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The problem with Summers' use of the term "secular stagnation" is that is prompts people to see the current set of symptoms in terms of an earlier era's debate, with camps forming around deficiencies in supply ("we've stopped inventing stuff") and demand (inequality). Your fellow MMTer, Randy Wray, is perhaps closer to the mark when he notes that the current situation is more likley to be the product of success rather than failure: "To put it in simple terms, the problem is that investment is just too damned productive. The supply side effect of investment (capacity creation) is much larger than the demand side effect (the multiplier), and the outcome is demand-depressing excess capacity". Contrary to the lament of messrs Gordon and Cowen re the non-appearance of jet-packs, technological advance over the last 30 years has been enormous, with software in particular adding an order of magnitude to productivity. The problem (evident in stagnant average productivity) is these gains depend on a small and shrinking amount of labour, hence the polarisation of superstar pay at the top and labour-capital substitution at the bottom. The solution may well be printing money, but this will not reverse the underlying trend in the evolution of the material base. It's technology, innit.
Toggle Commented Dec 10, 2014 on For worker control at Stumbling and Mumbling
Distance lends perspective, but this is still a middle-distance view. Over the very long run, Brown was no different to most postwar PMs: buffeted by circumstance and a prey to his own fears and prejudices. I suspect historians will highlight only one decision during his time as Chancellor, namely his opposition to the Euro, though the significance of his obduracy will not be understood for a long time yet (contemporary counterfactuals are obviously nonsense). His decision to hand control over interest rates to the BoE may have had its technical merits, but it was of a piece with his willingness to trust the City. Some have assumed a cynical, Faustian pact - bad money being turned to good use - but it actually looks like timidity, as does his studious ignoral of the 1%. Though Brown is often caricatured as a bruiser (a hazard faced by any Scotsman who doesn't look like Michael Gove), he was actually a bit of a prig (so quite like Gove, then).
Given that underlying public expenditure as a % of GDP has not fundamentally changed (and the deficit has not shrunk), and is projected to still be around 40% going forward, the question should really be: what is Osborne doing if he isn't shrinking the state? Much of his plan looks like the legacy of Thatcherism - privatising health and education and eviscerating local government - however it also appears to be more calculating in its protection of pensioners. If there is a conspiracy here, it may be the result of Osborne interpreting David Willets' The Pinch as a manifesto.
@Ralph, there is no evidence that paedophilia is more prevalent among muslims as a whole. However, there is ample evidence that child sexual exploitation is driven by opportunity (as gg notes), hence the prevalence among carehome workers (who are mostly white) and minicab drivers (who are often asian muslims). At the end of 2013, there were precisely 100 UK prisoners convicted of terrorism offences, of which 93 were muslim. This reflects current conflicts and the legacy of the "war on terror". If you'd taken a snapshot 20 years ago, they'd have been predominantly Irish Republicans. The part of the UK that has historically seen the greatest degree of electoral fraud has not been areas with high Asian populations, but Northern Ireland. In fact, electoral fraud (gerrymandering) was long condoned by government.
Your humour becomes ever more recherché. George Osborne's fawning biographer suggests that the leader who can provide the UK with a vision-thing "should be" the PM, which is a pretty obvious implication that it will not be, and that Ganesh is very relaxed about that. What is notable about Osborne is that he views economics in purely instrumental terms, hence he will make "imbecilic" and "silly" statements that he obviously doesn't believe, purely for political gain. To the extent that the media are culpable, it is because they are a willing (and consciously cynical) conduit for his nonsense. The Labour front bench may be wrongheaded about many things, such as the deficit, but you do get the impression that they actually believe the orthodoxy. What frustrates Ed Balls is that he simply can't carry off the chutzpah of the Chancellor. Ultimately, Osborne is a more dangerous adventurer than Johnson (B minor). It is never an appealing sight when journalists start talking about the need for a "galvanising leader" who can "transcend our small-time politics" and the "frivolity" of the public. The media are an ideological means to a hegemonic end. So, to a large extent, is economics. The gap between politics and economics is ultimately the responsibility of politicians.
Toggle Commented Nov 27, 2014 on Economists vs politicians at Stumbling and Mumbling
@AAV, the introduction of IT into banking did not make bankers redundant but increased their number and pay. This is because technology enabled the massive expansion of opportunities (derivatives, hedging, faster trading etc). Consequently, there was a larger host that could support many more parasites. Similarly, commercial finance (i.e. accountancy, auditing etc) has automated away a lot of clerical roles, but it has used technology to create a whole raft of new parasitical roles: management accounts, internal compliance, systems accountancy (can't count, don't understand systems) etc. Some of these supernumerary roles will in turn disappear as the balloon continues to descend and more bodies have to be chucked over board, but the corporate mafia will never disappear entirely because it is protected by corporate law.
Toggle Commented Nov 25, 2014 on Advice for youth at Stumbling and Mumbling
@Blissex, you are confusing the ideology of home-ownership with the legal and financial reality. Perhaps you've been reading the Torygraph and the Daily Hate a bit too much. If you take out a mortgage on a property, you do not own that property. Legally, the mortgagor does. That is why you do not get the title deeds until full redemption of the capital loan. Upon redemption, you own the property and can sell it to realise a capital gain. However this is only a notional gain for most people as you would then be homeless. You can realise a true gain if you downsize and buy a cheaper substitute property, but this means a much smaller net gain than the capital appreciation figures trumpeted by the press. That actual gain is theoretically equivalent to the loss in utility occasioned by moving into a lesser property. Everyone's utility is different, so some people may feel the gain is greater than the loss, but at the level of society this will be neutral as it reflects aggregate buyer valuations. As you say, what matters is how people "feel" about this, and how they perceive their social status as a result. A mortgage is "the freedom to own your own home" rather than debt bondage, while sole traders think they are small businesses rather than casual labour. Class consciousness is the issue.
@Magistra, you're somewhat misrepresenting Marx when you say he "put a self-employed hairdresser in a different and higher class from a salaried GP". Marx's views on class can appear contradictory - partly because he didn't finish that chapter in Kapital and partly because he recognised the mutable nature of class interests and their social representation - however he thought it ultimately boiled down to those that "live on wages, profit and ground rent, respectively, on the realisation of their labour power, their capital, and their landed property". Clearly, it is possible for the same person to live on all three revenue streams, however the vast majority depend on one. Owning a house (unless BTL) does not make you a landowner as there is no ground rent, and a mortgage is simply debt bondage where the collateral is the worker's future labour. Similarly, owning shares through a pension or mutual fund does not make you a capitalist. You're right to say that the "1%" is a useful image, not least because it reminds us that 99% of us largely depend on wages, but not that this is a departure from the Industrial Revolution. That fraction would have been as accurate a representation of the dominant force in society in 1814 as it is today (the key point of Piketty).
Your use of the word "paradox" is surely ironic. The egalitarian hegemony you point to is the product of capital's instrumental lack of discrimination (and a desire to turn lifestyle into a set of commodities) rather than the success of the left in "winning the culture war". Class, both the simultaneous maintenance and denial of, is central to capitalist ideology. Racism, sexism and homophobia are merely sites of opportunity. When there is more money to be made being anti-racist than racist, then the ideology adjusts accordingly. What working people need (and yes, I mean need not want) is not a party advocating more Tory women in the boardroom, or promising to "understand the concerns" of racist idiots, but one that promotes worker autonomy. It is, as you say, practical steps in this direction that would have the single largest impact on class consciousness. Unfortunately, the Labour party (which is the party that manages labour, not represents it) is incapable of such a seismic shift in its thinking.
In suggesting that "Labour must respect the working class more and the managerialist pseudo-elite less" you're rather ignoring the history of the party. Managerialism long predates the neoliberal infection and there has always been a class divide within Labour between the officers and the other ranks. The irony of people like Jason Cowley criticising Ed Miliband for not being Clem Attlee is that the current leader is actually cut from the same cloth. I imagine Attlee would have been as nonplussed by Lady Docker as Miliband was by Myleene Klass. The problem with Emily Thornberry was not that she took the photo, but that she didn't defend her action with "I'll snap whatever I fucking like". What this incident shows is not that the CLP are snobs, but that they're wimps. This is why a wuss like Alan Johnson is considered a contender and any lippy Scotsman is considered a "bruiser".
Toggle Commented Nov 21, 2014 on Why workers matter at Stumbling and Mumbling
@DFTM, your model of social change implies that the authorities pass laws and we change our behaviour accordingly. The reality is that legislation usually follows and confirms shifts in mood or changing material interests. The alacrity with which football clubs introduced seats in the early 90s reflected their realisation of the commercial opportunities that had become apparent with the launch of the EPL. A key part of this was attracting more high-spending fans (i.e. more middle-class = embourgeoisement) to the grounds while simultaneously displacing and expanding the low-spending sector via TV. Legislation reflected the growing social unacceptability of racism. It was an effect, rather than a cause. It's also worth remembering that part of the purpose of law is to remove the burden of responsibility from the individual faced with objectionable behaviour. In other words, when the indifference of the many turns to tight-lipped irritation then the law will not be long in coming.
@DFTM, re "Racism was reduced in football grounds not because economic conditions changed or that people become less ignorant, it changed because of legislation and a lower tolerance for racist ideas - pushed by authority". Au contraire. Racist chanting in grounds peaked in the 80s, in no small part due to the NF/BNP infilitration of hoolie firms following the failure of the Oi scene. While the authorities focus on hooliganism helped isolate the firms, the turn against racist chanting and violence more generally was as much down to fashion (Madchester), consciousness-raising (fanzines) and repulsion over Heysel and Hillsborough. This process was accelerated by the shift to all-seater stadia and the increasing embourgeoisement of football. The authorities have remained laggards in combating racism within football.
I'm amused that a post on how politics has been overtaken by narcissistic tantrums should prompt a comment blaming the baby-boomers for being "bastards who have no pity", riding around on their graduate ponies. The political change in society did not occur suddenly in the 60s but was a generational shift between the 50s and 80s. Where previously people saw their individual (i.e. selfish) interests best served by collective action, by 1979 enough of them believed their interests would be best served by individual "liberty". This reflects a change in material circumstances and perceptions of power, not of ethics. It is always foolish to imagine that human nature changes much, even over long periods of time. If we are selfish and narcissistic today, then so were our parents and grandparents. What does change, in line with material circumstances, is the prevailing ideology and the corresponding self-justifications we devise for our actions. Where once we vaunted collectivism as the product of altruism (the left) or patriotic self-sacrifice (the right), now we vaunt individualism as a form of craft authenticity (the left) or robust common sense (the right). Consequently, politics takes on a personalised form in which we express our "values" by deploring emblematic individuals, from Ched Evans to Russell Brand to Ed Miliband. But this is little different to deploring groups in society (imagined as well as real) as homogeneous bundles of bad behaviour, from baby-boomers to muslim cabbies to jews (or, conversely, to lauding them as homogeneous bundles of good behaviour). There are always horses and there are always riders. The trick is to identify the categorical difference, not worry about the jockey's silks or the horse's tack.
Nick suggests that we must accept "intelligent articulate celebrities who have come from poor backgrounds" for want of enough "poor people, whom no one has heard of". Of course, the very reason we haven't heard of them is because they don't get on the telly, outside of contrived gawpfests like Benefits Street, which suggests that there is an insurmountable catch-22. A poor person will only receive exposure for their views (as opposed to their deeds) once they have been categorised as suitable for celebration. This doesn't just mean richer (Russell Brand) or more socially compliant (White Dee), but also consistent with the ideological frame for the "decent" working class: sentimental, illogical, unworldly etc. Bob Crow was probably the last "face" who resisted this frame, which led to him being marginalised by the media as the left equivalent of Nick Griffin during his lifetime and promptly eulogised as a sentimental old Millwall fan once he died. Professional or accidental entertainers are better at playing this role, hence the scope of "celebrity" has steadily narrowed over the years (ironically, the public space is no less elitist than it was in the days of the Brains Trust). Even the middle-class celebrities used to mediate working class interests are now species of paid entertainer, e.g. Owen Jones, Giles Fraser etc. The triumph of celebocracy is crystallised in the fact that "working class intellectual" is now considered an oxymoron by TV producers.
Toggle Commented Nov 18, 2014 on Klass war at Stumbling and Mumbling
I'm not sure it is correct to say that the relationship between house prices and student debt on the one hand and the labour supply on the other is "unintended". If longevity is increasing, then it makes sense for capital to extend working lives and thus increase its share of the surplus of lifetime labour. Some of the changes this gives rise to, such as the pushing back of the state pension age, are clearly deliberate (regardless of the dubious claims about pension affordability). Student debt is obviously a claim on future labour (hence the mechanism for repayment), but so too is the cost of housing. The gradual increase in mortgage terms since the 1990s (25-year terms have declined from 70% to 30% of new mortgages, with a quarter now being for 30 years or more), is a key factor in the continued rise in house prices.
Toggle Commented Nov 14, 2014 on Bondage at Stumbling and Mumbling
Job polarisation, stagnant median wage growth (at least for men), the dearth of investment opportunities, and the accelerating wealth of the top 1% are secular trends that were apparent by the mid-80s. (You could argue that some of these trends, like investment, didn't become obvious till the early 90s, but other observers, e.g. Robert Brenner, would argue that there were clear signs as early as the 70s.) In other words, "New Labour's world" was always a construct that interpreted the facts to suit a particular ideological agenda. As there hasn't been a change in "relevance" - as opposed to a wider recognition of the facts and the systemic economic insecurity that they point to - I'm not so confident that the New Labour skin has been shed.
Toggle Commented Nov 13, 2014 on Beyond New Labour at Stumbling and Mumbling
Another characteristic of upward social mobility is a tendency towards sentimentality, which is both a way of grieving over loss and of projecting authenticity (you can touch my scars, if you like). I suggest you stop watching Corrie so much and go down the pub.
Toggle Commented Nov 12, 2014 on The scars of class at Stumbling and Mumbling
The Tory party has long been a fractious alliance between varieties of capital, from free-traders vs empire-preferencers in the 19th century to today's three-way divide between big capital (pro-EU), small capital (anti-EU) and finance capital (keen to arbitrage between in and out). Murdoch's position doesn't reflect a fear of EU regulation but a recognition that, in Europe's polyglot environment, media will remain essentially national so EU harmonisation is of little value to him. His contempt for the BBC is driven less by their non-existent lefty bias and more that they are the only organisation capable of being a serious competitor in the global anglophone market.
Toggle Commented Nov 10, 2014 on Tories vs big business at Stumbling and Mumbling
The problem is that the fixed-term parliament has led to an extended phoney war as legislation dries up. The media need something to get their teeth into and many backbenchers are bored. Manifestos won't be published till early April, after the March budget, so we've got 5 months of nonsense to look forward to. The prominence given to the EU surcharge is also symptomatic: a slight story that would normally only exercise the likes of Daniel Hannan. The danger is that this febrile atmosphere may give rise to emotivist policy-making, either to grab headlines or to avoid being on the wrong side of them.
Toggle Commented Nov 9, 2014 on Leadership in question at Stumbling and Mumbling
It isn't intellectually inconsistent to argue that central planning works at the level of microfoundations, i.e. individual firms, but that it is inefficient at the macroeconomic level, though I'm personally sceptical about both halves of that argument. However, it is inconsistent to argue that the exercise of power (i.e. hierarchy) is different in kind between the economic and regalian spheres. In other words, the significant point of the Cold War "peace" is not the survival of central planning so much as the continuity of attitude between Markus Wolff and Theresa May.
Toggle Commented Nov 9, 2014 on The Cold War isn't over at Stumbling and Mumbling
AllanW, Insofar as I've understood it, your JG scheme would have the following features: 1. An income set at the level of the Living Wage. 2. Assuming #1, "any benefits or welfare system beyond the job guarantee levels of remuneration will surely become unnecessary over time". 3. Every citizen to be eligible (i.e. the currently employed as well as the unemployed). 4. Not compulsory, which implies alternative income support for those who don't participate and remain jobless. 5. The scheme to be permanent and available on demand ("the job guarantee could be exercised by some people for the whole of their working lives"). 6. The scheme to be pro-social rather than a subsidy to the private sector ("a ready pool of skills, motivation and physical resource that would enable public initiatives to be implemented more quickly than currently possible"). Correct me if I've got anything wrong here. There is an obvious conflict between #4 and #2. This highlight one of the persistent problems with all JG schemes, which is whether they should be compulsory or not. If not, this implies #1 (an attractive wage) but rules out #2, which means that the scheme could not be fiscally-neutral (i.e. no change in overall spending). This doesn't rule it out, by any means, but a key claim made for both BI and JG schemes (and crucial to any chance of popular acceptance) is that they can be implemented by better using existing resources. Your proposal implies both an increase in taxation and a shrinking of the private sector relative to the public. It might be possible to make it fiscally neutral by abolishing housing benefit (and child benefit) immediately, but this just returns us to the issue that Luis raised, which is that the scheme may prompt massive social engineering, with the poor being decanted out of London & SE. Your scheme also implies a significant "deadweight loss", i.e. resources doing JG jobs that might be more productive doing jobs in the private sector. This is not a criticism of public sector jobs per se, but a recognition that employment churn is "sticky" - i.e. people don't move job at the point that is optimal for both them and employers, and they tend to bias towards sitting tight. This is why most JG schemes are designed to be either temporary and/or have wage incentives to encourage exit. Re "skivers", most skiving in society is done at work, which is why the denigration of the jobless is hypocritical. It is also more prevalent among whitecollar roles rather than bluecollar, because the latter tends to be subject to more workplace discipline, however it is deemed to be easier to spot among the latter - i.e. manual workers tend not to be granted the privilege of excusing their idling with "I'm thinking". Regardless of the reality, any JG scheme will be assumed by DM readers to be a hotbed of skiving. This prejudice, which is the ideological descendant of attitudes that gave us workhouses, is also likely to result in the scheme being limited to jobs that are easier to monitor and discipline, so call-centre and care work rather than data manipulation or investigation. A JG scheme is inescapably a class issue, in a way that the universal BI isn't. I admire the ethical basis of your scheme, but I don't think it would work in practice.
AllanW, Mention of gangplanks reminds me of Captain Rum in Blackadder on the subject of whether a ship needs a crew: opinion is divided. You're obviously entitled to your own vision of a job guarantee, but I was pointing out the common features of the theoretical schemes advanced by the majority of its advocates, such as Bill Mitchell and Randy Wray, plus the current policy proposals of the Labour Party. The latter are promising a limited job guarantee (25 hours a week) for the long-term unemployed (+24 months or +12 months for 18-24 year olds), that would be compulsory and paid at the NMW. See
AllanW, The job guarantee is a regulating mechanism that expands and contracts a buffer-stock of workers in the public sector depending on the health of the private sector. That's not my terminology, its what designers of the JG employ. In practice, both the JG and BI can be implemented in either a punitive or humane fashion. The decision is political, however there are structural features that make the JG more likely to be punitive. A fundamental difference between the two is that the JG must be paid at a sufficiently low level to encourage migration to private-sector jobs once the economy improves (workers must find these new roles for themselves - you can't just terminate JG schemes and hope for the best). This level would have to be less than the minimum wage to avoid inertia. A non-compulsory JG scheme would have to maintain a significant pay differential between JG jobs and unemployment benefit to be attractive. As the JG wage is bounded upwards by the NMW, this is likely to mean unemployment benefits becoming even more parsimonious, which is hardly humane. De facto, a national JG scheme would eventually lead to coercion either because of refuseniks starving to death or widespread grumbling about skivers. Given its temporary nature (and political self-delusion about the duration of recessions), there is a built-in caution against investing in long-run projects that might provide skill development, or indeed in formal training that might not be completed. In other words, most JG work will be manual and its organisation will look a lot like a labour battalion. The chief modern argument against the job guarantee is that it is based on traditional assumptions about cyclicality: the periodic move from full employment to unemployment and back again. It does not address secular trends in respect of automation and commodity deflation, and is thus guilty of "fighting the last war", being more appropriate as a response to the temporary depressions of the 20th century than the structural unemployment of the 21st.
@UberLibertarian, I think you'll find that the universe is a machine (i.e. a process, rather than a Newtonian mechanism), with lots of "free lunches". The most obvious is solar energy which creates food via photosynthesis. It is anthrocentric to imagine that "wealth" is only the tiny speck of matter than man has managed to transform. Of course, this attitude is just an extension of the belief that wealth should be limited to the small subset of humankind who claim responsibility for that transformation. @AllanW, a job guarantee is not a straight alternative to a basic income as they tackle different problems. A job guarantee attempts to address a surplus of labour, while a citizen's basic income attempts to address a surplus of wealth. For more, see
BI advocates on the right envisage it providing only a "social minimum", i.e. enough to avoid outright destitution. It would cover food, fuel, clothing etc, but not the infamous flat-screen TV. As this would be below the minimum wage, to ensure that "work always pays", the idea that it could cover current housing costs (anywhere, not just in London) is a non-starter. The problem that Luis highlights is that housing is now a near luxury even though shelter is a basic need. While the state could continue to shovel money to private landlords, it's more likely that the introduction of a BI would see a reversal in housing policy with councils obliged to provide "basic" accomodation for BI recipients. This would not be a return to the halcyon pre-Thatcher era because council housing then was (at least originally) intended for all income levels. Instead, the current social housing apartheid would become even more entrenched, which would maintain the value of private housing and thus keep the "propertarians" happy.