TLI Signature Lecture: The Corruption of Capitalism



okay and we have all been shaken tremendously by what happens on June 27 and so expect a series at least a female continues where we bring to be known as efficient as experts from a range of fields to the Institute to explore for us and with us challenges for all these people you know the research was testing the safety words that we just take half a minute to read you the caption about the lecture series do you know why why we created this lecture series and who we had in mind to speak just we have caught the lecture series contesting globalization post praxis examining transnational is a she capitalism and democracy in the old age the rector 3 June 2016 and perspective of the United you have been able that's what it was momentous historical events a century his constitutional damage is being invaded far beyond the country's borders but so far the loads even new technologies and origins while some point to the growing frustration of UK citizens over the net loss of sovereignty which is said to manifest itself in immigration numbers and he was associated fiscal and economic burdens other argue others argue for invited from that perspective perhaps it has to be seen as an outcry against conditions of economic and political marginalization and the state of precariousness in which the 99% percent find himself today in the UK and well of young brats it then becomes an illustration of globalization and his discontent that long ago video and looking at the manifestations of public outcry in Greece Spain and elsewhere an event less surprising than the post vote used and made it out to you so now I hand over to my colleague dr. one who will say a few words mark off first thank you so much for coming and to do that and the f1 season that I think one seat in the front when I was asked already instructed to prison the speaker I have some way that the don't know what is this for the person who uses to be more distinguished than the speaker and know where I took that quote from was from a Scully who introduced him during his inaugural lecture in 2013 but I'm saying regardless it's a privilege for me to be here today to introduce professor guy standing who earned his PhD in economics from the University of Cambridge it's master he has research professor and former professor of Development Studies the School of Oriental and Africa in London professor guy standing must help us at the universities of fast and Menashe in Australia yes also worked in various positions at the International Labour Organization including 7 years as director of the socio-economic security program and also was coordinator and main writer of the Aiello's Economic Security for a better world that's a global report that was published in 2004 professor standing has extensive NGO experience and also long-standing experience as constant as consultant for governments and various international bodies in the UK Europe Asia and Africa needless to say that including the widely received books on the notion of precarious I know that this not as typical blue-collar workers but as really extended to various groups but that's just what professor standing does he pushes us to always take a critical look and favorite phenomenon that we are experiencing and it was the same in the latest book which is one of seven that here's author so far the latest book on the corruption of capitalism which for people like myself who are just beginning to understand what what is happening even an Israeli of global capitalism and how it is rigged in favor of rentiers who restrict the supply competition competitors erode labor laws and deprived workers what women hold worked and you'd like to think of them as a Spurs of basic rights including the right to unionize so I to discussion and especially you have professor standing think of the affected places which is when and perhaps because it is in the power thank you thank you very much very nice because it makes me sound sound although you get to that stage so thank you very much this book is really the third even trilogy and the trilogy began with the precariat 11 a new dangerous class that books been translated into 19 languages from viral as an academic you never expect that sort of thing I promise you and I've been asked to talk about it in 400 places in 37 countries that doesn't have okay I get emails and contacts from people who want to tell me it's a reality which is and I thought I'd urge this last of the trilogy in a different way it's very interesting I'm economist begin by saying very good economics book there are not many around but every good economics book should begin with a nightmare and end with a dream and this is me this is essentially what I've tried to do in this book now breathe free let me tell you a bit of the background of context I know most of you know economists but I'll try and give the economic context essentially we're in the midst of a global transponder analogous to pal polanyi's great transformation except this is about the painful construction of a global market system whereas Kalani was talking about nationalizes this embedded phase followed by Green Bay phase as well as states we're in the midst of a global transformation and as with pallavi's great transformation in the first phase has been dominated by financial capital pursuing the interests of financial capital and has been implemented an ideological paradigm which we now call neoliberalism which is essentially being about a liberalisation of all markets but that's not the same thing as freedom the liberalisation on certain conditions in the interests of certain interests and it's been about the commodification of everything that can be commodified and a privatization of every human can be privatized including the dismantling of all institutions of social solidarity what this extent against the market institutions of solidarity management system are and they're glad to go in that in there either and what has happened is that the this this sort of neoliberal phase has gone along with logical revolution silicon revolution as we all know which has been very disruptive but fundamental aspect of it is not that the robots are gonna take arrived jobs but it's disruptive in the sense that it's changing the power relations and make facilitating a global labor market global labor process taking shape that's a key point for Maya's Asian experience a globalizing in which the world because in the last years or so and of course that has put huge downward pressure on wages in OECD countries huge down pressure especially as productivity can be rising dramatically faster in emergency so the contextual point but it's it's weakening of the power of labor and the power of ordinary people visibly the state and visibly multinational it's a critical background thing now in the process I'm flushing through these points very quickly because I want to get to the narrative of this book but I think it's important for those who aren't familiar with the precariat dialogue we're seeing in global class structure taking shape and that little-ass structures of Utah cracy up here and elite celeriac shrinking the only old neighborhoods and things applying then the shrinking proletariat and the preparing underneath is no longer class the underclass exists out in the streets but go what does it consist of it consists fundamentally of millions of people who are being defined by three dimensions first dimension is distinctive relations of production and that means they're being unstable unstable identity also has to do it doesn't get money it doesn't get access to non-wage benefits that constituted the emerging form of anybody commodification in the 20th century where more and more of the remuneration women to non-wage benefits the pension to pay holidays your medical leave or paternity leave or whatever that sort of stuff they don't give you that so the personal attention with the proletariat and the celeriac of course an in addition the precariat is finding that it's real wages the value of their wages that they can expect to get have been stagnant for thirty years Germany United States Britain France you could document that real wages you're bumping up and down but stop kidding ourselves that wages dependent dramatically improve it in the image that's what one key point the progressive politics and this means first to be exploited off workplaces as well as in place workplaces outside labour time as well as either the surface for more like all precariat eyes mind and consequently one error one mistake millions of people are being exploited by mechanisms of death like a whole chapter in this new book how it's delivered it's not an incidental feature it is a deliberate function they want us to be in there don't think that they would like to help you get out of there no they want you it's a reality Colette leads to the final point about the definition which is that if you're in the precariat historians called Genesis adenosine is a medieval concept which referred to people who went into a town this is the first time in history when you're it's a reality so you don't but at the moment it's split into three factions the first fraction consists of what I call activists falling out of old working-class communities families new traditions they don't have a lot of education in this part to prepare it so they listen to the populist fear fashions and the brexit is on the Donald Trump and the marine lepen next year and the AFP in German SF they believe in that direction dangerous I'm going to tell you that the second part of the progeria is what I wanna nostalgic these are the refugees the migrants the Roma the minorities that who don't have a present they don't have a hope they don't have any sense of belonging it's a very dangerous the third part of the precariat are the people by Google progresses but they cover the University they don't have a future they were promised a future when they went to university they were promised a career a sense of good Society and they're coming out with this and they get angry with anything for a new progressive politics and that's what this book is an attempt to go it now the next point which is central to this people is that what's happened in the last 30 years is the rhetoric of neoliberalism the rhetoric of our utilitarian politicians in the center left center right has been that they're constructing a free market to become you will hear every politician saying it's free market economy my contention in this book is this what they created is the most oh that's a strong state and I just give you some of the key points about it that first thing is then we've been captured by an intellectual property rights regime it's very key to my old distribution system that we must understand that rentier capitalism has been growing stronger and stronger and more of the total income being generated is going in forms of rent not profits for production of goods or services or for doing hard work labor but only property of various source and being able to receive enormous rental values Dominic Ames in 1936 predicted that during the course of the 20th century the twenty-eighth would experience euthanasia because he thought the capital that become so broad and common that the opportunity for monopolistic practices and positional capture of rent would differ he did not foresee the things that I'm going into in the book and particularly he did not see the neoliberal agenda which has built an architecture of institutions internationally and nationally which is guaranteeing the rent ease earn more than when I first went to Geneva UN was the biggest building and the international labor organization that was a nickel body down the road very little place you used to laugh at it because that sounded like a contentious it was white why not push it up for beer or two about WIPO where is white Oh today if you go to Geneva in the center of Geneva the two dominant buildings of the refugee agency and white OS conference center that stretches out into the middle so just American its conceit WIPO is the World Intellectual Property Organization and in 1995 they passed trips you can play around with have a trip in a white boat you know places the trips is the trade-related aspects of intellectual product and what that did was established a global system of intellectual property rights which has become enormously signal to start with patents became a county in 20 years for not being gone for anybody spotted paintings every country in the WTO every country in a prep in effect sign is up two trips so the guarantee everybody who has a patent 20 years and in some cases in pharmaceuticals and a few other sectors a further 20 years they can get this is a monopoly income which is taking the market out in other words nobody could compete on as priced and of course the number of patents in the last decade has true number of filings there are now in the stock of patents that are in force is over 10 million Hey look they estimate that the value of a stock of things we've got estimates and I got some any book but at the moment could be about 16 trillion dollars that's the value of the paper so the patents are guaranteeing a regular and what has been happening is that major multinational corporations have become movers they go round who bring out of the paper so if you get a patent for a little invention and you know think you thing pretty well they'll come along and offer you a million pounds in your section it's just good to dinners on that base and they string them together and they journeyed into billions and that's what the irony is that most patents are the result of publicly funded percent so you pay to undercut their risks to save them taking interest in their expansion and then they walk away and they visit all right so it is way more income and the argument that patents are returned to risk it's excuse me it isn't most painters not even used they are taken out as a defensive mechanism to stop competition and most patents that I've seen are not bad inventions ironically the world wide web is one of the big inventions of our time and that wasn't thank you that's why it's been broadly so here is one sort of rental income and I go into the statistics of a boy with them but it's an enormously influential in addition you have popular now globally the copyright system guarantees the owner of a copyright and is usually to publish another writer in there you know etc it's guaranteed an income for life Plus 70 years now I don't know what you're going to do to the money but you know maybe having the chops but that's the reality and sometimes it's not up to 95 so when politicians say we mustn't give something for nothing to people claiming benefits I will anglo-saxon words of them but this system guarantees a lot of people are look at some things box and brands which operators barriers to entry and provide rental in so you have a system here where most of the new products and services around the world are trapped by intellect a party there's no free market and anybody who's this is either an idiot or something that's the perfect source of renji rental income and I go through that is the boring chapter in some respects to recall that the architecture institution one little extra thing beyond noise what they mean to juste is the ISPs okay investor state dispute settlement some of you I can see know about it but essentially what it is is is integrated into the 3,000 plus new trade and investment agreements that exist where around the world which guarantees property rights and it does so by a very distinctive you might think democratic phenomena which is a corporation that sewer government if the government makes any policy change that in the view of the corporation threatens their future problems they get to appoint the judge the call there are three judges they're all corporate lawyers corporation of whites one the government points the second if the corporation doesn't like the third that suggested then the president of the World Bank who's an American always gets to a point you will be incredibly surprised that the United States hasn't lost any cases I don't know why that should be but it so this is the most they weasel hundreds of millions of dollars from developing countries in this process now imagine you as a citizen having the right to sue your government if you think they've introduced a policy which affects your future income we've been make a lot of money but that's what they do for the corporation's now you think this is a free market system you need to take action on the subject but that's the reality now the second part of renting a policeman – look it's time the second aspect of renting capitalism is the dirty secret of our age is the subsidies step they talk about cutting benefits they talk about not being able for the basic they talk about these things and yet they built an edifice of subsidies take all things that discussed in the chapter there were hundreds of millions of parents in this country billions and billions they accept every country about five six percent of GDP those in substance a feature of these subsidies is their mostly regressive in other words they go to richer groups the richer individuals they distort markets any subsidy distorts in some sense and they're inefficient and hugely expensive and they're part of the corrosion and corruption of democracy chapter 7 is about it includes the tax breaks the differentiation of tax ET the deliberate beggar my neighbor fiscal policy where you're lowering corporation taxes systematically to your country which is that people work it out that they pay more they pay income tax that if they pay corporation tax because corporation taxes down here so they incorporate themselves so there's been a huge growth of people who become corporations so that they only paid for great thing isn't it's an away very mentally you're not paying them those many other things that won't go into that but the subsidy state is hugely oriented to maintain act then you come to the next chapter which is about I call it deep splurge now I'm gonna get up essentially become an institutionalized name every country of any significance in the world economy has an incredibly high ratio of debt to actually many countries wherever under sense some to under section interesting thing is when the debt crisis from the financial crisis hit in 2007-2008 particular paper was written in the United States by a bank up supplies and he's and he's psychic saying that it come as high public debt you Slowbro so this is allowed for austerity and we have to same time lowering tax it's created a friend of mine if it happens but it's now accepted you wrote another paper pointing out that they were all wrong they've got their data points wrong and it wasn't any such relationship but it was the damage to be done well and then in the IMF have come out and said wait a minute ease with the fingers it's not public good it's private it that is the key and if you cut public debt you shifted on to private people so try to dentists be going up their corporate debt particularly if you're in the precariat and that you are on that page Warren so debt has become this rate sucky finnstrom by going to in many respects even in that chapter and of course did include student debt all right two things about student debt that you should we think about one is that they created a huge a student debt Oh what have they done it's a it's a wheeze fantastic we use it's called securitisation okay they're bundling the debts together and selling it to American multinational corporations and the bundle of dead your debt becomes an asset for the corporation and make them Lynn and burrow on the basis of holding their asset amazing a lot of money out it's very simple George Osborne sold to a company as I described under him to he sold it at a discount because here between encourage them and then come out that they are registered in the taxing so the rental income to new one is that property owners from around the world are buying up from public universities student accommodation local student accommodation to make them into gentrified high-cost then make huge profits from what was a public that's another piece of the puzzle now just being on the BBC and the producer often with rather than before me you asked me what's your favorite chapter in the book you see Michael I hope and I said the plunder of the cars many of you really like having to mean something to you as much as it does to me but it's one of the untold parts of this what's been happening is systematically privatizing and commercializing the cost chipping away not just on land of just underneath the land not just the spaces but the intellectual Commons the cultural Commons the social Commons that I described and this should be an anger if the reason I failed in writing the chapter because basically what they're doing is converting a heritage that goes back hundreds and hundreds of years into a rent extraction device for an elite and the blue talks and they say we don't but they're silly you know creating a new rigid part I just been reading breach at the moment to us this society instead of which I find that the government is being given huge guarantees to a private function whatever sorry I must be polite now learning that part of the story because it leads to the final by the life of rent a cataclysm is the work that's enough more and more people in the prokaryote and falling into it however hard they work they will not escape off and this is a reality that cannot really be denied and it's shown by the breakdown of the income distribution system a few points on that it used to be when I was a student at Cambridge and productivity went up it just went out now we just get down call it the opening of the jaws of the snake ii used to be that when profits went up wages better now there we go no longer it used to be that when it went up wages better basic no why don't make it on and it's not just in this country of the US or any one and the next one which really puzzled paul george osborne you feel sorry for George when he permit those it used to be the tax revenue from employment winter to sort of thing it's obvious except when he found that employment was rising tax revenue from employment was going down and that's because the new forms of jobs taking place so they're not getting into the taxpayer bracket now we have the situation where system has broken down the share of income going to capital is shooting up the share going to labour of shooting down that's a global phenomena but with more interesting than that because I think a lot of people know that is that the share within capital going to the top is going and within the labor share to share going to the top is going up so you have a situation where that phone capitalism is emerging but a whole chapter on that where as you very nicely put it you've obviously looked at that chapter essentially what is happening is that crowd labor is emerging as the new form of labor relations it's forecast by reputable people inside the industry that within the next five years one in every three labor transactions will be down line you won't have a standard employment relationship or any other solute employment relationship it will be done online by tasker's all this debate about whether booba drivers should be employees or self-employed well but will look ridiculous I've just been giving a lecture in San Francisco and uber chief executive was it in the audience even I think he was rather pleased when I got to this bit but the reality is that proudly we have no we have no protect people in doing it's driving down wage rates to super exploiting them particularly Amazon Turk the best part of me platform and it's been manipulated by venture capital does not want these companies to go why because they're making operational losses huge operational losses and the venture capitalists that put in the money drawn up agreements with these battle catalysts that they don't go public or they pay the major companies compensation because if they went public and they're making a pact uber is a hundred million dollars lost every quarter then the sharestream clutch right so they're not making any profit why not because they are deliberately undercutting their competitors it's a form of social dumping and they go into a city where a lot of them not just do but they go into a city deliberately under price but pay their drivers over there whatever might be the toughest Alumnus so that they're making more understanding this is a form of rentier ISM drives out so I'm their competition but you have to realize that all these platforms are labor krokus their old-style labor groups because they making 20% or 30% on every transaction the buddy would dearly to think about it just having a nap so this part is going to be integrated into labor law work right through these things and I've got some suggestions but just think of my presentation I do not apologize but the final two chapter one each time I read it myself I shouldn't do that gets me just so I have to stop reading it it's a corruption of our two marks by the finance used by the plutocrats by the oligarchs by the Rupert Murdoch's nobody's won an election in this country since 1974 without the explicit support of Rupert Murdoch fact win with ours why did he support brexit Teresa made she chosen children not chosen primary brushed across to New York spoke at Howard the United Nation spent four hours with he was honest why did you support bricks now I think he must be getting Gaga or something or so conceited his answer was why because when I go to Downing Street they do what I tell me by Americans of all streets not by Europeans or British me we should be any better the last general election all three main parties were run by our own PR companies which are the engine of our central bank is run by an ex-government sex man from him any met in the u.s. a true say of appointing a farmer to run their multi-part series but Goldman sexism as I described is a that leads to the final chapter and the final chapter is about the need for democracy's sorry because they're not going to change with that pressure and the meeting real story is how do we achieve things history industry monthly euthanasia of the rent that's the challenge we have in fact because morally and economically dependent rent-a-car doesn't accord with their own principles it is related to growth it's rewarding oligarchs in the leaves it's unjustified and the new income distribution system will have to achieve that euthanasia by understanding that we need mechanisms to provide Economic Security for people without that we cannot be expected to be good citizens we cannot and we need to realize how do we redistribute that ranking income let me capture that rental income to create some sort of sovereign wealth fund the democratically controlled sovereign wealth fund which enables us to be doing what Thomas Paine dreamed of in 1796 a return to the partners of social wealth a social dividend more it's feasible because you can develop these sovereign wealth funds and Alaska in Norway done so it's a good way of building up a base as the anchor of your system and then say okay we can develop on that basis we should not be allowed to be falling into the trap that libertarians and some others want us to fall into a trap we can't record a basic income because you'd have to replace this that the other we've got to realize that it's a necessary response to rent a attack it's a different way of leading people make more crack I'll end there on that point by acknowledging presence here at Malcolm Tory my good friend is also director of the citizens income Trust which is our basically the British version of our network promoting basic info anybody can join and it's a lot of members a lot of support and Malcolm his colleagues doing some fantastic work so pleased to see it thank you very much you




Leave a Reply

Your email address will not be published. Required fields are marked *