Unilateral disarmament at work

What’s the chances ?

Lying behind all the kerfuffle about tax evasion lies a problem which is more profound.  This doesn’t mean I believe the issue is trivial, just that the governments of the world could solve the problem of tax dodging individuals and companies inside a month if they put their minds to it.  Taxing companies on turnover without any allowances would cut out the export of profit to low-tax jurisdictions.  Making all personal tax returns public documents – as I think has been achieved in Scandinavia without their obvious collapse into a North Korean tyranny – would crack the problem of evasive individual behaviour.  And declaring to the taxman the possession and size of overseas bank accounts is not something that would bother me, and I have one.  Compared to solving the Middle East conflicts, or curing malaria, or securing clean water for Africa, eliminating tax dodging is, as the young people say, a no-brainer.

No, the problem which is being obscured is the inequality of wealth.  We are seeing press and TV comment on the tax evaders – often critical and apparently radical comment – which takes as a given that it is OK for individual people to own millions, and in some cases, billions of pounds worth of assets, whilst the general standard of living is static or falling – and has been so for some groups for twenty or thirty years.  There is controversy about why this is happening – is it new technology, the wider use of South East Asian imports, the rise in unemployment, the increased dominance of finance industries, immigration, government capture by special interests – but no-one is, I think disputing it.  Thomas Piketty drew predictable hostility by pointing out the arithmetically obvious fact that if the rate of return on capital is higher than the growth of national income, wealth will flow to those who own capital.  And that is, unambiguously, what is happening.

Here’s a thought.  Might the ability of corporations to devote disproportionate resources to management salaries and bonuses, to impose obviously unfair zero-hours contracts, to destroy historic pension arrangements, to hide and off-shore profits, to maintain pay freezes at a time of rising corporate profits have something to do with the lack of trade union power ?  The ability of employees to resist adverse change has been substantially weakened – in a sense, the workforce has been unilaterally disarmed.  As in the days before trade unions, a single employer faces a disorganised group of employees.  Trade union numbers have been falling every year since Thatcher came to power – from 13m in 1979 to 6.5m today.  Part is down to privatisation, as public bodies typically have higher rates of unionisation than private.  Part of this is due to the legal disempowerment of unions, making it less advantageous to be a union member.  The US campaign against unions – laughably described as ‘right to work’ legislation – is based on this idea.  The reason that changes in the law – and Cameron promises more – are less controversial than they are (and should be) is mostly down to the national memory of misbehaviour by some union leaders in the seventies and eighties, especially Arthur Scargill.  I wonder if he ever considers his role as he maintains a reclusive existence outside Barnsley: probably not, given his capacity for reflection.

So, would it be possible to make progress by raising trade union power – by, say, following the German example and having compulsory workforce representatives on the boards of companies ?  As a friend said when I raised this possibility – “good luck with that”. (later insert – This became a Conservative policy, and I tweeted that it would never happen, and it never happened)

p.s. the day after writing the above, I saw this article via Twitter.  And then, this diagram:

An idea whose time has come ?


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