There's an article in the Guardian this morning that reports:
The recent riots in London and other big cities were the product of an "out-of-control consumerist ethos" which will have profound impacts for the UK economy
Pure Guardian stuff, you might think, except:
The report by the global head of research at Tullett Prebon, Tim Morgan, is part of a series in which the brokerage analyses bigger issues for the UK.
And these guys aren't any brokerage: they're bang in the middle of the most complex, and as I'd have it the most feral of City activity. But as the Guardian note:
[The report] details recommendations to resolve what it sees as a political and economic malaise: new role models, policies to encourage savings, the channelling of private investment into creating rather than inflating assets, and greater public investment.
And it does on:
It warns: "We conclude that the rioting reflects a deeply flawed economic and social ethos… recklessly borrowed consumption, the breakdown both of top-end accountability and of trust in institutions, and severe failings by governments over more than two decades."
What's to blame?:
A typical internet user sees a hundred adverts an hour, the report says, and the underlying message many receive is: "Here's the ideal. You can't have it." Accompanying this is an inflation of government and private debt, a key theme of Morgan's other work.
"The dominant ethos of 'I buy, therefore I am' needs to be challenged by a shift of emphasis from material to non-material values. David Cameron's 'big society' project may contribute to the inculcation of more socially-oriented values, but much more will need to be done to challenge the out-of-control consumerist ethos.
"The government, too, needs to consume less, and invest more. Government spending has increased by more than 50% in real terms over the last decade, but public investment has languished. Saving needs to be encouraged, and private investment needs to be channelled into asset creation, not asset inflation."
These are all themes I explore in some depth in The Courageous State. It's good to see the City is likely to provide at least some support even if there are some aspects of Tom Morgan's report for which I have little enthusiasm.
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I don’t necessarily disagree with what Tim Morgan says, but from someone on a stratospheric City salary it has an uncomfortable whiff of ‘the proles should know their station.’
….Reading the executive summary of his report, that whiff becomes an overpowering stench.
The libertarian stench at the end is horrible
But there are bits noted worth referring to
The Bank of England has long been panicking about the lack of bank lending and how it is affecting consumer confidence, consuner confidence being a handy euphemism for “borrow-to-buy”.
The BoE thinks we need to get back to borrowing what we can’t afford in order to buy things we don’t need (mostly from other countries) to get the economy moving again.
Beggar investment! Get people borrowing again! Get people horribly into debt again and let the government sit back and take the credit for the resultant growth that has absolutely nothing to do with them!
Less investment – more debt!! 🙂
He may be useless, but you have to admire his prioritising !
“Prime Minister David Cameron may face further disruptions to his work schedule as he tries to juggle running the country with the demands of taking lots of holidays”
http://newsthump.com/2011/08/23/prime-ministers-job-could-be-interrupted-by-further-holiday-making/
But it of course fails to acknowledge that this is not just abouit proles wanting a bigger TV – because they are proles – and not just cos they are falling for ubiquitous advertising either.
As I’ve pointed out before, the emphasis on ‘consumers’ has been and is the justification for the whole neoliberal globalisation project. It ahs been key propaganda. It is the basis of what is called ‘international trade theory’ – or at least the way this is constructed to ensure that big capital wins out.
So people are only addressed as consumers. E.g. offshore production is accepted as good cos it reduces consumer prices – regardless of the effects on workers and on the economic earn/spend cycle, elements that are strangely are not brought into the equation.
Meanwhile transnational firms capitalise big time on the cross border wage differential.
Same goes for bringing in cheap labour. The surge in this will happen when people are so distressed, and with so little chance of employment, that ‘cheap’ will be very necessary.
I could not agree more-except on advertising,and the constant media promotion of “lifestyle” .
BUT,what are you suggesting-that we all go back to subsistence farming and cottage industries? Every consumer purchase keeps someone in a job somewhere-and possibly in countries where the alternative to that job might not bear thinking about.Or in the UK, the State resumes manufacturing,similar to British Leyland for example? Oh,there I must also add that transnational companies like Messrs. Toyota,Honda and BMW now manufacture “offshore” in the UK-and are very successfully exporting and employing a lot of UK workers at far from minimum wages.Would you deny all those people the chance of a decent job?
Alternatively,I hate to think of child labour in 3rd world countries producing goods at £2 a week for export to the UK,which is the other side of the coin,as you rightly imply. The question is obvious-but what is the answer? I`m not here to defend or condemn any”-ism” -just yearning for a few more answers instead of all the questions.
I’ll try and address these issues in The Courageous State – forthcoming!
Brian – If your question was to me.
That’s ridiculous about subsistance farming.
I was pointing out that the emphasis on ‘consumers’ to the exclusion of all else is not just due to the attraction of ‘toys’, but has been very deliberately manipulated so that people as ‘consumers’ are prioritised, instead of a balanced consideration of national economy and employment, along with meeting material and services needs and wants – employment is a need too.
All the ‘curves’ in ‘international trade theory show that liberalisation makes goods and services cheaper for consumers, but with no consideration of other factors e.g that some small poor countries rely on customs duties to fund any public services, or the effects of on jobs in higher wage countries. The answer to the latter is always ‘adjustment’, but the literature is sorely lacking in who pays for ‘adjustment’ as transnationals cream the profits from globalised production (cheap labour) and reduced import duties.
So the consumerist emphasis is not, as you interpret, just a commercial media push. It is the neoliberal push that we have had since Thatcher. It includes both the sell-offs and privatised contracting of public services, in fact of all public procurement (govt spending), being simultaneously liberalised (opened to transnational investors) as it is privatised, and, in the private sphere, all investment ops opened to transnational investors.
One result is that so much of UK economic activity is now overseas owned. Tell me that is good for the UK economy. Tata is registered in Luxemburg – so even rips off the Indian economy.
In jobs, if you have any concerns about the UK economy – it does matter who is doing the job, whether its a UK resident, or production overseas or workers brought in.
In terms of jobs, we need an overall comprehensive consideration of material and services needs and wants along with the needs for employment and the needs of the national economy.
There are implications of loss of tax and NI payments if people are brought in to work, ie.these are not collected, welfare cost implications if people here are displaced, and skills are lost here too, for the future. Bringing workers in is great for the ‘efficiency’ of the individual firm – cheap labour – but a no-win for the UK economy yet the UK govt is encouraging it as much as possible.
A good start woud be to reject the spin that ‘all protectionism is the work of the devil’. Other countries protect heaps of things e.g. 50% domestic ownership of enterprise and of land, and strict limits on workers coming in. India has strict % limits on how many cheaper Chinese workers a corporation can bring in. Did you get that one? Shall I repeat it?
Within the EU, we are the only Member State that is actually following the EU Directive to liberalise public procurement. That’s right – only 13% is being liberalised – us. The other countries are giving the work to domestic firms and domestic workers. We ALWAYS liberalise it, EU companies ALWAYS get the work (Bombardier?) cos they have cheaper labour, and if its services contracts as most work is, and the work is done here, they can then bring their own workers into the UK! This is the case on power stations across the country.
People here lose out in where their tax money is going, and they lose jobs.
No – not subsistence farming – just a government that works for the country not for London -based transnational financial services corporations. Not such a wild idea.
If your heart bleeds for overseas workers and their lack of rights, consider the oversupply of labour factor. If you really want to consider, high population growth is due to a lack of women’s rights – this is without question. So try working on that one, as we could, as a country, with a proper overseas devt policy.
The population of India has trebled in the last 50 years. We give aid to India. And Indian corporations bring workers in here, undercutting and displacing UK workers and profiting from the big wage margin. But also e.g. RBS.
Who wins, who loses?