Security and the economy

In these trying times, it needs to be pointed out that security is no longer just protecting one’s population from physical attack or about the nuclear deterrent. There are also digital and most importantly economic threats: building up and maintaining protections to these is vital to the national interest. The greatest threats to our quality of life are economic and the Tories threaten to erode our protections against those.

Let us do a thought exercise. Suppose I were an enemy of the UK with substantial financial resources: how would I go about seriously harming it? Conventional warfare is out and so is nuclear if I want to live to tell the tale. Terrorism is rather ineffective as security services snuff out the vast majority of threats. Cyber-warfare is a possibility and will grow in importance, no doubt, but it is economic (and political) warfare that would be the optimal choice.

Or let’s say I don’t intentionally set out to hurt the UK, I just want to siphon off some of the wealth the country generates for myself. I would ideally like to be like a Russian oligarch, prospering whilst the people were falling into poverty. The UK is after all a big wealthy country with a large market to sell to, a lot of government contracts to attempt to win and some natural resources. Take over a few strategic businesses, squeeze wages, eventually asset-strip them or move them to Poland, flood the market with cheap goods, and so on. Or win some government contracts and tap into some of that ‘other people’s money’. My cronies in the financial sector can meanwhile make some money by ‘betting’ against the UK economy. Nothing personal, just business.

Naturally, that won’t come without some degree of pain to the people of the UK. More of the wealth they create goes to me, as I squeeze wages. Some British businesses may not survive the competition or may be forced to move abroad, costing jobs. Of course, I will use every creative trick in the book to avoid tax. The economy slows down and the government has to make cuts due to lower revenue. If I succeed in taking over some sections of the public services or infrastructure, I will in addition find myself with businesses that are too important to fail, meaning the taxpayer covers my liabilities. That allows me to borrow with them as collateral.

If I succeed, me and my cronies would find ourselves with land and property (and so profit off the rents), seize the natural resources, obtain a few monopolies in some key sectors, control of (the profitable parts of) the public services, the markets. Such a degree of control means political power, and so any government would have no choice but to listen to us and compromise with us, thus undermining the UK’s sovereignty. Having taken over or crushed the competition, I could for example blackmail it for tax breaks and subsidies, threatening to remove more of my business elsewhere, or close it down. This is particularly dangerous if I am foreign and promoting the interests of another state.

The impact on the population would be predictable — Russia in the 90’s being an extreme example. Mass unemployment and under-employment results in lower quality of life and less money for the public services. This in turn means more preventable deaths, higher suicide risk, less support for structures that are tasked with preserving community and society and deal with social problems. Poverty and inequality will worsen, with a resulting increase in substance abuse and in crime. This result would be a dream come true to any enemy of Britain.

You would say all this is unlikely. But is it less likely than say a North Korean missile strike? One cannot deny that many third world — and some first world — countries were exploited in this way, their natural resources and markets seized by foreigners, and their fledgling economy opened up to foreign competition, with much of the local competition crushed.

What is currently stopping all this? It is the regulatory structure and the fact that some things in the UK are not for sale: typically because they are state-owned. It is also the employment law and laws against monopolies. It is a state determined to be an active player in the economy and to

So what would I do faced with such barriers? I would be seeking both to influence the electorate and to buy off the political class in order to help dismantle the above protections. This means promoting the people I want to be in elected via the media and lobbying the politicians in power endlessly. It means setting up think tanks that promote the ideology of removing those barriers. It means relentless scapegoating and divide and conquer as I attempt to explain away the resulting problems by blaming various different groups in society. It means recruiting a ‘local elite’ who stand to gain from the changes I wish to promote and will support me to the end.

I think most of us can see this process happening before our eyes, as there is constant, relentless pressure to deregulate and privatise. Of course, the overwhelming majority of the people investing in the UK are not enemies and prosperity of the UK is in their interest. Indeed, their investment is essential for the well-being of the country. But ultimately, economic liberalism, like pacifism, relies on trust. Trust that individuals, corporations, foreign states play by certain rules, not overstep certain boundaries.

But what happens if they do not? We want to trust others but be vigilant and have the right kind of structures in place for that. We want a properly regulated mixed economy where the state has a role and the ability of individuals to influence politicians is not absolute. We need to welcome investment but remain vigilant regardless, and have our elected representatives stay in control.

The Tories instead favour more liberalisation of the economy and more privatisaion. There needs to be a realisation that they are playing with fire and harming British economic security.