Dear Mayor Johnson,
I’m sure you’ll think it strange that the mayor of the great and wonderful city of London should find himself addressed in English by an unknown and uneducated man from a small country across the North Sea, who hides, poorly, but still hides, behind the mask of a Pink Elephant. So please, allow me to begin by apologizing for any awkwardness I may have caused. It’s just that after reading a news article about your speech “What Would Maggy Do Today…” which you delivered at the annual Margret Thatcher lecture, well, that I simply felt compelled to write to you.
You see, I had long thought the world-view of the UK conservative party and that of my own to be irreconcilable. The world your political party occupies and my own have always seemed so many oceans apart that all hope for a common ground seemed lost. And yet there it was, clear as day, on the website of the Guardian. Mr. Boris Johnson (it’s still mister, right?) the Conservative Mayor of London, quoted for saying:
“I stress, I don’t believe that economic equality is possible; indeed, some measure of inequality is essential for the spirit of envy and keeping up with the Joneses that is, like greed, a valuable spurt of economic activity.”
Oh how I rejoiced to find that there was hope after all. That we would be able to think alike, you and I, that we could see eye to eye and not just agree, but agree on something so fundamental. Inequality of position is a powerful force. It compels a man to act. It drives competition, and competition is the engine of progress; it’s humanity’s way of pulling itself out off the swamp by its own bootstraps.
Yes, it was a great feeling indeed. And yet, Mr. Johnson, Boris, in and of itself that joy would not have been enough to make me pick up my pen. It was only when I came across the words that had preceded your quote, that I felt compelled to write to you today.
“(…), it is surely relevant to a conversation about equality that as many as 16 per cent of our species have an IQ below 85, while about 2 per cent have an IQ above 130. The harder you shake the pack, the easier it will be for some cornflakes to get to the top. And for one reason or another – boardroom greed or, as I am assured, the natural and God-given talent of boardroom inhabitants – the income gap between the top cornflakes and the bottom cornflakes is getting wider than ever.”
After reading that I knew what I had to do. Which is to warn you Mr. Johnson. Because unlike you seem to think, all is not well with competition. She is no longer doing the job she’s supposed to. She is being assailed from all sides, and impeded in her ability to carry those smartest and most able cornflakes to the top of the pack.
Of course, threats to competition are nothing new. There have always been plenty who are willing to cheat, lie, steal, defraud, rob, exploit, maim, abuse their power or even murder in order to get ahead in life, and if we hadn’t the instruments to stop such people, competition would be creating far more misery than value. I believe this is a big part of the reason why we’ve created laws and why we’ve invented forms of government to uphold those laws, why we have a police, courts and prisons and why we have not only parliaments, but also ones that derive their power from each citizen equally, one man, one vote, instead of bowing to the highest bidder and behaving like a crooked cop.
Please forgive the political science lecture, Mr. Johnson. I’ve only been repeating these things you already know so that it would be easier to point out a first serious new threat to competition. I say first, because as in all crises, there is not one single problem, nor a single solution. Good government creates the circumstances in which competition can thrive. But governments operate at the level of the nation-state. And in the past twenty or so years, the economy has gone global. Though there are many benefits that arise from a global economy, this development has also allowed the thieves, murderers and charlatans to return to their game. This time, they are exporting their crimes to areas of the world where governments are weak, corrupt or absent.
You may recall a story about a sweatshop factory collapse, somewhere last spring. The place was called Rana Plaza, an eight story building in Savar, Bangladesh. On April 24, 2013, that building collapsed on top of the 3122 sweatshop workers inside, killing an astonishing one-thousand-one-hundred-and-twenty-nine people. The investigation of the disaster showed that the building had been constructed illegally, which is to say that a permit was allowed for a six-story building, but the owner had decided to put another two on top. Obviously Mr. Sohel Rana hadn’t done this for aesthetic reasons. His motivation was greed. And in Bangladesh, where the government is relatively weak, that greed could go unchecked, thereby creating suffering and death.
Now, you may ask what a faraway crime committed in a faraway country has to do with competition in the UK. But then you should know that this factory had been producing garments for retailers such as Benetton, Joe Fresh, Mango, Matalan, Primark and Walmart. Its products were sold in Western stores to Western consumers, its profits came from Western pockets. The unfair competition between Mr. Rana’s criminal production methods and other, more honest ones isn’t happening in Savar. It’s happening on High Street where, akin to Gresham’s law, the bad products are pushing out the good.
There are of course a million other Sohel Rana’s in the world. Together, they create a new economic reality in which honest companies have to compete with dishonest ones. But without any real legislation or enforcement it isn’t a contest at all, which is why more and more once-honest companies are being caught partaking in questionable behavior. H&M has been implicated purchasing cotton produced by slave labor in Uzbekistan. Victoria’s Secret has had a similar issue with child-labor-produced cotton in Malawi. Electronics giant Apple continues to be haunted by troubling reports about worker conditions in China. Royal Dutch Shell is implicated in bribery scandals in Nigeria. The list goes on and on. Our corporations are misbehaving partly because they have little choice. They can either join the corruption or they can lose their business to their corrupt competitors.
As I said, this is not the only problem. You see Boris, even though the benefits of honest competition to humanity are obvious, most individual humans don’t like competition very much. Sure, they like the idea of competition, as long as it works to their advantage. But as soon as people have made their own fortune, they’ll do everything they can to end the game while they are ahead.
An increasingly popular approach is using wealth and connections to distort the political process and public discourse. Successful people and corporations try to bend the law or public opinion to their own advantage, employing simple strategies such as donating cash in return for political IOU’s, or more sophisticated ones, such as publishing not-really-independent research results, running fraudulent public awareness campaigns or even drafting legislation that is then brought to vote by a friendly stooge. Hell, some people even join the Conservative Party.
In a way, it makes business-sense: when a government is considering enacting legislation that requires, say, the addition of a GMO-warning label to all foods that contain genetically modified ingredients, a large GMO firm has two choices. One: abandon their highly profitable business model and adapt to the effects of such legislation. Or two: attempt to influence the legislation or political discourse in such a way that the passing of the law becomes unlikely or impossible. Modern corporations make this choice the way they’d make any other business decision: by weighing the costs against the benefits and choosing the appropriate course of action. The moral component does not enter into that equation. In the US, agricultural & GMO giant Monsanto has not only been able to prevent the introduction of such a label, it has actually succeeded in passing legislation that shields the corporation from paying any damages, should it ever turn out that their GMO products cause harm to the public. At a cost of a few hundred thousand dollars to the campaign coffers of Senator Roy Blunt, they have prevented consumers for being able to make an informed decision and have exempted themselves from responsible behavior. We can only hope that this construction won’t collapse on top of public health.
Now, these practices are an unfortunate reality of our representative system and have always been somewhat of a threat to honest competition. But today this old threat is being exasperated by another factor, a curious property of capitalism not many people seem to have taken into account: the tendency of capital to concentrate.
Ask any millionaire (or billionaire) which of his many millions was the hardest to make and the answer will invariably be “the first one”. As capital accumulates, things such as economy of scale and the increasing proportion of income available for re-investment accelerate the accumulation, making it relatively easier for someone with a certain amount of wealth to acquire more and more.
In the past two decades, tax havens and the globalization of economic activity have allowed capital to concentrate at an unprecedented scale. A small group of people now controls an enormous proportion of all wealth and corporations are now bigger than ever before. At the same time, the costs of influencing legislation have remained largely constant. That means that from the point of view of wealthy individuals and big corporations, the relative benefits of influencing legislation have increased and we are now seeing, in the US but certainly also in the UK and in the EU, a strong growth in the lobbying efforts of large corporations and wealthy individuals.
These increased efforts are detrimental not just to competition, but also to the system of representative democracy. In the US, the congress approval rating is now down to 9 percent. Even a public assembly of schizophrenic pedophile crackheads should be able to beat that figure. Of course, corporations and wealthy individuals don’t care much for democracy anyway. Some are even trying to get rid of government interference altogether. Not content with just influencing domestic legislation, they are aiming their efforts at international trade agreements, treaties that take precedence over national law. A recently leaked version of the TPPA, the Trans Pacific Partnership Agreement revealed that this treaty is looking to erect tribunals where corporations can actually sue entire nation states should these nations be bold enough to adopt legislation that interferes with their money-making.
Boris, I’m afraid that honest competition is under threat by both the absence of proper laws and the ever-increasing presence of improper ones. And there is no reason to assume that these two developments will remain separated. We are racing towards a point where they conjoin, a situation in which men may make their fortunes from exploiting the weak, polluting the environment or decimating nature, and may then use their ill-gotten wealth to keep their immoral practices legal, their wretched products available and themselves out of jail.
That’s certainly how it played out for those top-level bankers at HSBC, when it turned out they would not be prosecuted, even though they had knowingly laundered billions for international drug cartels. Sure, they knew they were guilty. And so did the US Assistant Attorney. After all, the proof against them was staggering. But prosecuting them to the full extent of the law would draw too much unwanted attention to the case, which could jeopardize the delicate balance of the international financial system. The HSBC bankers had become too big to jail, and where normal people would have been locked away for decades, the bankers went free.
As I said at the beginning of this letter, Mr. Johnson, I am writing to warn you. I’m afraid that the lofty positions and the increasing incomes of the boardroom inhabitants you admire are due not to any higher IQ or other God-given talent, but to an ability to act completely and utterly without prudence, conscience, empathy or morality. And as their lofty positions provoke envy, their actions inspire others to behave just like them because such corrupt behavior is fast becoming the best strategy for improving one’s standing in life. And when that process is complete, Boris, competition, the true and honest competition that we should love and cherish will be gone, and progress will soon follow it.
You titled your speech “What Would Maggy Do Today…” and I must admit that I don’t know enough about your favorite Baroness to even begin answering that question. But I do have some idea about what she should do, in light of all this, should she be in charge now. She should realize that one of the most important tasks of government is to ensure that an honest man always stands a greater chance of success in life than a dishonest one. And she should act accordingly.
Ever at your service,
-The Curse of the Pink Elephant.