To regulate or not to regulate & trickledown economics

A friend of mine said to me the other day ‘this country has gone to the dogs, nothing works yet we’re paying the highest taxes in many a year’. And you know he’s right, the NHS is in a terrible mess, policing is too. Environmental protections are being weakened all the time and no one seems to be able to get the trains to run anywhere near reliably. I could go on but I think you’ll get my drift.

There’s been a political fad, which probably has its roots in the demise of the post-war consensus in the late 1970s, of deregulating pretty much everything and leaving many things to the free market to find solutions. I recall Gordon Brown’s ‘light touch regulation’ with regard to banking as an example. Of course, the free market will always come up with deregulation solutions that benefit the comfortably off and the wealthy; it’s how unregulated/deregulated capitalism works. The poorest in our society will always lose out and they’ve done so in spades as the checks and balances we once held dear have melted away. For me, the way a society treats its poorest is measure of how it is progressing or otherwise and frankly the UK treats those with little or nothing very badly.

Much of damage done has been via deregulation and the oft used phrase trickledown economics. When I say oft used phrase, I mean by the political right who have been shifting wealth in our society towards the richest whilst restricting help for the poorest. The theory is that by creating wealth the poorest will gain too but in reality the poorest have continued to get poorer so trickledown economics is really code for widening the gulf between the richest and poorest.

Some regulation will have been openly and deliberately cut/weakened by governments but probably much more has been caused by budgetary reductions to councils, the police, Environment Agency etc. etc. By reducing the amount of money a public/regulatory organisation receives the effect is that it has to prioritise what it does and therefore what it regulates. In the end checks that should be attended to simply don’t happen anymore.

So when you hear a politician telling you that deregulation will provide ‘X’ benefits just think that those benefits will be for the middle incomes to wealthy. The chances of the deregulation (often sold as getting rid of red tape) benefiting those with little or nothing are pretty much nil. And the same politicians will be promoting trickle-down economics. 

For capitalism to work it requires significant regulation otherwise the poor and those with little will continue to be exploited.