Rachel Reeves - the City of London's useful idiot
Published in The National, November 21, 2024.
Rachel Reeves is honouring her pre-election pledge to the City of London oligarchs - to protect and enhance their obscene wealth at the expense of ordinary people.
In her Mansion House speech she pledged to cut financial regulations which was music to oligarchs’ ears. The City of London not only doesn’t understand how to generate economic growth but has zero interest in doing so. Reeves has put all her growth eggs into the private sector basket where they will be duly broken by private greed.
She wants to increase private investment
by working in partnership with business and specifically, with the financial services sector… financial services must play a central part in our economic vision… and our plans for economic growth. Because I know that this sector is the crown jewel in our economy.
She knows nothing if she thinks the money laundering City of London is an economic crown jewel. Money isn’t a commodity, but merely a unit of exchange created by the government. The UK has ceded economic control to a creditor oligarchy that has been destroying the UK economy for decades. The only growth that will happen on Reeves’ watch is growth in inequality, poverty and social instability.
In his recent book, The Collapse of Antiquity, the economist Michael Hudson describes what happened to ancient societies that allowed creditor oligarchies to take over - they failed.
The ancient Babylonians understood that debt grows exponentially, whereas the means to pay off the debt - crops or the size of a herd - don’t, but grow in an S curve that tapers off.
This means that over time, debts will exceed the ability to pay. To prevent this from happening and the resulting social instability, rulers would periodically cancel the debts and redistribute the land that had been taken to satisfy repayments, thus restoring balance to the economy and society. It was a reset. Without it, economic growth would have been stifled and the people would have revolted.
In today’s western neoliberal economic order, the creditors are firmly in charge. There’s no debt forgiveness but debt enslavement. Neoliberal ideology says that free markets know best, so governments need to stay out of the way so the markets can work their magic. Except it hasn’t worked for the vast majority of people, just for a minority at the very top.
Having wealth is not like having bananas. With bananas, the first one is the most satisfying - the second isn’t as good, and the third even less so because you become satiated. In economics, this is called diminishing marginal utility.
But wealth is different. The more you accumulate, the more you want. It becomes an addiction and has a name - money lust.
As wealth accumulates and isn’t redistributed, society becomes increasingly polarised. All income and control over labour flows to the parasitic creditor oligarchy, which kills the host - the productive economy - and impoverishes the population. The society eventually collapses.
This is what’s happening to western economies. The rise of the creditor oligarchy - the FIRE (finance, insurance, real estate) sector - has led to deindustrialisation and the shrinking of the state sector. Instead of reinvesting profits in people and productive capacity, these predator capitalists reward shareholders, drive up share prices with stock buybacks and reap huge bonuses for themselves. They are like vampires who suck the lifeblood from the economy.
Rachel Reeves and her boss, Sir Keir, are the vampiric oligarchs’ useful idiots. That’s why, contrary to their pre-election promises, things are getting worse.
But there’s an alternative to neoliberal financial capitalism. The nations whose leaders the west has assassinated, debt enslaved, sanctioned, bombed and invaded because they had the temerity to resist neoliberalism, are uniting within BRICS to challenge the failed western model.
BRICS is in the process of replacing it with alternative institutions based on respect for national sovereignty, trade, development and cooperation, not hegemonic domination, indebtedness, sanctions and war.
That’s why more and more nations want to become members. A future sovereign Scotland should join the queue.
I've been following BRICS for around 4 years now, since first hearing about it. It worries me that the US with their mighty dollar don't seem overly concerned, I think they should be, do they have some dastardly plan under wraps? Most major economies are slashing their reserves of dollars, yet the US is silent. why is that?
This makes me sad that I live in England: like many original Londoners, we’d like to carve ourselves out of rotten England - with it’s idiotic economic model and p9licie.