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Britain’s problem: Philip Green is the archetype British capitalist

Philip GreenOn global capitalism in Lenin’s day, the Bolshevik leader had this to say: “Imperialism is an immense accumulation of money capital in a few countries … hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by “clipping coupons”, who take no part in any enterprise whatever, whose profession is idleness …” If only the money men of 21st century Britain remained excrescences on the economy, of directing their stooges to invest capital and growing fat off the labour and talent of others. At the risk of being wistful, this ideal-typical view of your average capitalist is long buried and have gone beyond mere uselessness. Drunk on their parasitism, they are oblivious to how their appetites are not just imperiling the health of the enterprises they gorge upon, but threaten to kill them outright.

The latest example is the collapse of British Home Stores (BHS), a venerable department store that has graced the high street for 88 years. Not that I ever went there, which I suppose is a microcosm of the predicament it finds itself in. Lately, not enough of anyone have come through its doors to buy outfits and lampshades. Yet the Darwinist cut and thrust of the retail market can only shoulder so much of the blame. The reason why BHS is looking down a barrel, and its 11,000-strong workforce face uncertain futures is in large measure down to its erstwhile proprietor, the fly-by-knight Sir Philip Green. Acquiring the struggling BHS for £200m in 2000, Green and his family shook the firm down for a billion quid. All the profits, all the wage squeezes, every saving that could be wrung from the business passed through head office en route to Tina Green’s capacious purse in Monaco. And when there was nothing left, Green offloaded BHS on his tax-dodging wife’s behalf for a quid. The new owners, a ragtag-and-bobtail outfit going by the name of Retail Acquisitions, failed to raise the cash BHS needed to start turning itself around.

It goes without saying that Green’s behaviour was grubby and disgusting, and he could face action from the pensions’ watchdog amid suggestions that the firm dodged its obligations (this would be on top of the pensions holidays many large firms took in the late 90s/early 00s, all with a nod from Gordon Brown). Seemingly aware he could be on the hook for something, Green has offered to stump up £80m toward the BHS pension fund’s half-a-billion deficit. I hope the sop is rejected and he gets rinsed.

As you can see, Green went well beyond the “coupon clipping”. His ownership and running of the brand suggests little if any interest in preserving the business for the long-term, of increasing products, introducing new lines, investing in new technology, and battling it out for market share. You know, the things Max Weber told us capitalists are supposed to do. If BHS was in difficulty 16 years ago, self-evidently a business that has a billion pounds sloshing around is a business that was not a basket case. Instead of treating BHS like a bile bear with the tap left on full for the Green durée, the monies could have been used to add value by expanding its range, aggressively marketing itself, and venturing properly into online retail. Instead, Sir Phil was to his host a tax-dodging, celeb-stalking, yacht-bothering tapeworm.

Ah, but he’s a one-off, a bad apple, yes? In the interests of fairness, BHS’s problems can’t all be laid at his door. The so-called death of the high street is the result of policies pursued over the last six years. The cost of living crisis (remember that?) was always more than a soundbite for millions of people. As meagre wage rises/freezes have bitten, people don’t have as much cash to splash, hence middlebrow stores like BHS were always going to face what the experts call a “challenging retail environment”. The second is the brash new competitor, Amazon, have got away with ripping off the Treasury. Without as much of a tax liability, they have built an infrastructure on the back of exhausting, low-paid work, which has given them an unfair competitive advantage. Having got caught dithering over steel, the Tories are not about to invite more scrutiny of their complicity in this situation. Which probably helps explain why Anna Soubry’s been very quick to discuss the issue in the House and dampen speculation about redundancies.

There’s a wider point. Green is the “cultural dominant” of what a capitalist looks like in 21st century Britain, the sort valorised, flattered, and admired by the City and its helpers. The pursuit of profit, of realising returns on investment, comes not from building things but of tearing them down. As David Harvey points out, global capital from the 1980s on snapped up sold off state infrastructure and coined it from the introduction of markets into public services. New markets were conquered, but these were provided by governments as they let capital swoop in and profit from institutions under their stewardship. Capitalism ate the infrastructure that sustained it. As Britain is the epicentre of global finance, we find here these necrotising social relationships have achieved their fullest expression: an economy whose GDP is dependent not on production, but the selling of houses between buy-to-let landlords, a state bent on selling off what’s left of the public domain to politically suitable bidders (one doesn’t have to be the highest, as the Garden Bridge fiasco demonstrates), and a financial industry that sucks in Britain’s best brains to design fiendishly complex but socially useless “products”, “packages”, “vehicles”, and “instruments”. Funny how the intangible has annexed the language of the concrete. In sum, the owners of capital have become dysfunctional and decadent from the standpoint of British capitalism itself.

Green is not a one-off. He’s archetypal.

This article first appeared at All that is Solid

20 Comments

  1. John Penney says:

    Good article, Phil.

  2. bill says:

    It is astounding to many people that we have learnt nothing from Robert Maxwell and that peoples pension funds can be raided. I am absolutely sure that were even part of the 400 million within BHS to have been re-invested in the future of the company then BHS would have stood every chance of reinventing its self.

    I sincerely hope that a Labour Government will stop pension funds being raided. The only people fit AND PROPER people to have control over the pension fund being workers and retired employees, advised of course by professionals. A role surely for a beefed up pensions service?

    If any one on Left Futures knows what the Labour Party intends to do to reform Pensions Legislation. I would be very interested.

    John Lewis is an example of a very good company.

    The John Lewis model of worker participation and ownership should be used every time a retail business is taken into receivership.

    The workforce should be balloted and given the right to controlling shares over the business.

    The future in my view for Labour is to pioneer new forms of social ownership.

    1. Mervyn Hyde (@mjh0421) says:

      A basic income based on live index related value would obviate the need for private pensions.

      This document by John Eatwell spells the pension crisis out in detail.

      http://mbz.net.pl/eftepe/Eatwell.pdf

      John Eatwell, Labour Peer, Head of faculty at Cambridge University.

      1. John Penney says:

        Utter nonsense, Mervyn. . As the Greens found out during the 2015 General election when for the first time their particular version of “Citizen’s Income” was subjected to mass media scrutiny, the concept would leave the most vulnerable in society worse off – and give the better off an unnecessary free gift. The idea actually requires considerable means assessment on an individual basis to work at all – destroying the supposed negligible cost of running it.

        Citizens income is an idea which has “bled over” into some Leftish/radical Liberal circles from the Far Right extreme Libertarian neoliberal camp in the USA , in that it aims to give each citizen an equal “annual money ration” out of which each person, as an “individualised consumer” in the market place will have to maximise their individual utility – by buying health insurance, paying for all their healthcare, subsisting whilst unemployed, etc. The scheme is paid for from the savings made by scrapping any other state-provided Welfare benefits. The idea of course entirely ignores the class reality of a capitalist market economy in which private WEALTH is mainly owned by the rich and superrich – particularly the MEANS OF PRODUCTION. Hence the idea of us all ever being in some state of “consumer equality” vis a vis the market is a cruel deception.

        Citizens income appeals to those on the self identified “Left” (including the Greens and even the Lib Dems in the past) who have given up believing that mass working class action can protect and build a comprehensive universal Welfare State – retreating instead into the fantasy of an automatic entitlement to an annual ” minimal survival ration” from the state. It is a thoroughly reactionary concept, with no positive virtues – a distraction from the need to build mass action against Austerity and work to create a socialist society.

        It was promoted in the 1930’s by the eccentric and highly authoritarian ,politically dodgy, “Social Credit Movement”. The then TUC had a good look at it as a concept (prior to the modern postwar Welfare State) , and rejected it outright as a distraction from the need to mobilise the working class, as a class – not a grouping of “consumers in a market place”, to create what was to become our now deeply threatened Welfare State.

        1. Mervyn Hyde (@mjh0421) says:

          Sorry John I made no reference to a “Citizens Income”, I referred to a BASIC INCOME, Index linked to real economic values.

          In other words and simple English, a wage for all that can’t work or are of pensionable age.

          There may be a need for additional payments relating to personal requirements that could be accommodated due to their circumstances, but fundamentally this basic income would be related to the average income.

          This of course has nothing to do with raising taxation or any other fiscal means, and would come straight from government spending directly into the economy.

          You have completely misread what I said, and should think in terms of what people need instead of treating us to your readings of past theories.

          I did provide academic evidence on how all the current pension systems work, and that is only what I want people to understand, is, how things operate at present; that it is proven, that private sector provision doesn’t work.

          The cheapest to administer is a direct payment for a real living wage, which would also relieve the younger generation of the burden of taxation.

          If you wonder how this would be paid for, please look up Money Creation.

          http://www.theguardian.com/commentisfree/video/2015/oct/28/david-graeber-what-government-doesnt-want-you-to-know-about-debt-video

          1. John Penney says:

            You are kidding yourself. Mervyn. Try as you might, you are simply obfuscating the clear fact that the “Basic Income” concept is actually just a sub-set of the wider “Citizen’s income / Universal Basic Income” proposal. Like its broader “Citizen’s Income” brother policy , it is a complete distraction from the current struggle to defend and rebuild the , widely understood and supported, existing benefits of our potentially comprehensive UK Welfare State. Our existing structure of Welfare State can easily encompass a generous level of state retirement pension, and generous unemployment and disability support benefits levels. The concept of a “Basic Income” is simply a distraction – and of course is also usually intimately entwined with the ridiculous Citizen’s Income , unworkable, idea that in a functioning economy perfectly able-bodied citizens , with a reasonable job offer in front of them, should have the undisputed right whether to work or not, and still receive the average social wage. That might go down well with some middle class hippy types, but try that out on any group of working class people and see how much support it gets.

            Also your apparent belief in the myth that a state can print unlimited amounts of money with no harm done to its overall economy (which is not to deny that a considerable, but finite, amount of “People’s Quantitative Easing” for infrastructure projects is a viable policy at present in a recession with nil inflation), is at one with your radical Liberal ideological framework.

            Give up the “funny money” and radical libertarian alternatives to a defence of the existing Welfare State proposals, Mervyn, and join the rest of us trying to mobilise working people around winnable, socialist, objectives.

  3. Bazza says:

    Since I started reading the financial pages of quality newspapers 5 years ago (often the most political sections and highly recommended) I can’t help thinking if this was the US where banks were fined billions for their role in sub prime lending then perhaps the Greens may be facing a £1 billion plus fine?
    Why this would easily make up the £500m+ pension fund deficit and the rest could be used to save the 11,000 jobs and the company could then perhaps be run as a type of John Lewis but perhaps with a trade union.
    Perhaps big business all over the World legally nicks the surplus labour of the working billions and we need to get this back.
    The New International claimed a few years ago that the rich have stashed globally 22 trillion dollars in illicit offshore bank accounts which is about 25% of the World’s wealth and just imagine the good we could do with tax paid on this for humanity!
    As someone once said: “It’s an upside down World.”

    1. Mervyn Hyde (@mjh0421) says:

      Bazza: Have you ever considered that when all money is printed (now electronically) out of thin air, that it is not about taxation used for public expenditure, but that money can be issued directly into the economy for social purposes, and that taxation is merely along with interest rates a regulator of economic activity.

      That said, we can spend into the economy that which is needed, and tax money out of the economy that is not. The mega rich offshore their wealth which doesn’t do anything but impoverish us, all money transactions stored offshore could be stopped dead in it’s tracks if we nationalised the Banks, we could then trace where money goes, instead of bleating over the fact that tax is evaded, and works against our well being.

      It should also be obvious that we don’t need the money of the wealthy in order to fund our public services and investment, so why do we wait around for big business to see a profit in exploiting the talents of ordinary people, in order to make even more money out of us?

      1. Bazza says:

        Ooops! Re my thoughts on the main article (my 8.36pm comment) I meant the New Internationalist magazine.

      2. Bazza says:

        Oh I have never considered the printing of money and didn’t realise we could take the banks into democratic public ownership.
        Thank you for your enlightenment.
        But then again if you look at my posts I have frequently suggested this.
        But state-led public investment, more democratic public ownership, windfall taxes big business, taxing the rich all as a transition until we work out a new, fairer, greener, non-exploitative economic system (20 hour weeks) together!
        But I think we need to offer ideas on the World as it is now on how we can save the jobs at BHS, Tata Steel, Austin Reed until we can fundamentally change things WITH working people.
        I am confident “Change is gonna come.”

        1. Mervyn Hyde (@mjh0421) says:

          Sorry Bazza, I have just read your previous post, clearly my comment was misguided.

          The reason I forcibly impress the point that our country can never go broke or run out of money, is, that is the whole premise which Neo-Liberal politicians use to impose austerity on to an unsuspecting public.

          It is the most powerful argument that will bring about change, it liberates us completely from clutches of the private sector and leads an enlightened democracy into the realms of self determination.

          It completely destroys the myths perpetrated by Neo-Liberals, about how the economy actually works.

          Once again sorry being a little overbearing.

  4. Bazza says:

    Ooops! The New Internationalist!

  5. Richard Tiffin says:

    interesting argument but why 1980 as the date it went wrong? The post war response of British capitalism was not to modernise but to profit whilst the German and Japanese economies started afresh after the destruction of their productive infrastructure and overtook us, destroying much of our industry in the process.
    Secondly, you looked at what British capitalism did, but not why or why Labour government did little to curtail the behaviour, in fact they arguably encouraged it. As Bazza pointed out above, government is supposed to be the executive committee of the ruling class as a whole and protect the health of the system as a whole from the excesses of sections of capitalists with actions like huge fines to deter damaging behaviours. For me that is the interesting question for the sclerotic nature of the system is as plain as the nose on my face.

    1. Mervyn Hyde (@mjh0421) says:

      Richard you need to understand Neo-Liberalism and its origins to understand the nature of political capture. the 1980s were in fact the culmination of decades of preparation by the feral elites who in Thatcher’s terms wanted to roll back the state.

      These people throw light on where the origins lie and the institutions they funded in order achieve their ends.

      http://thecaucus.blogs.nytimes.com/2012/06/25/cato-institute-and-koch-brothers-reach-agreement/

      https://en.wikipedia.org/wiki/Cato_Institute

      This is just one facet of the Neo-Liberal club that have been dictating events since before the 1970s.

  6. Mervyn Hyde (@mjh0421) says:

    John: I’m sorry but you simply don’t understand how money is created.

    Ask yourself how money actually enters the economy ?

    I’ll tell you so that there is no confusion, 97% of all money in circulation was printed out of thin air and issued as debt, the Bank of England is the issuer of that money, but issues it through the private banking system.

    For your information, the banks have no restrictions on how much to lend other than the ability to repay the loan. As we have seen in the past that works until someone is made redundant, then homes are repossessed.

    It is a fact that we can print money to an unlimited amount, just look at Japan today, by the way they have the same monetary system as us.

    http://www.theguardian.com/commentisfree/2013/jan/22/shinzo-abe-quantitative-easing-japan

    Just ask yourself how we would finance the reconstruction of an economy which suffered from a Tsunami like Japan, without printing money, secondly I would circumvent the private banking system and issue that money when and where it was needed, the NHS, public services and public investment, in fact as a socialist you should understand that we don’t need the private sector.

    Most of it either parasitically feeds off the government expenditure, like Virgin for example or has moved abroad.

    1. John Penney says:

      Sorry Mervyn, but I understand very well how money is created – and how the banking system actually works in a capitalist economy. I am a trained economist and ex economics lecturer. It is you that have bought into a nonsensical idea that because money is , very simplistically, indeed “created out of thin air” (but actually does have a close relationship to the values of real resources and production outputs in the real economy) that therefore there are no limits to the money that an economy trading constantly in a world market economy using a myriad of other value related currencies , can print – without reducing the real exchange value of its money in the world capitalist market , and hence it’s ability to secure the huge range of goods and services we require from abroad.

      There is of course , in the specific current situation in the UK of negligible inflation and underemployed domestic resources the real opportunity to indeed “print money” to pursue a large finite, planned, Left Keynsian economic reconstruction programme. But this does not mean your mistaken belief that there is no limit to the ability of a state to print money, without eventually producing hyper inflation.

      You need to learn more about the actual workings of a capitalist economy (even a Left Keynsian one) , rather than clogging up this site with this constant repetition of your fantasy economics.

      1. Mervyn Hyde (@mjh0421) says:

        John, Here is some facts for you to contemplate and cogitate over:

        Alan Greenspan

        “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default” said Greenspan on NBC’s Meet the Press

        Zero Hedge: That such a simplistic formula might not work cannot be questioned, as money-printing is the source of all political and financial power. To question money-printing as the one-size-fits-all solution to every economic problem is to question the power structure of the status quo

        And that, of course, is not allowed.

        Think Left: https://think-left.org/tag/paul-samuelson/

        John, again put simply for you, all money is printed out of thin air and issued as debt.

        Therefore if there is no argument about doing that, why can’t we issue it according to need rather than debt.

        1. C MacMackin says:

          The reason why not is very simple. At any given time there are only so many resources in the economy and only so many hours of labour which can possibly be worked (and, this being capitalism, there is a considerable waste of that resource due to unemployment). Printing money doesn’t alter that fact. If you have more money and the same amount of resources, then prices will have to go up–i.e. inflation. In deflationary periods or times of low inflation then you can get away with printing money in controlled amounts. It is true that a state can, in principle, print money to pay debts denominated in its own currency, but that doesn’t alter inflationary risks.

          Something which MAY be possible (John Penney, I’d by happy to hear from you on this, as I’m not an economist) is what we used to do in Canada. Up until the ’70s the Bank of Canada provided interest-free LOANS to provincial and federal governments for building infrastructure. The reason why we stopped doing this is not entirely clear, although I think it must have been an effort to combat inflation. Looking at historical data, you can see that for most of the period when these loans were used inflation was quite manageable, so I’m not sure to what extent this practice was responsible for inflation. As it happens, there is a court case going on at the moment which is trying to force Bank of Canada to resume this role. Canadian leftists love to talk about this policy, although I’ve always thought it seems too good to be true.

          1. Mervyn Hyde (@mjh0421) says:

            CMacMackin: could you explain why issuing money as debt is acceptable without limit, but public finance is not??

            I am also at a loss to understand why you see interest free money as a useful idea, when the capital still has to be paid back, money (I repeat) that is created out of thin air.

            Did you in fact follow my links which gives a clear explanation as to what I have been trying to say?

          2. C MacMackin says:

            I’m not saying that it is okay to issue money as debt without limit. Central banks impose certain limits on the issuance of debt (in terms of requirements for reserves etc.) and have various other tools to control the creation of money. As I say in my post, I’m suspicious even of the idea of a central bank lending extensively to the government.

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