“An Idiot’s Guide to the 10 Biggest Economic Mysteries (though there are more)”

 a con, Ada Colau, crisis, economics, Mariano Rajoy, Spain, Spanish  2 Responses »
Apr 272013
 

I’ve loosely translated this decalogue from the Spanish original below, which was tweeted originally here and came my way via Ada Colau.  The original text is by a clever soul called Pepe Quiralte.

And as you can see, in the top right-hand corner of the image we have a picture of the Spanish President, Mariano Rajoy, doing what so many Western leaders are doing best right now: destroying their peoples’ livelihoods, dignities and hopes for the future.

  1. There’s no work for anyone, but we are supposed to work until 70 and at weekends.
  2. We combat tax fraud by offering an amnesty to those who commit tax fraud.
  3. Consumer spending collapses?  We cut salaries and increase taxes.
  4. We had 4 million unemployed so we passed labour legislation to make EREs* [mass layoffs] and redundancies easier to implement.  Now we have more than 6 million unemployed.
  5. The whole construction industry goes belly up and so we cut research and development by 50 percent.
  6. We increase VAT and income tax but SICAVs** remain intact.  Capital escapes at unheard-of levels.
  7. We cut health and education, but if you talk of cutting official cars or expenses they accuse you of demagoguery.
  8. We make thousands of scientists unemployed but battle to get EuroVegas***.
  9. The problem is the deficit and we acquire a debt of €100,000 million to save the banks so that they can continue evicting us.
  10. The regions ask the state to save them, which asks the EU to save it and we allow ourselves to become indebted in order to pay the debt.

As a final thought, I assume when it says “An idiot’s guide to the 10 biggest economic mysteries (though there are more)”, it means more mysteries and not more idiots.

But perhaps, on second thoughts, that’s more idiots as well?

____________________

Footnotes:

* ERE as per Wikipedia en español (robot English translation here).

** SICAV as per Wikipedia.

*** EuroVegas as per the Guardian newspaper.

10 Economic Mysteries

On loving people who are different from you

 disabled, diversity, economics, economy, love, respect, unclassifiable  No Responses »
Feb 212013
 

We’re told we must love our enemies.  Precious few people seem to practise this art, though.

More common is the process whereby we make of those who are different from us our enemies.  In fact, it seems so prevalent these days we really need a new verb: to enemise.

My nuclear family – the family I have brought up – is full of different viewpoints.  Some I approve of, some I disapprove of.  But neither leads me to value the individuals in question more or less in comparison.  With people I am bound to love, I find it easy to love those who are different from me.  And I feel, I think, much richer for the circumstance.

Why, then, is difference such a trigger for hate?  If in our own personal environments we can appreciate its wisdoms, why is it so easy – in, for example, political activity – for us to forget them?

I could’ve titled this post “On loving Tories”, but I would’ve been wrong.  I can find some of the opinions of some Tory voters in people I value and have around me.  I pull them up on their opinions, of course, whenever I see fit – but they are unlikely to change theirs even as I am unlikely to change mine.  This doesn’t stop me wanting to be around them.  Yet in politics, it seems it should.  And anyone who doesn’t feel a burning desire to enemise difference is immediately either considered a suspicious soul or, simply, unworthy of acknowledgement.

To be honest, this enemising difference is far more unpleasant than just devising reasons not to communicate.  Of course, the higher up the greasy pole you go, the more unpleasant – and perhaps the more unresolvable – the differences might be.  At such levels, it may be true that war is the only acceptable posture.  But lower down the scale, towards those levels of humble voters and maybe local and community representatives, where personal relationships count, where neighbourhood relationships mingle, where what you say in public has an impact on very private interactions … well, here a different kind of communication is surely possible.

Here, surely, we do not need to unnecessarily enemise the opposition.

Here, surely, we can see that the power of difference and its remarkable dissonance can be a matter of pleasurable exchange and productive growth.

Here, surely, instead of a signpost to societal disintegration, difference can allow me to love and work with you more.

There are many kinds of differences, of course – just as there many kinds of freedoms.  I wonder if anyone has defined the former as competently as they have the latter.  It may be the case that some differences are incompatible with others: a difference of economic opinion, for example, can lead to an oppression of disabled difference.  We might wish to support the general principle of respecting all difference, even as the latter difference of the disabled loses out to the widespread – and taken-for-granted – concentration on violently imposing one or other of the former economic.

Respect is, clearly, a terribly important concept to this issue.  And it comes into play when we occupy ourselves with differences.

I think we need more of it for the sake of loving difference.  I’m just not sure how to engender it – either consistently where it already exists or newly where it does not.

Anyone any ideas?

How to deal with the end of life as we know it – take out a magazine subscription?

 dependency, economic abuse, economic blackmail, economics, economists, economy, econopocalypse, in a hole, marketing-speak, publishing  No Responses »
Jan 022013
 

This came my way a few minutes ago:

RT @_Lilykins The irony of Osborne claiming Labour is the party of borrowing, when he’s borrowing at record levels.

As a result, I tweeted the following:

Much better to be the party of borrowing than the party of daylight robbery. At least when you borrow, you aim to give s’thing back.

And then, quite felicitously and via Rick’s always perspicacious eye, came this story from Money Week titled portentously “The End of Britain”.  Apparently we’re stuffed – and not just Christmas-turkey stuffed either.  Roundly, totally and utterly stuffed. Stuffed till the end of time.

The end, in fact, of life as we know it.

Time to buy up supermarkets of tinned foods various?  Time to bunker down in outrageously expensive survivalist holes?

This is clearly Douglas Adams territory.

Clearly is, my friends.

For the solution that Money Week provides for its horrified readers to this veritable apocalypse of barely conceivable and almost indescribable proportions is none other than … wait for it … [innocent drum roll multiplied a thousandfold] … a magazine subscription to its content!

Yay!  Salvation was never so cheap!

A perfect end to a perfectly constructed universe.

The consumer and welfare societies, brought down by their two-headed dependency mindsets.  And yet, now, so dramatically saved at one easy stroke by a simple subscription to a possessor of secret truths like these.

Now where have I heard that before?

<sighs>

Will we never learn?

*

As to whether the oracle, above-mentioned, is right or wrong, I have no professional framework which allows me to provide you with an answer either way.  But what does seem clear is that if what they say ends up taking place, a magazine subscription will be a woeful defence against the societal trauma the publication appears to be predicting.

And if, indeed, as some have suggested, the content is the wizard wheeze of some overblown marketing department, surely it’s time that Money Week did a little bit of fruitful navel-gazing – and analysed its behaviours in terms of the apocalypse it apparently expects.  Printing stuff like this with the mere intention and objective of increasing the take-up of membership subs is hardly the most gratifying spectacle we might witness.

And whether one would choose to be a harbinger of doom or not, there are better ways of making one’s way in the world than this.

How growth is becoming an economic cancer

 a con, economic abuse, economic democracy, economics, economy, econopocalypse  No Responses »
Oct 312012
 

I suggested a few months ago that the knowledge society – you remember that wonderful future of intelligent work and fulfilling leisure they once promised us? – had been soundly hijacked by the social web.  I still think the thesis is relevant and worthy of further investigation.  And it’s relevant to today’s post too.

This article from the Independent lays it out all too clearly:

“On the UK’s current path, come 2020, household incomes across the bottom half of the working age population look likely to be lower than they are today,” it says. “A typical low income household in 2020 is set to have an income 15 per cent lower than an equivalent household in 2008, a return to income levels not seen since 1993.”

It also describes how middle-income jobs in services and manufacturing will vanish as further robotisation and the introduction of new technologies will wipe out such employment over the next decade.

Only last year, Left Foot Forward was informing us thus:

In 1977, workers in the bottom half of the earnings distribution received £16 of every £100 of value generated in the economy; by 2010, their share had fallen to just £12. By contrast, the share of GDP flowing to the top 10% of earners increased from £12 per £100 of GDP to £14.

[...]

If the full extent of bonus payments are included in the calculations the share of GDP going to the top 10% of earners increases from £14 per £100 to £16, while the share of the bottom half reduces from £12 to just £10.

Meanwhile, the Public and Commercial Services Union points out that:

While the value of workers’ wages in the UK has fallen, corporate profits have increased as a share of GDP from 13% in the mid-70s to 21% today. In this same period, government has massively cut corporation tax and income tax for the highest earners, so that now the poorest fifth of people pay more in tax, as a proportion of income, than the richest fifth.

Not to mention wholly legal tax avoidance which means large corporations get to use British infrastructures without paying a fiscal sausage to the state – or, indeed, the rest of us taxpayers.

The truth of the matter, of course, is that whilst innovation drove down prices, our wage-slave jobbery was kind of OK: we could put up with the grind in exchange for the ever cheaper diversion – something we did, in fact, end up doing.

That socioeconomic contract does, however, seem – in the light of the above figures – to be breaking up; and – perhaps – breaking down.  No longer can we rely on corporations to share out their ill-gotten gains.  No one at corporate level seems to care that they may be accused of greed.  No one, anywhere, wants to take ownership for the misery more and more middle-income families are going to suffer from over the next decade.

But hell!  We should be talking about the already poor.

Never was self-interest more self-evident than in latterday politics.

In reality, growth – that Holy Grail of modern political thought – is becoming an economic cancer.  Growth used to involve a society sharing out its benefits and progress for mostly everyone.  Now it’s becoming a helter-skelter dash to destroy an opposition at the expense of almost everyone else.  No one seems to care any more that future consumers are being slaughtered at birth.

All that the big companies and transnationals of this world can now seem to think of is how best to fleece the states that still care to pursue them.

Or, alternatively, re-establish their realities in other, more subservient, places.

A total disconnect from the communities that created them.

A carbuncle on the face of a planet which once loved its inhabitants but now only loves its inhabitants’ tools.

We need a new economics – and we need it fast.

Anyone out there care enough to invent it?

I’m no economist, but …

 Coalition, Coalition capitalism, Coalition economics, dumbing down, economic blackmail, economic democracy, economics, economists, economy, econopocalypse, Ed Miliband, Labour, process, unclassifiable  3 Responses »
Sep 142012
 

This news, clearly part of a broadening government attack on workforces’ rights, is just the start, isn’t it?  Beginning to move the goalposts, so that in law unfair dismissal is no longer unfair, is only part of a wider process designed to shift the blame for economic injustice and inefficient process from the so-called wealth creators to the workers themselves.

In truth, if these wealth creators were really so very good at their jobs, they wouldn’t resort to the simplistic notions of firing workers to get out of economic holes they’d gone and dug for themselves. After all, the easiest thing when parachuting into a company with problems is to order a three-month review and fire ten percent of the people.  Far more difficult, far more value-adding, far more deserving of the high salaries these supposedly clever people are able to command, is to analyse all the processes which operate in the company and rework them little by little so everyone employed has a value-adding role.

It’s much easier, however, to shift the blame for inefficient economies onto surplus workers who are surplus through no fault of their own.  And since it’s much easier, government and business lobbyists both look for intellectual cloaks to justify their poor and shabby instincts.

We, as workers, deserve far better strategies.  They, as supposed wealth creators, have none.

For in reality, in any case, these wealth creators seem of late mainly to be putting their wealth into non-manufacturing and low-employment sectors – where the financial returns for their own private money piles are going to be much higher.  As an example, I remember reading a short while ago about how major car companies now make more money out of financial services and investments than they do out of making cars.  I wonder how much employment such decisions now generate.  I wonder how many workers, as a result, aren’t even contracted in the first place.

The worst of it all, of course, is that in an economy where consumer confidence is low – and demand is just about as shaky as it could get – we’re getting business leaders looking to make their shrinking markets less unprofitable by cheapening the cost of hiring and firing labour.  So where is the entrepreneurial ambition in that?  What’s more, where is the economic common sense?  You’re hardly going to get demand up on its feet if you make workforces, consumers and families in general feel even less confident about their futures.  And yet cheapening the cost of hiring and firing labour is exactly what that will achieve.

One final thought.  The Labour Party is investing much of its energy in the idea of predistribution.  One element of this concept, if I have rightly understood it, is that we should believe in and aim for high-quality and high-skill economies.  My experience of working in a large banking corporation would, however, indicate this is not the way forwards that at the very least big business is looking for.  In giant organisations, they always look to dumb down competencies, for several reasons:

  1. Reduce the impact of staff turnover.
  2. Reduce the cost of retraining.
  3. Reduce the cost of salaries.
  4. Reduce the danger of intellectual property loss.

These are all key elements in the decision to choose the dumbing-down of processes over the training-up of staff.  In reality, high-quality and high-skill economies can only operate in those societies where there are extremely high levels of trust and stability between workers and management.  This is definitely not the case in Coalition Britain.

And if Ed Miliband’s right-wingers continue to encourage him to sit on his hands, as they probably will do, it’s hardly going to improve under any future Labour government.

Politicians mention immigration when they don’t want to mention capital

 a con, capitalism, economic democracy, economics, economy, econopocalypse, Ed Miliband, immigration, perishable goods  1 Response »
Jun 222012
 

Ed Miliband speaks on the subject of immigration.  You can find his speech here in full at politics.co.uk.

Sadly, it seems that Miliband is falling once more into the trap of defining a mere indicator of our ills – a political litmus test if you like – as being the very cause of all our troubles.

In reality, immigration isn’t the issue at all: the issue is that politicians of his stratospheric level cannot decide, in the midst of economic doom, whether they believe in expanding or steady-state economies.  If, in their heart of hearts, they really believed in the former – that never-ending growth was the solution to our problems – then immigration would never be seen as anything but a positive tool to resolve our problems of low birthrate, skills gaps, a population which is getting older and so forth.

Unfortunately, it would seem that – in their heart of hearts – they can’t quite summon up the intellectual courage to admit either to themselves or their woefully kept-in-the-dark voters that an expanding economy, with all the rapacious economic activity which goes along with it, is simply no longer feasible in a world of clearly finite resources.

Yet they continue to act in other areas of policy-making as if it – that is to say, an open-ended and expansionary society – truly were an option sensible people could continue to promote.

Of course, Mr Miliband, the problem isn’t that immigration is putting an impossible strain on our economies.  The problem is that for the past fifty years your political class has created and sustained policy structures which support the idea of expanding economies and all their implications – and then spent the last four years in utter denial when the gravy train has completely gone off the rails.

Sort out what you want to make of our economies before you fiddle around with irrelevancies such as nationalities and borders.  For what’s absolutely clear is that if you want to talk of borders, far more important than influxes of people is the free and destructive movement of capital at the whim of global investors.

When politicians mention immigration, it’s generally because they don’t want to mention something else.

And that something else is the cruelties of an all-imposing capital: a capital which makes poor workforces servants and sufferers of cleverly eternal money – instead of clever money servants of the perishable goods that are ordinary people.

Good at Leveson, bad at economics – is this the reason we’re in such a hole?

 economic democracy, economics, econopocalypse, euro, eurozone, in a hole, Leveson inquiry  No Responses »
Jun 152012
 

Paul is unhappy with Peter Watt’s top-down assumptions.  He (Paul) argues that:

Someone who acknowledges that he is in the “Westminster village: (he says ‘out there’, not ‘out here’) “suspects” the proletariat are not interested in the Leveson Inquiry, and therefore suggests that those in the Westminster village should stop covering it.

As someone most definitely outside the Westminster village but also interested in Leveson, I find pretty damn patronising Watt’s insinuation that I’m not really up to such intellectual demands.  So, I more-than-suspect, would plenty of my friends, who may not follow every minute of Leveson, but would object pretty strongly to the idea that the questions who controls the papers, and in whose interests, is nothing for them to worry their pretty, skint little heads about.

I can see why Paul took it the way he did.  I took it differently, though.  Reading less closely than he did, Leveson for me is an example of how a nit-picking democracy is good at navel-gazing but – when set alongside the euro crisis for example – very poor at the big issues in times of crisis.  And with Leveson and cases like those of the Murdochs more generally, our politicians seem to getting better at the former – but worse at the latter.  The very thing which is good about Leveson – slowly teasing out the truth month by month; that drip-feed journalism which takes its time – is what is leading our leaders and their institutional structures down a route of no-return in relation to the big stuff such as euro economics.

Of course, you may argue if more people had been more involved in running our institutions from the start, we wouldn’t be in the situation we find ourselves.  My instinct would be to agree – problem is, right now, do we have the right to be that ambitious?  Or, indeed, the practical and realistic opportunity?

Does a democratic morality now have a place in economic theory?

 a con, economic democracy, economics, economists, economy, econopocalypse, experts  No Responses »
Jun 072012
 

Back in December, I wrote an unhappy piece on the subject of blaming professionals – in particular, lawyers, bankers and economists – for a whole host of miseries that are currently afflicting us.  I concluded thus:

Though there is, of course, an alternative to making diabolic the entire financial services sector: hate the lawyer as suggested; envy the banker just in case; and commiserate with the poor economist for the impossible task he or she has always faced.

Suzanne Moore, writing yesterday in the Guardian, concludes with no such kindness.  Instead, she says (the bold is mine):

Do not complain either when economists and government ministers tell you that what you thought had a social purpose must now be profit-driven. Money must be made from schools, hospitals and looking after the elderly. The privatisation of care is one of the only growth industries. This is what you get from this dictatorship of economists, and it should be overthrown. It is wrong and keeps being wrong. The choices to be made now are moral, not economic ones. Only an idiot or an economist would think otherwise.

Which brings me to wonder if we couldn’t conflate the two concepts: no, not idiocy and economics; that – as an idea – is surely the laziness of Moore’s (and, on occasions, my) writing.  No, what I’m really wondering is whether there isn’t a place in economic theory for the matter of morality – in particular a democratic morality.

At the very least there currently exists an amorality of considerable proportions.  (Some of us on the left of the political spectrum would even see it as immorality – though, for the sake of today’s discussion, let’s settle on the former as a less inflammatory and distracting starting point.)

What’s the argument I have in mind?  Nobody these days would expect of a “proper” science a total disconnect from moral issues.  If then, as Moore alleges in her piece, and even as she charges it fails, economics aspires to such a state of scientific grace, shouldn’t it also be required to take onboard issues relating to societal right and wrong?

The problem would currently seem to be that in its socially scientific ingenuity, economics manages to get away with getting things amazingly inexact.  Like the weather forecasts we expect not to believe, economists have the grand virtue of working with complex systems with many variables to justify their getting predictions off-beam.  This may, in fact, be what’s at the heart of Moore’s little rant.  Yet we wouldn’t ask the Met Office to stop its investigations into such complexities; why, then, does she want economists to step off the accelerator pedal?

Maybe the reason is precisely that: we have learned – and have the capacity as ordinary citizens in the street – to ignore the implications of an inexact weather forecast whenever we want.  But that level of democratic disengagement doesn’t seem to exist in the application of economic theory.

Today, for example, I read that according to the rating agency Fitch, which presumably employs a number of economists to validate its periodic pronouncements, the Spanish banking system won’t need €40 billion to sort it out as originally believed but, instead, between €60 to a €100 billion (in Spanish) (Google robot English translation here).  Just imagine if we ran any other expensively rewarded profession in a similar way: being paid to get things wrong by such enormous factors.

Meanwhile – to a non-expert – another question arises: how did the banks themselves get it so wrong?

After all, money’s their business surely.  More than any of us, they should have known how far to go in getting into debt and marshalling the consequential risk.

So did an absence of the morality Moore requests of society play a part in the disasters they are now bringing to the table?  Would things have turned out differently if a democratic morality had had a place in economic theory?  And how long can economists continue to exert their profession without factoring in the social pain their experiments are apparently leading to?

Of course, Suzanne Moore is unfair in her criticism of economists – just as I was unfair back in December when I foulmouthed not only the latter but also bankers and lawyers.  Those of us who find ourselves at the mercy of forces beyond our ken are bound, at some time, to make the mistake of shooting the messengers.

Or mistaking the messengers for the actors themselves.

But whilst economists refuse to integrate into their assumptions their effects on finite human lives, perhaps – after all – it’s not such a massive mistake.

Not because they are idiots, though, as Moore would have us believe; rather, because they are just too undemocratically amoral for them to acquire the right to be the scientists they wish to emulate.

Economics simply hasn’t caught up with the moral progresses and societal engagements of the hard sciences.

It’s time it did.

Why we’re in the shit we’re in

 a con, Coalition capitalism, David Cameron, economic abuse, economics, economists, economy, econopocalypse, elitism, politicians, politics  No Responses »
May 202012
 

Apologies for the title.  But reading this article from the Wall Street Journal this morning reveals to me with an evermore greater clarity exactly why we’re in the shit we’re in.  Some choice thoughts from this excellent piece on the subject of what economists really (don’t) know:

As Greece girds for elections next month that could lead to its exit from the euro zone, economists are acknowledging an unsettling reality: No one knows what the bill will be.

[...]

The Institute of International Finance, a global association of banks that has represented private lenders to Greece in negotiations with the country, took a broader view. In a February report that leaked in March, it put the total cost at a minimum of €1 trillion, including over €700 billion that could be needed to prop up other troubled European economies, including Portugal and Italy.

[...]

“The IIF went for a trillion because, why not?” says Gary Jenkins, founder of Swordfish Research, a U.K. bond-analysis firm. “It’s a great figure, sounds fantastic.” However, Mr. Jenkins adds, “I don’t think anyone can work out a precise figure. The uncertainties are just absolutely huge.”

So whilst Mr Cameron’s government berates us for not putting our household affairs in order, his chummy friends at stratospheric economic levels go for a back-of-the-envelope figure when pricing the cost of things – because it “sounds fantastic”.  And in the meantime, such back-of-the-envelope merchants continue to describe the less-advantaged economic powerhouses of the West as PIGS.

Fuck youse.

*

Question is, who are those “youse”?

Economists will argue that as theoreticians and thinkers, they simply lay before those who take the decisions the options they’ve duly imagined.

On the other hand, those who participated in developing the atom bomb surely had qualms of conscience around the matter – even if they took no part in the final decision to drop it.

So do we blame the economists for creating a self-consuming Darwinian evil of winner takes all?  Or do we blame the politicians for eagerly attaching themselves to such theories when the intellectual times we live in could’ve delivered so much more?

Or can we simply rejoice – in a cutting-one’s-nose-off kind of way – that even the experts must now experience the directionless impotence the rest of us are living from day-to-bloody-day?

“Austerity” is a euphemism; a “collateral damage” for our times

 a con, atomised society, economic blackmail, economic chemotherapy, economics, economists, economy, econopocalypse, people, perishable goods, politicians, politics, professional politicos  No Responses »
May 072012
 

I just tweeted the following thought:

“Austerity” is a neat euphemism – just like “collateral damage”: those who use it refuse to take ownership for the pain they cause.

A definition of “collateral damage” then?  This is what Wikipedia currently says on the matter:

Collateral damage occurs when something incidental to the intended target is damaged during an attack. When used in conjunction with military operations it can refer to the incidental destruction of civilian property and non-combatant casualties.[1][2]

Whilst some time back we might have thought the intended target of austerity strategies everywhere was supposedly lazy and complacent economic processes – foolish lending by lenders on the one hand, excessive borrowing by borrowers on the other – it would now appear that the real object of austerity measures has become the people themselves.  Essentially because those in power now care to shift the blame for their manifest stupidities onto those who occupy the lower levels of societal hierarchy:

Philip Hammond, the Defence Secretary, said that banks were not solely responsible for the financial crisis as “they had to lend to someone”.

The minister, who played a key role in drawing up David Cameron’s economic strategy in opposition, also claimed that people who took out loans were “consenting adults” who, in some cases, were now be seeking to blame others for their actions.

And this:

“Households were spending more than they earned. That’s why household debt rose.”

It’s clear, then, that up there in the stratosphere of decision-makers, there must be a more widely shared perception that voters and their families and friends – not systemic failure of complex financial instruments – are now in the cross-hairs of those who make policy.

Mr Hammond is hardly going to have invented the idea in a vacuum, after all.

It is my thesis, therefore, that austerity measures as engineered and devised of late do not aim to sort out a dysfunctional economy first and foremost – only collaterally damaging and hurting the people who depend on its workings.  No.  In reality, these people in charge are looking precisely to damage and hurt the people first and foremost, for it is they who are to blame for not having operated as economies most need.

Whilst before we wondered if the people had become a necessary, even if sad, collateral damage to an attempt to rescue an economy, it seems clear to me now – and perhaps to you too – that the economy has become a necessary, even if sad, collateral damage to a pontificating and patronising attempt from top-flight politicos to allegedly rescue the people from themselves.

We the people are being punished because we do not act as these politicos and economists various believe economies need us to act: sensibly, rationally, intelligently and measuredly.

Because we cannot manage that, they – even they – are prepared to sacrifice their own love of that beast which is the economy (their whole reason for being, acting and researching) on the altar of societal suicide.

Rather than contemplate making economic theory in the image of the people’s needs, they prefer to prejudice the perishable goods that are people’s finite lives.

In this, both politicians and economists are the trench-warfare generals of our time.

Where, if not at the beginning of the 20th century, are we to find such an example of stubborn idiocy and casual cruelty as we now bear witness to in economic theory and practice – and throughout the world that serves to destroy us?

People in charge who refuse to take ownership for the pain and destruction they administer.

A passive-aggressive state if there ever was one.

The passive-aggressive invisible hand which wife-beats us all into submission

 Depression, economic abuse, economic blackmail, economics, economists, economy, econopocalypse, perishable goods, recession, suicide in Europe, unclassifiable, unemployment  No Responses »
Apr 302012
 

Two articles which tell the same story.  First, how the number of entrepreneurial, business and job-related suicides has reached alarming proportions in Italy:

According to the EURES social research institute, suicides have been on the rise in Italy since 2008, with at least two per day on average in 2010, when 362 unemployed people and 336 entrepreneurs killed themselves. In 2011, a record 11,615 Italian businesses closed their doors. In 2012, at least 25 and as many as 70 suicides have so far been linked to Italy’s economic troubles, especially prevalent in the industrial north and the construction industry.

The widows say there is too little dialogue and not enough state support for families that have fallen into despair over unemployment, bankruptcies and loan defaults.

Second, a story from Britain on how the very body politic that is responsible for administering our terrible response to the awful crises that assail us responds most despondently – and with equally dispiriting familial implications – to its ongoing consequences.

Essentially what we have is a situation where people must fit into systems.  No one believes, these days, that we should fashion our economies around the needs of the finite and perishable goods that are real people’s lives.  The reality is that whilst the systems seem to be working, most people are happy to muddle along – and even allow the powerful to encourage such muddling.

But since we are so locked into our systems, when the latter break down … well, so do we.

I am reminded of this by the story reported from Spain recently where the cost of Metro journeys was I believe hiked by 30 percent.  Just imagine the effect on an ordinary commuter.  In a sense, when they bought their flat on the outskirts of town, a social contract was being signed by the providers of such infrastructures and the purchasers: you settle down here, bring your income and your outgoings, and we’ll provide the reasonable means for you to get to work.

Now the message is: we’ve got you by the balls.  Stuff your standard of living.  Stump up the difference.

And it’d probably be morally justifiable if we were all equally affected, too.  But we’re not.

This is not just capitalism.

This is naked and unbridled theft.

And whilst the economic experts talk of the dangers of economic recession, the real danger out there is a marauding and eventually all-encompassing depression of an emotional nature.

An emotional depression in which the passive-aggressive economies that nudge us so very cleverly have, step by deadening step, ensnared us.  Just as that wife-beater makes his wife believe through very reasonable argument that she is the real problem at heart, so these economies – and their public sponsors and representatives – are designed and structured to make us all feel we are to blame for the disasters which are destroying so many existences.

Never was the invisible hand better named.  The invisible hand not that guides the markets but wife-beats the voters, their families, colleagues and friends into savage and terrible submission.

Idealism as the realm of politics (or what we’ve all gone and lost)

 economic democracy, economics, economists, economy, econopocalypse, ideas, ideology, on a high, politicians, politicking, politics, undemocracy, uneconomics  No Responses »
Mar 222012
 

Frances Coppola – she of ex-bankers fame – makes a lovely point in relation to how politics and economics should approach each other:

@peterpannier I think idealism is properly the realm of politics. Work to change the ethical stance of policy, and economics will follow

Here I do feel we see a mindset which comes from massive corporate organisation: for anything to work, there needs to be a very specific and particular set of shared values.  Get the ethical stance right – which the vast majority of corporations in a competitive rather than collaborative world only ever manage to pay HR lip service to – and the rest will sort itself out.

I think she’s right, of course.  Which is why revolving doors (more here) are so particularly damaging.  They strip away all opportunity for ethical stances as deliberately entailed conflicts of interest sweep away all moral behaviours.

And I don’t mean moral as in morality itself: just what’s proper and fit when you take on the responsibility of representing others.  If in loco parentis means we can trust our teachers to do as we would do, in loco voteris – as a concept and philosophy (don’t hold me to the Latin, mind!) – would encourage our representatives to see us as their clients and customers and therefore, with the appropriate sensitivity, act accordingly.

Idealism as the realm of politics?  Yes.  That’s what’s missing in modern politicking.  The lines between politics and socioeconomic theory have become so blurred that the ability to dream a better world is lost to current society.  We have become so terribly unambitious in what we imagine for ourselves that what we do is now reduced to administering rank inequality.

We need dreamers again to predict the future.  Not nightmares which force us only to survive in the present.

____________________

Further reading: James Firth has just brought this excellent post of his to my attention on the subject of societal trust and confidence and their relationships to a wider prosperity.  Well worth your time.

Does 97 percent of all British aid really go straight to funds in tax havens?

 a con, bad capitalism, Bill Gates, charity, corporations, debt relief, economics, econopocalypse, financial crisis, financial deficit, Ireland, World Development Movement  6 Responses »
Mar 172012
 

I was at a conference in Manchester today, organised by the Jubilee Debt Campaign and the World Development Movement.  You can currently find the programme for this event here.  I wasn’t able to stay for the whole stretch, but the morning and afternoon sessions I attended were truly eye-opening.

Shocking, in fact.

The session which really knocked me for six was titled “Can the 1% save the world?”, was held in the morning and was led by three excellent speakers: Sarah Bracking, from the University of Manchester; Andy Bowman, the Red Pepper economics editor; and Mick Moran, from the Centre for Research on Socio-Cultural Change.

Some statistics from this session and others to be getting on with (please do correct me if I have noted this information down incorrectly; some of the figures were so startling I still can’t believe my ears whilst other concepts, especially the financial ones, are totally alien to my understanding):

  • Sarah Bracking explained how 97 percent of all British aid goes straight to private equity funds in tax havens across the world.  Here, they are primarily administered for the benefit of their secretive and generally anonymous investors – as well as on behalf of the often very similar corporations which build and profit from the massive infrastructure projects in developing countries.  What they don’t tell you is that after five or ten years these private equity funds close down, leaving no historical trail and effectively operating without risk or liability for the aforementioned infrastructure projects … if and when they poison, maim, kill or otherwise negatively affect those who end up living in their shadows;
  • it’s calculated that these tax havens lead to $160 billion of lost corporate tax revenues;
  • the British CDC (Commonwealth Development Corporation) (I think that’s what it’s called – again, please do correct me if I’m wrong on any detail as I’m currently swimming in an awful sea of ignorance) uses 164 private equity funds to distribute foreign aid but refuses to specify which ones it uses – it’s not, in fact, obliged to.  Recent figures showed it made a profit of around 22 percent on its investments using the instrument that is private equity funding, which led a parliamentary oversight committee (I didn’t catch the name of the committee, though wish I had) to urge it to reduce this amount substantially, and fast, before it either caused public offence or – presumably – encouraged the media to start digging further;
  • the risk or liability for all these huge and profitable infrastructure projects ends up lying entirely with governments which themselves have no recourse to their creators: within five years, 80 percent of the companies left behind by the private equity funds in the nation states in question go bankrupt;
  • this, then, is the ultimate financialisation of society: clever investors elude all responsibility, build huge projects without reference to sustainability or environmental impact, make their profits over five- or ten-year periods, withdraw their funds at the end of this time and then move on – locust like – to the next project they can foist on a struggling democracy;

But this isn’t only happening in the global south.  Try Ireland for example (or even the UK, for that matter – re the NHS, Legal Aid, education, the police or any number of what to date have been public services):

  • the myth of the Celtic Tiger was, in hindsight, built on an unsustainable basis: a) ephemeral jobs provided by, in the main, American corporations (probably also using tax havens to reduce tax liabilities); and b) a housing bubble;
  • after the crash, the Irish government guaranteed all the deposits and bonds, the “crushing liability”, of six private banks – effectively socialising the private mistakes of reckless investors;
  • Ireland now suffers 15 percent unemployment; 40,000 people are leaving every year to find work elsewhere; banks are not lending; they’ve had five austerity budgets; and the debt is now worth 200 percent of the national income;

What’s more, the bond holders whose investments the Irish government so foolishly guaranteed are anonymous.  There is no obligation for them to reveal their identity.  This makes it difficult for campaigners to know where to campaign, as the implications of calling for a debt writedown of one or another bank may be radically different.  In the case of just one bank, the Irish people are committed over a twenty-year period to repaying €47 billion back to the reckless investors whose identity cannot be known, just so the bank can finally be closed down.  This isn’t just a question of toxic assets: this is a question of radioactive assets!  This is, in fact, like decommissioning a nuclear power plant.

*

And so I come to the question of that first session: “Can the 1% save the world?”

An example given was the Gates Foundation.  An apolitical organisation?  Hardly.  Five percent of their huge annual budget goes to lobbying and advocacy activities.  Their mission then?  To make the largest possible measurable impact on health in the shortest amount of time possible.  All very laudable – but, even so, well within Gates’ own business metrics mindset.

Their political line?  Creative capitalism, marrying altruism with self-interest.  They subsidise Big Pharma and the seed technology organisations to produce products they wouldn’t otherwise care to produce for countries in need.  Nothing wrong with that, you may say.  And maybe you’re right.  But it doesn’t half seem to me that when you give someone an opportunity to copyright seeds or vaccines, or whatever the silver bullet may be, you’re allowing them to sell cheap first in order to get your farmers, your patients or – God forbid – your Office software users hooked, so that in the not-too-distant future you can jack up the prices to your now captive market and make a killing on your now helpless end-users.

And as Andy Bowman pointed out: “Business is not becoming more charitable but charities and NGOs are becoming more businesslike.”  I don’t think he was being particularly complimentary or positive when he said this.  The lines are getting very blurred.

The truth of the matter is, as Mick Moran pointed out in his talk, the one percent of the one percent – those who over the past few decades have experienced a fabulous enrichment – no long command public confidence.  Social science shows us that this draining away of trust was accelerated by recent crises but was not created by them.  The very richest in society have never lacked so much as today the capacity to command support amongst the voters and ordinary citizens.

Still, I am not sure that I am as upbeat as Moran seemed to me to be when he pointed to movements such as Los Indignados and Occupy, and the activism in non-party-political contexts which seems to be the latterday standard for protest.  Structure and strategy and the ability to focus and make policy are traditional party-political strengths: I’m not sure if these disparate protest organisations aren’t playing into the hands of the one percent of the one percent.

These individuals have managed, with their corrupt revolving doors, and as ministers become board directors and board directors become ministers, to de-legitimise politics to such an extent that even in the developed world we now begin to despise what we have.  It does, in reality, beg the question that if we are so dissatisfied with what transnational big capitalism has brought us, why should we have the right – or, indeed, the urge – to impose it on others?

Just one more thought to add to this rather rambling post, if you’ve followed me thus far: if clever bods who run private equity funds have brought our financial services sector to the brink of disaster; if business metrics have led us to a world where the strengths of collaboration are eliminated by the weight of furious and totally amoral tax-havened competition; and if the ruling elite is so brazenly incapable of reinvesting fairly in economies it would now appear to be stripping for all they’re worth … well, what really is the point of applying such strategies to the developing aid budgets of the world?  Is this really a case of Big Tobacco?  You get squeezed out of the developed world, so move on – as would the already mentioned biblical plague – to the developing?

Is that all they’re doing?  And is that what we’re allowing them to do?

And, finally, can anyone please confirm whether, indeed, 97 percent of all British aid is funnelled through 164 tax havens across the world which bear no risk nor liability for the results of their investments?

Economics is like a litre of milk (and not just the spilt kind …)

 economics, paradigm, science, UHT milk, unclassifiable  No Responses »
Feb 172012
 

Let me explain.  This morning I put two litres of UHT milk on the table – one almost finished, the other not yet opened.  I knew that it wasn’t yet opened because I’d taken it from the six-pack box it generally comes in.

Our daughter finally tumbled out of bed at around ten past eleven and proceeded to have her cereals – unwitnessed by myself.  She cleared her plate and bowl away – but not the milk.

I could tell by shaking it that the almost-finished litre was even more almost finished – but I couldn’t tell very well by shaking the previously unopened one if it had been started or not.  My dilemma then?  Whether to put both litres of milk in the fridge – or just the even more almost-finished one.

For the problem with these kind of containers – as with pressed-juice products too – is that the only way you can tell if they’ve been opened is by actually going ahead and opening them.  The act of unscrewing the top is the only barrier to getting irrevocably inside.  There is no second line of defence.  In essence, you can’t open them to see if they’re open.

Which isn’t, I assure you, as stupid as it sounds.

And this is why economics seems – to me at least – like a litre of milk.  Not just of the spilt variety either.  Who, out there, can find me a more fruitful field of endeavour than economic theory as applied to political practice?  If retail sales fall, the government can say it’s either due to the cold snap or to a warmer-than-expected quarter.  If unemployment rises, the government can say it’s either due to rising imports or increasing productivity.

And I’m not saying the government isn’t right when it gives these never essentially exclusive excuses.  All I am saying is that the government can never be wrong precisely because economics is like those litres of milk which discombobulated me this morning – that is to say, you hardly ever know where economics is really at until you’ve passed the point of no return.

It is, in fact, the most paradigmatic science of our times: if we didn’t have the word “life”, we’d probably use the word “economics” instead.

Exactly why governments are wrong to blame unemployment on the workshy

 economics, government, in a hole, ISO quality mark, jobs, suppliers, total quality management, unemployment, work-life balance, workforces, workshy  No Responses »
Jan 302012
 

On Saturday I argued:

I do wonder if the crisis isn’t rather more profound, mind.  What if the deficit isn’t really financial?  I mean obviously there’s a shortage of political will to spend our way out of encroaching crisis, as perhaps we have preferred to do so on previous occasions – but, in reality, perhaps the problem is actually that we simply no longer have enough jobs to go around.  No mystery here – nor a particularly perceptive remark.  But, nevertheless, maybe – in the circumstances – worth revisiting.  As the past century progressed, automation struck in more and more professions: we now learn by ourselves; medicate ourselves; bank by ourselves; book our holidays by ourselves; even get to the point where we contemplate the possibility of legally representing ourselves.  And maybe – just maybe – all the aforementioned just goes to show that the balance generated by our economic structures between jobs and consumers is suddenly and irrevocably tipping in favour of the latter.

That is to say, our latterday Western economies – as they are set up and structured these days (and for some reason my unpractised eye is totally unable to fathom) – require far more of us to play the role of passive consumers than that of productive workers.

Meanwhile, this terrifying paragraph (from page 31 of this TUC-discussion .pdf) (the bold is mine) only serves to confirm my unhappy and inexpert intuition:

[...] The Office for Budget Responsibility (OBR) has forecast that labour’s share of the output of the economy will have fallen by four percentage points between 2009 and 2016. On present policies and trends, it is unlikely to recover this lost ground beyond that year. As in the past, it will be those in the lower half of the pay distribution that are most likely to be bearing this fall. The gains from recovery, when it comes, are likely to continue to be unevenly divided. This means a continuation of the trend of the last 30 years, with those on middle and low incomes likely to face a continued shrinking in their combined share of the nation’s annual output. Indeed, TUC analysis has shown that the amount paid to employees in wages in 2011 was £60bn less than would have been the case had wages continued to rise at the same rate as in 1978. Our growing wage gap is significant.

All I can see, then, and for various reasons, is that the way we have engineered our economies (whether consciously or otherwise) – both in relation to the forces that operate to drive them as well as in relation to the very human instincts that underlie multiple intra- and inter-company decision-making processes – has meant everything significant in such economic activity is fully taken care of except its ability to generate sustainably plentiful and quality jobs.  The free markets do work after all – we get millions of iPads for half the price a desktop cost five years ago; business waste is eliminated year on year by good businesses using total quality management strategies; and even faraway developing countries out there get to share in some of the progress this all supposedly implies.

But jobs, quality jobs, quality work-life balances, seem to be becoming evermore distant as realistic prospects on the horizon.  In the end, we as workers are nothing more than those suppliers at the very end and bottom of the food chain that is Western civilisation.  What else could we expect now than to be squeezed forever and always?

As well as blamed for losing our jobs – when the blame clearly lies with the system, its parameters and awfully limiting ground rules.

If only we had an ISO quality mark to define the ability of a company to generate those plentiful and quality jobs I mention above.  Something we could take into account when we signed a contract or made a purchasing commitment. 

An idea, don’t you think? 

An idea at the very least.

Whether a good idea … whether sufficiently groundbreaking … well, that’s a separate matter …

Perhaps not for me to say.

What I do know, however, is that our issue most definitely isn’t with the workshy but, rather, with an economic system which designs and makes new machines far more efficiently than it does new tasks, jobs and roles.  And in the light of such a reality, there really should exist no government out there honestly able to declaim the problem lies with workforces not wanting to work. 

For it’s simply not true.  And to say otherwise is to tell monumental porkies.

Fearful figures on the verge of an economic breakdown

 crisis, economics, in a hole, jobs, latterday capitalism, Spain, unemployment, youth  No Responses »
Jan 282012
 

This is indeed a lost generation.  The country of my wife and children, Spain, as reported by the Telegraph yesterday, now has a youth unemployment rate of 51.4 percent.  Meanwhile, as painted by the English version of the Spanish El País newspaper, the wider picture is just as terrifying:

According to the National Statistics Institute’s (INE) latest quarterly Active Population Survey (EPA), the unemployment rate climbed from 21.5 percent in the third quarter to 22.85 percent in the period October-December. The ranks of the unemployed swelled by 348,700, while the number of people who lost their jobs during the whole of last year amounted to 577,000. The number of people out of work at the end of the year stood at a record 5.273 million.

The solution to this problem?  As follows:

The gloomy figures underscored the dire need for an overhaul of the labor market, a task the government wants to complete in the first quarter of this year.

But with an important proviso:

“This shows that the government has to carry out a labor reform that focuses on incentivizing hiring, rather than just on cutting firing costs,” Bloomberg quoted Estefania Ponte, chief economist at Cortal Consors, in Madrid as saying. [...]

And I thought capitalism had all the tools it needed to sort out – all on its lonesome – the pretty mess someone, or something, has got us into.

Oh!  It does …

In 2011 Spanish luxury goods sales were up by 25% despite the economic climate in the country.The luxury goods sector brought in 4,500 million euros up to the end of this year.

Truth of the matter is that capitalism by itself offers no convincing solutions for a broader society.  It can’t.  It’s been so vigorously – and for such a long time – a fundamental part of the problem.

And as any good experienced teacher would tell you, there is no one methodology in the world which can ever teach you everything you need to know or do.  We must apply the same principle to economic practice.

Instead of building these self-justifying barricades between different classes and ways of seeing.

*

I do wonder if the crisis isn’t rather more profound, mind.  What if the deficit isn’t really financial?  I mean obviously there’s a shortage of political will to spend our way out of encroaching crisis, as perhaps we have preferred to do so on previous occasions – but, in reality, perhaps the problem is actually that we simply no longer have enough jobs to go around.  No mystery here – nor a particularly perceptive remark.  But, nevertheless, maybe – in the circumstances – worth revisiting.  As the past century progressed, automation struck in more and more professions: we now learn by ourselves; medicate ourselves; bank by ourselves; book our holidays by ourselves; even get to the point where we contemplate the possibility of legally representing ourselves.  And maybe – just maybe – all the aforementioned just goes to show that the balance generated by our economic structures between jobs and consumers is suddenly and irrevocably tipping in favour of the latter.

That is to say, our latterday Western economies – as they are set up and structured these days (and for some reason my unpractised eye is totally unable to fathom) – require far more of us to play the role of passive consumers than that of productive workers.

Does it have to be that way?  I really don’t know.  Wasn’t there a time, for a while, in the last quarter of the last century, that a potentially halcyon period of generous leisure activity began to be promised to our future generations?  I can certainly remember the predictions made by the technologically minded stories and thinkers who dominated my scientifically influenced thought processes in my more tender years.

Of that – however – we hear little these days, it would seem.  Instead, the things they tend to say now remind us we must work for less; work more flexibly; work more insecurely; and, above all, expect no guarantees whatsoever.

Stability of personal income is no virtue or given of modern Western society.  As an American called Kirk (and spookily so) apparently said at Davos today:

US trade rep Kirk: “More and more Americans question value proposition of trade… think weve traded jobs for cheap t-shirts /iPads #Davos

And it’s not just the jobs – it’s the nature of those jobs.

For Christ’s sake capitalism – get your bloody act together before it’s too late!

You’d almost think your proponents thought there was no alternative.

But there always is – to everything.

So where have all your competitive instincts gone?  Is it in fact – and here perhaps we have a horrifying unspoken truth – that, after so much time spent managing and manipulating and operating in monopolistic markets, our capitalist captains have forgotten what real free markets feel and look like?  As well as the instincts which should correspond to such mindsets?

Fearful figures, indeed, then, on the verge of an economic breakdown.

All of us, that is.  Sooner or later.

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