Bunkum. It has the same credibility as President Donald Trump saying the rising stock market proves that his economic policy is correct. But the two are related. It all comes down to regulation and duping the population.
Johnson and his fellow Brexiteers talk about British sovereignty and throwing off the yoke of the Brussels bureaucracy and its tangle of regulation so that British enterprise and the jobs that go with it can thrive and everyone will be better off. Trump rails against workplace regulation and makes executive orders to overturn environmental regulation so that American business can “forge ahead”. He, too, points to foreigners under-mining American enterprise and jobs.
The Brexiteers and Trump play upon the disaffection and xenophobia of lower-income people and offer them hope. But it is a false dawn.
Johnson was correct in citing regulation and Brexit in the same breath, but the real agenda of Brexit is not to enable the British Parliament to legislate for the safety of vulnerable people like female cyclists. To the contrary, it is deregulate as much as possible.
If truth be told, Johnson as mayor did push for greater cyclists’ safety, but it was the EU that put forward the new regulations on cabin windows and Britain in fact unsuccessfully opposed the idea because in the words of a government spokesman in 2014, “They will not produce practical changes in cab design and could lead to additional bureaucracy for Britain.”
Regulation – or more correctly deregulation – is the core issue for Brexiteers and Trump.
And the reason is fundamental.
When you look at it, wealth is nearly all generated from the natural environment, workers and consumers. And regulation is mostly directed at ensuring businesses, particularly big businesses, do not over-exploit the environment, workers and consumers, or the public at large.
So, of course, if you remove environmental regulation and allow businesses to pollute the air, ground and water and not pay for its remediation, the share price of those businesses will go up. But it does not improve the economy overall. Someone has to pay for the environmental damage – in health and remediation costs. Indeed, shifting the cost to the community at large often delays the remediation, causing extra costs.
Similarly, if you water down occupational health and safety regulation and the regulation of pay and working conditions, the share market will go up, but the economy overall is worse off because of the extra costs of workers’ damaged health and the economic costs of growing inequality.
Removing consumer-protection regulations will also increase share prices while worsening the economy. Unsafe products are costly. Reduced competition, cartels and monopolies make us worse off.
So do not be fooled by a rising stock market in the US. It is not a symptom of an improved economy. Rather it is a symptom of costs shifting from the rich few to the broader community.
But people are fooled. Abraham Lincoln rightly said that you cannot fool all of the people all of the time. But you only have to fool half of the 60 per cent or so who vote on the first Tuesday after the first Monday in November or on referendum day. After that, those pesky regulations that benefit the many but hinder the wealth creation by the already-wealthy can be watered down or done away with.
Moreover, that power can be used to boost military spending which further enriches large corporations – witness this week’s demand from Trump that NATO members boost military spending to 4 per cent of GDP. Surely, military spending should be a finite sum geared to responding to the threats not to a percentage of GDP which with corporate tax cuts results in less money for general health, education and welfare.
Sob. And the Australian Government having trashed the car industry replaced it with massive military construction so it could retain the South Australian seats, instead of doing the smart thing: seeding an electric car industry in Australia.
The tragedy is that the out-of-work voters in the US rust-belt states and in the North and Midlands of England will be the very people to suffer most from executive-order deregulation and withdrawal from the environmental, occupational and consumer protection regimes of the EU.
Some voters are slowly waking up the grave mistake they have made, but it is too late. A second Brexit referendum in the UK is not on the cards, and Trump has two and half or (spare us) six and a half years to go and can do a lot of deregulatory damage in that time.
Meanwhile, in Australia, this week brought us similar insights into the role of regulation and wealth generation for the few at the expense of the many.
This time is was electricity.
Before the 1980s, many areas of the economy suffered from bloated inefficient public monopolies and stifling over-regulation. Electricity was among them.
But we got duped that the answer was radical privatisation and deregulation. The result has been rapacious big businesses – banks, insurance companies, utilities, franchisers, and industrial farmers – ripping off the environment, their workers, consumers and the public at large.
We are getting sick of it.
And so is the chair of the Australian Competition and Consumer Commission, Rod Sims. Sims has had a bit of an epiphany on privatisation and deregulation in the past few years. Once part of the free-market set, he now sees what cowboys they can be. Over the past few years he has warned that privatisation can lead to a harmful public monopoly being replaced by a harmful private monopoly.
His position gives him unique insight into business malfeasance, on one hand, and the benefits of a competitive market on the other.
This week, while talking about how the electricity companies have abused their market position and consumers, he said, “We think the market can still work, but we think it needs this dose of regulation that we are proposing.”
Hear. Hear.
Instructively, he used the word “dose”. A “dose” is what a doctor prescribes to a sick patient. It is measured. It restores the patient to health.
There is nothing wrong with a “dose” of regulation to protect the many and the vulnerable against the well-off few – just as the EU moved to protect London’s female cyclists.
And finally, earlier used the word “dupe”. You dupe people with ingenious propaganda that appeals to emotion not intellect. That is exactly what Boris Johnson did, and it unmasks him. Notice he said “FEMALE cyclists”. You can hear the plucking of the heart-strings.
CRISPIN HULL
This article first appears in The Canberra Times and other Fairfax Media on 14 July 2018.