The capitalists aren’t our saviours

The BBC Breakfast show this morning had a feature on the impact of a regeneration project masterminded by Mary Portas, one of the Dragons. The feature didn’t offer hard numbers but gave anecdotal evidence that the efforts had had no real impact. There was a strong theme of entrepreneurialism, the idea is that the reason that the high-street, and the small businesses on it, are collapsing is that they aren’t entrepreneurial enough. They need to take advice from an entrepreneur. Those being interviewed talked about being more resourceful, more spirited, needing to work hard (implying this was an alien concept), and that they had been encouraged into promotional schemes like 3 for 2 offers and outdoor sports events designed to stimulate footfall. After the feature the studio interviewed Saira Khan. She made a vague reference to the industrial revolution, perhaps to encourage some kind of cultural resonance, not really sure what her point was… then she made some references to the internet, which she argues is the key factor in the devastation of the high-street: that they don’t have an internet presence. Her solution followed that they need to fit their business models into the internet age, and have to offer some kind of product diversity that distinguishes them from the things we can get online. I’m not sure how specifics derive from this vision. What services or products would such a high-street provide? Obviously food and drinks can remain as is, but what can they sell that would differentiate them from the transnationals? Extreme high end custom made luxury items?

The problems with the high-street, and wider, small businesses and localised supply chains, is known to everyone. It’s not a hidden problem. Nor is the issue of large scale commerce exploiting tax laws. Both themes run in parallel in the media right now. What is surprising, to me, is that no-one seems to have put these two things together.

People shop online for two reasons. 1) it’s cheaper and 2) it’s more convenient than bricks and mortar shopping. Why is it cheaper? We are expected to believe it is because of economies of scale, and achievement of globalisation [2]. Could it be that it’s cheaper to buy a book of Amazon because we’re giving them huge subsidies in the form not only of letting them evade tax but also by literally giving them tax benefits and breaks? It is more convenient to buy from a multinational online, but they don’t own internet presence, they didn’t invent delivery of goods [1]. Home delivery predates the internet and setting up an e-commerce website is easy nowadays. It seems to me that the economies of scale are pure exploitation and deception. This means that they can afford to sustain an internet presence far beyond what any small high-street business can hope to achieve. They show up at the top of internet searches because they have the resources to make that happen. So really, the convenience argument comes back to the same bottom line: they’re ripping us off and erecting barriers to protect the large from the small. A sole-trader corner shop can’t decide one day that they don’t fancy paying tax nor do they have the disposable revenue to fund large scale marketing and public relations. Shopping centres compound the issue, they are expensive to occupy and wet/cold weather concentrates footfall into their premises.

There is more to this than the business potential of high-street shops. All industry and commerce is being replaced with multinational cooperations that more and more cater to the wishes of the share-holder over those of the stake-holders. What isn’t replaced is turned into a supply chain puppet. Farmers, while being in principal self employed with all the liabilities that places on them, in practice aren’t because of the enormous bargaining power organisations like Tesco have. They essentially become production departments inside the supermarket group, except without any of the legal baggage actually hiring people incurs or the risks associated with owning means of production. We are buying things we know very little about shipped across the planet that we could buy off someone down the road. We are buying books written, printed, bound, in the UK, delivered by UK covered workers on UK funded roads, protected by UK funded police, billed in the UK; but seeing no tax remuneration and paying them for the pleasure. The ‘innovations’ they offer us are nothing but more devious ways to rob us of resources and rights, ways to sell us what is ours to start with.

During the horse meat scandal it was interesting to see the food industry’s spokespeople’s position shift in almost telepathic union. At first they said it was possibly an illegal conspiracy, but when that became untenable all the interviewees (of which there were a lot) seemed to instinctively shift their position. Suddenly it was the consumers fault! We wanted cheap food… so obviously they are going to end up selling us horse meat. The problem with that is that according to this the cost of food in real terms over the past few years has increased. There has also been coverage recently that asserted that the fresh fruit and vegetables we get at supermarkets are more expensive than that locally sourced independent retail. So, even the misleadingly lower ticket price isn’t always lower.

If we want to protect the real economy, that is industry and commerce that contributes to our lives and over which we have influence, we need to reverse the barriers that protect the big from the small. We need to literally and directly subsidise local supply chains. People will always want potatoes and books and coffee, we don’t need Tesco, Amazon and Starbucks to provide us with these things.

[1]  They use our public infrastructure practically for free. Their business operates because we provide most of it’s platforms at a hugely reduced price that they largely avoid even paying.

[2] Standard economics theory holds the bizarre idea that production costs increase as production rate increases, which is one of the ways economists are stuck blind to the problems of free markets.

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