Everyone’s familiar with the tale of The Three Little Pigs.
Three pigs leave their home and go out into the wide world. Two build frail houses from straw and twigs that the Big Bad Wolf blows down. They get eaten. The third pig’s house is made of bricks and keeps the wolf out.
What if the pigs represented governments, with democracy the house that is supposed to protect us against big business – the Big Bad Wolf?
Did anyone think to build a house that can withstand the huffing and puffing of the wolf?
Banks blackmail policy makers
The wolf is sly. When he realises he can’t blow down the third house, he tries tricking the pig.
Big business is sly, too. HSBC, for example, has just pulled a stunt in Britain. After much deliberation HSBC announced it’ll stay in London. Great news, right?
Maybe not. The UK-listed bank only confirmed its decision to stay put after policy makers agreed to relax banking rules.
Not a coincidence, says Christine Berry of the New Economics Foundation, quoted in the Independent:
“HSBC was never likely to leave London, but by dangling the threat of doing so, it has successfully lobbied policymakers into unpicking a whole string of measures designed to protect taxpayers and consumers”
Let’s just call it what it is: blackmail.
I get that financial services are a massive industry for the UK, but loosening your grip is not a smart move. All you do is create a dependency on the actions of those in the big tall buildings.
Sweetheart deals, ruthless cuts
It’s not just banks that seem able to dictate governments.
Last month Google’s tax deal with the UK government was made public. George Osborne triumphantly defended it as if getting the world’s biggest company to pay anything was thought impossible.
Meanwhile Facebook paid less tax in 2014 than a British worker on an average wage.
The same goes for Starbucks. The European Commission wasn’t too pleased with the deal it struck with the Dutch government and even called it a form of state aid.
Let that sink in for a moment. The Netherlands has been providing ‘state aid’ to a £58 billion company.
Basically, Europe’s biggest austerity governments have been telling citizens ‘nothing is possible’ and corporations ‘anything is possible’.
I’m confused, who are they supposed to represent?
To its credit, the EU has been doing some great work to counter this trend. It’s been turning the screws on banks since the crisis by introducing tougher measures to keep the financial service sector in check.
The Commission is also investigating Britain’s arrangement with Google and similar ‘sweetheart’ tax deals struck by Apple, Starbucks, Fiat and Amazon with various European states.
Multinationals shouldn’t be allowed to strong-arm governments into giving them special treatment.
To its discredit, the EU could be undermining its own work as we speak. The Transatlantic Trade and Investment Partnership (TTIP) that’s currently being negotiated with the US could hand even more power to big business.
It’s still unclear whether or not the controversial investor-state dispute settlements (ISDS) clause will be incorporated in the treaty.
ISDS is part of the Trans-Pacific Partnership (TPP) that was signed earlier this month between 12 states in the Pacific Rim. It allows corporations to sue governments in special courts if policy hurts their future profits.
It’s rumoured to be part of the future EU-US deal as well.
Luckily we’re not there yet. Negotiations are ongoing and it’s not certain it’ll stay in the final draft. But the fact that this clause exists is in itself frightening. It shows big corporations are not messing about.
When the news of Osborne’s tax deal with Google broke, Rupert Murdoch criticised the PM and the chancellor for being ‘posh boys in Downing Street’ who were ‘easily awed by Silicon Valley ambassadors like Google chairman Schmidt.’
I feel this point could be more convincingly made by someone who’s not a media tycoon who vehemently lobbied for their re-election one year previously.
But it’s not his words that we should be taking seriously. It’s the air of untouchability with which they were said.
Big business becoming more powerful poses a threat to ordinary citizens. It always has and it always will.
Prior to the crisis, politicians had let banks become so powerful that they were deemed ‘too big to fail’. Who had to bail them out? I’m sure you remember.
If companies like Google, Facebook and Starbucks keep accumulating more and more wealth without a substantial amount flowing back to the state, who will end up paying for it?
That’s right: ordinary citizens. It’s their services that will be cut. It’s their money that will be taken in the name of austerity.
Are we still dancing in our houses of straw and twigs with the wolf right outside? Is the house even there anymore? If it is, who’s going to stop the wolf from blowing it down?
Who’s not afraid of the Big Bad Wolf?