There is no question that this will be a difficult winter for people on low incomes. The list of cost pressures driving up the cost of living are well rehearsed; above all, the cost of heating and electricity are rising fast.
It is therefore commendable that a coalition of organisations are calling for more support for people who will be in fuel poverty over the winter. Among other asks they want the Scottish Government to reintroduce the Home Heating Support Fund. People are genuinely struggling.
But this is becoming a familiar picture; not everyone in the economy is doing badly. In fact for those who own the economy this is a boom time. In the last quarter the profits of the S&P 500 companies (the top performing 500 corporations in US) are on pace to rise 50 per cent year over year.
In the UK this year, companies made £6 billion more profit in the second quarter than they did in the first. The western world hasn't seen profits rise like this since the global economy was rebounding from the pandemic. This is a golden era for the very wealthy.
In that context, financial support for households becomes no less important but looks slightly different. As a thought experiment, if the Scottish Government raised income tax to pay for a generous home heating fund, that money would effectively be transferred from household budgets through public budgets into corporate profits.
A heating fund would expand demand (people who couldn't afford to heat their house would now be able to do so) and expanded demand would increase corporate profits at the expense of household budgets.
This demonstrates the problem we now find ourselves dealing with; the global economy has become so corrupted and so rigged in favour of the investment classes that almost any action taken to support households transfers wealth from people who don't have it to people who do.
This is the Catch 22 we are caught in which was most evident during the pandemic. This is still not properly understood but the pandemic was probably the biggest single transfer of wealth from the many to the few in recent history, surpassing the bailout of the banks in 2008 (which is a close second).
When we fund social financial duress using public money without reforming the economic system which created the duress, it is little more than using public money to pay an extortion racket, further and further undermining public budgets just to keep household quality of life the same.
There is no space here to do a full analysis of how this happens in detail, but Common Weal will soon publish a paper which shows the extent of the problem. It shows something strange; wages appear to have nearly kept up with inflation in recent years and yet household incomes are falling as a proportion of national wealth.
There are a number of reasons for this but we believe a primary one is the shift of wealth away from income altogether and onto assets. While corporate profits are up just now, the real transfer of wealth has not been in income shifts but in asset appreciation – we do not tax the things that make the rich rich, like rising share portfolios (which we only tax if some are sold).
In the short term this leaves the Scottish Government with little it can do other than let people freeze or offer some financial to help. But that does not mean the Scottish Government is not part of the problem. It very much is. It is lobbying to cut tax on the most profitable part of the global economy, oil and gas. And it is privatising Scottish assets into the pockets of the global investor class on a daily basis.
Its latest support for rigging the economy against the Scottish public is its full-throated defence of data centres. Politicians want to give the wealthy everything they want and then find it forces them to bail the public out, severely undermining public budgets and harming public services. This doom loop is a fairly neat encapsulation of why European democracy is in crisis.