Our economy is in a mess. I think that should be obvious to anyone, and yet you don't hear that message too often on the BBC news, ITV, Newsnight and much of the print media.
Ken Clarke had to leave the government before he could say the UK's economic recovery is not 'firm;y rooted'. Even so he was being mighty generous to George Osborne. Too many are; Ed Balls in particular.
Some realise how wrong this view is. Paul Mason is one of them. He was right to argue, as I think he did, in a Guardian article on Sunday that the most important theme in much of the UK economy is alienation.
That alienation is dangerous. As Phillip Inman has argued, debt and ageing pose massive problems in our economy. Those problems exist in the short term - when rising interest rates are going to push millions over the edge with regard to household solvency. They face the risk of real alienation, for that is what bankruptcy and all that goes with it is. By 2018, at the latest, I suspect this to be a crisis engulfing the next government of what ever complexion it may be, and yet neither Ed Balls or George Osborne want to talk about it. If Danny Alexander does, well no one is listening.
And Alex Andreou, also arguing in the Guardian, has in a sense pulled these themes together, albeit inadvertently (it's me doing so, explicitly). As he points out, unless we have a vibrant population of young people then they can't sustain the elderly - which is what the crisis of ageing is really all about.
What all three have in common is a concern that no one is addressing these issues. As Paul Mason says:
The moment a party says: "We stand for the low-paid worker against the loan shark, the rip-off landlord and the profiteering boss," young people in places such as Bow Arts might show some glimmer of interest in politics — instead of the utter cynicism and detachment that is routine.
And as he also said:
Strangely enough, we once had a political party whose entire brand, and even name, was centred around improving the wages and conditions of people who work.
His implication is all too obvious. Phillip Inman is not too subtle either:
Britain has become expert at putting off decisions and hoping for something to turn up. Without a return to ultra-cheap commodities, another technological/productivity revolution, or a return to more modest living and delayed gratification, it's a plan that is running out of time.
It is Alex Andreou though who goes to the core of these issues though, when looking at them from a European Union perspective, when he says:
It is up to us to reclaim Euroscepticism — the critical assessment of how we want Europe to work for us and make it work.
In this sense Alex adds the most to debate even if I am sure Paul Mason was probably more read. That's because Alex Andreou makes clear that there are issues that need not be mere matters of concern, and even anxiety, in the current situation, but about which action is possible. Paul Mason and Phillip Inman offer counsels of despair. So too does Alex Andreou, in part, when he says:
It is telling that the Europhobe alternative narrative always ends at a referendum endorsing exit. I have yet to hear a coherent narrative of precisely how the eggs are to be unscrambled.
But it is his twist on that argument is pivotal. He argues that whilst the right have a narrative it is one that does not work. It is a similarly incoherent narrative from the right that Osborne, Balls and Alexander will all offer at the next election. Even if the spin on the EU will differ what Alex Andreou is saying is that all that these politicians will offer are tales of despair and resignation: that ,after all, is what the narrative of the balanced budget and the withdrawal from the responsibility of the politician to put forward an alternative (including on the EU) is all about. What that narrative, quite literally, represents is an argument that there is no choice.
Paul Mason and Phillip Inman do not move much beyond that despair. Alex Andreou does. As he says:
There is no doubt that the EU has lost its way. It has been captured by vested political, financial and corporate interests. It is up to us to reclaim it and reform it.
What he is saying is that of course there are faults in the economic and power structures that we have; it would be absurd to think otherwise. But this does not mean we withdraw from discussion or resort to the discredited solutions of bygone ages (like balancing budgets). What we should instead seek to embrace is an active recognition of these failings as the start point of an alternative narrative.
That is the foundation for a radical politics of change that is intended to deliver empowerment. When all we're being offered is a tale of despair and powerlessness by all the major political parties you can see why I think Alex Andreou's argument pursues his concern to the necessary next step on the way to progress in a way that few will currently do.
I wish others would have Alex's courage. We certainly have candidates for Chancellor who do not and who instead appear to wish to put their heads in the sand. Paul Mason and Phillip Inman are right to note the poverty of those candidate's thinking and the alienation it induces. But Alex Andreou is also right to say the time for noting it has passed. The time to deliver on alternatives has arrived. It's unlikely to happen in 2015. But we still have to work for it, nonetheless. I hope I am.
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I note you suggest “debt and ageing pose massive problems in our economy.” I disagree about ageing at least. If care is needed money can be created to provide it. We have a central bank which can create money, there is an excellent use for it, one to which it can be put without devaluing it. We’re already aware money is a beief system, I’d suggest other countries, at least the ordinary people of other countries, would have a mighty respect for the UK pound if they understood it was being created ex nihilo to fund care for the elderly. They’d no doubt be clamouring for their central banks or their equivalent the ECB to be doing the same. Financiers might decry this suggestion but they’re parasites so we can ignore them.
If this was considered too radical an approach, a more conventional one might be for the Treasury to create and sell old age bonds. These could be purchased by money created for the purpose by the central bank and that money used for the care of the elderly. I know many will suggest this is no different from the scenario above, just a disguise for it, and that’s very true. However, let’s consider what happens if, say, an entity so respectable as a pension fund buys bonds. Where does the money it uses for that purpose come from? It’s made up ex nihilo by the private banking sector, at interest at that so what we would have again is a disguised version of the above. People don’t seem to understand that, their heads filled with nonsense about instant and automatic hyperinflation. Consider, the high street banks are creating money from nowhere all day every day yet none of us are even remotely contemplating having to fill a wheelbarrow with pound notes just so we can pop along to Tesco for a loaf of bread. Education on this subject is desperately needed in this country.
Well put Bill – people don’t understand money and feel it has to control THEM!
People do not realise they are slaves -they are very stressed on low wages, having their benefits peremptorily sanctioned and have little head space to think things out.
As I often repeat to people obsessed with the inflation bogey: research shows that economies GROW with inflation of up to 40%!
We need to be aware that Chancellors are not economically literate and simply mouth the information handed to them every morning by advisors. Osborne is a very rich man who is simply playing a game of ‘let’s be chancellor.’
But ‘care’ is labour intensive. Wages create demand, which brings forth production, which brings forth taxes. This then becomes a virtuous circle.
Paper cannot help an old person to the toilet, no matter how much of it you print. You claim to understand what money is but this obvious fact escapes you. More real resources will be required to look after the elderly, that is why it will be an additional burden on the economy.
Paper liberates resources
And those resources – people – already exist
You have the analysis completely the wrong way round
Consider Mode 4. If these people are available, and it appears to be established that they are, then they can be hired to help the elderly using money created ex nihilo. Why not? It’s what it’s for. Create it from nowhere and use it to create proportionate wealth and you won’t devalue the currency, a concept which seemingly dare not pass the lips of our political leaders. Perhaps this has something to do with their swearing allegiance to the Crown in the shape of our current monarch, a woman who benefits enormously from the popular misconceptions about what money is. We don’t hear a lot of political discussion about land value taxation either, perhaps for similar reasons.
Congratulations, you’ve found the free lunch which has been eluding economic theory all these years. If you print money you devalue the existing stock. Basic supply and demand. It is banana republic stuff. And the idea that only unutilised resources will get used is ridiculous. When you wave cash what is it that makes the unused resources run to the front of the queue? Resources will always be diverted from other things. Nursing homes are not going to be built on wasteland using bricks no one else wanted. And that is why there is no free lunch.
You clearly have not the first idea of economics
The Bank of England would not agree with you’ albeit if took until this year for it to admit it
James, bank notes/virtual currency no longer represent specific amounts of gold. We came off the gold standard decades ago. Were we still on it, what you’re saying would apply but we aren’t, and haven’t been for a long while now, so it doesn’t! Try to keep up James! 🙂
My point has nothing to do with the type of money we use. My point is simple. Increasing the amount of money available does not make the allocation of resources more efficient. If it does, then please tell me what the right amount of money is and how you know what that is. Because the answer always more than we have now seems a bit shallow. If the reason is to give more money to the government to spend then surely raising it via taxation is a more progressive and honest way of doing it.
If you understood anything about money you would realise how absurd your comments are
Start with Ann Pettifor’s e-book, I suggest
Apparently, a record number of people are now in employment, yet spending and growth have barely moved.
Which tells you all you need to know about the quality of these jobs.
And I see the artificial housing boom has brought the equity release vultures back out of the woodwork.
Profit, as ever, is allowed to come before people.
One wonders where the tax take is from this huge increase in employment, and might further wonder why it still is that the Chancellor is borrowing money at such a furious rate the Coalition have borrowed more money in their short term of office than Labour did in their preceding far longer term.
But Bill, you can’t say that, it’s not allowed! How dare you suggest that the policy of austerity is actually leading to greater borrowing than the outrageous profligacy of the ‘tax and spend’ Labour party? After all, all right thinking people know that the tories are the party of economic competence and self discipline, while their opponents are feckless and irresponsible, who will waste the money gained from ‘hard working families’ (it’s that phrase again!) through taxation on paying for millions of layabouts who live a life of absolute luxury on the welfare state, and bloated public sector organisations staffed by pampered, over privileged people like nurses, teachers, social workers and civil servants.
So true
The only problem I have is that the US didn’t go down the austerity route. THeir economy hasn’t done much better.
Hang on – have you noted their employment data?
It’s a jobless recovery -we can be clear about that. If you hammer people off JSA; twist people’s arms until they agree to being self employed then you create a mirage that is politically useful.
As David Graeber has pointed out referring to most so-called jobs as “bullshit jobs”:
“Over the course of the last century, the number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically. At the same time, “professional, managerial, clerical, sales, and service workers” tripled, growing “from one-quarter to three-quarters of total employment.” In other words, productive jobs have, just as predicted, been largely automated away…
But rather than allowing a massive reduction of working hours to free the world’s population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning not even so much of the “service” sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations…
These are what I propose to call “bullshit jobs.”
The so-called ‘self-employed’ and zero hours workers are even in a worse situation than the “bullshit employees”.
I cannot see this situation holding unless I have underestimated the populace’s penchant for slavery and digesting lies.
Simon
I certainly wouldn’t use those terms. Most people like to take pride in what they do. It is human nature.
What is worth mentioning is that constant ‘austerity’ has forced people from worthwhile jobs to jobs that achieve nothing. There used to be a lot of jobs that were valuable that now aren’t done, not by Lithuanian immigrants or anyone.
To give an example, in London &, to a lesser extent, Manchester & Birmingham, there have been spates of stabbings & shootings taking place in parks & on the top decks of buses. Now, when I was a lad, you never had that, even though society was, in many respects, more violent. Why? We had bus conductors & park attendants.
I don’t suppose you young-uns could even remember that!
There are bound to be a record number in work. The population is rising all the time.
Those in work and on a low wage get working benefits, so money is not growing on trees. Hence spending is not growing. Credit is not being slung at people anymore, and (apart from payday sharks) people on low wages are not credit-worthy.
3500 employed by DfWP to crack down on benefit cheats (a few billion)
300 employed by HMRC to crack down on tax evasion (more than a few billion, try a few tens of same)
Poverty breeds apathy.
I hope to live to see the day when other uses are found for Westminster lamposts.
Ageing does not have to be a problem. If people are able to work and put money into a good pension scheme, they will pay tax in old age too. In fact everyone does, via VAT for instance. Give people a chance to work for a good wage and old age will look after itself to a large extent.
I do not recommend you researching the pension industry. It is rivalled only by the banking industry for corruption, high charges and poor performance.
I think George wants a return to the early 1900s’…..where working people lived to an average 46 and the new state pension started at 75.
Oh…
Pension age rising.
Free (sic) healthcare starting to end.
You fail to take account of the forces that are maintaining the status quo, the chaos and the vulnerability.
Financial services control much more than our own government, and the agenda of the transnational financial service industry fronted by the City of London and its lobbying mechanism TheCityUK is on a much bigger scale than the UK national economy – which is a pawn in the game, a necessary model.
Yes it is stronger government that is needed to control this and to change direction, but where the power lies, including the power to control governments, has to be exposed, so people know what they are up against. Such parochial talk just misleads.
The eu is similarly controlled by transnational finance. It is a mechanism for achieving global ambitions primarily through the EU role in the international trade agenda.
The EU was set up for this (role of European Roundtable of Industrialists) and it has been its purpose (single market in preparation for an EU/US single market -> global single market, all for the benefit of transnational corps).
There therefore is no ‘reforming’ of the EU’- that is pie in the sky.
Because of this grand plan, we need to get out of the EU and fast before such expanded single markets become a reality.
A major element in the plan is cheap labour in an ever expanding EU (we just opened to another 45m – v low paid Ukrainians – but that didn’t hit the headlines).
Moving cheap labour across borders is also the most secret aspect of the EU’s international trade agreements.
I was gobsmacked to link to,Paul Mason’s article. NOW, after at least 10 years of political correctness stymying what he could have done in his privileged role(s), he admits in passing, how fundamental to the dire situation for UK workers is the cheap labour supply via the EU mechanism.
Other politically correct sideline sitters take note.
The Migration Advisory Committee (which advises the government, only to be ignored) recently highlighted how a cheap labour/skills supply undermines youth training and hiring in this country. It received little attention and dots were not joined.
The labour undermining aspect is a major reason, but there are more, for exiting an EU THAT CANNOT BE REFORMED BECAUSE WHAT ITS DOING IS WHAT IT WAS SET UP TO DO.
And the EU provides a smokescreen for where control actually lies in this country
I totally agree Linda-the EU is a disaster, producing self-preening kleptocrats like Lagarde.
I have some sympathy with Alan Sked left of centre breakaway from UKIP which aims to take the votes of the somnolent Labour Party. Tony Benn’s prediction for the EU have materialised beyond even his vision.
In 1817, David Ricardo outlined the prerequisites for functional free-trade:
1) Capital must not be allowed to cross national borders from a high wage to a low wage country.
2) trade between the participating countries must be balanced.
3) Each country must have full employment.
It is a beggar your neighbour and beggar your own country approach we have which benefits multinational corporations.
Simon, can you please give me the source for the Ricardo quote. I am on the exec committee of the International Union for Land Value Taxation and Free Trade and am trying to get the ‘Free Trade’ bit removed. Henry George apparently supported Ricardo’s free trade was different to what ‘they’ perceive as free trade. I never did believe in it myself. I understand that Keynes had a similar concept.
“It is a beggar your neighbour and beggar your own country approach we have which benefits multinational corporations”
Quite.
Now look at how many ex-big-four-accountancy employees there are in the European commission.
Then ask yourself whether your above quote is by accident or design.
Then back to TTIP.