I have my first post on the new Progressive Economy Forum blog this morning. In it I argue for revision of our national economic goals, saying:
Suppose, though, we were to set more appropriate economic goals that might replace the almost irrelevant 2% inflation target? What might those goals be? And how might they be implemented?
I suggest there should be five targets, all of which are very obviously related. They are:
- To create full employment; whilst delivering
- rising median earnings from that employment; against a backdrop of
- falling income and wealth inequality; to be achieved in an economy where there is
- ecological sustainability; with the goal that all should share in a
- flourishing economy in which the wellbeing of all people matters.
I would propose that it is hard to argue against these targets — together, they appear to be the very definition of a successful economy.
The rest of my argument is available here.
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How are we going to introduce more money into the economy, if it’s found to be necessary, when full employment is achieved?
Government keeps spending
So long as it taxes it
But what would we need more money for?
Very happy to see you using median rather than average.
For wealth and income inequality I agree it is too high and my first question to any economist is what do they think is the equilibrium wealth and income distribution? Still waiting for a good answer.
Rather than target the distribution directly (point 3) I would invest in people, their education, skills, and health, and housing and transport, using sustainable energy as per your points 4 and 5. When education spend per pupil is the same in the public sector as the private sector we might start to see the meritocracy that politicians like to talk about but do not really care about.
Interesting points Charles
I hoped they were overlapping but this was up for discussion
I think PEF needs to agree on th8ngs l8ke this if it is to be relevant
I liked reading that. It’s like a 21st Century version of Clause 4. Now, how can we get the Labour Party to adopt it because it puts meat on the bones of ‘for the many, not the few’?
It will be going their way…
Alas, Labour will not listen. John McDonnell is their economics leader and he dismissed your views saying you didn’t really know what you were talking about. “Not really an economist” was what he said about you.
And it looks like Corbyn and McDonnell have a strong grip on Labour, leaving you impotently watching from their sidelines.
I suggest you may not know everything.
Very much so.
Kristen O’Donnell what is the source for your comment because if verifiable it tells us that John McDonnell is in a position way above his pay grade since it takes little effort to find out that MMT is the outcome of the work of many economists starting at least with John Maynard Keynes so Richard Murphy has authoritative and learned economist sources to support his arguments?
Can you really separate economic goals from social goals? IMHO they must be integrated, otherwise there is the danger that however laudable the former they can be captured by, basically, the greedy. So we have “maximising shareholder value” or “the social responsibility of business is to increase its profits.”
I’ve mentioned here and elsewhere that the State owes it citizens decent housing, the right to employment, equity in wealth and income, free quality education, a properly funded health service, cheap or free energy and water, a pension people can live on, free, reliable, comfortable, accessible public transport, a clean environment, good leisure facilities and so on.
These are the kinds of social goals a modern economic policy could create investment for, so that no one is left out and no one is a billionaire oligarch.
I would hope these do embrace social goals – hence the last one, in particular
Freedom under law, economic freedom, personal freedom, fairness, happiness and equality of opportunity.
Is there a place for these?
I am not sure anyone could flourish without them – so yes
Although what is economic freedom?
Good and terse, sounds like Green Party policy! I suggest change “wellbeing” to “wellbeing and healthcare”.
We worry about the NHS. The Cons and Neolibs have maxed out returns , notably, on – Housing and Education, as well as privatised public utilities. What is the next exploitable area for the UK to maxout on – Healthcare. This is where Trump, May and Co pickup (task in progress) by increasing pharmaceutical prices and a free-for-all in a privatised NHS with great opportunities for insurance schemes (scams).
That’s a little Cartesian to me
I am not sure the mind / body split is required
I agree median is a much fairer benchmark than average (average is so often use as a stat to mislead people). Out of curiosity:-
* why median rather than modal income?
* why median / modal rather than minimum income? Or should the objective be both minimum and median / modal incomes to increase?
Please try not to laugh if my questions seem naive. Finance & economics are not strong areas for me.
A modal number is the most frequent
In income terms that may well be nothing
I am not sure how useful that would be then.
Increasing the median income would undoubtedly be better than the increasing mean income (since increases in the income of the wealthiest would distort the mean income, as per what another commenter has sensibly highlighted). If the modal income though is zero, would that be the income of the people in society who need to have their income increased most? Increasing the modal income seems possibly more likely to favour those at the lowest end of the income spectrum. Increasing the median income would more likely favour those nearer the middle.
I am not convinced: the mode is just one number
re Mode: “In income terms that may well be nothing”
As in non functional zero hours contracts or for some other reason.
With any system there would be ways to cheat the figures upwards by out-sourcing low wage employment wouldn’t there ?
I think I’ll vote for Michael Gove’s everybody should be above average principle. 🙂