The Corruption of Capitalism

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On the plus side, Guy Standing has put together a powerful indictment of contemporary capitalism. While some of his material is familiar, it seems fair to say that everyone will come away from this book knowing more about the inequities of capitalism than they did before.

He looks at the use of charities as a means of tax avoidance, for example. We learn that Lady Gaga’s Born This Way foundation raised $2.6 million in 2012 but gave away only $5,000. And the Cancer Fund of America over ten years raised getting on for $90 million, but only gave cancer patients a paltry $890,000.

This is only small beer as far as the scale of tax avoidance goes, of course, but effectively robbing cancer patients is particularly shocking. Three quarters of the companies on the Fortune 500 list have tax haven subsidiaries, indeed 7,622 between them. Certainly, this is serious stuff.

He chronicles how the state subsidises the rich with Iain Duncan Smith no less, getting in a decade well over £1 million in subsidies from the EU’s Common Agricultural Policy. When the EU proposed to cap the subsidy, the British government refused to apply the cap in England. This was at the very time that Duncan Smith was capping benefits.

And we learn that in the US no less than 20 million people (6 percent of the population) now live in trailer parks which have become big business. One US multi-billionaire, Sam Zell, owns no less than 140,000 trailer parks, earning him $777 million in 2014.

Standing looks at the way that student accommodation in Britain has become big business with one company having 46,000 beds. Other investors are desperate to break into this sector, with Goldman Sachs leading the way.

There is, however, one crucial sector that Standing neglects. This is not just a matter of sniping, but rather that it would have been interesting to see what he made of it and because he could have brought these extremely dangerous developments to the attention of a wide audience. This is the privatisation of war and security, a sector that has expanded hugely since the Iraq War began.

The fact that modern capitalism now includes in its repertoire heavily armed private companies is a growing threat to bourgeois democracy that has gone almost unnoticed. The scale of the privatisation of war and security, not just in the US but in Britain as well, urgently needs exposure.

More problematic is Standing’s remedy for the abuses he has documented. He seems to regard neoliberalism as a betrayal of capitalism, with a return to the good old days of “honest” capitalism as the way forward. He writes of a time when there was a “social democratic state” that presumably kept capitalism honest.

This is nonsense, but it seems to be what contemporary reformism amounts to. The book comes recommended by John McDonnell.