You couldn’t write the script. A bunch of fabulously wealthy elites arriving by private jet to a luxury mountain resort to discuss…the inequities of capitalism…To add insult to injury, Donald Trump is wrapping up the session. Pandering to his POTUS role, they seem to have developed amnesia towards his recent tax bill which slashes corporation tax, rewards the individually better off and inflates the deficit leaving less money to help ease what…oh yes, the inequities of capitalism…
Most sensible people know free markets work and the State should be a facilitator and only a part contributor, aiming to provide equality of opportunity and protecting those who simply can’t manage on their own.
But to limit the role of the State, the rules of economic engagement must be applied equally and they are not currently. The richer you are, the more you can avoid paying tax (global corporations for example, well represented at Davos…). Add to that executive greed, frequently found in privatised industries, exposure to rising property prices and stock markets, all under the scrutiny of social media, and you have a toxic mix that allows the rich to get richer, in full visibility of the ordinary voter.
Making capitalism work fairly involves corporations paying fair taxes globally; executive remuneration based on long term incentives for wealth creation, and the State not over-promising in its role as facilitator and contributor to investment whether it be infrastructure, health care, education, to name but a few services.
The solutions lie partly in active corporate governance. Owners of our pension funds for example need to act in a wider capacity than simply short term gain because in the longer run, it benefits us all. Privatised industries need their monopolies breaking up. Public services under strain also don’t need the exaggerated claims of competing political visions but genuine reform driven by cross-party consensus. There is always a role for government but just think, for example, how valuable free markets are in the area of the environment, where competing firms are driving hugely beneficial technological developments.
When we talk about capitalism and free markets, we really mean a mixed economy. If the tilt is to be away from an ever growing State, the Davos crowd need to step up to the plate and make a few expensive sacrifices. If there is acknowledgement that this is necessary, then through the snow blizzards, you might just see evidence that the system is working…
Inside Right Politics 