Will Roche continues with his second in
a series of three articles on monopoly
In my previous
article ‘Monopoly Capitalism’ I tried to demonstrate that monopolisation is endemic
to a capitalist economy. I showed how economies of scale lead to ever-larger
companies, and to the domination of entire national economies. Big business has
become wealthier and more powerful today than ever before.
forces are not the only causes. Political forces are at work too. In this
article, I’ll try to demonstrate how big business infiltrates and controls
government, and indeed, how government has become absorbed into big business.
long since been conscious of the nature of the state, its industrious defence
of the capitalist class, and its prejudice against working people. But much of
the public are unaware of just how incestuous the capitalists and governments
domination of parliament is not a new phenomenon. During the late 1800s, for
example, Liberal Prime Minister Gladstone’s efforts to regulate the rail
industry were obstructed by 132 MPs who held directorships in railway
companies. But today, it takes place on an unprecedented scale.
has a big impact on policy making, not because of the strength of their ideas,
but due to the amount of money they throw at government. The party of big
business, the Conservatives, get the lions share of their funding from rich
individuals and corporations. They recently hit the press for the enormous £5m
donated by millionaire Stuart Wheeler. David Cameron has personally raised more
than £5m for the general election campaign after nearly 100 business people
signed up to a premier club that offers them a private dinner with the Tory
leader for an annual fee of £50,000.
due to working class disappointment with policies in office, the Labour party
has become increasingly dependent on big business. Labour originally received
90% of its funding from the trade unions. Today that figure stands at a mere
30%. New Labour now gets over 20% of its funding from big business.
This money has
more strings attached than the Philharmonic Orchestra! It’s often used to
secure exemptions from the rules, to get permits or receive other favours. For
example, Bernie Ecclestone, head of Formula One, donated £1m to New Labour
before the 1997 general election. Almost immediately after a subsequent meeting
between Blair and Ecclestone, the UK ban on tobacco advertising was
If you’ve got
the money, you can hire a lobbyist and get your interests represented at the
heart of government – who says we live in a democracy? Most of it takes place
behind closed doors, but the clumsy occasionally get caught.
In 1998, there
was the ‘cash for access’ scandal, where lobbyists were being paid by
corporations to secure meetings with ministers. There was the ‘cash for wigs’
scandal in 2001 with Lord Chancellor Irvine. And earlier this year, there was
the ‘cash for influence’ scandal where four Labour Party Life Peers offered to
help make amendments to legislation for £120,000.
business has gone much further than bribery and lobbying. Capitalists and MPs
freely interchange between government and private firms. This process has
become known as the ‘revolving door’. Companies are often keen to employ former
ministers as they hold inside information, or influence policy-making, which
can advantage a bidding company.
There was a
significant turnover of ministers in 2007. For example, Patricia Hewitt MP,
former Health Secretary, became Special Consultant to Alliance Boots Ltd. Most
prominent, though, have been former Prime Minister Blair’s new roles as senior
adviser to JP Morgan Chase & Co. and Zurich Financial Services.
many business people have become MPs, accessing classified information and
influencing policy for their industries. For instance, Chairman of British
Airways, Lord Marshall of Knightsbridge, who campaigned against tax on aviation
fuel, is now in charge of Gordon Brown’s energy tax review. Paul Leinster,
Director of Smithkline Beecham, which has polluted streams in Sussex and
Gloucestershire, is now Head of the Environment Agency’s Environmental Protection
Directorate! In 1999, Leinster proposed that
companies should be allowed to monitor their own pollution, and that regulation
be redesigned by industry.
people can even temporarily go and work in a minister’s office for a couple of
years. This is known as ‘seconding’, and it’s completely legal!
This has had a
profound effect on industry. For instance, it is quite extraordinary the number
of former MPs and ministers who are now working for the nuclear industry. All
the inside pressure has resulted in remarkable about-face in government policy
since 2003, when it announced it was "not going to build a new generation
of nuclear power stations". In 2007, the Government said in contrast that
it would be a "profound mistake" to rule out nuclear power.
of Defence is just as bent. They recently privatised the Defence Evaluation and
Research Agency, built from public money, changed the name to QinetiQ, then
sold it off to the U.S. firm Carlyle, a company currently making a fortune from
the ‘reconstruction’ of Iraq. And, guess who’s on the board of Carlye? George
Bush, and John Major. No wonder the company is getting plum contracts!
notable conquest by big business has been the privatisation of public services,
most notably, the NHS. Over a hundred hospitals have, or are being demolished,
and lucrative contracts are being farmed out to private firms to build a small
number of private hospitals, only to then be leased at great expense back to
the NHS. Private firms have also taken over catering, cleaning and portering.
has successfully installed its representatives into government. In 1997, the
Confederation of British Industry, a lobbying organisation for big business,
demanded that government’s Private Finance Panel (composed of civil servants)
be scrapped and replaced with a Task Force composed of industry
representatives. It got it. Adrian Montague, a merchant banker who worked on
the privatisation of British Rail, and the Channel Tunnel project, was put in
In a move that
outraged critics, the government hired Robert Osborne head of Tarmac, one of
the major builders of private financed hospitals, to run the private finance
unit at the Department of Health (DH). How about that for a conflict of interest!
By 2007 the DH’s Commercial Directorate had a staff of 190, of whom just eight
were civil servants, the other 182 being recruited from the private sector.
In the past 18
months over 25,000 jobs have been axed from the NHS, and thousands of hospital
beds lost. One in eight NHS Trusts faces closure. The corporate takeover of the
NHS is well underway.
permission for sale
local authorities, whose task is to represent the public interest, have been
swayed by private companies, who often offer inducements. In Pembury, Kent,
Tesco offered to give £200,000 to the local authority’s park-and-ride scheme
and pay £300,000 for a community centre if it received planning permission for
a new store. Whilst supermarkets were lobbying against the introduction of a
new tax on store car parks, Tesco made a £12m donation to the Millennium Dome.
Tesco subsequently met with John Prescott. Two months later the tax proposal
was scrapped. Much of these plans go ahead despite enormous public protest from
local residents. Many consider this bribery, but government calls it ‘offsite
planning gain’, and it’s completely legal!
sector is better represented in than supermarkets. Chain owner, David
Sainsbury, who has donated over £5m to the Labour Party, was a minister for the
Department of Trade and Industry, as it was then called. Until recently, Tesco
executives inhabited no fewer than six government task forces.
arbiter of planning in England
is the Secretary of State for Environment, Transport and the Regions. They’re
just as crooked! In 1993, Secretary of State for Environment John Gummer
installed a new division called the Construction Sponsorship Directorate (CSD),
aimed at ‘helping the construction industry’. This was an organisation designed
to lobby against legislation Gummer was in charge of enforcing! Key positions
were occupied by industry reps. This helps to explain some of their scandalous
decisions, such as agreeing to the construction of Manchester Airport’s
second runway. Dismissed as unnecessary by transport consultants, and deeply
unpopular with local people, it destroyed one of the most stunning landscapes
in the northwest of England.
More recently, we have the Heathrow third runway scandal, where the British
Airports Authority got into bed with the Department of Transport. They ran the
consultation on its behalf and were given access to all kinds of confidential
information and were able to fiddle the figures.
dominate the political arena the world over. In Japan, they call it the iron
triangle, referring to corporations, government and the labour bureaucracy. In India, one in
four election candidates are millionaires. In the USA, George Bush raised a record
breaking $130 million for his 2004 election campaign, donated by the likes of
Pricewaterhouse Coopers, Goldman Sachs and Merrill Lynch & Co.
awareness is growing. In Britain,
according to a survey by the Committee on Standards in Public Life, 56% believe
that half or more of ministers use their power for their own personal gain. In
90% now believe big business has too much power. More significant, is that 20%
of Americans believe that socialism is superior to capitalism, according to the
Rasmussen poll. The future of monopoly capitalism and all its trickery is
beginning to look less certain.
In my next
article, I’ll try to debunk the myth that capitalism is efficient, and show the
enormous resources it squanders, and the destruction it causes. I’ll also
explain, surprisingly, why there is a positive side to monopoly business, as I
make the case for socialism.
Click here to read part one of this series