Stefano Pessina, UK tax dodger, and the acting chief executive of Boots, has recently created a stir in Britain by claiming the Labour Party’s economic policies are “not helpful” for business or the country. It is rarely a good idea for chiefs of industry to enter the political arena in this fashion. Mr Pessina can speak for Mr Pessina but he cannot speak for Boots as a company. There are many people who have a share in, or work for Boots, each with their own personal view. He is entitled to a personal opinion, of course, but why would he single out the Labour Party? They are far from perfect but their current policies are more pro-business (just about) than the Tories!
All businesses, and presumably Boots is no exception, want a healthy demand for their goods and services. They want paying customers, with money to spend in their pockets.
They aren’t going to get that if their customers don’t have a job, or are in some poorly paid job. Or even a non-job like a zero hour contract which gives them employment for zero hours! Just about every town in Britain has boarded up pubs, cafes and and shops, and also unemployed youngsters hanging around those closed down businesses . This should give common ground for the political parties which traditionally would be expected to represent business and those who may traditionally represent those working for, or hoping to work for, those businesses.
Of course, it is less like this in some areas than others. It’s not as bad in Maidenhead as it is in Middlesbrough. Is it that there’s nothing that needs doing in Middlesbrough? The phrase ‘full employment’ isn’t much used these days. There’s a general acceptance, among Labour and Tory politicians alike, that the term ‘full employment’ cannot apply any more. It’s even worse in Euroland. There the conventional wisdom, at least in pro-German governing class circles, is that Greece, Spain, Italy and France need even more bouts of austerity to cure the ravages of previous bouts of austerity. The remedy for any economic problem invariably involves cuts and more taxes. The Labour party, in Britain, are offering nice fluffy socially responsible cuts. Whereas the perception is that that Tory policy, if freed from any LibDem influence, would involve more severe and socially irresponsible cuts which, no doubt, would get a nod of approval from Angela Merkel.
No leading politican, in any of the major parties, has the courage to question the conventional wisdom that budgets can be balanced by increasing taxes and reducing spending. It’s obvious they cannot. It should also be obvious that this is the economic equivalent of a dog chasing its own tail. There is no evidence in the slightest that this approach has ever worked or will ever work. There’s lots of evidence that it closes down businesses and deprives the former employees of work though.
It is in the interests of both business and labour to challenge this failed concept. It shouldn’t be a left/right issue. It should be one that unites everyone.
Modern Monetary Theory: Real Economics 