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I think you've underplayed the impact of expected earnings on house prices. The move towards later retirement had been matched by a growth in mortage terms (about 1/3rd are now 30+ years). The increase in the state pension age may turn out have had a much greater impact on house prices than Help to Buy or other government interventions. Also, much of the house price inflation over the last decade has been focused on London and the South East, where there is an expectation (by foreign investors, as much as anyone) of above-average wage growth. Short of a recession, a sensible policy would probably seek to address the ever-elusive rebalancing of the economy between London and the regions, though that would mean a supply-side strategy to prompt demand-side growth. I'm also not entirely convinced by D2's argument (cited by Luis) comparing house prices to IPOs. While shares are obviously bought in part with a view to capital appreciation (i.e. as an asset), there is also a calculation of the potential for future earnings (i.e. dividends) relative to GDP or index growth, which doesn't find an obvious parallel in the utility of housing services (i.e. shelter).
Toggle Commented 2 days ago on On cutting house prices at Stumbling and Mumbling
Related to this, there is also a class of policies that have supposedly been pursued but whose fruits have remained tantalising out of reach because they "haven't really been done at all". In other words, the failing was not one of bad implementation, which might be the result of incompetence or unfortunate circumstance, but of insincerity. While Universal Credit will be characterised by some as a botch by Whitehall, I suspect Brexit will be framed by many leavers as deliberate sabotage.
Meanwhile, Boris Johnson is farting in the general direction of Europe ...
The audience for Hammond's speech is not the general population, let alone young people with no experience of the 70s but a vague appreciation from parents that houses were cheaper then. He is arguing against the principle of a return to earlier times, whch on the face of it seems an add manoeuvre for a conservative. Specifically, he is warning the Tory base (and Brexiteers in particular) not to try and wind the clock back to the 1950s. In other words, he is trying to defend the neoliberal putsch that was effected in the Conservative Party under Thatcher. I don't rate his chances.
Toggle Commented Oct 3, 2017 on The lesson of the 70s at Stumbling and Mumbling
Let me put an opposing view ... The shift from manufacturing to services has been paralleled by an increase in cognitive labour. This is because services tend to require more flexibility and interpretation, and because consumers place greater value on customisation (this has even fed back into manufacturing, where variety and build-to-order is now commonplace). The growth in cognitive labour is both cause and effect in the growth of data. This demand for greater flexibility in the production and delivery of both goods and services has encouraged a move away from hierarchical control in task management (self-managing teams on production lines and artisan bakers have this much in common). More workers today are doing jobs where they have to exercise judgement, and this is independent of the compositional switch between manufacturing and services. Were these workers to rely on belief over evidence, you'd expect the results to be poorer. The development of process analysis in manufacturing (and empirical techniques like SPC and Six Sigma), which mpc refers to, only gained traction in the West at the point that manufacturing started to go into decline, i.e. the 1970s & 80s, having been road-tested in Japan by the likes of Deming and Juran during that country's reconstruction in the 1950s & 60s. Before then the dominant regime was Taylorism, which focused on task sub-division and the minimisation of labour autonomy. An alternative theory for the rise of "post-truth" politics is that people have come to value their own opinions (however formed) more highly than before, which may be partly attributable to the way that increased demand for judgement in the workplace has boosted confidence, though I suspect the wider social trend of greater individualism (and narcissism) has perhaps played a larger part. Ralph's point about the intrinsic difference between science and arts grads is arguably the wrong way round as regards political utility. The humanities teach you how to potentially resolve conflicting claims where conclusive evidence is lacking, as it is in many real world situations. Arts grads don't have a contempt for facts (for example, any half-decent historian employs empirical techniques), but equally they don't have a contempt for fiction.
High CEO pay is a symptom of the end of feudal relations, in the sense that it is a feature of modern, financialised firms rather than more traditional family-owned companies (or paternalistic trusts like John Lewis). Overpaid CEOs are rarely organic products of the business - either family heirs or churls who've worked their way up. They're closer to condottieri: mercenaries brought in from outside, often as part of a leveraged buyout or as prep for a flotation. I appreciate this is stretching the analogy, but it highlights that high CEO pay is a product of surplus corporate cash, just as the prevalence of mercenaries in Northern Italy in the late Middle Ages reflected that region's liquid wealth (the emergence of banking and merchant capital markets in Rennaisance Italy is not a coincidence). It also suggests that the process of financialistion has inflated remuneration by creating an artifical market for CEOs in which pay norms are divorced from the productive base (so greater shareholder power would not necessarily arrest this). The simplest way to restrain high CEO pay may be to increase the cost of capital.
Toggle Commented Aug 30, 2017 on Against high CEO pay at Stumbling and Mumbling
@Luis, much of what you say is good and true, but it really applies to civvies like us, not MPs. Part of Pidcock's role is to represent attitudes as much as constituents: think of it as performative oppositionalism. I suspect she's more broad-minded that she's letting on, and I doubt she'll refuse all social contact with Tories. MPs can't engage each other in the common manner (Eric Joyce's crime was to overstep this invisible line), so there is inevitably going to be a premium placed on gestures. The value of Pidcock's is that it shows she considers politics to be a serious matter. Compare and contrast with Dennis Skinner's sarcasm, which has merely earnt him a reputation as a lovable eccentric. Interestingly, much of the negative commentary on Pidcock has seen her action in terms of school friendship groups, a la Mean Girls or Heathers. A less middle-class media might have referenced the long tradition of workplace ostracism as the corollary of solidarity.
The criticism of Pidcock has predictably come from the political centre, not the right. Over and above the usual happy mean ideological guff, I suspect this reflects anxiety over the diminishing prospects of a cross-party compromise on Brexit.
The cost of capital is at an all-time low. This is not just because of monetary policy since 2008 but because of the secular fall in the cost of capital goods since the late-1970s. Capital is increasingly surplus (i.e. in glut) not because of a shift to immaterial labour but because of the change in the composition of fixed capital itself, most notably the increase of software relative to hardware. This has had two consequences. First, it has led to more promiscuous investment: "fail fast, fail often", as the Silicon Valley mantra has it. Second, it has shifted capital from productive to distributive activities, notably marketing and brand-building (the shift from tangible to intangible capital is a symptom of this). Uber is not just subsidising prices to wipe out the competition and prevent new entrants, it is consciously buying market share in the hope that it can eventually monetise its dominant position. Uber's problem is that the strategy for monetisation keeps changing. First the app was meant to disrupt traditional taxi firms and allow both cheaper fares and profit (didn't happen); then monopoly would allow it to ratchet up prices (hasn't happened and isn't likely to); then expansion into mass transit and home deliveries would get it over the line into the black (improbable). The latest (and probably last) iteration is that autonomous vehicles will allow Uber to dispense with drivers and their associated costs/profit-share, but this move would ironically require Uber, hitherto a capital-light firm with a lot of free cash, to become a fixed capital-heavy business with signficant debt (i.e. it must buy/lease lots of cars or else sell up and become a service front for an AV manufacturer).
Toggle Commented Aug 23, 2017 on A new capital? at Stumbling and Mumbling
Your statement "They had hoped that the defeat of trades unions, privatization, cuts to top taxes, deregulation and fiscal austerity would unleash a dynamic, productive economy" could equally be applied to liberals. One interpretation of post-1974 history is that progressive liberals deserted social democracy and threw in their lot with the Tories, providing much of the "reforming" impetus of the 80s and 90s. Margaret Thatcher was an oddity within her own party because she was a conventional social Tory pushing a classical liberal line, which allowed the reactionary right to focus on the former while liberals focused on the latter, or more precisely on a managerialist liberalism that saw the state as a practical as much as an ideological market-maker (i.e. neoliberalism). The Tories' current electoral prospects are dependent on motivating that tranche of social reactionaries who drifted away from voting after the mid-90s and returned for the EU referendum, but doing so will likely further alienate both liberals and the more pragmatic conservatives. May's problem is not that her core support sees the 21st century as a refutation of their beliefs but that they consider it to have been the product of a conspiracy by liberal entryists into the Conservative Party (this idea was key to UKIP's growth). They want to actively reverse the liberal gains that the Tories oversaw, from the EU single market to gay marriage. The Tories are at war with their recent history but, averse to dissing the Blessed Margaret, they are forced to imagine a fantasy land that predates her and the "liberal 60s". This explains why so many Tory reactionaries in their 60s and 70s valorise decades, the 40s and 50s, that few had any adult memory of.
I think previous commenters are missing the key point: the success or failure of Brexit may not become irrefutably apparent until most of us are dead, and even then other factors may complicate the picture. After all, historians are still arguing over whether the sclerosis of the Spanish economy in the 18th and 19th centuries was the result of the disruptive impact of South American gold and silver in the 16th. On a similar theme, it's worth noting that David Aaronovitch is still in denial about the Iraq War, even if his recent columns read like the shrieking of a soul in torment. I fear he is way beyond the point of recantation.
@Mark, "As a Red Tory I would much rather see the labour market fixed to eliminate rents than paper over the cracks with more redistribution". One thing that Tories of any colour tend to discount is that it is a lot more difficult to eliminate rents than it is to redistribute. Indeed, the claim that redistribution is a blunt tool (e.g. that universal benefits are wasted on the better-off) is a feature, not a bug.
@Blissex, "Indeed there is a large age-related component to the Bexit story, people who still feeel angry at England's defeat in WW2 and the loss of the English Empire, and feel that being "just a member" of the EU is a national humiliation ... What however I cannot understand of Brexiters is their blind spot as to how the USA have political and operational control of english foreign policy". People who were conscious of the "defeat" of 1945 - i.e. the formal ascension of the US to the role of global hegemon and the UK's irrefutable relegation to the second rank - would have been born in the 1920s, so they'd be in their 90s now. There aren't that many of them still around, which is why the very real anti-americanism of that generation has faded into the background (the last cultural manifestation of the tension this gave rise to was probably Yanks, the 1979 John Schlesinger film). The British Empire disappeared between 1948 and 1965. The current generation of 60-70 year-olds who appear to have such a pivotal influence on politics mostly came of age after this period and consequently have no direct experience of empire either as a reality or a rhetorical trope in political discourse (Enoch Powell was probably the last politician to play this tune and he was marginalised after 1968). What this generation did have experience of were the economic shocks of the 1970s, which were widely (and incorrectly) presented as evidence of British moral decline by that earlier, empire-minded generation (i.e. a 50 year-old in 1973 would coach an impressionable 21 year-old on how Britain had sunk low despite two world wars and one world cup). Imperial nostalgia has been and continues to be an important factor in British politics (the Falklands War didn't help), but it has been a pastiche rather than the real thing (see the collected works of messrs Johnson, Fox and Gove). In essence, what we're still suffering from is the Thatcher generation, the cohort born in the 1950s who has no lived memory of empire but experienced a stultifying cultural backdrop that surivived the impact of the countercultural 1960s, largely because it was the provincial norm while the latter was the metropolitan exception.
Toggle Commented Jul 16, 2017 on My Brexit dilemma at Stumbling and Mumbling
I suspect the general election result pretty much killed the Taylor Report stone-dead. I presume the idea was that a now-triumphant Theresa May would use it as pabulum in advancing her "workers agenda", encouraging a weakened but by now "sensible" Labour Party to support her strategy of sentimental managerialism (i.e. paternalism in old money). In the event, both May and Taylor look like history's leftovers.
James O'Connor's scheme is enlightening with regard to tuition fees. The default Tory response, articulated by Michael Gove and Jo Johnson, is one of legtimation: that non-graduates would be disadvantaged (made less happy) if they have to subsidise the education of graduates, so fairness demands that graduates pay (somehow). But the problem we face is a crisis of expected accumulation - i.e. the fear among many (though not upper middle-class types like Gove and Johnson) that most graduates may not secure sufficiently well-paying jobs in the future (a prospect that the IFS report would seem to share). But this fear is not simply about the possibility of stagnation, it springs from a deep-seated cultural fear of debt (which was ironically used to garner support for austerity in 2009/10), which is more prevalent among working class families who now have least confidence in the earnings premium offered by a degree. In other words, the Tories are incorrectly framing tuition fees as an issue of legitimation when it is actually one of accumulation.
So, in brief ... Thesis: Read Marx (but start at chapter 10) Antithesis: Read something else. Anything else. Synthesis: Libertarians are, like, bogus, dude.
@nicholas, "No-where does it say in the the recent Labour Party manifesto that private dwellings should be confiscated by the state, yet this is what Corbyn has just advocated in the wake of the Grenfell fire, when there is no need for such draconian action, and people can be put up in the nearest Premier Inn". Shit happens. We don't expect any party manifesto to include an exhaustive list of all possible contingencies. We expect the government of the day to respond. If, as an advocate of direct democracy, you insist on securing a popular mandate for such action, you should be campaigning now for a fresh general election, or at least a re-run of the local council elections in Kensington & Chelsea. Corbyn has not proposed confiscation (which is permanent) but requisition (which is temporary). It is usually better to prioritise the requisitioning of public property, such as school sports halls, over private dwellings for obvious logistical reasons. Corbyn's "escalation" on this occasion was clearly prompted by two factors: the scale of the disaster and thus the number of people suddenly made homeless (far in excess of the capacity of nearby hotels), and the attenuation of public services in the borough. In a free market, a supplier is not under any obligation to sell to a particular consumer or to do so at a particular price, so Premier Inn could not be relied upon unless you think we should over-ride the rights of the company's shareholders to dispose of their property as they see fit by turfing out all other guests and insisting they house all the homeless. The irony is that the effective disappearance of the local council, and its inability to provide humanitarian aid to its own residents, is more akin to Venezuela than anything Labour has proposed.
Toggle Commented Jun 21, 2017 on Selecting for Corbynism at Stumbling and Mumbling
The natural selection model is useful, but one refinement we have to consider for politics is the range of options presented to the electorate. Come an election, there is often only a realistic choice of two and we don't tend to get a situation in which one "wins" for good, like Homo Sapiens edging out the Neanderthals. I don't say this to advocate proportional representation or multi-round voting, but to note that the selection of options in a first-past-the-post system means that most politics - in the sense of actually testing and refining policies - happens within party structures. This suggests that a structural reason for Corbyn's popularity is the reintroduction (or re-emphasis) of popular, participatory democracy within the party. Toby Young's £5 membership fee may have been more emblematic than he realised.
Toggle Commented Jun 20, 2017 on Selecting for Corbynism at Stumbling and Mumbling
@Tom Papworth, The home-ownership rate has been in decline for over a decade now. The converse of this is an increase in the number of people renting, which either means more landlords or larger holdings. Either way, there is a landlord interest that is thriving and the Tories appear more concerned with it than with home-owners.
Toggle Commented Jun 16, 2017 on The landlords' party at Stumbling and Mumbling
Douglas Fraser in the first comment takes a traditional reactionary position: "The more that the politically uninvolved are encouraged to vote, the less well informed will be the outcome" (the term "uninvolved" is a 21st century euphemism for "ignorant", which in turn was a 20th century euphemism for the older idea of "interest" - i.e. only property-owners could exercise good judgement in public affairs). One way that this elitist position has been reconciled with democracy is through the idea that while the individual voter may be an idiot (them obviously, not us), they possess a collective wisdom when massed through the ballot box. There were plenty of pundits this week who talked of the sophistication of the electorate's singular answer (not a few of whom previously bemoaned the blunt instrument of the referendum), as if we'd cunningly calculated the optimum vote split in advance. While this can easily be dismissed as mystical nonsense, it's worth noting that more respectable versions of this thinking underpin ideas such as complex emergence, the general intellect and Hayek's system of prices, not to mention the more risible "wisdom of crowds". Hayek's eulogy of prices is apposite to the pundit process: "The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned". Opinion polls and focus groups (and tightly-managed debates like Question Time) are an attempt to turn complex opinions into symbols, and thereby to abbreviate democracy. What was notable about the many and various "humble pie" articles (and book-eating) this week was the admission of error - I have failed to correctly interpret the signal, or I have misjudged Corbyn - but there was little appetite for more democracy, despite the polls (sic) suggesting we'd be more than happy to have another go at the ballot box.
Toggle Commented Jun 15, 2017 on Political pundits' biases at Stumbling and Mumbling
On the material interests vs preferences point, perhaps Mayism is about preserving existing gains rather than further enrichment, hence the focus on symbolism rather than practical policy. Much of the language of "fairness" and looking after the interests of "ordinary" people in the manifesto reeks of ressentiment. Perhaps the Mayite is an instinctive anti-capitalist (anti-EU) who was bought off by fictitious capital in the form of property. In other words, a lukewarm Thatcherite for whom the past is now more significant than the future. Home ownership has been in decline for well over a decade now and a sense of loss has been pervasive in political discourse since 2000: a loss of probity (Iraq), a loss of standards (expenses), a loss of loyalty (Labour "deserters"), a loss of opportunity (social mobility) etc. This culminated in the festishisation of control in last year's referendum. The sensitivity over the "dementia tax" is surely not simply about the state expropriating property wealth but about the threat of impending loss. The Tory party is not merely decadent and conflicted in its class interests, it is shackled to a generation that faces electoral decline.
Toggle Commented May 21, 2017 on Who benefits from Mayism? at Stumbling and Mumbling
@Jim, IBM was never a monopoly (there were other mainframe suppliers), but it was sufficiently dominant that it could reinvent itself as a software and business business services provider once the "big tin" market was eroded by minis and desktops. The key to this transformation was its established global footprint, i.e. the infrastructure of offices, commercial partnerships and political contacts. In other words, the network effects that benefit incumbents were at work long before social media. While competition was employed rhetorically to open up countries to globalisation, the result was the creation of a new class of multinationals who tended to shift from a vertically integrated model (controlling manufacture, distribution and sales) to a horizontally integrated model (focusing on "core competencies" such as R&D, brand and finance) with most of their operations sub-contracted. Apple is a good example of a business that went from vertical (e.g. insisting that eveything it made should be incompatible with other devices) to horizontal (essentially positioning itself as a luxury goods brand). National competitors, who are often still vertically integrated for political reasons (keep the jobs here etc), are at a scale disadvantage while the cost of entry to new global competitors is now much greater. In other words, globalisation was justified by appeals to competition but it has produced a less competitive environment in many industries. It's possible that Apple will be knocked off its perch one day, but its also possible that it will simply buy-out any emerging threat. That has been the standard MO of most Silicon Valley giants for years (and one reason for the cash piles).
Toggle Commented May 18, 2017 on The end of competition? at Stumbling and Mumbling
Austerity has clearly played a part, in terms of a failure to invest in system upgrades, but the larger error is one of commission rather than omission, namely the decision to reject proprietary systems for commerical off-the-shelf software. This reflected the public sector adoption of supposed private sector best practice ("buy not build") in the 90s and was driven as much by New Labour, after its u-turn on marketisation and embrace of the privatisation of ancillary services, as by the Tories. At the time, this strategy was justified on cost-benefit grounds: it was cheaper than bespoke development, it used proven technologies, it would commodify IT skill needs and thus lower ongoing costs etc. The "legacy mish-mash" problem outlined by Dipper was also a factor: we have an old mainframe "black box" but nobody knows how it works (ironically, a black box is highly secure precisely because there is no malware that targets it). Factors that weren't considered (because the case was usually made by business consultants, not techies) included the risks posed by sunsetting (i.e. inertia leading to unsupported systems, such as XP), data isolation (creating auxiliary systems, e.g. spreadsheets, that aren't backed-up over the network), and malware (more is written for Windows not because it is a less secure OS but because it has a massive installed base). The NHS IT landscape is typical of the public sector but it is also typical of much of the private sector, particularly those businesses where IT strategy has been set by the CFO rather than the CTO. The besetting sin is an obsession with short-term cost control that simply builds up greater costs down the road. The root cause is a naivety over markets and commodification.
Re the Jonathan Freedland piece you linked to, it's odd how people who claim never to read the papers or watch the TV news have somehow managed to form an opinion on Jeremy Corbyn. Freedland put it down to "instinct", which is weak even by his standards. People are obviously interested in the factors that impact on their jobs and public services, but they don't necessarily associate this with "politics", which for many is something to be avoided, like chuggers and Jehovah's Witnesses. This is rational given that politics is designed to be exclusive. Democracy's major problem is falling turnout. Unless you believe that older cohorts more disposed to vote are blessed with the wisdom of age, which doesn't quite tally with the popular explanations of Trump and Brexit, it doesn't look like that trend correlates with growing ignorance. In other words, "I'm not into that stuff" may reflect more than just a lack of knowledge.
@Dipper, The government can already legally limit the number of non-EU migrants in order to encourage UK businesses to invest in training. It has never worked - business always persuades the government to relax the quotas or criteria - yet this has never led to the government suffering anything more than minor embarrassment. The thrust of this post is that the immigration target isn't actually a target at all, in the sense of an indicator of intent, so it is pointless to imagine it could have any effect on behaviour. It is purely symbolic.