The Establishment: And how they get away with it
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‘This is the most important book on the real politics of the UK in my lifetime, and the only one you will ever need to read. You will be enlightened and angry’ Irvine Welsh
‘He is excellent on how the state has become a creature of capital, controlled by the corporate sector. As Jones shows, British capitalism is highly dependent on state largesse, and rich corporations are the biggest scroungers of all’ Peter Wilby, New Statesman
Ever since Britain was plunged into economic disaster in September 2008, there has been a concerted attempt to redirect people’s anger away from the powerful. Instead, the British public are routinely encouraged to direct their frustrations at other, often more visible, targets, who have long been vilified by elite politicians and the media alike: immigrants, unemployed people, benefit claimants, public-sector workers, and so on.
Politicians and media worked almost hand in glove to promote the myth that people who should be held responsible for the nation’s multiple social and economic ills are those at the bottom of the pecking order, rather than those at the top.
But if the many problems and injustices that not only afflict, but define, British society are to be solved or ended, then the spotlight must now fall on the powerful.
Today’s Establishment, in my view, is bound together by common economic interests and a shared set of mentalities: in particular a mentality that holds that those at the top deserve ever greater power and wealth.
The modern Establishment relies on a mantra of ‘There Is No Alternative’: potential opposition is guarded against by enforcing disbelief in the idea that there is any other viable way of running society.
Without the police’s support, the British government could never have inflicted such a crushing defeat on trade unionism. Having been trained to regard striking trade unionists as ‘the enemy within’, police contempt was easily transferred to other groups of working-class people: in the case of the 1989 Hillsborough Disaster, it was Liverpool fans.
But in recent years, with the Establishment more confident of its total victory, keeping the police on side has become less of a priority. Now,the police have to face the same sorts of attacks – job cuts, the slashing of wages, the worsening of terms and conditions, privatization – that other public-sector workers have long faced.
The sanctity of property is judged to be more important than the rights of human beings: the rich, for example, can leave properties empty for long stretches of time, even as millions suffer the consequences of a housing crisis, and the law will protect the absent property-owner from homeless squatters. British prisons are full of people from deprived backgrounds, mostly suffering from mental distress:
Benefit fraud – costing an annual £1.2 billion, or 0.7 per cent of social security spending – is treated as a despicable crime, while tax avoidance – worth an estimated £25 billion a year – is even facilitated by the state.
In the book, I look at how neo-liberal ideologues who were ostracized in the post-war period achieved stunning political victories, implementing ideological schemes which were once seen as extreme and unworkable.
Under the modern Establishment, the function of the state has been reconfigured. Now, it exists to support private interests, including sectors – like the City – which have nothing but contempt for the state.
Under the modern Establishment, the function of the state has been reconfigured. Now, it exists to support private interests, including sectors – like the City – which have nothing but contempt for the state.
It is the system – the Establishment – that is the problem, not the individuals who comprise it. The objective is to change the system and the behaviour it encourages, rather than replacing ‘bad’ people with ‘good’ people.
I would like Britain – and indeed other countries – to be run in the interests of people’s needs and aspirations, rather than on the basis of profit for a small elite.
We live in a time of Establishment triumphalism, when other ways of running society are portrayed as unthinkable. That triumphalism must be chipped away if we are to build a different sort of society.
Much of the Establishment is not satisfied unless politics and society is relentlessly being transformed in their direction: ever lower taxes on the rich and privatization, for example. Anything that hints in the opposite direction is deemed intolerable.
Living standards have not fallen for as long since the nineteenth century. Meanwhile, as the Establishment’s position has become further entrenched, it has been boomtime for those at the top.
The struggle against an unaccountable elite with interests that clash with those of the broader population is not specific to Britain. The British Establishment, after all, is intertwined with ruling elites in other countries.
One day, this Establishment will fall. It will not do so on its own terms or of its own accord, but because it has been removed by a movement with a credible alternative that inspires. For those of us who want a different sort of society, it is surely time to get our act together.
We don’t really know who or what ‘the Establishment’ is, or what it looks like – which suits its members rather well.
‘The Establishment’ is a term that is often loosely used to mean ‘those with power who I object to’. This book will indeed suggest there are groups of mostly unelected and unaccountable people who really do rule the roost, not simply through their shared wealth and power, but because of the ideas and mentalities that govern the way they behave.
Here is what I understand the ‘Establishment’ to mean. Today’s Establishment is made up – as it has always been – of powerful groups that need to protect their position in a democracy in which almost the entire adult population has the right to vote. The Establishment represents an attempt on behalf of these groups to ‘manage’ democracy, to make sure that it does not threaten their own interests.
In the decades that followed World War II, several constraints were imposed on Britain’s powerful interests, including higher taxes and the regulation of private business. This was, after all, the will of the recently enfranchised masses. But today, many of those constraints have been removed or are in the process of being dismantled – and now the Establishment is characterized by institutions and ideas that legitimize and protect the concentration of wealth and power in very few hands.
The Establishment includes politicians who make laws; media barons who set the terms of debate; businesses and financiers who run the economy; police forces that enforce a law which is rigged in favour of the powerful. The Establishment is where these interests and worlds intersect with each other, either consciously or unconsciously. It is unified by a common mentality, which holds that those at the top deserve their power and their ever-growing fortunes.
This is the mentality that has driven politicians to pilfer expenses, businesses to avoid tax, and City bankers to demand ever greater bonuses while plunging the world into economic disaster.
Not to subscribe to these beliefs is to be outside today’s Establishment, to be dismissed by it as an eccentric at best, or even as an extremist fringe element.
The terms of political debate are in large part dictated by a media controlled by a small number of exceptionally rich owners, while think tanks and political parties are funded by wealthy individuals and corporate interests.
Yet there is a logical flaw at the heart of Establishment thinking. It may abhor the state – but it is completely dependent on the state to flourish.
The British media is an integral part of the British Establishment; journalists and politicians alike obsessively critique and attack the behaviour of those at the bottom of society. Unemployed people and other benefit claimants; immigrants; public-sector workers – these are groups who have faced critical exposure or even outright vilification. This focus on the relatively powerless is all too convenient in deflecting anger away from those who actually wield power in British society.
The powerful once faced significant threats that kept them in check. But the opponents of our current Establishment have, apparently, ceased to exist in any meaningful, organized way.
Whereas the position of the powerful was once undermined by the advent of democracy, an opposite process is now underway. The Establishment is amassing wealth and aggressively annexing power in a way that has no precedent in modern times. After all, there is nothing to stop it.
The Establishment has remained unaccountable and unchallenged for too long. That has much to do with a failure to define who it is and what it does. This is a debate that is long overdue – a debate not just about who rules us, but about the threat they pose to democracy itself.
In the last three decades, wealth and power have been taken away from the broader population and systematically redistributed to those at the top. It would not have been possible without the determined efforts of their outriders.
Back in 2004, when in his mid-twenties, Elliott set up the TaxPayers’ Alliance, a self-described ‘non-partisan grassroots campaign for lower taxes and better public spending’.
The TaxPayers’ Alliance is a right-wing organization, funded by conservative businesspeople and staffed with free-market ideologues. And yet it presents itself as though it were simply the voice of the taxpayer.
The strategy of the TaxPayers’ Alliance was clear: to demonize public spending, portraying hard-earned taxpayers’ money as gratuitously wasted on gimmicks and perks.
Trade unions – the traditional foe of the business elite and large sections of the British right – were a key target of the TaxPayers’ Alliance.
The extraordinary influence of the TaxPayers’ Alliance is widely acknowledged. The Guardian believed it to be ‘arguably the most influential pressure group in the country’.
The TaxPayers’ Alliance is, of course, deeply embedded within a network of right-wing outriders. A confidential guest list for a post-2010 general election TaxPayers’ Alliance ‘roundtable’ discussion reads like a ‘Who’s Who’ of the British radical right.
Similarly, the list of Trustees behind Policy Exchange is a ‘Who’s Who’ of City millionaires and Tory donors.
It might seem tempting to view the outriders as nothing more than tools of the wealthy elite, translating their economic interests into political ideas that are then peddled to the public.
Take Reform, a right-wing think tank that specializes in pushing the case for the privatization of public services. ‘Of all our money, 70% comes from companies and 30% comes from individuals,’ says Nick Seddon, the think tank’s former deputy director.
Reform’s donors include corporate giants such as the General Healthcare Group, BMI Healthcare and Bupa Healthcare, which would benefit from the selling off of publicly run services.
Early in 2013, Reform published research endorsing the privatization of Britain’s prisons, a policy from which even the Conservative-led government had begun edging away. *
What was not mentioned was Reform’s substantial funding from security firms G4S, Serco and Sodexo – companies that were already running fourteen prisons, and stood to benefit from further privatization.
Nowadays, the outriders are closely entangled with the political elite as well as with big business. Take Policy Exchange, whose reports include calls for the wholesale privatization of public services: ‘Politicians must stand up to militant trade unionists, including banning the right to strike for emergency workers, to truly deliver a revolution in the way public services are delivered.
Policy Exchange, in fact, was founded by politicians. It was set up in 2002 by a number of key Tory MPs and MPs-in-waiting, one of the most prominent of whom was its founding chairman, Michael Gove, MP and co-author of Britannia Unchained, a book damning the British as ‘among the worst idlers in the world’, and demanding a new assault on workers’rights. In 2013, Seddon, a keen backer of NHS privatization, would leave Reform to become David Cameron’s new health advisor.
To be an outrider in modern Britain is to wield considerable power: the backing of corporate interests, an incestuous relationship with the political establishment and strong connections to journalists.
What is missing is a genuine counterbalance to these outriders. There is, for example, the Institute for Public and Policy Research, a centre-left think tank that is supposed to be an alternative to the right-wing outriders.
Its big funders include the tax-avoiding multinational Google; Capita, a private company that makes money by taking over public assets; and energy companies such as EDF Energy and E.ON UK. In other words, the IPPR can hardly be described as a think tank that is independent of the Establishment, let alone challenging it.
A lonely exception to these organizations is the New Economics Foundation, a progressive think tank that remains studiously ignored by most mainstream media.
Meanwhile, university economics departments have been emptied of opponents of the status quo.
It means that supporters of an order that favours wealth and power can draw on endless intellectual material, as well as being granted academic respectability. Its opponents, on the other hand, are intellectually starved. ‘That’s one legacy of neo-liberalism: fencing off the means of knowledge production, claiming it as theirs.’
What the corporate-backed outriders have achieved is this. They have helped shift the goalposts of debate in Britain, making ideas that were once ludicrous, absurd and wacky become the new common sense.
The privatization of the NHS is one example: even Margaret Thatcher did not dare to do it, but the coalition government has been able to turn it into a reality.
The outriders have proven a wise investment for their corporate and wealthy backers, whose power and fortunes have flourished in neo-liberal Britain. The national political conversation is kept relentlessly on the terms favourable to those with wealth and power.
Politicians are clearly in awe of the impact their policies have had on people’s ability to get filthy rich – and they couldn’t miss the contrast with their own pay cheques. The ‘because I’m worth it’ mentality.
It is hardly stretching a point to say that many MPs now see their role not as a vocation, a duty or a service – but, rather, as just another upper-middle-class career option that is not being remunerated as well as other comparable professions.
The expenses scandal exposed a striking hypocrisy among the political elite.
The outriders had preached the rolling back of the state, and their sermon was picked up and amplified by politicians. Those people portrayed as dependent on the state became particularly demonized, with MPs playing a key role in focusing public anger on the poorest in society – which proved extremely effective at deflecting scrutiny from those at the top. *
George Osborne, the Chancellor, had painted a lachrymose picture of the ‘shift-worker, leaving home in the dark hours of the morning, who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits’. Despite enjoying a reputed £4 million stake in his family’s wallpaper business, in 2009 it was revealed that Osborne switched or ‘flipped’ the designated publicly funded second home permitted to MPs, leading to claims that he had saved £55,000 at the public’s expense.
A quarter of Tory MPs are private landlords, as are 15 per cent of Liberal Democrat MPs and 12.5 per cent of Labour MPs.
Because successive governments failed to build housing or control rents, around £24 billion a year is now being spent on housing benefit. This is a benefit that subsidizes private landlords.
The Conservative MP Richard Benyon is Britain’s wealthiest parliamentarian. Benyon is paid £120,000 a year through housing benefit.
The most troubling aspect of the expenses scandal, though, was how politicians, as an entire caste, believed that such hypocrisy and greed were acceptable. Having transformed the theories and mantras of the outriders into practical policies, they themselves had become true believers.
There are a number of reasons why the Tories have become the natural political representatives of the modern Establishment. Ideologically, Conservatives have no doubts about capitalism as a system. But, crucially, they are bankrolled by those with everything to gain from the current order.
Following the 2010 general election, and despite a manifesto pledge to end ‘top-down reorganizations’, the Conservative-led government unleashed a full-scale privatization of the NHS.
While in opposition, Andrew Lansley, then the Conservatives’ Shadow Health Secretary and chief architect of the privatization agenda, accepted a £21,000 donation from John Nash, then the chairman of the private healthcare firm Care UK. Nash – who has thrown over £200,000 at the Conservative Party.
A whole raft of other private-healthcare tycoons and businesses, also invest in the Tories.
Labour’s relationship with the Establishment is more conflicted. Many of its leading figures have been more than content to take their place in the new Establishment.
Tony Blair was fixated with wealthy and powerful individuals such as media mogul Rupert Murdoch, billionaire Bernie Ecclestone and right-wing US President George W. Bush.
Peter Mandelson holidayed on the yacht of Russian oligarch Oleg Deripaska, with other guests such as the Conservatives’ then Shadow Chancellor George Osborne.
The Labour Party, however, was originally founded with the aim of challenging those with wealth and power, rather than indulging them.
Following Tony Blair’s assumption of the Labour leadership from 1994 onwards, fearful of being challenged by party activists, New Labour curtailed internal party democracy.
Tony Blair’s rebranding of Labour as ‘New Labour’ was, above all else, a conscious attempt to portray the party as ‘pro-business’. Labour’s shift from its original mission was instrumental in making the Establishment what it is today.
No wonder, then, that policies promoting the interests of those with wealth and power have come to be seen simply as ‘common sense’.
Tough decisions’ also features prominently in Establishment vocabulary, generally meaning policies that reduce the living standards of others, or tough for anyone but politicians, and implying that opponents are weak or cowardly.
And so, here is the reality of modern British politics. The views of millions of Britons are simply not represented. Even mild shifts by the Labour leadership away from the Establishment’s groupthink trigger a frenzied response.
If the public is overwhelmingly in favour of a policy that might put the business elites’ noses out of joint, such a policy cannot be entertained.
Because of Thatcher’s overwhelming success at eliminating opposition, today’s civil service shares the dominant Establishment mentalities.
Politics has become a closed shop for the privileged. Today, those who benefit least from Britain’s economic and social order are increasingly unlikely to penetrate the Westminster Bubble.
Parties are no longer thriving political movements, full of grassroots activists who can hold politicians to account. Rather than thriving democratic movements rooted in communities, these hollowed-out parties are husks.
MPs have a direct personal stake in the prevailing mantras of individualism and self-enrichment. * Little wonder, then, that so many MPs uphold an order from which they personally stand to profit. The borders between the political and business elite are now so porous that it is increasingly difficult to treat them as separate worlds.
British business and political elites are not distinct entities: they are deeply intertwined.
The privatization of the NHS proved to be a depressingly lucrative venture for many British legislators, including members of the party that had founded it in the first place.
Former Prime Ministers profiting from business links with dictators who abuse human rights may look deeply distasteful, yet even this is not forbidden by law. But understanding this porous border between the political and corporate worlds is crucial to understanding the corporate elite’s stranglehold on British democracy. *
New Labour politicians embraced the politics of the Establishment, extolling the benefits of free markets, business and enterprise. On leaving power – even in disgrace – they would win contracts with the economic elites whose interests they had championed.
It is not just ideology and self-interest that makes politicians such natural champions of the wealthy. Much of their time is spent in the company of private interests and their professionalized, slick lobbying teams.
It has been estimated that the lobbying industry is worth 拢1.9 billion.
Companies would not be throwing such huge sums around unless they believed they were getting a substantial return.
The current political order faces little meaningful challenge. Yet trust in politicians is at a pitifully low level: according to pollsters Ipsos MORI, over 50 per cent of Britons think MPs put their own interests first; 72 per cent do not trust them to tell the truth; and 65 per cent think that at least half of MPs use their power for personal gain.
Britain’s political life remains under a suffocating ideological grip. Slashing taxes on the wealthy; selling off public assets; rolling back the state; cutting back social security; weakening trade unions: all this is relentlessly passed off as the mainstream, the ‘centre-ground’ from which only the unelectable and the extreme deviate.
But the Establishment could hardly hope for a more effective lobbying operation than the British media.
The media play a crucial role within Britain’s Establishment. By focusing their fire at those at the bottom – often with coverage based on distortions, myths and outright lies – they deflect scrutiny from the wealthy and powerful elite at the top of society. All of which is hardly a surprise, given that their owners are themselves part of that elite, ideologically committed to the status quo.
There is not a free press in Britain: there is a press free of direct government interference, which is a different thing altogether. Instead, most of the mainstream media is controlled by a very small number of politically motivated owners, whose grip on the media is one of the most devastatingly effective forms of political power and influence in modern Brtain.
In July 1995, as the Tories became a national laughing stock, Blair flew to meet Rupert Murdoch in Australia’s Hayman Island and – two months before the 1997 election that swept New Labour to power – The Sun dramatically swung behind him.
Without doubt, the biggest turning point which led to Labour being elected was when The Sun came out in support.
Blair’s relationship with the Murdoch empire went far beyond one of neutrality: it had become intimate. So much so, in fact, that Blair would end up becoming part of the Murdoch clan itself.
In the run-up to the 2003 invasion of Iraq, New Labour’s spin-machine was at its most frenetic, feeding the media spine-chilling stories of Saddam * Hussein’s weapons of mass destruction.
All of Murdoch’s 175 newspapers across the world backed the war.
So important were the media barons under New Labour that Blair or Brown would visit them as though they were paying homage in a royal court.
The priorities of the media elite became the priorities of the government itself.
The media is almost entirely committed to Establishment policies and ideas, which they attempt to popularize for a mass audience.
At the Leveson Inquiry into the British media in 2012, Murdoch openly stated: ‘If you want to judge my thinking, look at The Sun.’
With so many journalists from privileged backgrounds, who do not use public services, who rub shoulders with the wealthy and powerful rather than with ordinary voters, is it any wonder that vast swathes of the media so naturally defend a status quo with which they identify so closely?
The media agitate against policies that might have even a slight impact on the privileged – because they are the ones who run Britain’s newspapers.
In the media, management has such sweeping power because of the smashing of the trade unions, who used to be able to take a stand against management decisions.
It is not just the crushing of the unions that has ensured compliance from within. The workforce has become increasingly casualized, making them easy to hire and fire at a whim. Those who step out of line face being tossed aside with barely a moment’s thought.
Put all these factors together, and there is little wonder that so much of Britain’s media sticks to Establishment lines.
The media’s determination to dictate who holds power is as strong now as it has always been.
There is a compelling counter-argument to the claim that much of the media is rigged in favour of wealthy interests. Sure, the power of the mogul-owned media is strong – but it is kept in check by the mighty BBC.
A closer examination of the most influential players at the BBC, however, reveals precisely the opposite – that the BBC is, more or less, a mouthpiece for the Establishment.
As one former senior BBC journalist put it to me – strictly off the record – the corporation is ‘set up to be the transmitter of mainstream ideology’.
The BBC, he said, was a ‘factory churning out that viewpoint’: a deep-seated commitment to neo-liberal economics.
The BBC is a perfect vehicle for the Establishment, for it allows the free-market status quo to be portrayed as a neutral, apolitical stance. *
The right’s relentless criticism of the BBC for ‘left-wing bias’ is a clever preventative measure: it allows them to police the output of the BBC.
Independent research underlines the extent to which the BBC echoes the views of the status quo.
Business representatives outnumbered trade-union representatives on the BBC’s News at Six by more than nineteen to one.
The BBC, in short, is an outlet that is staunchly pro-business, biased towards right-wing voices, and acts as a consistent platform for Establishment perspectives.
The British people are not being served by a media that exists to inform them, to educate them, to understand the realities of the country they live in and the world around them. Instead, much of the media is a political machine, lobbying for the often personal objectives of their owners.
Medieval Britain had the Church to rally opinion in favour of the status quo; the modern British Establishment has the mass media instead.
But as repressive as it can feel, the media is by no means the most authoritarian pillar of modern Britain.
How the police exercise their authority reflects the imbalance of power in British society that the Establishment itself embodies.
The police enforce a law that cracks down on the alleged misdemeanours of the poor but which ignores, allows or facilitates the far worse behaviour of those at the top – such as tax avoidance or, purely through greed, plunging the economy into calamity.
As industrial struggles beckoned following Margaret Thatcher’s assumption of power in 1979, one of the new government’s first acts was immediately to approve the 45 per cent pay rise, even as other public-sector workers were suffering cuts to their pay packets. In the storm that followed, the loyalty of the police was assured. Police officers would play a key role in seeing off opponents of the new, neo-liberal Establishment.
During the Miners’ Strike, the police were not acting as impartial guardians of law and order. Rather, they were heavily embroiled in a struggle to defeat the miners at all costs: ‘It was plainly a political battle.
The defeat of the miners in the mid-1980s was an event that marked the smashing of the modern trade-union movement – the most formidable organized threat the new Establishment had yet faced down.
This was a critical moment in the consolidation of the new Establishment – its ability to neutralize mass organized opposition to its ideas. The police had played a key role.
Both Orgreave and Hillsborough revealed elements of an organized campaign – to purge statements of anything that could be used to criticize the conduct of the police.
During the 1980s, in response to the trade-union upheavals that accompanied the rise of the new Establishment, the police had been trained to treat working-class people as the ‘enemy within’.
Thatcherism had bought the loyalty of the police; they had fought its battles, becoming ever more authoritarian in the process.
After the hobbling of the unions, radical opponents of the Establishment would be far more fragmented and disparate. But they would still face batons and mass arrest – and worse.
After the hobbling of the unions, radical opponents of the Establishment would be far more fragmented and disparate. But they would still face batons and mass arrest – and worse.
Since 1990, nearly 1,500 people have died following police contact, but not a single officer has been convicted as a result.
Aggressive policing, kettling, mass arrests, the demonization of protesters based on deceit, actions that cause injury or even death – here are the consequences of the Establishment’s authoritarianism.
Between 1993 and 2012, Britain’s prison population nearly doubled, the highest per capita in Western Europe.
This new authoritarianism was selective, to say the least – its targets were those at the bottom of society, rather than those at the top.
In May 2012 thousands of off-duty police officers marched through London in protest at cuts, privatization and restructuring. Social media abounded with suggestions that they should be kettled.
Cuts and privatization: this had been the fate of other workers, and now (belatedly) it was the turn of the police. And they hated it.
The authoritarianism of the police reflects the distribution of power. They enforce a form of law that cracks down on the misdemeanours of the poor but which, as a general rule, defends the powerful. Police authoritarianism belied the Establishment’s claims to have rolled back the frontiers of the state. In actual fact, the state thrives under the Establishment – providing, of course, that it acts on the Establishment’s behalf.
Despite shades of moderation and radicalism, the British Establishment’s governing ideology is consistent. The state is a bad thing, and gets in the way of entrepreneurial flair. Free markets are responsible for growth and progress.
Businesspeople are the real wealth creators. It is a sentiment echoed by elite politicians of all stripes.
This view is so widely accepted by the Establishment that those who even mildly call it into question are regarded as political eccentrics. And yet the whole ideology of free-market capitalism is based on a con: British capitalism is completely dependent on the largesse of the state. What’s more, the Establishment’s free-market ideology is often little more than a front for placing public assets in private hands at the expense of society.
The state is the backbone of modern capitalism, and sustains it: protecting big business, training its workers and subsidizing their wages, bailing out its financial heart, directly topping up bank profits. And yet terms such as ‘scroungers’ are almost exclusively used against the poorest rather than private interests who – as we shall see – refuse to even pay tax.
It is the same story for the government’s various so-called welfare-to-work schemes – another example of the Establishment funding private companies whose core purpose is profit, not helping people.
And so the nature of modern capitalism is exposed: a publicly subsidized racket, where the real ‘scroungers’ are to be found not at the bottom of society, but at the top. The great fire sale of state assets includes even the NHS.
It is impossible to overstate how much of a monumental rip-off PFI has proven over the last two decades or so. The commissioned projects were worth £54.7 billion in total – but, by the time it has finally paid off the consortiums in decades to come, the taxpayer is projected to end up paying a barely believable £301 billion.
Money is being diverted away from patient care and straight into private pockets. It has left hospitals staring into the abyss of bankruptcy.
But it was not until the coalition came to power that the entire English NHS faced being dismantled.
Privatization has become an avalanche. In the first three years of the coalition government, 8,000 beds were cut, the Royal College of Nursing estimated that there were 20,000 fewer nurses than the NHS needed, while the service was expected to find £20 billion of so-called ‘efficiency savings’ by 2015.
None of this is accident: it is design. The NHS has been left in the grip of free-market ideologues.If it doesn’t generate profit, it doesn’t want to know. The market literally wants to make money, profit, that’s their philosophy, simple as that. It will end with a two-tier health-care system.
But this is a story that is emblematic of Britain’s Establishment. No longer are its public services there, above all else, to provide for the public good: the needs of profit, rather than of people, are being catered for.
The Establishment ideology that the state is somehow illegitimate, an obstacle to the entrepreneurial flair of the ‘wealth creators’, justifies not providing it with the revenue it needs to function. Even at a time of austerity shredding through services and livelihoods, large swathes of Britain’s wealthy elite have effectively ceased to pay their taxes. It is a practice that exposes just who the British state serves.
Companies such as Ernst & Young encapsulate some of the worst mentalities and practices of Britain’s Establishment: a never-ending quest to concentrate wealth in ever fewer hands; the erosion of barriers between private interests and the state; and an ideological rejection of the state, used to justify a refusal to contribute to maintaining its basic services and functions.
Britain’s elite avoids paying £25 billion worth of tax each year.
Following his assumption of power in 2010, David Cameron set up a ‘Business Advisory Group’ * . Among its sixteen members are the heads of notorious tax-avoiding companies. Of course, there are no representatives of trade unions or consumers’ organizations: this is an opportunity for tycoons to exercise direct political influence over the Prime Minister and his key allies.
Big corporations and wealthy individuals effectively have lobbyists in the heart of the British state, helping to form laws on their behalf and then advise them on how to exploit loopholes they have created.
There’s nothing in company law about doing the right thing for society.
The systematic avoidance of tax by the wealthiest demonstrates just how much power large companies and billionaires exert over democratically elected governments, either through a presence at the highest level or through outright bullying.
Governments are undermined by companies that deprive them of funds necessary to maintain the provision of services.
It illustrates a pervasive Establishment mentality – that it is unreasonable to have to pay tax to a state they believe is merely a pesky obstacle to their entrepreneurial flair, rather than asserting just how dependent they are on the state’s largesse.
The transfer of public assets to the private sector; the reduction of corporate taxes; the entry of corporate lobbyists into the heart of power; untramelled globalization; and the defeat of the traditional trade-union enemy – all fuelled a deep sense of entitlement and triumphalism, as well as an ever more unequal distribution of wealth.
Under the new Establishment, basic utilities that were supposed to be a public good had been flogged off to the private sector. Families are having to choose between heating their homes and feeding their children. Each winter, cold homes contribute to the 20,000 or more elderly people included in the grim ‘excess winter deaths’ figures.
There were 195 meetings between ministers and the Big Six and their lobbyists in the first ten months of the Cameron government; there were just seventeen meetings with environmental groups.
The stripping away of public assets is just one reason why so much wealth has ended up concentrated in the hands of the elite. It is a redistribution that has been dramatic, to say the least, since the emergence of the modern Establishment.
The country might be trapped in an economic crisis, but corporate Britain is sitting on a cash pile worth hundreds of billions of pounds in what amounts to an investment strike.
But there is another factor that has proved central to the concentration of wealth at the top: the lack of meaningful or sustained countervailing pressure from below. Here is one legacy of the defeats suffered by the trade-union movement.
Of the advanced OECD countries, only the United States has a worse record on employment protection than Britain.
It is taken as read that the direction of travel is ever more wealth and power to be shifted to the business elite – whether they ask for it or not.
Establishment ideology is so hegemonic, so unchallenged, that it is almost considered commonsense – a default position from which only an eccentric or a political dinosaur would deviate.
When Britain’s financial elite plunged the country into economic disaster, the British Establishment were quite clear: it would be working people who picked up the tab for the crisis, not those responsible for it. There is no more compelling insight into how power works in this country.
In the City, Britain’s financial sector, you can find the mentalities of the Establishment expressed in their purest form.
Here, the concentration of wealth in the hands of an ever-smaller elite is a process that is not only defended, but glamorized. And – perhaps most strikingly – a sense that there is one rule for those at the top, and another rule for everybody else.
Rather than rocking the Establishment’s foundations, the financial crisis brought its values to the fore.
Unemployed people increasingly found themselves treated like criminals. Those who shared responsibility for plunging Britain into economic catastrophe faced no sanctions or punishment. They were not driven into poverty and hardship, nor forced to depend on food banks in order to eat. *
The crisis would underline just whose side the law was on. Britain’s Director of Public Prosecutions proposed that sentences for benefit fraud should be extended to up to ten years.
But unemployed people have no lobbyists at the heart of power; no political party is dependent on them for funding; they have no army of prominent think tanks and outriders to leap to their defence.
There was a time when there was broad and systemic regulation of finance. Because of these constraints, the City was not a cornerstone of the post-war consensus. But in the early 1970s, this framework began to disintegrate.
As Thatcherism helped forge the new Establishment, the financial sector was encouraged as never before.
The financial sector would end up benefiting from a state bailout immensely greater than any ‘subsidies’ received by other industries.
When it came to the City, Thatcher claimed, all previous governments did was place ‘barriers … in the way of its improvements’. Those barriers would be toppled.
Thatcher swiftly abolished capital controls, or taxes on the movement of capital. It meant both a dramatic strengthening of the power of the financial markets, and a diminishing of the power of elected governments over the economy.
The City flourished in the 1980s, even as manufacturing was decimated. Privatization of utilities such as British Gas benefited the City, too .
In 1986 the City’s rise was accelerated by a package of measures that became known as ‘Big Bang’.
In 1919, the Conservative government brought Britain into the European Exchange Rate Mechanism.
On 16 September 1992 speculators such as George Soros, banks and pension funds began selling the British pound. In an attempt to shore up the pound’s value and prevent Britain’s ejection from the ERM, the Bank of England spent £2 billion worth of currency reserves every hour: It was all in vain.
Britain was humiliatingly forced out of the ERM. The speculators had taken on an elected government and won. It was an instructive lesson in the new balance of power between government and finance.
Whatever the rationalizations, the City – though long powerful – had under the new Establishment achieved an unassailable position.
When Labour came to power in 1997, manufacturing was allowed to continue to wilt, while the City flourished as never before.
‘The City is immensely powerful in the sense that it has a really strangulating ideological grip on the mindsets of the rest of the British Establishment, in particular on the political establishment,’ says Ann Pettifor. ‘And that power is sort of psychological, sociological, as well as financial and political.’
This ideology, of course, originates with the outriders who had been so sidelined until the late 1970s. The beliefs of the intellectuals and economists who met at Mont Pèlerin in 1947 had become the religion of City traders, bankers and politicians alike.
As New Labour’s Chancellor of the Exchequer, Gordon Brown’s fawning over the City could compete with any Conservative.
Labour’s internal rationale was in part this: that the tax revenues flowing from the financial sector could be used to fund social programmes. * So it is a corrupt relationship. You could say it was Brown’s Faustian bargain, just as Blair’s Faustian bargain was with Murdoch. And that was the basis of New Labour, really.
Manufacturing provided more taxes and employed more people, but was left to rot by a political elite fixated on the financial sector.
The ideology promoted by the outriders – that individual self-enrichment was the key to economic growth – was championed by the financial sector like no other.
‘The private sector failed and had to be rescued by the public sector, and there was no alternative.’ This was socialism for the rich on an epic scale. It was not free-market dogma that came to the rescue of these banks: it was the state.
According to the National Audit Office, the scale of state backing for the banks peaked at an astonishing £1.162 trillion. But these banks were not made accountable to the people who had bailed them out: It’s corporate fraud on an industrial scale, sanctioned by the government.
For the poor in Britain, it is sink or swim. If the million or so families who depend each month on legal loan sharks such as Wonga are unable to pay their debts, they are likely to have bailiffs hammering on the door.
Whilst the Bank estimated that the poorest tenth of Britain’s population each lost £779 because of quantitative easing, the richest 10 per cent enjoyed a £322,000 jump in the value of their assets.
Back in the 1970s, when the trade unions were wrongly scapegoated for Britain’s economic troubles, they faced exceptionally punitive measures.
In the late 2000s there was no similar crackdown on the banks that had plunged Britain into the biggest economic disaster since the Great Depression.
The coalition government justified the need for austerity on the basis that Britain was indebted, and that spending cuts were a key means of reducing this debt. ‘George Osborne told me himself that all of this was about spin and politics.’
Despite the claims of the coalition government that their austerity measures were paying off the debt, they added more national debt in four years than Labour had managed in thirteen.
As workers’ pay packets in Britain shrink, the number of food banks has exploded, and – the ultimate indicator of despair – the nation’s suicide rate has jumped. But there remains little sense of guilt or shame within the City.
The people there are largely despicable, venal, greedy. The longer they live in the City, the narrower they become, shut off to the rest of the world. Any sympathy they might have had, or understanding of the world, is shut down.
PR firms are crucial in crafting and managing the images of key financial institutions, whether maintaining and improving their standing among investors, or with the public and the government of the day.
PR agencies are vital organs in the current Establishment body politic. Financial giants represented by these PR firms are instantly tapped into a vast political and media network.
These efforts have helped secure dramatic concessions from the government, such as the cutting of corporation tax and taxes on companies’ overseas branches, and the crippling of a national not-for-profit pension scheme that was intended to help millions of low-paid workers.
The City of London Corporation remains a stubborn pocket of resistance to democracy. It is an institution that dates back to the twelfth century. It was granted a certain autonomy, and these entrenched practices and privileges have survived. It exists outside of the writ of Parliament, and even has its own lobbyist who sits opposite the Speaker in the House of Commons.
The entire British government demonstrated, not for the first time, that it was one giant lobbying operation for the City of London.
A total of 134 Tory MPs and peers are currently or were once employed in the financial sector. Around half of the donations to the Conservative Party come from the City.
After the crash, with the tentacles of finance reaching so far into the political world, there was never a prospect of any meaningful change that would challenge the position of the City.
It is a clear example of how democracy is subverted by a tiny elite, however much this elite’s interests collide with those of the country as a whole. It sums up the notion of ‘one rule for the elite, another rule for everybody else’.
A new shared ideology between the Establishment and the US elite transformed what Winston Churchill had christened ‘the special relationship’.
The election of Ronald Reagan in 1980 – just over a year after Margaret Thatcher’s British electoral victory – proved a decisive turning point. If Thatcherism had played a key role in forging Britain’s new Establishment, the two Reagan administrations unleashed a similar process in the United States.
The 1980s witnessed the development of a new ideological bond between the British Establishment and US elite.
The rise of Tony Blair in Britain and Bill Clinton in the United States would cement the British Establishment’s intellectual bond with the US elite.
The rise of New Labour would mean abandoning any critical approach to US foreign policy, helping to cement a common Establishment position.
Leading neo-conservatives founded the Project for the New American Century (PNAC) in 1997. The PNAC openly wanted a global order built in the image of the outriders, backed up by US might.
The new Establishment was ideologically committed to subordinating itself to US power as never before, irrespective of which President was in office. It was a relationship cemented by disastrous conflicts.
When Britain committed itself to joining the 2003 US-led invasion of Iraq, it enjoyed the support of the leaderships of the two main political parties as well as much of the media. But it also provoked the biggest demonstration the country had ever seen.
The build-up to British involvement in the Iraq conflict was marked by deceptions and spin in which much of the Establishment – particularly the political and media elites – played their role.
This catastrophic intervention was driven by the Establishment’s devotion to US power.
The invasion of Iraq would underline just how much power the once-ostracized outriders had. Backed up by the greatest military force on earth, they set out to transform Iraq into their own free-market theme park.
The greatest threat to individual freedom would arise from the ‘war on terror’, launched by the US after the attacks of 11 September 2001 with enthusiastic support from the British Establishment. It would not only mean a clampdown on civil liberties in Britain: British citizens could be deprived of their freedom on the orders of the US.
...under the terms of the Extradition Act of 2003, which allowed the US to extradite people from Britain with no prima facie evidence...another product of the Establishment’s unprecedented devotion to US interests: the signing away of the most basic liberties of its own citizens.
Neither the European Union nor any other single institution has, above all others, deprived the people of its sovereignty. It is the Establishment that really reigns supreme. It is this Establishment that has curtailed and trimmed British democracy, ensuring Britain is a country rigged in favour of a tiny, self-aggrandizing elite. And until that changes, democracy in Britain will be imperilled. *
The status quo may be treated as common sense now, but future generations will surely look back with a mixture of astonishment and contempt at how British society is currently organized: a reigning dogma that treats the state as an obstacle to be eradicated and shunned, even as the state serves as the backbone for private interests; a media that serves as a platform for the ambitions, prejudices and naked self-interest of a small number of wealthy moguls and how institutions run by the elite attempted, with considerable success, to redirect people’s anger to those at the very bottom of society.
The Establishment represents the institutional and intellectual means by which a wealthy elite defends its interests in a democracy.
A democratic revolution – to reclaim by peaceful means the democratic rights and power annexed by the Establishment – is long overdue. *
A compliant media happily goes along with an agenda that furthers the interests of the wealthy as though it was simple common sense to which nobody in their right mind could object.
Opponents of the Establishment are ignored, dismissed as dangerous or deluded extremists, and – if needs be – humiliated.
The behaviour of the powerless is relentlessly scrutinized, rather than that of the powerful – protecting the Establishment in the process.
By surrendering democratic powers to private interests, and by building a political elite that differs more on nuances than on substantive issues, the Establishment has committed untold damage to democracy.
The Establishment has left many people resigned, devoid of hope, without a feeling that it is possible to resist.
Far-reaching change can only happen if a broad enough section of people are inspired enough by its promises, and confident enough about its realization.
The problem is that such dissidents are often all too disparate and fragmented, working on individual projects.
If supporters of a democratic revolution are to succeed, it means bringing these fragments together, creating our own effective outriders, partly in the form of savvy think tanks that can navigate through a hostile environment.
Unless an alternative is crafted that is coherent and credible, and which resonates with a mass audience, then the status quo is here to stay. That is what the neo-liberal outriders themselves realized many decades ago.
The most repressive anti-trade-union laws in the Western world have ensured that the balance of power lies firmly with bosses.
Defeating the Establishment’s anti-union mantra would benefit all of us.
Public ownership that involves service users and workers would help democratize the economy, posing a genuine alternative to both the market and rigid statism. The whole approach of endlessly moving towards a society run on the basis of profit for a small elite would be dealt a sizeable blow.
The power of finance limits what democratically elected governments are able to do. That means there is an urgent need to wean Britain off its dependence on the financial sector by developing a new generation of modern industries.
Nothing epitomizes Britain’s ‘socialism for the rich’better than the financial sector.
Rather than flogging off the banks that were bailed out by the taxpayer, government could turn these institutions into publicly owned regional investment banks, helping to rebuild local economies across Britain.
The New Economics Foundation proposes a range of capital controls to help an elected government regain the ability to implement economic policies, attract more stable long-term investments, and reduce the ability of finance to throttle Britain.
A democratic revolution would have redistribution of wealth at its very heart.
An all-out assault on tax avoidance would mark a reassertion of society against the power of wealthy interests.
The accountancy firms who have colonized the state need to be evicted from power – no more being seconded to the Treasury to help draw up tax laws and then allowing their clients to get round them.
The evicting of corporate interests from the heart of power would be at the centre of a democratic revolution.
Energy giants, for example, are interested in making money, not in serving the interests of consumers: there is therefore no place for their representatives in arenas of power like government departments.
There should be limits on how many national media outlets one individual can own, restricting the power and influence that oligarchs can wield in a democracy.
Internships help to ensure that only those with prosperous parents can afford to be exploited and enter the media – or, for that matter, a whole range of other professions from politics to law. *
A democratic revolution would drive the power of Big Money from politics too. Limits must be imposed on the amount that wealthy individuals and businesses can donate to political parties.
MPs should be barred from taking up second jobs for cash; moreover, a ban should be imposed on former ministers with responsibility for, say, health or defence taking up posts with private companies that operate in such areas. The revolving door must be firmly shut.
Think tanks should be obliged to publish a list of their donors in full so that any conflicts of interest can be scrutinized.
At the very least, power needs to be devolved away from Westminster to local councils, including in areas such as housing, education and health.
The facts around discrimination and corruption in the police force speak for themselves: But that will mean far-reaching institutional change, and a genuinely independent body to hold the police to account, unlike the currently supine so-called Independent Police Complaints Commission.
Across the Western world, living standards are falling, public assets are being flogged to private interests, a tiny minority are being enriched at the expense of society, and the hard-won gains of working people – social security, rights in the workplace and so on – are being stripped away. There is a common cause to be made.
Such proposals represent a modest attempt to reassert democracy: to reshape a society run in the interests of the majority, rather than one that is ordered in favour of a wealthy, unaccountable elite.
‘Power concedes nothing without a demand,’.‘It never did and it never will.’