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Affordable Essentials – A Fairer Economy in the first place

Posted on April 7, 2025 in Economics, Philosophy and Rights, Politics by Peter Ellis

990 words / Reading time 5 mins

 

We all require affordable essentials. People rely on them for their most basic well-being. Yet, the economy does not deliver affordability as a principal purpose. It also fails to release sufficient wealth, to fund the welfare state. The State let’s down those least able to purchase unaffordable goods and services when it cuts welfare. And the global poor, when it reduces overseas aid.

Redistribution is failing the general population, through the double-whammy of unaffordable pricing and insufficient national income applied to meet societal need. Including income support to help those struggling to afford essentials. Populists widen the fissures this creates, to fracture society. But there is a solution.

Markets are merely the train tracks along which the economy travels. It is the ethics and purpose of those supplying markets which determines outcomes. And the problem with affordability and the allocation of national wealth to meet societal need, is that those interested in growing personal wealth through shareholder ownership enjoy a monopoly over the market economy. Prices are higher to increase profit and tax minimised to increase the wealth of shareholders. It is the distributive economy which causes unaffordability and needs to be reshaped.

For too long we have blamed ‘markets’ or been in thrall to them. When we need to take possession of them for the public good, in ways that will help people in their daily lives and wider society.

 

BUT HOW?

Energy – Simple builds affordable

The nationalised company, National Energy is significant. But for most people unable to heat their homes, it is white, background noise. What people need is consumer choice. To be able to buy their supply from a distribution company, purposed to offer tariffs at the cheapest sustainable price. Earning sufficient profit, not maximising it. Operating ethically, including by helping those on pre-payment meters. Owned not to promote shareholder self-interest, but through a stewardship framework, for consumer and societal best-interest. And competing in the open market.

Meg Hillier, the Chair of the Treasury select committee, points to the loss of good faith and “upheaval” by acquiring assets through nationalisation. Whereas Jeremy Corbyn argues for public ownership through nationalisation. Upheaval has never deterred private equity investment. But even if instigated, nationalisation lacks permanence and purpose. Governments change, privatisation follows nationalisation, and there are many examples of nationalised companies failing to change outcomes. Nat West is just one recent example.

However, the economy can be societised, by channelling capital towards an enterprise economy purposed to deliver affordability. Supported by consumers choosing to purchase from enterprises they believe in and  serving their best-interests. This capital exists, a mixture of commercial, government sponsoring, pension fund, institutional, philanthropic and retail investment justified by stable and secure returns.

 

Water – Consumers are investors too

Water bills are rising by an average of £123, a 26% increase to fund £104 billion of infrastructure investment. No private investor would invest like this, without asking the question, “what return do l get on my investment”? So, where does this consumer investment stand in the companies’ balance sheets; it doesn’t!  What rights to affordable water in the future do consumers receive for this investment; they don’t! Nationalisation may be a blunt tool to use to achieve ethical standards in the water industry. But a societal company purposed to operate ethically and provide water at the cheapest sustainable price achieves long-term affordability and ethical working practices.

 

Housing targets for new build helps guide policy towards increasing supply. But of itself, lacks purpose. Attached to the provision of social housing it has purpose. But is the purpose to create more homes, or to create more affordable homes? If it is to build affordability into the sector, then government should look to incentivise new forms of affordable, rental tenure. Not just rely on the imprecise lever of supply.

 

Insurance involves a collective, pooling of risk, with inherent characteristics suited to purpose-driven, not shareholder interest.

 

If banking services are inaccessible for those unable to obtain bank accounts, then the government could offer a societal Mpesa framework, where cash is transferable through a payments system linked to mobile telephone numbers.

 

The pathway to a fairer economy and affordable essentials – Political and Economic Rights

The private sector achieves much and must be embraced. It will remain the primary determinant of national wealth creation and outcome. Society recognises this already, bearing the cost pf public debt, subsidising the private sector and freeing shareholders from wider societal responsibilities. But, through its monopoly, shareholder interest restricts policy, the nation’s share of its national wealth and the mechanisms able to build an inherently fairer economy. Policies made more difficult in a lower growth and uncertain economic environment.

Neo-liberalists seek ‘freer’ markets to further their personal self-interest, enabling those with existing wealth, often authoritarians, to exploit markets, through unfettered power. Wider society, its general population and consumers require markets to be liberated, so that they serve their personal and our collective best-interest as a primary purpose too. Democratising the economy.

Governments, including the current one, can act with immediacy to build an economy providing affordable essentials. Organically developed and relatively small-scale initiatives can achieve enormous gains for society at large. But it requires Government to understand its responsibility and power. Responsibility, to consumers and the general population, particularly those who are poorer and marginalised. Its power, that we have the collective capital, public, private, institutional and retail, to fund the development of enterprises making essentials affordable.

The provision of affordable essentials is of paramount significance, to meet need and build a fairer society, but also because the supply of essentials we all use, is most suited to a purpose-driven sector. Patronage, including political patronage, is important to redirect the redistributive economy in favour of those in need and to benefit the general population. But what is crucial, is the very thing that has been denied them, primary economic and political rights connecting them to a fairer economy in the first place.

 

Illustration by https://www.bexgilbert.com/