John Whittingdale, secretary for DCMS, thinks “It is important to look at the impact the BBC has on commercial rivals”. So even Tories want to rig the markets when it suits their interests. And since Murdoch has always been a much-sought-after ally at No.10, and his ambition has always been to replace the BBC by Fox in Britain, Whittingdale’s words carry considerable influence. Indeed he went further when he also asked Ofcom to carry out a ‘health check’ into the terms and conditions determining how the BBC treated independent producers. The key principle in all this is of course competitiveness, and it is absurd to apply this to a world-beating news organisation like the BBC as though it were on a par with makers of widgets or icecream.
Nevertheless it does open up useful new angles for industrial policy. If the BBC must not be allowed to harm or diminish the commercial prospects of its rivals in the market place, why should countries that mis-sell (i.e. palm off at a price) things that customers don’t want, rig Libor or the forex or gold markets to the disadvantage of unknowing customers, or swindle the nation out of billions in tax evasion/avoidance, be allowed to get ahead of those who are honest and play by the rules? Why should those companies which hugely damage the environment in defiance of international rules or knowingly take on workers on near-slavery terms and conditions be allowed to undercut more scrupulous employers? And if a Right-wing government can intervene to fix the market rules to get the results they want, why shouldn’t Left-wing governments also fix the market rules to achieve their aspirations of protecting the environment, improving labour standards, calling corporate power more effectively to account, etc?
After all, it was Adam Smith who in his The Wealth of Nations who chose the East India Company as a case study to show how monopoly capitalism undermines both liberty and justice, and how the management of shareholder-controlled corporations invariably ends in “negligence, profusion and malversation (corruption)”. Smith’s vision entailed firm controls on corporate power, and subsequent history, both then and now, has shown how absolutely right he was. If it is to contribute to economic progress, the corporation’s market power has to be limited to allow real choice and prevent suppliers being squeezed and consumers gouged. That suggests much more rigorous controls on over-dominant market share in several sectors. Its political power also needs to ne constrained if it is not to rig the rules of regulation so that it enjoys unjustified public subsidy or protection. Internal and external checks and balances must curb the tendency of executives to become corporate emperors. That was written in 1776, but it’s horribly relevant today, and just as Adam Smith insisted, the enforcement should be carried out, now as much as then.