As much as I want to get rid of the Bullingdon Club bullies
in Downing Street, I have major doubts about Ed Miliband. He keeps quiet when
he should be shouting from the rooftops and announces the most stupid policies
which are ill thought out. Is he really surrounded by idiots and unable to judge
their ideas on merit?
Take the latest example to dictate energy prices, ostensibly
to make sure the benefits of a fall in oil prices are passed on. Doh! It is not
the function of government to set the prices that a business charges its
customers. Where are we going here, should business apply to the government to
change their prices?
I didn’t appreciate it at the time but I was one of the
first business students in the UK to study marketing in the 1970’s. How we
laughed at business models where price was based on cost plus a gross profit margin. Price is what the customer is willing to
pay. A business then judges whether it can meet that price and make a
profit.
So how do you control excessive profits resulting from a failure
of the competitive marketplace to function in the public interest. Governments have a number of mechanisms, they
can introduce a one off windfall corporation tax (the threat should do), they
can improve competition using the model that was intended when the energy
companies were privatised and which the government at the time failed to fully implement.
They can force separation of energy supplier from energy
producer, as intended on privatisation. This should be done by forcing energy
companies to float off parts of their business. This is what governments do,
they set the market conditions under which businesses operate. They do not stand apart at a distance from the
business dictating prices. Stupid stupid boy.
I’ve been reading Al Gore lately and I am stunned by his eloquence.
He almost writes in prose. He puts it
far better than I can, and incidentally makes British politicians look rather badly educated.
“The idea of making truly meaningful collective decisions in
democracy that are aimed at steering the global machinery we have set in motion
is naive, even silly, according to those who have long since placed their faith
in the future not in human hands, but in the invisible hand of the marketplace.
As more power to make decisions about the future flows from political systems
to markets, and as more powerful technologies magnify the strength of the
invisible hand, the muscles of self governance have atrophied.”
Wow – beautiful writing. He goes on,
“In the United States, many have cheered the withering of
self governance and have celebrated the notion that we should no longer even
try to control our own destiny through democratic decision making. Some have
recommended, only in half jest, that government should be diminished to the
point where it can be drowned in the bathtub. They have
enlisted politicians in the efforts to paralyze the ability of government to
serve any interests other than those of the global machine, recruited a fifth
column in the fourth estate, and hired legions of lobbyists to block any
collective decisions about the future that serve the public interest. The even
seem to sincerely believe, as many have often written, that there is no such
thing as the public interest”
Well Ed Miliband, you need to start exercising those muscles
of self governance.
Footnote - David Cameron urges firms to use windfalls from
cheaper oil to fund pay rises. Argh! Keep politics out of business decisions
but ensure that markets function for the public good. In this case Britain has
gone too far in restricting trade unions. Redress that balance of power and let
workers negotiate pay rises. David Cameron is even more stupid than Ed
Miliband.
