw on managers from industry for their information.

This is now part of the problem in Britain and America. It is now longer the case that industry supplies the government with information. In all too many cases, it guides government to its own advantage, and dominates government. The fact that the political parties’ conferences is sponsored by private industries, all seeking to get a cut of state action, is part of this. So the way the big accountancy firms sent their executives to assist the political parties in preparing their policies on taxation, which has led to the creation of the massive tax loopholes and offshore accounts, which have allowed people like Dodgy Dave Cameron to avoid paying his due whack of tax.

The way the Japanese have attempted to solve the problem is through ‘deliberative councils’. These are formal meetings between government officials and businessmen, which are covered by the media and have observers from academia.

I think this is an excellent idea. We desperately need to clear out the corporate corruption of parliament and the political system, so that government legislates for the people, and not to maximise the profits of the rich few at the expense of the rest of us. At the same time, information and experience from industry should be available to government. And that information, and the influence that it gives, should not be hidden, but be genuinely open and transparent.

At the moment, it certainly is not, despite Dave Cameron’s mendacious bill on lobbying. This is actually designed to do the opposite. His lobbying bill stops charities and trade unions from lobbying, while allowing the big corporate lobbyists to go on as normal. And as far as I’m aware, none of the newspapers regularly report on the influence of private enterprise on the parties. The only reports of it I can remember reading are those in Private Eye. This must change, and soon, in order to curtail the corporate corruption of British politics.

Corruption and the Sale of Tory Seats in the Early 20th Century

February 27, 2016

From contemporary political corruption in America, to political corruption here in Britain. In the early 20th century parts of the Conservative party were scandalised by the cynical way safe seats were sold to the highest bidder by the local Conservative associations. These charged for the time exorbitant fees to prospective candidates. ‘Gracchus’, the pseudonymus author of the anti-Tory book, Your MP, devotes a whole chapter to the corrupt sale of seats, and the massive preponderance of the rich in the Tory and National Liberal parties. However, this passage in particular on pages 27 to 28 makes the point.

Now we go deeper still: we find one of our witnesses, one of Major Patriot’s Tory colleagues, saying that “it is lamentable that Tory seats should be sold to the richest candidate.”

And, turning back, we find a reference to a “financial burden not within the capacity of all” potential candidates (East Toxteth), and another M.P. complaining that “a married man with an income of £2,000 a year” cannot afford to be an M.P. (Spelthorne).

There is plenty of evidence on this. P.W. Donner (Basingstoke) was reported by the Morning Post, 28.6.35, to have said that he “had been forced to leave Islington, his present constituency, on the grounds of health and economy. The Hampshire Executive (of the Tory Party) had asked him for a subscription less than half what he was now paying in Islington.”

The Hon. Quintin Hogg (Oxford) wrote in the Nineteenth Century, January, 1934, that “the local Tory associations are rotten to the core”. In one agricultural constituency, he wrote, prospective Tory candidates have been informed they need not apply unless they can subscribe to the organisation the fantastic sum of £3,000 per annum.

In a northern industrial city, £600 a year is the least annual subscription that the Association will consider.

According to the a valuable study recently published, Parliamentary Representation, by J.F.S. Ross, the average amounts of election expenses for contested elections in 1935 were in round figures:

Conservative candidates……£780
Liberal candidates. ………£520
Labour candidates…………£360

One Conservative candidate, Mr. Ian Harvey, published in January, 1939, a memorandum headed “A Plutocratic System,” which goes so far as to state that “in nearly every case” (when candidates for Tory seats are chosen) “the question of finance is of primary importance.” He estimated that men “have always an excellent chance of being adopted “if they are willing “to pay all their elections expenses (anything between £400 and £1,200) and to subscribe between £500 and £1,000 (a year) to the local Association.”

The Federation of University Conservative Associations, meeting in London as Mr Ian Harvey’s memo was published, passed unanimously a resolution deploring the influence on the choice of candidates of “considerations of personal fortune”.

In the book by Mr Ross there are further examples, from Frome in Somerset, Hendon, and the University of London Conservative Association. Mr Ross calculates that only one person out of each 1,150 of the adult population has the income necessary to have “an excellent chance” in Mr Harvey’s phrase, of being adopted as a Tory M.P.

When Mr R.A. Brabner, (Hythe) was chosen as candidate, it was stated in the London Press that he “will pay £500 a year to the Conservative Association, and his election expenses. That is a fairly moderate contribution for a safe seat near London” (Evening Standard, 27.6.39).

The same inquisitive newspaper noted, about Lt.-Col. F.G. Doland (Balham and Tooting(, that his is “an expensive seat to fight. The Conservative candidate’s election expenses are between £700 and £700 … I understand that the Conservatives expect their candidates to find this money out of their own pockets, and, in addition, to provide a ‘subsidy’ of about £600 a year” (13.7.36).

Sir Derek Gunston (Thornbury), one of the very few Tory M.P. on the Executive of the League of Nations Union, spoke more recently on the subject of “purchasable seats’:

“Rich, safe seats, with ample resources that could be tapped, are too lazy to make the effort so long as they can find rich men who, while willing to go through the mill of fighting an election, are nevertheless prepared to pay for a safe seat. In practice you find the able but less well-off candidates fighting the hopeless seats. It is the rich, safe seats which demand the highest contributions (Evening Standard, 2.10.41).

Let us try to be clear what all this evidence amounts to. it does not mean that every Tory buys his seat. It means that enough of them do so to matter a great deal – to matter so much that very many other Tories protest, are uneasy, try to get the matter altered. (But do not succeed in doing so).
(My emphasis).

It therefore comes as no surprise that 95% of MPs are millionaires. Nor is it surprising that contemporary grass roots Tories complain about being sidelined in favour of rich donors. This type of corruption also became endemic in New Labour, when various businessmen ostentatiously switched from the Tories to Labour, and then were parachuted into safe Labour seats in preference to the local parties’ preferred candidates. And there has always been an element of corporate corruption in politics, where Corporations have bought influence by contributing to party coffers. It’s rife within the modern parties, and particularly the Conservatives, where the Tory party conference was largely funded through sponsorship and donations by rich corporations seeking a slice of public contracts. For example, Jeremy Hunt last year moderated a discussion about the future of the NHS in a talk sponsored by a private healthcare firm.

While the effective sale of Tory safe seats may not exist, or proceed in quite the same form, this passage shows how cynical the Tories were in choosing the richest as their preferred candidates, and the influence money could get you in the party.

Corporate Influence and Staffing of Government in Britain and Pre-Revolutionary Russia

April 28, 2014

One of the features of post-Thatcherite British government is the strong influence of big business on government policy and even the staffing of government departments. Government officials are frequently drawn from corporations, where they have directorships or occupy other positions in senior management. The conferences of all three main parties are sponsored by businesses hoping to influence government policy and win contracts or other business concessions from their political clients, once they are in government. The parties increasingly formulate their policies according to think-tanks, formed by and representing the views of particular industrial or corporate interests. Private Eye for years, since as far back as the ‘sleaze’ of John Major’s administration, has documented the way corporations and their employees have permeated government institutions. This has most often been done with the specific intentions of reducing or blunting government regulation of industry. Thus you can find the presence of various senior employees and directors of the big accountancy firms in the Inland Revenue, presenting the government with schemes on how the rich can become even richer by avoiding a tax. Officials drawn from the City have entered the various government bodies regulating the financial sector, to argue that the City should be less regulated. The result of this policy was the massive corruption and trading in toxic debt that created the present international financial crisis. And an extremely large number of the present government have links to private healthcare companies hoping to benefit from the privatisation of the NHS. One of these is Jeremy Hunt, the current Health Secretary, and IDS. I’ve blogged before about how the Nazis had a similar policy of co-opting leaders from business to staff the Reich industrial combines and organisations.

And it was exactly the same in Russia in the decade immediately preceding the Revolution. Big business deliberately set out to influence government policy. Business leaders entered the government, while ministers, senior civil servants and officers of the armed forces moved into posts in private industry. The regime was compromised and ultimately discredited by massive corruption. Kochan describes the situation in Russia in Revolution (London: Paladin 1970).

Industrialists more and more put themselves at the service of the government in the economic development of the empire. An Association of Industry and Commerce, founded in 1906, and its journal Industry and Commerce, devoted themselves specifically to the purpose. The association was a federation of industrial organisations formed along geographic and functional principles, e.g. The mine owners of south Russia or the Baku oil producers. By the beginning of 1914 it embraced thirty-four banks and insurance companies, 251 industrial undertakings, eleven transport companies and nineteen trading concerns.

The association consistently advocated the further economic development of the empire through a policy of high entrepreneurial profits combined with austerity in consumption. It argued against free competition – ‘the anarchy of the market and a chaotic fluctuation of prices’ – and in favour of a five-, a ten- or even a fifteen-year plan, that would overcome Russian backwardness and free it from dependence on agriculture. It proposed cooperation between industry and the government in, for example, the irrigation of Turkestan for the cultivation of cotton, the construction of the Volga-Don canal, and the intensive exploitation of the Magnitogorsk iron deposits in conjunction with Siberian coal. … Planning from above, with the sympathetic stabilizing and regulatory intervention of the vast resources at the disposal of the Treasury would enable trade and industry to take their full share in industrial development, it was hoped. In the last resort, the association envisaged a type of corporate state in which industrial and commercial interests would play a co-determining role vis-à-vis the government in relation to economic policy.

For this reason the association scheduled its own congresses to take place during the Duma sessions – the membership overlapped in many cases – and ‘sometimes its debates were the more interesting and important of the two,’ noted one observer. The association functioned as a vast pressure group: ‘… Russian industry and commerce must, in the interests of self-preservation, ‘ declared an early initiator of the association, ‘express not only its broadly based views but also know how to present these views to those institutions and groups on whom will depend the putting into practice of this or that law or policy … Here lies the whole root and the whole meaning of the All-Empire congresses of the representatives of industry and commerce. (pp. 166-7)

What socio-economic influence was possessed by these conglomerates of power? This is not easy to analyse. It seems likely however, that they had a disintegrating influence in further corrupting and demoralising the Tsarist bureaucracy. An insider, V.I. Gurko, at one time assistant minister of the interior and member of the state council, avers that the integrity of the overwhelming majority of high officials was ‘beyond question’. But he must also admit that private concerns engaged prominent officials at ‘fabulous sums’ with a view to the man’s ‘official connexions and his knowledge of the methods necessary to obtain governmental backing … particularly to secure some state concession. ‘ The line between public and private interest became more and more difficult to draw. This applied particularly to the armament industry. Take Avdakov, for example, for some years the chairman of Produgol, then the Association of Industry and Trade and at the same time councillor in the ministry of industry and trade; or Lieutenant-General Brink, a former head of the department of naval construction and chief inspector of naval artillery, who became a director of the Putilov works; or Vice Admiral Bostrem, a former commander of the Black Sea fleet, who became president of the board of the Nikolaevsk naval construction company; or General Ivanov who joined the board of the same company; or General Miller, former head of the state-owned Obukhovo works, who became director of the Tsarizyn artillery plant.

Civilian official similarly moved between government posts and private industry, especially in they were engaged in the ministries of finance and trade and industry. There was Timryazev, for example, and Bark, Arandarenko, M.M. Fedorov, V.I. Kovalovsky, N.N. Pokrovsky, Langovoi, Litvinov-Falinsky – all these men moved at one time or another between their ministerial arm-chairs and an equally well-padded position in industry or industrial association. (p. 168).

This describes pretty much every government since Maggie Thatcher, including that of Cameron and Clegg today. And the Association’s policy of demanding high profits as well as austerity exactly describes the current government’s policies.

That all ended with the upheaval of the 1917 Revolution and the Bolshevik seizure of power. We don’t need a revolution with all its horror and bloodshed in Britain. But we do need proper government, where the public interest rules and where corporations are not allowed to corrupt, influence and direct government policy.