"Money"
The Today programme on Radio 4 is running a series and ‘Christmas poll’ on the question ‘Who runs Britain?’ Accompanying the series, three bloggers are writing opinions (here) by rota on each day’s report and discussion. The first was yesterday, and was assigned to me, on the subject of ‘Money’. This is what I wrote.
‘Money’ does not run Britain. You had only to listen to the report and discussion on the Today programme to realise the vacuity of this notion. It was a speculative hypothesis (and in the case of one of the panel interviewees, Noreena Herz, a dogmatic assertion) that was left without explanation, let alone substantiation.
The link between money and power was once obvious. It was depicted in the political caricatures of James Gillray in the 18th century (see, for example, the ‘The Nabob Rumbled’). The commercial giants of that era, the ‘nabobs’ of the East India Company, amassed huge fortunes from trade, and openly used them to buy political influence. But in the 21st century it is much less easy to see how the ability to spend translates into power. It is no answer to say that now the process is shielded from public view. Even though people and corporations with large amounts of money do try to obtain influence, they are frequently and conspicuously unsuccessful. To this day, despite having covertly given money to MPs to press his case, Mohammed al-Fayed is not a British citizen. The billionaire Sir James Goldsmith attempted to swing the political debate by founding his own Referendum Party to fight the 1997 election; it disappeared in a blizzard of lost deposits.
One reason that businessman, entrepreneurs and the super-rich are thwarted is, as Ken Clarke and Bill Emmott pointed out, that wealth is now more dispersed. In the advanced industrial economies there are of course the super-rich – the equivalents of a Vanderbilt or a Ford – but there are many more of them than in the late 19th or early 20th centuries, and wealth is no longer predominantly dynastic.
Nor is it true that power has shifted from a moneyed class to institutions. Evan Davis’s report cited the Clinton administration official who declared that if reincarnated he would want ‘to come back as the bond market, because then you can intimidate everybody’. But this is merely an absurdly hyperbolic way of saying the bond market will charge a premium if it perceives policy to be inflationary. Financial markets will be unable to ‘intimidate’ a government from carrying out its programme if the policy mix is internally consistent (as was not the case, for example, with sterling’s ignominious exit from the exchange rate mechanism of the European Monetary System in 1992).
One interviewee in the report – a bond trader – suggested that the Governor of the Bank of England is the most powerful man in the City. This may be true in the sense that the Bank of England has the power to set interest rates (though the Governor is only one member of a nine-person Monetary Policy Committee, and commentators have lately suggested that things may not be going his way). But it is purely an operational independence to carry out a politically-determined objective. The Bank has the task of meeting an inflation target; what inflation target to set is a political decision.
The final sense in which money could be said to rule was suggested by Noreena Herz, which is that business is able to pressure governments to adopt or eschew particular legislative measures. This is an entirely unconvincing claim. First, it arbitrarily assumes that ‘business’ is synonymous with money; secondly, it assumes that business is a homogeneous force tending to a consistent view, whereas there are many competing businesses with differing policy preferences; and thirdly, it doesn’t explain how this transmission mechanism from money to power is supposed to work. The one point on which I would agree with Ms Herz is that businesses are a sectional interest (or a lobby), and that government needs to treat their representations critically. But this is true of many types of organisation: pensioners’ lobby groups, pressure groups such as Greenpeace or CND, or trade unions. The consistent theme of these organisations’ lobbying efforts is that government should adopt their own policy views while someone else (i.e. the taxpayer) should pick up the tab. Lobbying and lobbyists do, in my view, pose a hazard to democratic government, but this has nothing specifically to do with the corporate sector and still less anything to do with an abstraction called ‘money’.
If you doubt this, consider Prime Ministers’ uncomfortable experiences with entrepreneurs. Richard Branson was scarcely dignified by becoming the public face of Mrs Thatcher’s campaign against litter. Bernie Ecclestone’s donation to New Labour was returned when suspicions were raised that it reflected political favours to do with exemptions from a ban on tobacco advertising (and the issue caused acute political embarrassment for Tony Blair). Britain is a long way from being a plutocracy. It does not even merit the much weaker description of a political system dominated by corporate interests.
Case dismissed.
