All my life I’ve grown up with monetarist neo-liberal governments. Such governments have been marketed to the electorate as ‘the’ alternative to the failed ‘socialist’ system, meaning the Soviet system. The politicians have argued for privatisation of nationalised monopolies as private sector competition leads to greater efficiency and hence growth. such policies were implemented in teh 1980s, an era which saw mass advertising and increasingly innovative marketing .
Of course the Soviet system didn’t work, but neither does monetarism.It has recently made the media that Tesco, a dominant UK supermarket chain, is experiencing lower profits and decreasing market share, this is a problem as the share price is falling, as investors will get less return on their investment. I would argue that this ‘failure’ is a failure of the monetarist system that demands successful companies to have continuous growth, which isn’t really possible.
Tesco was a successful company and because it provided a service which its customers wanted. The idea of having a large shop where you could buy almost all your weekly groceries, at low prices conveniently in one shop, was a fantastic enterprise. The company achieved this by being big and having an efficient supply chain.
Having achieved an efficient supply chain and market dominance, there wasn’t much it could do in real growth, but continue to be a profitable business. So what did it do to maintain growth? It diversified by expanding from a grocery business into other retail areas, such as clothing, hardware, electronics and CDs. This expansion allowed the business to grow, this was coupled with marketing strategies, designed to increase the amount of money customers spent in the stores. This continued to the point where prices became distorted and active manipulation of it’s customers shopping habits. For example by lowering the quality of it’s produce to increase profits. What happened was a business no longer making a profit by providing it’s customers with a service, but by exploiting it’s customers.
It now faces competition from the ‘budget’ supermarkets, which have a simple efficient model that undercuts the old dominant supermarkets on price . It’s market share is also decreased by customers seeking better service or higher quality items from alternative shops.
This is a failure of monetarism, as in the continued ‘demand’ for growth of the business has mostly come about through marketing strategies. Marketing has become so clever, that it can sell inferior products to the masses, marketing the lifestyle of consumption these inferior products. As a people we have become used to advertising everywhere, it’s almost seen as too burdensome to resist. A failure as once a business maximises the service it provides to it’s customers it can no longer grow, yet the monetarist system demands further growth, where no real growth on such a scale is possible.
This system has become so dominant in the British political system, that Labour, the formerly socialist party, had to adopt monetarist policy in order appeal to the sections of the electorate it needed to get elected (Blairism). What this left Britain with was a representative democracy that represented the marketing solutions to appeal to a minority of the electorate. The politics of the country is no longer about debate about the best policy, but power is granted to the best players of the PR game, as exemplified in TV shows like ‘In the Thick of it’
The traditional big three parties are no longer liked or respected by the majority of the population, but their public relations and marketing skills are such to maintain this power base. So, in thrall to this political system is the political class, that it has become corrupted by it. Political parties are lobbied by big businesses, who control policy to the extent that genuine market competition is suppressed. Paradoxically the very argument that brought about the system in the first place.