19 May 2012


Resilience is a word youwill have come across a lot if you have had any dealing with the Transition movement. Defined by my dictionary as being able to recover easily following a shock, it’s something which I think we could all agree is a positive characteristic for any person, ecosystem or economy to possess. But it’s one which as a society we seem to have largely left behind.

In the context of the European economy, let alone that of the world as a whole, Greece is a pretty insignificant player. How then is it that we have managed to build an economic system which is threatened to its core by one small country which has made aspectacular mess of its finances. Where is the resilience in that? Our banking systems are so closely connected and dominated by the giant global banks which everyone was told were the way forward, that when a problem appears in onecountry, it cascades all around the world.

It isn’t just the financial system though which lacks resilience. The pursuit of efficiency and maximisation of profit demands that you cut your supply chain to a minimum and operate on a just-in-time basis. So a few days on strike by oil tanker drivers for instances would bring the whole of the supermarket system to a standstill and leave us running short of food. While the loss of one key component supplier can bring an entire production line grinding to a halt.

I have written about tipping points before in this column (October 2011) and it was this lack ofresilience in the financial world which made it vulnerable to passing such apoint. Back then I was sure that the financial world had passed its tipping point and things would never be the same again – what has happened since makes that even clearer. I wasn’t so sure about society, but that looks to be the case for Greece and as the rest of Europe and the developed world faces up to a future of economic contraction, budgetary problems and an entire generationshut out of the workforce the chances people will just sit back and let ithappen to them shrink day by day. Thank goodness.

Our problem is that so far, our governments are not on the same page as many of us. They still cling to the hope that the growth machine can be restarted if only they throw even more money at the corporate sector. Cutting taxes to attract business to yourcountry is a pointless exercise which does not generate any more growth it justmoves it from one country to another. What is really needed is a much morerigorous approach to corporate taxation and a refusal by major nations to deal with companies avoiding tax by using tax havens and indeed to cutting relationswith nations which offer tax haven status to companies.

So let’s see Luxembourg thrown out of the EU unless it raises its corporate tax rate to a more sensiblelevel (BBC Panorama story). Let’s tackle the tax havens in our own back yard such as the Channel Islands, the Isle of Man and London for that matter - see the Christian Aid work on tax havens. Their prosperity is being built on denying legitimate taxrevenues to other EU countries; and that means denying public services to thepeople of those countries. Tackling these places might mean we can no longerget our music and books so cheaply, but is it really fair that Amazon and Playamongst others can dodge paying corporate taxes on their substantial turnoverand profits while high street retailers go bust because they cannot compete?

We have two choices.Increase taxes on a corporate sector which is paying historically low levels ofcorporate tax; or carry on cutting public services. I know which I prefer.

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