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The economy is fragile, we all know this. The Crash of 2008 was the last time the world’s economies were truly put to the test. For some, this was the time of the most severe economic hardship they have ever had to face, leading to financial ruin for not only countless businesses, but also countless ordinary, working-class people.
However, as within all disasters, there is also opportunity. One such case of someone fiercely grasping an opportunity and running with it is the billionaire investor, George Soros, who successfully speculated against the British pound, winning billions. According to the man who ‘broke the Bank of England’, such economic collapses are only to be expected and ‘would have occurred sooner rather than later’. Worse still, Soros admits – and history agrees – that he himself has the power to break markets, because, according to him: ‘I have been cast as a financial guru who can influence markets. That has forced me to impose self-censorships on my statements – exactly because I can move markets’.
Such markets and their fragility do not lend well to long-term economic plans, this much is quite obvious. However, the problem goes much, much deeper than solely financial problems, but social and cultural issues too. Let me explain.
When the market is unrestrained, fragile and under-regulated there is a potential for the largest companies to not only generate monopolies within industries they dominate, but it also leverages them into a position of considerable political power. This is to be expected, especially as wealth creation – and the ever-increasing socio-economic disparity it always creates – has skyrocketed in recent years, it is, arguably, completely inevitable. These monopolies can completely dominate industries, something that the majority of people are against, for reasons I won’t get into here. With that being said, and with wealth inequality aside, in the Twenty-First Century, there is now a new inequality that is powered by such monopolies and exorbitant wealth disparity – one of simple influential power.
When these multi-billion dollar companies – and, in the case of Apple and Google, trillion-dollar companies – exert such a powerful presence economically through monopolising industries that result in a large portion of a nation’s GDP, it is only natural that they have a certain level of influential, political power that many others do not; solely due to their excessive net worth. This is where the paradoxical issues begin to appear.
If we are to allow private enterprises relatively free reign over any and all business decisions – as legislation currently allows across western representative democracies – is there a point at which enough is enough? In recent times, we have seen the potential for private enterprises to not only implicitly abuse the power and influence they have upon not only their customers but citizens in general, but also explicitly through their ability to fund and influence governmental parties and bodies.
Twitter, Google and Apple have all recently shown their true colours regarding such abuse of power. They have chosen to censor and ban those they simply dislike in the name of social justice and a zero tolerance policy on intolerance. The problem is when the actions of private enterprises can be so powerful that they can interfere and damage not only the democratic process by suppressing dissonant voices on their own platforms, but also by explicitly banning alternative companies – and thus self-imposing a monopoly not only on the social media industry (and thus all of the money that industry generates), but also upon free speech and thought itself.
Private companies have now ascertained such a high degree of capital and influence that they have essentially assailed the walls of the civil society that once housed them, reaching their snatching hands into the realm of the state. Simply put, the power that was once owned by elected politicians is now held by a select few unelected multi-national corporations, corporations, I might add, that are not only beginning to monopolise industry sectors, but share such an enormous percentage of economic growth that their actions alone could singlehandedly crash world economies.
Their power has utterly eclipsed even the wildest imaginations of the original socialists, but they are wrong to think that this can be stopped through the abolishment of capital or even the total ownership of it.
Private enterprises cannot be allowed to have the level of free reign over the economy at both micro and macro levels, however they also cannot be allowed to have the level of political and influential power they currently have over free speech and thought.
Instead, there must be an alternative that suits the need of the citizen at both a local, national and international level.
It is imperative that the two current positions of power – that of the state (Members of Parliament, the judiciary, the legislative etc.) and that of the civil society (Private companies and banks) are at the whim of the electorate. They must both share the same vulnerability – that of being unelected come the next election cycle.
I must be clear here, however, that this is not nationalisation of all private enterprises, that dreaded word that has become so muddied in the current political landscape. Instead, the alternative is not to be interpreted as a fusion of socialism and capitalism, but an antidote to them. It must be a system that accounts for the natural inclination in humanity to pursue wealth creation and entrepreneurship, but one that can simultaneously restrict and regulate nefarious actions similarly inherent to the human spirit.
The exact outlining of such a system has yet to be fully realised. However, this article has taken the first step on actualising it. Only through firstly identifying a problem can its antidote be correctly configured and administered
Soros, G., & Schmitz, G. (2014). The Tragedy of the European Union: Disintegration or Revival? New York: PublicAffairs.