The failure of the international banking system shows our economy is flawed. Photo: Getty
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Market rule isn’t working, but we can build a new world

The way we have run our economy is fundamentally flawed. 

Writing under leaden grey autumn skies, it is easy for a pervasive cloud of pessimism to dull one’s consciousness.

The way we have run our economy is fundamentally flawed.

Listen to Pope Francis: "How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? . . . Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape."

And yet the people at the top continue to suggest that our economy is the best attainable.

They argue, for example, that:

  • The market is the most effective and efficient mechanism we have to distribute goods and services. The provision of public services should be left in private hands even when those services are funded by the taxpayer.
     
  • The government should stand aside in case it ‘crowds out’ the private sector.
     
  • The town square should only be a commercial market place, rather than a place of everyday encounters between friends, neighbours and acquaintances to share common experiences and even to contest the existing order of things.
     
  • The rich should be incentivised by filling their boots with gold whilst the poor need to be incentivised by being paid less.
     
  • Gross inequality is a fundamental condition of human society and the most powerful oligarchs rather than working people are the source of all wealth.
     

These are the precepts by which people at the top think we should be governed.

But they are mistaken. You only need to see the failure of the international banking system, or the dismal record of the British housing market, or to look to the American health system to see how private provision of social goods can fail. And yet you could be mistaken in believing that they are incontestable truths.

So deeply entrenched are these ideas that it is easier to imagine the end of our planet (or at least the end of humanity as a result of some disaster) than it is to imagine that we human beings can build a different kind of country with a different set of values.

But that has to be our task. And it may not be as hard to achieve as we imagine.

Because most people know that the present system is bust. There is a spirit of dissent in the country. It is the common sense of our times that Britain is not working properly for the millions, though it works well for the millionaires.

There is a cynicism about the media who perpetually fail to report the truth as most people experience it. And there is contempt for a Westminster government which is seen as remote and failing to address the fact that so many are feeling increasingly hard up.

Only this week, the Resolution Foundation found that 5m people are now in low paid jobs – that’s up by 250,000 in one year alone. We have also seen an explosion in zero hour contracts. 1.4m people are now believed to be in a job without a guaranteed number of hours. Underemployment, temporary work and false self-employment have all increased.

Yet David Cameron still stands up in the House of Commons and tells us that more jobs are being created and the economy is growing.  And the masters of the New World Order purr with contentment when he does so. But the utter complacency of the closed circle of the rich and powerful on whose behalf he speaks jars daily with the difficulties of ordinary life as it is experienced by millions.

And so it falls to each one of us to contest the dominant ideas which promise additional riches for the most well-off and continued servility for the rest of us.  It is the task of every citizen to imagine a better future. Because in the absence of hope we will fall into despair. And when the latter gains primacy over the former, social catastrophe looms.

And in undertaking this task each citizen will not be alone. For there are millions who have to one extent or another dreamt of how things might be if there were a different set of social, political and economic arrangements.

I have spent all my life active in the broader Labour movement and for me this remains the best hope for a brighter future.

But there are also all kinds of other organisations and active communities which are equally expressing their dissent from the attempted reduction of human interaction into a set of self-interested commercial exchanges. Or the way in which we have entered into an exploitative and indeed destructive relationship with our beautiful planet and our fellow creatures.

Interestingly, the explosive development of modern technology, the internet and social media now allows direct and informal communication between citizens without mediation by the rich and powerful who throughout history sought to control our thought processes.

And so a new world is possible, and the means are at hand. Our task is to develop the movement which will give expression to the dissent which so many people feel.

Jon Trickett is Labour MP for Hemsworth, shadow minister without portfolio and deputy chair of the Labour party 

Jon Trickett is the shadow lord president of the council, shadow cabinet office minister and MP for Hemsworth.

Getty.
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The Brexit Beartraps, #2: Could dropping out of the open skies agreement cancel your holiday?

Flying to Europe is about to get a lot more difficult.

So what is it this time, eh? Brexit is going to wipe out every banana planet on the entire planet? Brexit will get the Last Night of the Proms cancelled? Brexit will bring about World War Three?

To be honest, I think we’re pretty well covered already on that last score, but no, this week it’s nothing so terrifying. It’s just that Brexit might get your holiday cancelled.

What are you blithering about now?

Well, only if you want to holiday in Europe, I suppose. If you’re going to Blackpool you’ll be fine. Or Pakistan, according to some people...

You’re making this up.

I’m honestly not, though we can’t entirely rule out the possibility somebody is. Last month Michael O’Leary, the Ryanair boss who attracts headlines the way certain other things attract flies, warned that, “There is a real prospect... that there are going to be no flights between the UK and Europe for a period of weeks, months beyond March 2019... We will be cancelling people’s holidays for summer of 2019.”

He’s just trying to block Brexit, the bloody saboteur.

Well, yes, he’s been quite explicit about that, and says we should just ignore the referendum result. Honestly, he’s so Remainiac he makes me look like Dan Hannan.

But he’s not wrong that there are issues: please fasten your seatbelt, and brace yourself for some turbulence.

Not so long ago, aviation was a very national sort of a business: many of the big airports were owned by nation states, and the airline industry was dominated by the state-backed national flag carriers (British Airways, Air France and so on). Since governments set airline regulations too, that meant those airlines were given all sorts of competitive advantages in their own country, and pretty much everyone faced barriers to entry in others. 

The EU changed all that. Since 1994, the European Single Aviation Market (ESAM) has allowed free movement of people and cargo; established common rules over safety, security, the environment and so on; and ensured fair competition between European airlines. It also means that an AOC – an Air Operator Certificate, the bit of paper an airline needs to fly – from any European country would be enough to operate in all of them. 

Do we really need all these acronyms?

No, alas, we need more of them. There’s also ECAA, the European Common Aviation Area – that’s the area ESAM covers; basically, ESAM is the aviation bit of the single market, and ECAA the aviation bit of the European Economic Area, or EEA. Then there’s ESAA, the European Aviation Safety Agency, which regulates, well, you can probably guess what it regulates to be honest.

All this may sound a bit dry-

It is.

-it is a bit dry, yes. But it’s also the thing that made it much easier to travel around Europe. It made the European aviation industry much more competitive, which is where the whole cheap flights thing came from.

In a speech last December, Andrew Haines, the boss of Britain’s Civil Aviation Authority said that, since 2000, the number of destinations served from UK airports has doubled; since 1993, fares have dropped by a third. Which is brilliant.

Brexit, though, means we’re probably going to have to pull out of these arrangements.

Stop talking Britain down.

Don’t tell me, tell Brexit secretary David Davis. To monitor and enforce all these international agreements, you need an international court system. That’s the European Court of Justice, which ministers have repeatedly made clear that we’re leaving.

So: last March, when Davis was asked by a select committee whether the open skies system would persist, he replied: “One would presume that would not apply to us” – although he promised he’d fight for a successor, which is very reassuring. 

We can always holiday elsewhere. 

Perhaps you can – O’Leary also claimed (I’m still not making this up) that a senior Brexit minister had told him that lost European airline traffic could be made up for through a bilateral agreement with Pakistan. Which seems a bit optimistic to me, but what do I know.

Intercontinental flights are still likely to be more difficult, though. Since 2007, flights between Europe and the US have operated under a separate open skies agreement, and leaving the EU means we’re we’re about to fall out of that, too.  

Surely we’ll just revert to whatever rules there were before.

Apparently not. Airlines for America – a trade body for... well, you can probably guess that, too – has pointed out that, if we do, there are no historic rules to fall back on: there’s no aviation equivalent of the WTO.

The claim that flights are going to just stop is definitely a worst case scenario: in practice, we can probably negotiate a bunch of new agreements. But we’re already negotiating a lot of other things, and we’re on a deadline, so we’re tight for time.

In fact, we’re really tight for time. Airlines for America has also argued that – because so many tickets are sold a year or more in advance – airlines really need a new deal in place by March 2018, if they’re to have faith they can keep flying. So it’s asking for aviation to be prioritised in negotiations.

The only problem is, we can’t negotiate anything else until the EU decides we’ve made enough progress on the divorce bill and the rights of EU nationals. And the clock’s ticking.

This is just remoaning. Brexit will set us free.

A little bit, maybe. CAA’s Haines has also said he believes “talk of significant retrenchment is very much over-stated, and Brexit offers potential opportunities in other areas”. Falling out of Europe means falling out of European ownership rules, so itcould bring foreign capital into the UK aviation industry (assuming anyone still wants to invest, of course). It would also mean more flexibility on “slot rules”, by which airports have to hand out landing times, and which are I gather a source of some contention at the moment.

But Haines also pointed out that the UK has been one of the most influential contributors to European aviation regulations: leaving the European system will mean we lose that influence. And let’s not forget that it was European law that gave passengers the right to redress when things go wrong: if you’ve ever had a refund after long delays, you’ve got the EU to thank.

So: the planes may not stop flying. But the UK will have less influence over the future of aviation; passengers might have fewer consumer rights; and while it’s not clear that Brexit will mean vastly fewer flights, it’s hard to see how it will mean more, so between that and the slide in sterling, prices are likely to rise, too.

It’s not that Brexit is inevitably going to mean disaster. It’s just that it’ll take a lot of effort for very little obvious reward. Which is becoming something of a theme.

Still, we’ll be free of those bureaucrats at the ECJ, won’t be?

This’ll be a great comfort when we’re all holidaying in Grimsby.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Brexit. You can find him on Twitter or Facebook.