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FromArseToElbow
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The Times could hardly be accused of being ahead of the curve. Osborne's true success in setting the terms of political debate came in 2009/2010, when he crafted the Tory strategy of claiming that Labour negligence was to blame for the banking collapse, and that the clear and present danger was government debt. While he could point to the Austerian consensus in the EU for backing, his real luck was in having a supportive press that relished the opportunity to attack the public sector and the poor. Plus ca change. They are now willing to tub-thump that happy days are here again. The over-use of the term luck implies arbitrary fate. The reality is more often structural bias (e.g. the "luck of birth"). While there is no single smoking gun to explain the collapse in productivity, it is pretty clear that productive capital investment remains too low, which is more likely to be cause than effect. Ultimately, this stems from the privileged position of the City, which is a deliberate political strategy, clearly evinced in the decisions taken by Osborne & co and the adulatory response of the conservative media.
Toggle Commented Dec 31, 2013 on Lucky Osborne at Stumbling and Mumbling
Given limited liability, the regulatory arbitrage of multinationals, the implicit state bailout for banks, and the success of corporations in avoiding responsibility for externalities, the question is surely whether private "ownership" in any form is adequate from the perspective of society?
Toggle Commented Dec 16, 2013 on Ownership in question at Stumbling and Mumbling
The strength of pro-SA feeling among many Tories in the 70s and early 80s cannot be explained by pragmatic anti-communism alone. For them, the defence of the republic was as emotionally engaging as Spain had been for anti-fascists in the 30s. They didn't feel as strongly about Chile. For some (like Mr and Mrs Thatcher) this was a matter of kith-and-kin and post-imperial resentment, though this was moderated as the "anglo" big capitalists came to see Apartheid itself as the problem by the late 70s, leading them to press the Afrikaaners to negotiate. What gave the pro-SA camp their last, viscious lease of life was the growing right-libertarian influence in organisations like the FCS. For them, SA was a land of extreme Lockean property rights and natural hierarchy. The glib racism was incidental, which is why so many of them found it easy to reinvent themselves as Tory modernisers, though the mask occasionally slips when they address areas outside the M25 as if they were Bantustans.
We have to downplay the significance of luck because otherwise the basis of capitalism (work is rewarded, just deserts etc) is undermined, so it's a reasonable conclusion (given the world we live in) that luck plays a larger role than conventionally allowed.
Toggle Commented Nov 27, 2013 on Luck at Stumbling and Mumbling
The 45-60 cohort is also the last one that foresaw technical progress in terms of Golden Age of SciFi hardware, i.e. jet-packs and HS2, and has been disappointed by the "trivia" of the Internet or the dullness of shipping containers. The "problem isn't so much that technical progress has slowed, [or] that it never really paid in the first place", but that the unit costs of technology have plummeted at such a rate as to make it difficult to fully reinvest profits since the 90s. Abundance and a deficiency in aggregate demand are essentially the same thing, but from opposite ends of the telescope.
Toggle Commented Nov 27, 2013 on Stagnation: in the mind? at Stumbling and Mumbling
The public sector has always been prone to managerialism, but it did traditionally operate in a pluralist environment, having to balance the competing demands of Whitehall, local councillors and the unions. The last 30 years have seen that environment whittled away, largely replaced by a "commercial" relationship between central government and large private companies. Prince2 was created as a filter for public service outsourcing (IT was the first place they started). It prevents smaller businesses from competing with the favoured suppliers who have made its manipulation a core "skill". It adds nothing to vanilla PM best practices and has few fans in the private sector beyond ex-public cartels that lack the competitive pressure to change (e.g. the utilities).
The macro vs micro paradigm is an interesting thread in the history of thought, which you can trace from Neoplatonism (at least) via the hermetic tradition (golden section, Fibonacci etc) to early modern science (Newton was supposedly the last alchemist). From there it proceeds, via political theory and the notion of equilibrium (Hobbes et al), to the social sciences, of which economics is a branch (despite the festishisation of numbers, which is just a hermetic relic). As above, so below, etc. Of course, both macro and micro are abstractions and therefore poor substitutes for the complex and messy thing that is the real world, despite their utility in discourse ("models" in current parlance). The problem is the twin belief (delusion?) that a dynamic system can be frozen at a point in time, and that a portion of that system can be representative of the whole. Despite the maths, this is just magical thinking. Why don't we gate-crash the barbie, beat the shit out of Jurgen (he sounds a twat), and help Kostas finish off all the booze?
The desirability and reliability of growth is the central neoliberal shibboleth, the panacea that will deliver improved living standards without the need to address distribution: "we'll grow the pie for all". The moment you accept that growth isn't coming back any time soon (for whatever reason), you inevitably shift focus onto the distribution of wealth and associated questions about incumbent privilege. The socialisation of investment smacks of a Keynesian attempt to make capitalism work despite itself, and thereby delay the day of reckoning.
"The problem with democracy". Hmmm. The trouble with this line of thinking is that it assumes people can make "wrong" choices, whether simply ill-informed or arbitrary. But who is to decide what "wrong" is? Perhaps we should have the people vote on it. As for the shortcomings of the voters being a characteristic of democracy, I rather thought that was a feature, not a bug.
Toggle Commented Nov 19, 2013 on Irrational voters at Stumbling and Mumbling
Or maybe Cameron is just trying to head off criticism of his own privileged background, ahead of a challenge by the iconically mobile Michael Gove, should he fail to win outright in 2015.
The step up in the E-to-U flow, from around 350k pcm to 400k pcm after 2008, will also have a knock-on effect in the reporting of median gross annual earnings for full-time employees. The ONS bases this figure on workers who have been in the same job for at least 12 months (so it's not actually median for all workers, just for a subset). If a higher percentage of the labour force are regularly moving in and out of short-term employment, and if that cohort tends towards the bottom end of the income scale, this will push up the median figure. I don't know how significant this is, but it's another pointer to the increasing opacity of the ONS stats with regard to the labour market and "real" income.
Toggle Commented Nov 13, 2013 on On labour market flows at Stumbling and Mumbling
Small-c conservatism, like progressivism, does not align with any left-right political spectrum, so there is no reason why it shouldn't "fade" on the right. This ideological waxing and waning just reflects changing interests, e.g. Labour's shift from the "conservatism" of the 70s to the "progressivism" of the 90s. To refer to it as a "disposition" is to treat it as an intrinsic quality, whose fluctuation over time reflects the rise or decline of particular groups and sentiments, when it is better thought of as a pragmatic response to changing circumstance. The idea of a conservative disposition or temper is itself ideological. It's a commonplace that opposition to immigration is indicative of a fear of wider social change rather than outright racism. The Tory right are (mostly) more progressive than conservative in respect of that underlying change, i.e. they are consciously pushing for a more precarious and unequal society. Consequently, they are adopting progressive tactics: an appeal to data rather than sentiment (even if misrepresented); lurid anecdotes (the skiver trope is the flipside of older coal-in-the-bath cliches, the one hostile, the other sympathetic); and the criticism of self-interested elites (the EU, the public-school mafia, the BBC etc). Conversely, the left, which is on the back foot, finds itself employing conservative tactics: the longing for a saviour (Gordon Brown's Freudian slip); the focus on consequences rather than causes (price-caps rather than cartel-busting); and the nostalgic appeal to tradition (the Spirit of '45 etc). "Good, genuine conservatism" is no more concrete than "good capitalism".
Toggle Commented Nov 9, 2013 on Is conservatism dead? at Stumbling and Mumbling
The planning fallacy (or optimism bias) is real, but so too is the bad news bias - i.e. failures get more publicity than successes. In fairness, failure is usually a lot more entertaining (except for the participants). Schadenfreude at hubris confounded never goes out of fashion. In fact, large-scale projects can be planned successfully (i.e. approximately on-time and budget and delivering the promised benefits), using standard deterministic and probabilistic techniques (in a nutshell: plan from worst-case backwards). The common causes of project failure are well known. Their persistence is a feature, not a bug - i.e. a reflection of political constraints, vested interests (rent), or a cultural overhead ("the cost of doing business"). Common-sense tells us that major projects do succeed without pulling the world down around our ears. GDP growth can be interpreted as success exceeding failure in aggregate (and as failures often "cost" a mutliple of original estimates, there must be a lot of successes). Pessimistic planning tends to be eschewed by organisations wedded to the heroic leader fallacy, where simply describing success is deemed to be 90% of implementation (Hitler in his bunker and IDS have a lot in common on this score). This is near mandatory for projects that are the result of political initiatives.
Toggle Commented Nov 7, 2013 on Unavoidable failure at Stumbling and Mumbling
Another way of expressing this would be that the primary and persistent driver of long-run economic growth is curiosity. This would be an optimistic interpretation, in contrast to the pessimistic interpretaion of the Austrians (ignorance is inescapable).
Toggle Commented Nov 6, 2013 on ignorance at Stumbling and Mumbling
The ONS cannot track individual movements (no ID cards or local registration), so they are only able to report net changes within local authorities. The 52k figure is the product of a much larger number of people leaving London, offset by the (slightly smaller) number that have moved there. As the net of regional migration within the UK, it also excludes international migration, which is obviously significant (in both directions) in London. This figure alone doesn't tell us much about the willingness of Londoners to leave London. The key ONS datum is that there were 2.8 million internal migrations during the year to Jun-12. Though there will be some double-counting (i.e. people moving twice or more in the year), this is roughly 4% of the total UK population. If London is only losing 0.6% of its residents a year, then it is an oddity nationally. The 2.8m figure suggests that internal migration is fairly common and perhaps not as different to the US as we think (an analysis of the "Fraction of the Population in 2005 that Moved Residence in the Previous Year" shows 11% for the UK and 13% for the US - http://www3.nd.edu/~awaggone/papers/migration-msw.pdf) As William notes, internal migration has historically been very common in the UK, something that is celebrated in music and literature (the current Jeremy Deller exhibition in Manchester is incidentally good on this - it will eventually move to London). The myth of English rootedness (an invention of nineteenth century Romantic Toryism) is as ideological as American get-up-and-go.
Toggle Commented Nov 5, 2013 on Price signals vs culture at Stumbling and Mumbling
@Phil Beesley, if you think Polly Toynbee is a "lefty", then I'm afraid their cunning plan has worked. The Guardian's commitment to "balance" means that for every Toynbee or Seamus Milne article, you get a piece from a romantic Tory like Simon Jenkins or a free market ideologue like Melissa Kite. A quantitative assessment would place the paper on the centre-right. They only look "progressive" because the middle of the media spectrum is way to the right of the population at large. By the way, there is no dispute over the BBC's bias among those who actually study the subject (as opposed to politicians). It is biased towards the establishment, which means slightly right of centre, hence it often finds common cause with the Guardian.
Zorblog raise an interesting point. I don't agree that these assumptions are simply "dictated" by the media, but there is clearly an institutional bias that reinforces some of them (the lauding of public opinion is obviously self-interested). Perhaps as the media evolve these assumptions will too. Their fundamental belief is that shouting can effect real change, which is a species of perfectibility. This also influences their support for managerialism - e.g. their promotion of heroic business leaders, which reaches parody by the back pages; their faith in hydraulic policy (Steve Bell's Dacre Downfall skit was both funny and true); and ignorance of deadweight costs (a fear of complexity and thus the absence of easy answers). But they would exhibit these characteristics even if they were editorially leftwing. Where the media are more ideologically determined (i.e. advancing the agenda of the powerful rather than themselves) is in the dissing of the state and public sector professionals. I know a few journalists and they are acutely conflicted by this, given their own experiences of creeping deprofessionalisation (some just want to take other professionals down with them). There has been a clear change in tenor over the last 50 years, from representing the common man against thoughtless power (a church broad enough to encompass GK Chesterton and Paul Foot), to a psychotic antipathy towards the state and pro-social organisation, which is hardly compensated for by a festishisation of the monarchy and armed forces. They are a morbid symptom.
"The decline of mass production and rise of more human capital-intensive businesses means that traditional capitalism with external shareholders and top-down hierarchies is no longer technically efficient". Though automation can create high-value roles (e.g. IT jobs that didn't exist 10 years ago), the aggregate impact is less human capital-intensive business, not more. That's why we have more robots, a growing surplus of labour, and stagnating wages for all but a few. This means that top-down hierarchies, based on the ownership of capital (i.e. robots), are not going away. "The internet is facilitating cooperation at the expense of traditional capitalism". No, it's facilitating global monopolies. For all the "long tail" ideological blether, the reality is consolidation. The Internet might look like devolution, but in reality it is a scale economy. Of course both of these features, capital-labour substitution and monopolistic concentration, are as predicted by Marx.
You're right that the problem stems in part from wishful thinking and the popular idolisation of metaphysical concepts such as the market, but the economics profession has aided this with its fondness for "iron laws", "mechanisms" and all the other phenomena of a clockwork universe, not to mention the privileging of mathematical models over the methods of social science. But all of this is just a distraction. The question should not be "why are economists' forecasts sometimes wrong?", but "why are they encouraged to make them?" I think you addressed this pretty well last year: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2012/11/economists-as-dentists.html
Toggle Commented Oct 31, 2013 on Against forecasts at Stumbling and Mumbling
Building on Luke's analogy, there is the famous case of Len Shackleton's autobiography, wherein one chapter, entitled "The Average Director's Knowledge of Football", was a blank page. The problem is not that we are all fools who ignore evidence and cleave to prejudices, but that many of the powerful are. The hold of EMH on politicians is akin to the theories of Charles Reep. They made perfect sense on paper, but were a terrible sight to behold on grass. I think professional economists are beginning to overdo the self-pity, just as Aditya and others (e.g. the other Ferguson's 'Inside Job') are overdoing the "we name the guilty men" schtick. Economists are ideologically important, which is why they will always be corrupted, and why political economy went out of fashion.
Toggle Commented Oct 30, 2013 on Economics, good and bad at Stumbling and Mumbling
@Graeme, I think Chris's point is that big businesses can offer well-paid sinecures to politicians, not that they create more jobs in the wider economy (though that too is true). Small businesses lack the wherewithal to effectively bribe MPs.
Toggle Commented Oct 29, 2013 on "Crooks and knaves" at Stumbling and Mumbling
The belief that the government are wrong 'uns is as old as the belief that if only someone could get word to the King, everything would be put right. By the way, I see no reason to believe that MPs have become more moral over time. If consorting with gangsters was good enough for Bob and Tom, I'm sure it goes on today too. They have to get their coke somewhere, and most SPADs are bloody useless at anything more complicated than a sandwich.
Toggle Commented Oct 29, 2013 on "Crooks and knaves" at Stumbling and Mumbling
@Bevin, I wasn't seeking to make it sound "nice", merely pointing out that the decisive shift in agriculture happened over a relatively short period. This gave rise to terrible social suffering and also the creation of "the reserve army of labour" that was crucial to the industrial revolution that followed. Over the period 1750-1850 the UK population trebled but the number employed in agriculture fell from 45% to 22%, with most of that drop happening after 1800. In other words, 1 in 4 of the population went from the fields to factories and workshops within living memory.
Just to add to Dipper's point, not only has the ICT revolution been running for decades (arguably for over a century, if you start the clock with the electromagnetic wave experiments of Edison and Tesla), but the agricultural revolution did not take thousands of years. The real revolution in agriculture was not the domestication of livestock or the invention of the plough, but the improvements in productivity and efficiency that occured during the late 18th / early 19th centuries. This enabled the majority of the population to move from an economy based on subsisdence to one based on manufacturing and services. Technological revolutions typically have a slow build up over many decades with an "accelerated" peak (when they come to public attention) and a gradual "deceleration" (actually more of a plateau, but we find it easier to think of it as a wave-form). Brand is subscribing to a classic ideological trope - the idea that modernity means that everything is speeded-up. This serves to encourage manic consumption and the worship of pseudo-change (I imagine he's been through a few iPhones in his time). His heart is in the right place, but he doesn't half talk a lot of bollocks.
Clearly sportspeople are attractive investments because of the massive upside in potential earnings. They are perhaps best seen as growth stocks (trading young footballers is common in S America), while yer average yoot is (in aggregate) a yield stock.
Toggle Commented Oct 24, 2013 on Shares in people at Stumbling and Mumbling