The Guardian reports this morning that:
Overall, during the year [2022-23] 12 million people were in absolute poverty [in the UK] – equivalent to 18% of the population, including 3.6 million children – levels of hardship last seen in 2011-12 after the financial crash.
Growth will not solve this. We know that wealth never has and never will trickle down.
In that case, nothing will change under Labour without radical reforms to benefits, minimum wages, worker rights, trade union rights, and the probable creation of wage councils. So far, I am not hearing nearly enough about those reforms, which instead already appear to be at risk of being watered down.
We do, however, keep hearing from Labour about the need for growth.
As I argued yesterday, this is the wrong policy for this era in history. Meeting everyone's needs within sustainable limits should be our priority now. Unless that change happens, 12 million people will continue to live in absolute poverty in the UK.
Is that what Labour wants?
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A political party needs both morals and brains, the two are inseparable.
The hope when the Labour Party was formed was that it would have both. Only on one rare occasion has it had both that being the Attlee administration immediately after the Second World War.
Today you don’t have a true Labour Party you have a Starmer Party. The latter appears not to have morals or brains. The lack of morals is easily pointed to, the treatment of Corbyn, the reneging on pledges and continuous u-turns, the taking of rich people’s money, and the one-sided Zionist approach to the Gaza/Israel conflict.
The lack of brains in my view boils down to two things not understanding Sectoral Balances Accounting in relation to the country’s monetary system, the other is the failure to examine how just the taxation system also needs to be as a necessary component of using a monetary system.
Richard has admirably researched the latter and been able to point how unjust the taxation system is resulting in an under contribution of tax by the wealthy, an under-contribution that frustrates tackling the country’s issues or problems.
In regard to understanding Sectoral Balances Accounting it isn’t really that intuitive and those who recognise the need for this understanding need to work on simplifying how it works. Here, for example, is the simplest I’ve found so far:-
https://www.youtube.com/watch?v=128NAbDcsLA
I’d echo Schofield’s comment on the lack of understanding of basic macroeconomics and especially the role of taxation, and equally lament the ignorance within the Labour leadership.
That neoliberalism has captured and utterly dominates the messaging means we are informed, even by allegedly expert media correspondents, that higher taxes (however targeted) are invariably bad and always damage the economy and lower taxes are eternally good.
This message also permeates some of the Labour membership. Recently, I had a short but futile debate with a self-declared champagne socialist(sic) – a “Labour Together” militant instrumentalist type – who claimed that an income of £75k, so basically the top decile, was barely sufficient for anyone with a mortgage in the South East of England, and taxing this group more was just unfair..
When the BoE were busy hammering the country with interest rate rises on the TINA principle, Peston was the only MSM commentator I heard who noted, and more than once, that there was a valid alternative to the deflationary approach of interest rate rises through increasing selected taxes, and this would be less damaging for most people. No wonder he defected from the BBC.
Richard’s message is that a balanced tax portfolio can be a thing of joy, and achieve the goal of “Meeting everyone’s needs within sustainable limits”.
That is the fundamental goal.
But….. we desperately need better messaging to promote and support the substance of the tax reform agenda in the Taxing Wealth report, and preferably a range of pithy three word slogans and social media memes and graphics that can get that across.
At the immediate political level, it needs to be more nuanced and clever than just ‘tax the rich’ as it is the wealthiest who have the loudest voices in any pushback, (and who now own both the media and two main political parties).
Thanks for your excellent comment Tony. It’s clear to me there has to be a simplified approach to get politicians to combine “morals and brains” and this can be boiled down to a twin set of arguments.
It’s obvious Richard’s taxation conveys a relatively simple message that taxation in this country is unjust and can be changed to the point of improving well-being for all.
Pushing the understanding of Sectoral Balances Accounting obviously isn’t as simple in comprehension terms but it does have the virtue of pointing out by sheer logic why the UK government needs the capacity to create money in its own right and from thin air.
Could it be that the emphasis on growth provides an excuse for not addressing the visible evidence of the increasing problems that austerity/neoliberal socio-economics cause for an increasing number of regular citizens and their children?
Which sections of our society might benefit from current Labour Party socio-economics?
“Meeting everyone’s needs within sustainable limits” should be the global priority for the foreseeable future. It is a scandal that we can’t achieve (or even approach) that domestically.
An increase in minimum wage (and the rest), yes,of course. We need this to address fairness, poverty, and to improve productivity. Whilst employers can employ people on low wages they won’t make the investment needed to reduce their reliance on labour and increase productivity. Low wages are a cause of low productivity, it’s no mystery.
But what about a minimum wage too? Higher tax payers get a bung of 40% of the tax threshold, about £5000 per annum. Surely we can at least pay everyone that (and more or less abolish the tax threshold), which will help those with the very lowest income?
No one gets a bung when they hit the £50,000 threshold, Tim
What do you mean?
For clarity, I mean that the tax threshold confers a tax benefit of about £5k (40% of £12570) to someone earning sufficiently more than the 40% tax threshold.
My apologies if using the term “bung” was confusing.
My point is that higher rate taxpayers get “given” that £5k, whereas those on the lowest income get very little (because they don’t pay much tax).
Why is it OK to “give” £5k only to those who earn well? Fairness suggests that everyone should be given the same £5k benefit irrespective of whether they earn a lot.
Those on lowe pay get half the value…
Remember the allowance is phased out above £100k at resent…
There is not one peer-reviewed paper that supports the so-called “trickle-down” effect.
The last 14 years of government demonstrates that trickle down does not work.
The obvious alternative is trickle-up through I variety of means, such as a government job guarantee, and investment in the infrastructure of the country.
Thank you and well said, Richard.
I was at a City trade body briefing and reception yesterday late afternoon and evening.
Attendees are “impressed with Labour’s genuine engagement with and commitment to the City”. As the City is not the wider UK, one wonders what’s in store for the rest of us.
One, who has known Starmer for two decades, welcomed a Starmer premiership, saying Starmer has always had that PM quality. The asset management economist said he “was from the left and feared the British left won’t miss an opportunity to miss an opportunity” and not turn out to vote Labour. I asked what makes a Starmer government a left wing government. He explained there would be no Johnson psychodrama, Sunak incompetence and wider Tory corruption and the Windsor agreement rapprochement would continue, but no further integration as there’s no need for European integration apart from defence as the US, not just Trump, will leave Europe at the mercy of Russia. That’s all we can expect.
We did agree that Sunak was not up to the job and his City career had never been exposed by the MSM. If it had been, the public and Tory MPs would have known Sunak was a wealthy and well connected empty suit.
I was aware, but let the economist talk. He said the Blair team was content to work in the background, but would make its presence felt in government and flood Whitehall with advisers. He compared the Blair team to a starship.
Apart from Labour’s renewed and misguided infatuation with the City, the malign influence of Blair and Mandelson and their shadowy links and donors worry me. I think the MSM will eventually turn on the English Pasok and expose the corruption and conflicts of interest.
I have noticed the trolls and camp followers taking you and Owen Jones to task. One wonders what they know about Labour that we don’t.
I am aware that the Labour camp are piling onto Owen and me, althugh only to some extemt in my case.
The reason? Who likes to be told the Emporor has no clothes?
Thank you, Richard.
I agree with you and was thinking about you when listening to that stuff.
For those familiar with Owen Jones’s position (but not on MMT), he published the following yesterday (Thu 21 Mar 2024):
“The Labour party is in my blood. Here’s why I’ve just cancelled my membership”, The Guardian
https://www.theguardian.com/commentisfree/2024/mar/21/labour-party-cancelling-membership-policies
Comment:
“Owen Jones leaves Labour to back Green and independent candidates”, socialistworker.co.uk (21 Mar)
https://socialistworker.co.uk/news/owen-jones-labour/
“What is We Deserve Better, the group Owen Jones has left Labour for?”, LabourList (21 Mar)
https://labourlist.org/2024/03/owen-jones-labour-we-deserve-better-socialist-progressive/
Thank you for the links.
I note that there was no possibility of below the line comment on LINO List – I wonder what they are afraid of?
I am working with two other people – I am interested in hearing from people that would like to stand as independents & need help to get started.
I agree about Sunak’s lack of any demonstrable ability. Extending the metaphor, isn’t Hunt cut from the same cloth, making us governed at the moment by a pair of empty suits, with all that entails?
“isn’t Hunt cut from the same cloth”
Congratulations on avoiding a very easy typo there.
Anyone who has been in Labour through the Blair year’s knows that vicious attacks and betrayals, plus the relentless placing of apparatchiks are the normal modes of operation at all levels. Col Smithers confirms what many already knew, that Blair tested the water a few years ago (with planted stories in the MSM), found he was a toxic brand, so then became the eminence gris of the ‘kill socialism’ movement. My local and regional organisations, when I was a member, were dominated by them. They had little backing from the then broad membership, which is why they didn’t want all-member meetings, since they could control who was a delegate. The Regional Officers are 99% Blairite.
Thank you, John.
In addition to Blair and his catamites, Blair’s donors (Persian Gulf and central Asian autocrats, big oil, big pharma, big ag and the military industrial complex, essentially Tufton Street) prefer that he does their dirty work in the shadows.
Rupert Murdoch blames Blair for the breakdown of his marriage to Wendi Deng. Any overt action by Blair is likely to attract scrutiny from the Murdoch attack dogs.
As you were saying the other day, there will be no growth. Dr. Tim Morgan writes well about this and has a simple way of explaining why.
https://surplusenergyeconomics.wordpress.com/2024/03/22/273-systemic-jeopardy/
“Unless that change happens, 12 million people will continue to live in absolute poverty in the UK.”
I agree. Taxes are one way to help the poor – there are others. Energy use tends to be a function of the place you live in. Energy pricing is linear x pence/kWh .
Lets try this: the vast majority of people in a home use max 5MWh of elec and 20MWhr of gas per year.
We could apply a per m2 measure & then introduce geometric pricing – above a given limit – each additional kWh cnsumed doubles in price.
Zero-carbon RES is permitted, Fossil generators of any sort – not – & if found (a good argument for their registration btw) will mean confiscation of property.
At best it would be lots of money for the poor, at worst it would focus minds and force the rich to use less energy/more RES.
12 million in absolute poverty is vile – people here in Bx are amazed.
Mike – another thing to model
Not that much modelling needed. Oddly, in terms of elec – number of occupants tend not to impact on consumption (empirical – 2012 study which measured actual use in 200 odd homes). Gas is a function of size of house (and style – 3 layers in winter & thermo @ 18C vs teeshirt & thermo @ 22C etc). & we have modelled that.
Energy consumption will correlate with income (hypothesis) if there is a principle of pay more tax based on more income – why not pay more for energy above say a 75 percentile. “Pay more to help those in absolute poverty pay less” – MP stands back to hear arguments to the contrary.
We have a demographic crisis. Our fertility rate is only 70% of the replacement rate, and falling fast. If someone has a large family they will use more energy. In addition they will receive little help through tax, or welfare. Furthermore, they will be harassed and abused if they are poor, notably by the MSM; for being irresponsible when they have no money. In other words, in Britain we are using culture, politics and tax to ensure we are extinct in short order. And rejecting immigration with ferocity.
In short, Britain must be the dumbest country on earth.
I have no problem whatsoever with falling populations in some developed nations.
This is a highly desirable trend given continuing deterioration in biodiversity and other problematic externalities.
All the current dynamics of an increasing % of older less economically active populations have been long predicted by the demographic transition model, and we have been able to observe Japan’s transition in terms of an ageing population already.
The obvious solution is to sustain an economy which manages the bulge in older age groups for the two decades needed, rather than just aim for endless consumer growth. If this needs a few more % of GDP in public spending on social care then so what ? .. after all ye widnae push yer granny off a bus.
We need to change direction anyway to mitigate and reduce the impacts of climate change, so managing the demographic bulge ought not to outwit government.
Continued population growth, notwithstanding the Malthusian spanner, is as highly undesirable.as continued resource reduction through inefficient economic growth on a finite planet
Yet it needs managing at the same time, as demography underpins the socio-economic system in the real world.
The prospect of another 2 billion humans before the population peak is reached is only going to create more problems, yet the UN and other international institutions we need to be robust and effective just are not there.
What is needed is a slow managed decline in the developed nations in their aggregate population and an equivalent sustainable enhancement of the economies of the less developed nations with higher birth rates – especially those with massive environmental pressure from climate change.
Sub-Saharan Africa is one such, but then so are the developed nations north of the Mediterranean going to become less able to support human populations.
So we have a pattern of both developed and less developed nations with massive predicted environmental changes which will reduce their liveability very considerably.
I first studied demography over 50 years ago.. and wondered then, as now, as to why there is not more significant co-ordinated international action to seek to mitigate the impacts and suffering caused by uncontrolled migration and seek to balance these with shortfalls in economically active populations elsewhere.
That was during the Ibo Ngerian and Bangla Desh crises. Yet it is still totally crisis driven, but the patterns are actually quite predictable, and soluble with will. .
Migration is one of the most significant manifestations of human society and laissez faire has led to dangerous imbalances between people and resources – the obvious consequence being almost unremitting wars for territory and assets
This really is not something the market can decide and the nation state represents a very rigid and inferior institutional structure for dealing with human mobility.
It really is not just a question of managing northward and southward migration of surplus populations to mid latitudes, but harmonising economic development, whether growing, flatlining or declining. with movement of jah people..
Integrating political economy with demography is a no brainer.
The problem is climate change
Because of that billions of people are going to need to move
This is the great unsaid aspect of this that very few want to recgnise or talk about but it is going to happen
How do we manage that?
“What is needed is a slow managed decline in the developed nations in their aggregate population and an equivalent sustainable enhancement of the economies of the less developed nations with higher birth rates”.
I beg your pardon? What do you think you are managing here, a light switch? Yes, we will just manage a gentle decline of the world population; because the world does international relations so well.
China had a population growth a few decades ago that frightened it so much, it had the most draconian punitive population birth control in the world; and still couldn’t control it. It was prosperity that cut the Chinese birth-rate. now they are struggling with the ramifications of a falling fertility rate; and that is a highly managed society.
The world has failed on climate change; led by the advanced country blowhards, who talked biggest, then ran away – because it just wasn’t proving easy. Now look at Britain. It cannot even manage its own economy, or cope with rising poverty in its own backyard, in the 21st century; but we are going to organise people around the world, like chess pieces; on something as fundamental, unconscious and powerful – as reproduction.
I despair of the value of rational debate with responses like that.
Well, JSW, there is certainly no rational debate if you do not actually read the whole piece.
“What is needed is a slow managed decline in the developed nations in their aggregate population and an equivalent sustainable enhancement of the economies of the less developed nations with higher birth rates”.
Firstly, stating what is needed is not stating a prescription but is identifying what is necessary.
Secondly, to then bizarrely cite China as if their quasi totalitarian one child policy is/was the only model for demographic change really misses the point, notwithstanding presenting a straw man.
As I stated repeatedly, the aim is not to control but to manage demographics in conjunction with climate change and the macroeconomics that demands.
You’ll surely accept market failure requires intervention – well so does demographics.
There is already a position of slow decline in terms of ageing populations not being replaced by the number of births in many developed economies. It is happening anyway.
This is a late stage of the demographic transition.
Death itself requires no additional state compulsion – unless Soylent Green is seen as your preferred model for population control.
The management of the current population bulge of over 65s in many other developed nations, but especially the UK, really does require attention in terms of provision of additional social and health care and we absolutely do need to argue that economic growth is desirable in that sector of the economy, even if we need to increase the %GDP spent on these spheres for the two decades that it will take for the old age group bulge to pass.
This is the opposite approach to your proposed punitive and irrational system.
I would hold that the Miriam Cates position that we need to increase birth rates at least to the replacement BR number is utterly irresponsible, environmentally, socially and economically.
That leaves net immigration to increase the economically active % of the population, if that is seen as desirable. I’d argue there is a strong global ethical case for immigration. Germany took in 900,000 Syrians on this basis.
Yet before that we need to recognise that we currently have 9.3m economically inactive persons and a work structure whereby the 5.5m(ish) on some kind of disability benefits simply have no prospect of working at all because employment is structured to disallow so much disabled participation in the workplace, even for those who might be able, and wish, to undertake some kind of work.
So .. restructure workplaces wherever possible.
The DDA ought to be seen as only the start point.
The Resolution Foundation claim 2.7m people are now too sick to work, with numbers still rising, and the UK is the only G7 country with a lower rate of employment than before the pandemic.
Presumably the impact of austerity on the NHS overall, as well as the dismal funding of mental health, is part of the equation of long term sickness preventing people becoming economically active.
Again, active management of demographics here requires increasing funding to remedy these deficiencies – and not the ludicrously punitive regimes being promised by both major parties. (Liz Kendall, is quoted as saying there is “no option of a life on benefits” under Labour)
Many, if not most, industrialised countries, all of southern Europe, Australia, USA and Canada are going to suffer severe climate change impacts and this will affect their capacity to absorb migration from sub tropical countries also with high level disruptive climate change impacts to replace those ageing persons becoming economically inactive. Yet that is no reason not to look for solutions to displacement. And we are not.
Amartya Sen regarded all famines as manmade, but added to these, there are already huge daily pressures on subsistence farming and the world’s major flood plains are extremely vulnerable so we do need to plan for migration to safer environments for the displaced. Only supra-national organisations can co-ordinate this, and strengthening the UN and comparable institutions has to be an essential step, despite what might be ‘pax Americana’ from January 2025..
Finally, the fact that the Paris climate change targets will be missed and corporate capitalism does not think much beyond short term financial targets is no reason to give up or reduce the pressure for adequate climate change measures.
Your pessimism might be partially justified, but it is fatal.
For great nation read troubled planet.
“Governing a great nation is like cooking a small fish…”
“Governing a great nation is like cooking a small fish…”
Ah, enigmatic wisdom. Unfortunately, what you are trying to do is herd a vast shoal of mackerel, if I may offer a better simile for your population management thesis. This is just re-inflated, doom-laden Malthusianism; window dressed for the intellectual fashion of our unstable times. Unlike you, I do not offer sweeping solutions, with scant regard to how it could be done; or offering grand prescriptions for the implications of population decline, and the deep, difficult problems it creates. Everything we do in an economy is a function of the availability of a ready pool of labour.
The problem with Malthus was he was predicting a future he didn’t understand. I have no such pretension; but I do know that however incompetent we may be at managing economic or population issues (and the evidence suggests our track record is not persuasive of our ability to predict efficiently in human affairs), and whatever the problems that face us with population growth, we now are long conditioned by custom, precedent and history to understand at least some of the implications of population growth – it is what we expect (since the Black Death): but we have no real usable pool of substantive knowledge of managing declining populations, but that problem is likely to be far, far more difficult to manage well than population growth. And that is the problem we are now faced with solving. And here in Britain, we have made it worse by discouraging fertility through tax or welfare cuts; and Brexit; and now we are in a serious fix, obsessed with immigration as the problem, rather than the solution.
And from this ill-thought through calamity, you think we can start fixing the world population problem with what I am afraid I consider a mish-mash of sweeping, half-formed generalisations; none of it that I can see based on substantive research, or authoritative sources. And yes, I read it.
For the avoidance of doubt I did not propose a “punitive and irrational” solution. I referred to China’s ruthless policy; actually making the point that Government finds this problem hard to address because it operates in very complex ways. What is mad, is creating tax and welfare policies that actively discourage having children, when the demographic trend is already falling steeply and we cannot cope, and have no plans to solve the crisis we already have, with a fast aging population, labour shortages, and a crude immigration policy. And you think, from here we can fix the world’s population problem. Sure. Sure.
I am inclined to your view
Hi Mike,
I have an ASHP heating a three bed house averaging 20C. The electriciy usage is 12MWh per annum.
Heat pump users would be financially disadvantaged for being environmentally friendly, If I understand you correctly.
Mike,
Im sorry for my previous comment re ASHP’s, please ignore. I have just noticed your mention of “Zero carbon RES permitted”!
Simon.
Reading the submissions to the House of Lords National Debt Sustainability Enquiry Committee quite encouraging. It would seem only the politicians leading our main political parties are lacking in nous and therefore a curse to the nation!
https://committees.parliament.uk/work/8090/how-sustainable-is-our-national-debt/publications/written-evidence/?page=1
May I here draw attention to the New Economic Foundation (NEF) submission to the Inquiry? It provides a clean, crisp, sharp and trenchant disposal of two matters that Neoliberalism, the Conservative Government and the OBR persistently fail to master. In answer to the first question the Debt Sustainability Inquiry ask; ‘What is meant by a “sustainable” national debt? Does the metric of debt as a percentage of GDP adequately capture sustainability?’. The NEF offer this response, at 1.5-1.7:
“1.5. Looking at the history of debt default globally, there is no clear relation to debt as a percentage of GDP (debt-to-GDP). For example, in Japan debt-to-GDP has risen to over 250% in recent years, while interest rates have stayed low and affordable. Meanwhile, Ukraine defaulted on its debt in 1998 when debt levels were only 41.8% of GDP. Therefore, debt- to-GDP cannot explain all here. Attempts to explain the difference may consider the composition of government debt: who the debt is paid back to, how it will be paid back, and what it was originally incurred for.
1.6. Furthermore, while the cost of government debt would increase with its size if interest rates were fixed, in recent history the opposite has been the case. As the UK’s debt-to-GDP doubled from under 40% to over 80% in 2008-2020, the cost of government debt repayments actually fell. While there has been upwards pressure on government interest payments recently because of inflation and the Bank of England raising interest rates, the real cost of borrowing has still been low-to-average by historical standards.
1.7. Debt-to-GDP also doesn’t capture the possibility of policy responses to increasing government financing needs. If there is sufficient space for taxation or borrowing, then this should also be considered for how sustainable our debt position is. In the UK, our tax revenue as a percentage of GDP is lower than many of our international peers, suggesting room for raising revenues here. Furthermore, recent UK bond sales suggest high demand for our government borrowing. These are important considerations for debt sustainability, yet are eclipsed when the only focus is the debt-to-GDP ratio.”
In answer to the second question the Debt Sustainability Inquiry ask; ‘The Government’s target is for public sector net debt (excluding the Bank of England) to be falling, as a percentage of GDP, by the fifth year of the OBR’s forecast. How meaningful is this target; and how does it inform an evaluation of the sustainability of our national debt?’. The NEF offer this opening critique of OBR forecasting in their response, 2.1-2.2:
“2.1. As explained above, such a target ignores the affordability of debt and the space for policy to rectify it. In this case, the target becomes rather arbitrary. Under such a system, debt can rise even if it is unaffordable for the first 4 years of the OBR’s forecast. Yet debt must fall, even if it is affordable, in the fifth year of the forecast. As the UK’s debt has been affordable in recent history, the latter creates a significant problem, it puts pressure on the government to reduce spending or raise taxes just to meet the target in the fifth year of the OBR’s forecast, even when debt has been affordable.
2.2. In the UK, this has often come at the expense of departmental capital budgets, which has contributed to the UK’s stagnant and low levels of investment compared to the rest of the world and lowest in the G7. With this lack of investment linked to low growth the UK has consistently undershot its GDP forecasts by the OBR and therefore consistently missed our fiscal targets to reduce debt. Such forecast errors seem to imply the miscalculation of the impact of government spending and have therefore led to an austerity bias in fiscal policy. The OBR forecasts show little effect of cutting budgets, yet in reality we have seen growth stagnate. As our rules are so dependent on forecasts it would be wise for them to come with a degree of uncertainty or at least different projections, rather than privileging just one exact forecast outcome.”
I think these responses by the NEF usefully summarise the serious flaws in the management tools used to manage the National Debt, and the poor grasp of forecasting by the OBR, that itself is part of the problem; and not the solution.
Very good
I share the frustration with the obsession with “economic growth” as the cure for all our ills. But I am trying to identify quick “common sense” arguments that can puncture this particular bubble.
Might it be said that,if a High Street has 10 coffee shops, if yet another coffee shop opens, we can welcome a 10% leap in “economic growth.” Impressive statistics,or what?
But, in the end, what is the real value of just another coffee shop? The question must be ” how does this growth really benefit the population ” and “shouldn’t growth be statistically scored so that truly beneficial growth ( a domestic insulation initiative ,for example) is rated higher than,say, a range of antique shops?
I would welcome any other arguments for “rapid response” situations.
We can get a large bump in GDP by pairing up families so parent A is paid to look after family B’s children and vice versa. Because unpaid domestic or caring work does not count. Or more accurately is not counted.
It is left as an exercise for the reader to work out whether being paid to look after each other’s children – rather than each looking after their own – really represents “growth” of a sort that we might want to encourage.
By the way, due to demographics, and limited change in productivity, we need immigration to show any sort of growth at all.
Agreed
Paying for child-minding has spawned an industry of child day-care. At the same time many parents look after their children at home, unpaid. One model becomes an item in the measurement of GDP; the other doesn’t.
At the same time, many people struggle to afford the cost of nursery or child day-care, pre-school, and afford go out to work. The neoliberal culture is to push people to work, but not necessarily pay people enough to be able to do it. It creates a stressful, faux value in a process that is little more than a way of creating economic activity by taking in each others’ washing.
This post took me back to the Guardian and then to the original DWP material.
That material (section 11, figure 36 for anyone interested) shows that the share of the population in absolute poverty using this measure fell dramatically from 1960 until about a decade ago. About 75% of the whole population were in absolute poverty in 1970, and about 50% were in absolute poverty in the mid-1980s. That won’t correspond to the understanding of “absolute poverty” in the minds of most people who were around in those periods.
The other point is that the obvious cause of that dramatic decline was GDP growth. While other things are going on too, the relative lack of GDP growth in recent years has indeed been a big brake on progress.
Depending on time and place economic growth may or may not be desirable, but it needs to be noted that it is an extremely useful piece of rhetoric for avoiding the discussion of vitally important topics.
For instance, how will the rich become richer if we were instead to live in a steady state economy? The obvious answer is by taking wealth from everybody else, which is pretty much where we are today.
So if you want to avoid having this awkward topic ever discussed the only option is to keep talking about growth, the tide that supposedly raises all boats.
To take another example, if you are a town centre shop worker who has lost their job to a profoundly anti-social, questionably legal company company like Amazon you will be told to accept that for the moment your life is in ruins but, in the long run, growth will give you a wealthier and better quality life. Some chance.
And so on, and so on.
Economic growth is a universal panacea for avoiding awkward questions.
and an especial cop out for Reeves.
Out of pure ignorance Reeves cops out of everything with meaningless platitudes. She clearly doesn’t understand Sectoral Balances Accounting:-
https://billmitchell.org/blog/?p=32396
We should really stop calling it the Labour Party in favour of the Starmer Platitudes Party (SPP)!
Chancellor Jeremy Hunt has said £100,000 is “not a huge salary” for people in his Surrey constituency.
https://www.bbc.co.uk/news/articles/crgdly318jeo
I think it really tells us everything we need to know about what is wrong with Tory Britain, but also the size of the failure of neo liberalism since 1979. 45 years in total – Tories – 32 years – Lab 13. 12 million in absolute poverty, and we have a chancellor telling us that £100 grand is not a huge salary for those in his constituency.
I totally agree about meeting needs. Sweden had, at one point a policy called “folkhem” – the folk home – and “trygghet” – (roughly translated, security) This meant all policy was directed towards citizens wellbeing, including trade and industry policy which was aimed at creating good, secure jobs. A direct understanding between trade and industry, the government and labour unions, that companies were expected to “play nice” in return for no strikes, reasonable wage demands (according to policy) and no strikes and well-trained workers. And functioning public transport so they would get to work on time.The Government provided worker training where there was a lack and generous unemployment (administered by the unions) if there was a surplus. Industry was expected to be a good partner ( getting help to establish and generous tax on profit) or government would legislate.
It was a good arrangement – I met industry heads who said it made their job easier. It was capitalism fettered and milked by socialism. After the assassination of P.M Palme, Industry refused to play, became confrontative and Sweden swung to the right.
To paraphrase Nick Lowe – What’s so funny bout jobs, good homes and social security?
Well, JSW, that really is a deeply nihilistic and simplistic view of demographic issues.
Simply denying concerns will not make them go away, and the laissez faire approach you seem to be endorsing is fatalistic.
Labelling my position as neo Malthusian is as ignorant as it is uninformed.
Yet you really do like your straw men.
Nowhere do I suggest we can ‘fix the world’s population problem’, simply commenting that supranational institutions and national governments have to manage demographic trends with as much attention as they attend to the economy, and with climate change as the sword of Damocles. In any case there is no single ‘population problem’.
Nor do I state anywhere that immigration does not have a contribution to make, though I only consider it as a short to medium term option.
There are three main reasons for this.
1) We do not know and cannot really anticipate how far technology will reduce the demands for labour in any given part of the economies of developed nations, or substitute in the outsourced global manufacturing countries.
2) We do not know how much climate change impacts will reduce liveability in mid latitude developed nations, and especially those with Mediterranean climates where drought and water shortages are already having an everyday impact.
3) We do not know how changes in global energy industries, distribution and consumption will impact across the different levels of national economic development in relation to demographics. (Currently one Norwegian consumes as much energy annually as fifty Botswanans)
Whether you like it or not, the phase of birth rates falling below death rates is with us, across the entire developed world, and BR will fall progressively across developing nations too within one or two generations.
There is nothing you can do about Stage 5 of the demographic transition, and no Miriam Cates like plan to increase the birth rate in the UK or any other developed nation by providing a few benefit incentives for children will succeed in counterbalancing the long term pattern of lower BR than DR.
Stage 5 of the demographic transition is happening now and it is not reversible.
Japan is the lead example in the industrialised nations, but South Korea is not far behind.
On current trends Japan’s population will drop by around 30% by 2070 – from 125m to 87m
The growth of over 65s will be from c. 20 to 40% of the population by 2070.
How Japan deals with this is still open for their policy makers to decide, but we will need to learn from them, as well as anticipating and planning for the UK. That is my central point.
Actual numerical decline in a very densely populated nation like Japan is not necessarily a problem. There are obvious benefits. It is not the outcome but how the transition is managed that presents the issues needing to be addressed. There will be solutions.
Even massive increases in BR and/or immigration will not substantially alter the issues being created by current trends in ageing populations in economically advanced countries. There has to be managed decline, and we have to plan for it.
What is needed is to try to ensure the welfare of all age groups as the population bulges and narrows progressively shift through the population pyramid. Monitoring and planning for demographic trends is not rocket science. That we are not especially good at it is why it needs more attention.
How additional health and social care might be achieved with groupings of possibly 40% of over 65s in many countries, and within two generations, is what needs discussed pretty urgently.
I have already suggested we consider reframing economic growth to include spending a higher % of GDP on health and social care as desirable. It’s about all of our welfare.
Yet even that will require social attitudinal changes if we are merely labour market fodder supplying GDP growth in a neoliberal system .. and most of us here reject that as the key driver.
The question then is how do we reframe positive economic performance to include care of people’s welfare (of all ages) through this phase of the demographic transition ?
I expressed the view originally that declining populations in developed nations may well be desirable and need not present a crisis, if anticipated and planned for, and extended that argument to demographic trends and patterns globally which need much more attention from the relevant institutions, and integrating with climate change actions and wider macroeconomics. I have not seen any counter argument to the position that demography needs much more thought, anticipation and planning both nationally and globally.
What is truly mad demographically, is doing nothing and simply dismissing global population issues in the naïve hope that a few tweaks in migration and additional child benefits can counterbalance inevitable demographic trends here, and we’ll just blind eye the rest.
Rejecting demographic issues as too difficult to even consider really is a counsel of despair.
I posted this with hesitation. I am but happy with the tone about another contributor. If that continues I may not think the same next time.
I am indifferent to your abusive tone; it is of no consequence. You have simply lost the plot. One moment I am proposing a “punitive and irrational system”; the next, I am “doing nothing and simply dismissing global population issues” because it is “too difficult”. Make of the enraged muddle what you will.
I didn’t offer any prescriptions; I said we had a demographic crisis, because it is a crisis. In Scotland the fertility rate is already down to 1.3 children per woman, against a 2.1 replacement rate; that is already under 62% of the replacement rate; and we are in a Union that gave us Brexit, which exacerbated the labour shortage problem; has compounded this with a tax and welfare policy that is hostile to multiple children, and even has a Universal Credit, 2-child limit; and has a hostile policy to immigration. I did not make any case; but would certainly make a case for loosening Universal Credit, enhancing tax and welfare benefits for multiple children (with some hope it may reduce the steepness of the decline, if not stop it; rejoin the EU and allow freedom of movement in Europe. Does that fix he problem? No. Is it a step forward? Yes. These are practical, specific things we can do, or aim for.
Apart from some vague references to welfare, I still see no real, usable policies, or substance to what you propose; anywhere in now three longish comments. You reference “planning”, but not the content of the plan. You make general statements about more spend on welfare and care; vague and unspecific, where I offer modest and specific, targeted proposals, withinn what we know and know can have some effect, on a subject we know little about. Furthermore, you want to spend on care; but the problem is not just money; it is – ironically – labour shortages, which are at crisis point already. Nurses are retiring, and at the same time the growing numbers of the ageing population are adding people needing care at a fast increasing rate; compounding the growing gap. The numbers of new starts or students are not there to replace them. Brexit stopped it, and the post-millennial generation here, simply do not offer the numbers to replace them. Your argument remains a long list of hand-wringing, of accusation, of big assertions, of no real specifics – and generalised waffle.
Accepting declining populations without a clear, positive immigration policy; and efforts to slow the decline cannot be managed in the way you assert and assume, but do not prove; because most of the factors in ageing populations require more labour intensive work; the very variable you do not possess.
There is nothing despairing in my position. It is constructive, within the knowledge and capacities we actually possess. I do not believe you are offering anthing at all.
I think that’s a concluding comment.