Editorial from the September 2007 issue of the Socialist Standard
It used to be that business news concentrated on the performance of the economy and the pearls of wisdom of business leaders. In recent years however the business pages of newspapers have slowly become filled with allegations and investigations of price-fixing, cartels, insider dealing and corruption.
Last month, in headlines which made front pages round the world, British Airways was fined over £300 million for price-fixing – agreeing with their competitor to fix the price of fuel surcharges at an artificially high level. “The world’s favourite airline”, that old advertising slogan for BA, will perhaps not be making a re-appearance anytime soon.
In the dock alongside them of course should have stood one of the UK’s favourite capitalists, Sir Richard Branson of Virgin Airlines, except he turned Queens’ evidence and snitched just in time. According to the bizarre rules which usually seem to affect businesses differently from every one else, by blowing the whistle on the dirty dealings of BA (and themselves) they are automatically free from prosecution no matter how dirty their hands.
The very idea that these two bastions of free enterprise should have been colluding to effectively “defraud” their valued customers might have shocked some. After all here is what British Airways customer policy states: “The well being of our customers is extremely important to us”. Virgin’s customer charter is the same although it seems a little prescient “We put customer service and commitment to our passengers at the heart of what we do. We strive to get it right, first time, every time. But occasionally things don’t go as planned”.
Remember of course that Branson and Virgin for many years played the part of the plucky little David complaining against BA’s Goliath abusing its monopoly position with airports to try and keep Virgin out of the Atlantic market.
The news headlines related primarily to the size of the fine rather than any surprise that these business practices actually go on. These are not exceptions, occasional one-off incidents worthy of a news item. Corruption is an inherent part of capitalism. And what is known about is obviously only the tip of the iceberg.
And we maybe should not even pay much attention to those states trying to regulate their own capitalists – they are just as guilty. US Democrats have recently been trying to legislate (“Nopec”) against OPEC, the oil-producing and exporting countries, on the basis that these countries, instead of competing for market share on the basis of price, agree production rates with each other in order to keep the price high for all. In capitalism maintaining production takes second place to maintaining profit.
World socialists aren’t much bothered which activities of capitalists actually comply with its own laws or not, except perhaps to draw attention to the inconsistencies of the system and to show how it doesn’t even live up to its own ideology: the “free” market just doesn’t do what it says on the tin.
World socialists don’t want the “free” market system. But neither do we have any confidence in a supposedly regulated market system. There will never be enough consumer rights ombudsmen, Offices of Fair Trading or anti-trust legislation to police capitalism. The buying and selling system provides just too much reward. Instead a cosmetic pretence is maintained that the market system is dynamic and competitive. A veneer of fairness is maintained to encourage us all to carry on participating in the game, on the basis that there is some sort of level playing field in capitalism. But the real battle has never been one fought between capitalists, but rather, against them and their system. So which side are you on ?