No one can deny that capitalism creates wealth. However, since the 1980s with rampant privatisation from the neoliberal policies of both the British Prime Minister Margaret Thatcher and US President Ronald Reagan, capitalism has become out of control. Corporate power has grown massively; union power has disappeared; workers’ rights have greatly diminished; homelessness has soared; and an enormous wealth gap, in which the 85 richest people in the world own as much as the 3.5 billion poorest, has emerged.
These are the major problems with unregulated capitalism and, as recently shown by the Tesco scandal, they will carry on as long as there is limited control over capitalism. We have seen it plenty of times before with the likes of Enron, AIG and Lehman Brothers in America. The constant let down of a ‘utopian’ economic and ideological lifestyle whereby global capitalism has made us dependent on consumer products, creating the illusion that neoliberalism is the way to go, the perverse idea that big businesses can take care of themselves without relying on state intervention.
In reality it is really quite different. It’s socialism for the rich and capitalist rugged individualism for the rest of us. As the journalist Owen Jones points out, big businesses rely on the taxpayer: for example the bail-out of the banks during the 2008 financial crisis.
The problem with Tesco portrays the issue with unregulated capitalism perfectly. Shares have fallen dramatically: approximately £400m worth recently. Last year Tescoís profits had fallen by a quarter. Like Enron, it had lied about the amount of profits it had gained for in a half year by £250m.
Additionally there are other reasons as to why Tesco is a prime example of the growing power that corporations within our global capitalist world flourish. According to The Guardian, Tesco have formed complex schemes to get around paying taxes, so basically while completely failing to deliver profits (the main aim of capitalism) they also are unable to deliver anything progressive in our society like paying their taxes to help fund the welfare state.
Tesco use zero-hour contracts where workers on the minimum wage are called in whenever there is work available, for what could be any amount of time. Nine out of ten employees at Sports Direct are on zero contract hours. The depravity this policy brought in shows the excessive power given to employers to ‘control’ their employees’ lives.
Enron was an energy-trading company that declared bankruptcy on 2nd December 2002. The scandal, which came to light in 2001, revealed that the company had lied about its profits and criminal trials involving the top executives, some of which refused to speak in order to cover themselves. The documentary Enron: The Smartest Guys in the Room shows the scandal in more depth.
Corporations lack accountability. Tescoís chairman resigned when it was revealed that its profits were falling; Enronís top executives, such as former CEO Jeffrey Skilling, had his sentence cut to 14 years in 2013.
It’s fair to say that money does rule America, but can the same be said about Britain? With corporations and global capitalism now dominating the market across the world there can only be one answer: yes. Tax avoidance, unaccountability, shady dealings and a fall in profits: what is the point of neoliberalism? An ideology that is beneficial for the few and not the many, an ideology that is doomed to keep failing and putting a burden on the taxpayer.