Corporate malfeasance

May 10, 2012

Tony Blair is a highly pragmatic politician who reacts to the world as he finds it ("Tony Blair: up the 'revolution'", 3 May). Lying behind the changes that he portrays as inevitable are some unpalatable truths about his own and others' lack of global leadership.

The world's corporations and wealthiest individuals have been allowed to deny nation states access to their wealth on a scale that has made billionaire Warren Buffett queasy. This is what the world of offshore tax-havenry, transfer pricing and non-dom status is all about, as Nicholas Shaxson shows in his brave book, Treasure Islands: Tax Havens and the Men who Stole the World (which should be mandatory reading for well-informed citizens). Even George Osborne has confessed himself shocked: he should have read Shaxson's book.

With the public sector increasingly starved of revenue all over the world, the same corporations that withhold their taxes then step forward to "solve" the problem of "underperforming" public services (public-private partnerships have been the soft entry point for this). But the logic is chilling. The disappearance of public services means a lack of accountability. If you experience problems with your healthcare, try fighting a big corporation protected by the sinister, smothering blanket of commercial confidentiality and the best lawyers in the land.

In higher education, the public-private mix has gone furthest in the US. As research by Andrew McGettigan and Howard Hotson shows, a tiny fraction of elite universities gobble up the resources at the expense of the rest. World-famous private institutions such as Harvard and Stanford universities are profligates when their achievements are measured in relation to their cash mountains. Meanwhile, the rest of the US system is mediocre - and can be diabolical.

By contrast, the UK's publicly funded system, which Blair is happy to see confined to the dustbin of history, has been consistently among the world's top performers in terms of attracting foreign students (as Blair himself acknowledges), and also in research productivity per pound spent.

David Cameron and Osborne continue to frustrate attempts by other world leaders to devise practical means to rein in unregulated and untaxed global corporate capitalism. Their myopic pragmatism can only lead to a continuing downward spiral in the democratic accountability and quality of our vital public services, including our (currently) world-beating higher education sector.

Simon Szreter, Professor of history and public policy, University of Cambridge

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