In theory building societies should surely be one component of a sustainable banking sector. In practice although they are ‘owned’ by members, the board always succeeds in getting all its nominees elected, and so members have no control. Banks which are plcs at least have to worry about the share price. Building society boards have been completely unaccountable. The Building Societies Members Association (BSMA) – www.building-societies-members.org.uk – exists to challenge this state of affairs. Help their campaign to get one or more member nominated directors elected – see http://www.building-societies-members.org.uk/Building%20Societies%20News.htm.
Someone has asked me exactly how it is that the building society boards manage to ensure that only their nominees get elected. It works like this:
The building society board will decide who they want to fill any vacancies that arise. They will nominate exactly as many candidates as there are vacancies. Members have the right to nominate their own candidates. However this fact is not advertised; to discover this members would have to search through the website for a copy of the rules, or contact the secretary to ask for a copy. Furthermore each such candidate needs to be nominated by 250 people, and the society will not contact members asking for nominators, so it is quite a task to contact the 250. Also if a second member wished to stand he or she has to find a different set of 250 nominators. In spite of that there have been member nominated candidates in the past.
If there are no member nominated candidates, members are invited to votes ‘yes’ or ‘no’ for each of the board nominated candidates. Unsurprisingly the ‘yes’ vote always wins; members are given no useful information on which to judge the individual candidates.
If there are member nominated candidates, then the multiple X vote is used to elect the requisite number of directors. Suppose there are four vacancies to fill and, in addition to the board’s nominees, there is one member nominated candidate. Each member is entitled to cast up to four votes but does not have to use all four of them – though the wording on the voting paper can suggest otherwise. If a member wants the the member nominated candidate to be elected and decides to cast all four votes then he or she has to decide which of the board candidates to leave out. Different members will make different choices and so votes cast for the member nominated candidate will be largely cancelled out.
In this situation if every member votes for the member nominated candidate then he or she will be elected. Suppose 10,000 members between them cast 40,000 votes. Then the member nominated candidate attracts 10,000 votes leaving 30,000 to go to the other four. That is 7,500 each if they are equally distributed. If however only 8,000 members vote for the member nominated candidate, then the others attract 32,000 votes between them, which if equally distributed is 8,000 each.
It follows therefore that if every member uses all their votes it is likely that in order to elect the member nominated candidate, then approaching 80% of voting members will have to vote for him or her. However if members can be persuaded to vote only for the member nominated candidate then the desired result becomes more possible.
Possible remedies for the unsatisfactory situation include:
- Elect directors by preferential voting (Single Transferable Vote). At the moment the legislation prevents this and it is not in the interest of the main political parties to change this.
- Provide that at least one place on the board is reserved for a member nominated candidate. Again this would require legislation but the main political parties might not be quite so vehemently opposed.
- Adopt the Swedish practice of including stakeholders other than board members on the nominations committee.
- Adopt a similar practice in relation to the remuneration committee.
Note that these suggestions are the author’s and not necessarily those of BSMA.
It is a common perception that money subverts democracy. Many partial solutions are advocated but are either not in the interests of the elite, or where adopted singly do not work. It seems we are heading for a world in which huge corporations determine what laws are made and what we may do. To prevent this more radical and holistic solutions are needed.
In former times the elite ruled with the sword. Now they use money to achieve the same result without getting their hands dirty. Money buys arms, influence and instruments of repression.
Money funds political campaigning and so it benefits parties that look after the interests of the wealthy. The right are ready enough to complain about union funding of the Labour party but this pales into insignificance compared to funding by the wealthy – often through corporations.
Money funds massive lobbying exercises, such as climate change denial.
Too much research funding is provided by the private sector. Occasionally research results contrary to the interest of corporations are suppressed. More often research priorities are influenced by the profit motive rather than the common good.
The media are not balanced or objective. Their focus is often determined by the interests of their owners and advertisers. It is no so much that they lie, but that many of the really important issues are not covered properly; hence citizens receive a very distorted picture of reality. How then can they exercise their democratic rights in a sensible fashion? It is very disappointing that the BBC also manages not to cover many of the important issues. If any organisation can afford high quality investigative journalism it should be the BBC.
Inequality is rising. In part this may be because with technological advance, less labour is required. As things are it is capitalists that benefit from the technology and so there is a vicious circle in which far from wealth ‘trickling down’ it flows up. Social mobility is reduced. This is justified by the current dominant neoclassical economic theory, for which there is no empirical evidence, and which contains internal logical contradictions. Neoclassical economics claims to predict the inevitable and so morality does not come into economic decisions. If the theory were correct then morality would be irrelevant, but it is not right and ought to be challenged. wages/salary/’compensation’ levels are more often determined by power relations.
In our system money begets money. ‘ Unto those that hath shall be given; from those who hath not shall be taken even that that they hath’.
Money has captured the leadership of all the main political parties in the UK. Under most voting systems the leadership are able to impose discipline on MPs. STV would make them more beholden to voters.
International ‘free trade’ necessarily subverts national democracies. It places reliance on Intergovernmental Organisations most of which are essentially undemocratic, and dominated by corporations. A common argument for free trade is that it is ‘the engine of growth’. But endless economic growth is unsustainable. We need to adopt the Swedish motto of Lagum (‘just enough’, or ‘just the right amount’). Rather than maximising international trade, we want stability. It would help if Keynes’ plan for controlling the balance of payments had been adopted at Bretton Woods.
The right to a fair trial means nothing if you cannot pay for representation. The legal system is not fair. Corporate Personhood must be abolished.
Views of the British monarchy and Royal Family are somewhat mixed. There is a large and fanatical fan club, including many Americans; there is increasing criticism of Royal finances including the tax status of the Duchy of Cornwall; but I sense a silent majority of those with no fixed opinion. Surprisingly there is very little discussion on the constitutional role of the monarch.
Each year a large number of executive decisions are made by Order in Council. As far as I know the Queen has never failed to approve any such Order, and neither did her father before her. The vast majority of Orders in Council concern relatively trivial administrative and ceremonial matters. I have no problem with these. A minority however concern much more significant issues and I would pick out in particular ratification of trade treaties. Currently the UK has 94 Bilateral Investment Treaties in force. Each of these provides that major corporations can sue the British government for any loss of profits arising from (often necessary and proportionate) regulation. It is argued that the UK derives net benefits from these agreements, but it is undeniable that national governments have ceded huge amounts of power not only to the EU, which we all know about, but also to corporations. Very few people know this and parliament has never been properly consulted.
If the Queen refused any Order in Council it would of course create a constitutional crisis, but what if she said that these matter ought to be decided by Parliament and declined to say yea or nay? Of course she would have to announce her intention in advance. How then would the establishment react?
They might try to persuade the Queen to allow prince Charles to deputise – he already does on occasions I believe – but surely he would not be so disloyal as not to follow her example. They might try to get her judged to have lost mental capacity, and seek to appoint a regent – but who? In any case as the Queen is the most respected member of the Royal family, would they get away with it?
The biggest hold the establishment has over the Royal Family is finance, whether it be the size of the civil list or taxation; but it ought not to be a stranglehold. The Royal Family could well afford to economise drastically without hardship. In any case the establishment has an interest in retaining our ostentatious style of monarchy to distract attention from the reality of elective dictatorship. If the Queen really cared about the interests of her subjects, as I believe she did at the time of her coronation, she would not allow herself to be blackmailed by financial considerations.
Update 2 Jan 2014
More important than all its failings below, the BBC has totally failed to cover the Transatlantic Trade and Investment Partnership currently being negotiated in secret between the US Dept of Trade and the European Commission. This has nothing to do with mutual advantage and little to do with whether the American people or Europeans will do best, but everything to do with mega corporations screwing all of us. The most worrying feature is investor State dispute settlement, whereby secret courts packed by corporate lawyers operating outside any national jurisdiction decide our fate. If this is not killed democracy is.
BBC’s failure to cover this is a crime against humanity.
Update 6 September 2013
Now we know WHY the BBC is so biased, see: http://scriptonitedaily.wordpress.com/2013/09/03/why-is-the-bbc-banging-the-war-drum-on-syria-just-look-who-runs-it/
Update 20 August
Police thugs smash all Guardian’s hard drives, and misuse ‘terrorism’ powers. http://www.theguardian.com/commentisfree/2013/aug/19/david-miranda-schedule7-danger-reporters?CMP=OTCNETTXT8115
Update 18 August:
BBC are not covering zero hours contracts. Channel 4 is; so much for Public Service Broadcasters.
Some print media are sensationalist, biased and inaccurate. This is well known. But we might expect the BBC our only public service broadcaster which we have to pay for via our licence fee should be unbiased but it is not. This bias is more subtle. The BBC does not lie directly but it is selective in what it covers, tending to avoid things the government would rather you did not know; and when they do cover such issues, often you get one side of the story.
This post will be updated as examples come in.
1. The perception that increasing inequality is fair and inevitable is based on neoclassical ‘orthodox’ doctrine for which there is no supporting evidence.
2. The major cause of the banking crisis is that governments from the Thatcher government onwards have not attempted to control the level of private debt as was being successfully done between 1944 and the 1970s.
3. BBC goes on and on about Salford, but what about the NHS blood transfusion service being handed to Mitt Romney?
4. Duchy of Cornwall’s tax affairs covered on Channel 4 Dispatches programme, 1st July 2013, “The Prince and his Secret Properties”, but not on the BBC
5. BBC’s Horizon programme on FRACKING on 20 June – presenter Prof. Ian Stewart was supposed to be unbiassed in that the question he left hanging – Just because we can, does it mean we should? But there are very serious concerns as illustrated by the movie ‘Gasland’. The technique is highly controversial; one third of government ministers have a financial interest. Not to mention this is hardly unbiassed.
More on Fracking not covered on BBC:
Water firms raise fears over shale gas fracking 19 July
Article on tax incentives for fracking Radio 4 1pm 19 July, typical weak BBC interview, nothing on climate change and no challenge to Mr Fallon’s incorrect statement that fracking has not polluted groundwater anywhere in the world!
6. According to Israeli born musician Gilad Atzmon, the BBC tried to censor conductor Nigel Kennedy’s remarks when introducing palestinian artists:
“The BBC was reportedly set to cut out remarks about apartheid in Israel made by world famous violinist Nigel Kennedy two weeks ago at the Proms Music Festival.
Would the BBC leave Kennedy’s comment in, no one would have noticed it. But now, we are all paying attention to Kennedy’s observation. But we also learn a crucial lesson about Jewish power in Britain in general and within the BBC in particular!
‘Ladies and gentlemen, it’s a bit facile to say it but we all know from experiencing this night of music that giving equality and getting rid of apartheid means there’s a chance for amazing things to happen,’ Nigel Kennedy said while introducing artists from the Palestine Strings at the Proms music festival two weeks ago.
And I wonder, what could lead the BBC to remove such a beautiful a humanist and universalist statement?” http://www.gilad.co.uk/writings/i-salute-the-bbc-not.html
The government claims there will be adequate regulation to prevent the harmful effects of fracking. Even if they are sincere about this, and even if it were technically possible to make fracking ‘safe’, it is likely that in 2015 any such regulation will be swept aside by a new trade treaty. I have explained this in a letter to the Dorset Echo, which surprise surprise has not been published. In this the Echo is merely copying the attitude of the bulk of national media including, regrettably, the BBC. My letter reads:
“Who will really be ruling us in 2015?
Most people realise that many of our laws are now made in order to conform to decisions made in Europe, and there is a lively debate on whether we should remain in the EU. What most people probably do not realise is that if negotiations between the USA and the European Commission conclude as expected, a huge amount of power will be transferred from national governments and the EU to multi national corporations.
The deal that is being negotiated is called the Transatlantic Trade and Investment Partnership (TTIP.) Negotiations are secret and that in itself is surely grounds for deep suspicion. The European Commission acknowledge that corporations will be able to sue sovereign governments if their profits are adversely affected by any regulation, and that national courts cannot interfere in such disputes. Instead tribunals made up of trade lawyers sitting in secret will make judgements that are not subject to appeal.
So if for example the UK or Europe has in place better environmental or public health regulation than the USA, these regulations would be overturned by TTIP.”
For more on this go to: http://www.monbiot.com/2013/11/04/a-global-ban-on-left-wing-politics/ , also published in the Guardian on 5 November under the title ‘This US Trade deal is a full frontal assault on Democracy’. By following up his links you will learn what I know about this.
Who will effectively win the 2015 general election:
- The Tories?
Actually 15 people. You may not know their names:
- Brigitte Stern (France)
- Charles Brower (US)
- Francisco Orrego Vicuña (Chile)
- Marc Lalonde (Canada)
- L. Yves Fortier (Canada)
- Gabrielle Kaufmann-Kohler (Switzerland)
- Albert Jan van den Berg (Netherlands)
- Karl-Heinz Böckstiegel (Germany)
- Bernard Hanotiau (Belgium)
- Jan Paulsson (France)
- Stephen M. Schwebel (US)
- Henri Alvarez (Canada)
- Emmanuel Gaillard (France)
- William W. Park (US)
- Daniel Price (US)
None of them British!
Who are they and why will they control us? I will give you a clue – TTIP.
For a long time I have wondered whether the House of Commons serves any useful function. Certainly senior civil servants have dubbed it the ‘monkey house’. Both government and opposition front benches are more answerable to corporate interests than the people who elected them, and the vast majority of MPs follow their instructions like sheep. This distressing trend will shortly be accelerated by a US – EU treaty due to be concluded at the end of 2014. This is known in Europe as the Transatlantic Trade and Investment Partnership (TTIP).
In common with many other international trade agreements are concerned with eliminating not just tariff barriers but also sensible national regulations which other countries party to the agreement have failed to pass. However the most worrying feature of recent trade agreements which is likely to be incorporated in TTIP is the ‘state – investor’ dispute resolution mechanism, whereby corporations can sue any government which passes regulations which limits their profits. This is not just theory as citizens of Canada and Australia know to their cost. Claims for compensation can run into billions. Many many proposals for much needed regulation have been dropped after threats from corporate lawyers.
Under this mechanism these disputes are not heard by courts in the defendant nations (which according to the European Commission are hopelessly biased) but instead by a very small cabal of arbitrators who are corporate lawyers (operating in secret) who will have worked for the corporations concerned (and therefore clearly not biassed!). These lawyers trump our supreme court.
You don’t believe me? Read George Monbiot’s article at http://www.monbiot.com/2013/11/04/a-global-ban-on-left-wing-politics/ , also published in the Guardian on 5 November under the title ‘This US Trade deal is a full frontal assault on Democracy’. He quotes a number of references all of which I have read, and which support his conclusions.
So what will the consequences for the UK if this deal goes through? Monbiot concludes,
“Investor-state rules could be used to smash any attempt to save the NHS from corporate control, to re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways, to leave fossil fuels in the ground. These rules shut down democratic alternatives. They outlaw left-wing politics…” Not just left wing politics surely. Is it left wing to want to defend your local community? Is it left wing to want to encourage local businesses? Is it left wing to expect your bank to be trustworthy? The treaty would threaten all these things. Monbiot goes on to say,
“This is why there has been no attempt by our government to inform us about this monstrous assault on democracy, let alone consult us. This is why the Conservatives who huff and puff about sovereignty are silent. Wake up people, we’re being shafted.”
This government claims that fracking in the UK will be much better regulated than in the US. If this is the case at present, the regulations will need to be rescinded when TTIP comes in.
I will be asking South Dorset MP, Richard Drax whether he will ask the Prime Minister to make a statement on TTIP before Christmas, and in particular what is his position on state – investor dispute resolution?