more post Genoa hand wringing

Ian Murray seamus2001 at home.com
Wed Aug 8 17:19:00 PDT 2001


< http://news.independent.co.uk >

Learn from Genoa and soften the cosh of global capitalism Christopher Walker 05 August 2001

He walked into the courtroom wearing a large overcoat trimmed with fur at the collars and cuffs. He was immaculate, from his manicured fingernails to his hand-made silk shirt. The technological breakthrough his company had delivered to mankind had garnered him a vast personal fortune. A reporter grabbed his sleeve. Did he think his "monopolistic profiteering was in the interests of the public"? The chairman turned to him with a dismissive sneer: "Public be damned".

Bill Gates may wear T-shirts, but his PR is a lot slicker than Bill Vanderbilt's. Entrepreneurs have come a long way in the last 100 years. And yet the smoother image is not stopping a growing global protest at the supposed evils of capitalism, cartels and globalisation. The Cartier store on New York's Fifth Avenue was a recent focus for protest. The ladies who lunch were gripped with horror as demonstrators thrust posters of mutilated limbs in their faces shouting: "Your diamond did this".

It has been ten years since the fall of the Berlin Wall, that very physical symbol of the triumph of capitalism, and yet it is quite clear that large sections of the world's public are not convinced. Globalisation has become a bad word. In its starkest form this discontent finds expression in the radical demonstrations of Genoa. One group from Germany, Linksruck ("shift to the left"), was quite straightforward, simply calling for "the abolition of capitalism". But there is evidence of a more widespread malaise.

Governments are responding with various initiatives and legislation designed to clip capitalism's wings. Not least, here in the UK. We may not have seen anything like the Microsoft case, but last week the Government announced new rules on cartels. The Office of Fair Trading will become a criminal prosecuting authority, carrying out surveillance to catch offenders. There are proposals to introduce the UK equivalent of plea bargaining for whistle blowers.

It is important to realise that the announcement is part of a general campaign by the Government. It is quite clear that there is a growing concern at the heart of Tony Blair's administration that voters are becoming critical of the free market. Thus we have seen many changes in employment law, initiatives on socially responsible investment (SRI) and proposals to change the law on corporate manslaughter.

The law is seen as inadequate. It requires proof that within a company there is a "controlling mind" who had a direct relationship to the manslaughter. As such, there have been only three successful prosecutions, all of them involving very small companies where executives could not hide behind a complex corporate bureaucracy.

Dissatisfaction has centred around two areas. In the building industry, a record number of people are being killed on building sites. Similarly, attempts to prosecute anyone for the recent rail crashes have failed, although there are reported rumours of five individuals at Railtrack and Balfour Beatty being pursued over the Hatfield crash.

A Safety Bill will make corporate manslaughter charges easier. The need for consent from the Director of Public Prosecutions will be removed, "pockets of negligence" aggregated, and the singling out of a "controlling mind" ended.

Whether these various pieces of direct legislation will address the problems is another matter. It is the more gentle encouragement through government initiatives such as the one on SRI that are having more effect. Take last month's launch of the FTSE 4Good index, that attempts to strip out the sinners from the index for those who want to invest ethically. The chosen list may or may not be correct but at least it is focusing minds on the ethical issue.

Public pressure can have an effect through consumer boycott. Shell's environmental focus is the result of consumer reaction. That much publicised diamond protest triggered a consumer reaction, which pushed the industry into re-thinking its stance on importing from areas of conflict.

Whether we get there through legislation or other means, the need to soften the image of capitalism is clear. If we don't do it, the protesters of Genoa might start to have real political influence, and push Europe dangerously away from the free market.



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