THE more things change, the more they stay the same. It’s an old French saying, says Terry Bell in his latest Labour Wrap, and he thinks it applies not only to the latest budget, but to almost all such economic policy statements.
He maintains that finance ministers and the national governments they serve are constrained by the system in which they operate and which they accept. As a result, they continue to apply variations of the same policy remedies to the same problems over and over again, apparently always expecting a different result.
According to what Bell says is a statement probably wrongly attributed to Albert Einstein, this behaviour indicates insanity. But, “such is our economic system and the way we deal with it”.
This, because organised labour and the political and business establishment seem to accept the existing system as if it was preordained, unchangeable and ancient. However, Bell maintains, that this is “completely wrong”.
He points out that income tax, as we know it, was first introduced in Britain in 1799 as a temporary measure to finance a war. It was repealed in 1802 and then reintroduced when war broke out again. In the United States, it was also introduced to finance a war in 1861.
Bell also points out that the so-called father of modern liberal economics, Adam Smith, supported the banning of shareholder companies because they were so prone to corruption. And, says Bell, this was before the advent of limited liability, let alone the “rigged gambles involving currencies, derivatives and so on”.
All these “rigged games”, he maintains, have the effect of exploiting disempowered working people. And it is many of these victims who, in desperation, turn to charlatans, cranks and political populists on the basis that anything is better than what we have.
As a result, Bell says, nobody should be surprised by the electoral success of the likes of Donald Trump and others of this ilk. He asks: is it not time we, citizens everywhere, had serious discussions about real, meaningful, transformation?