Let’s talk about inequality; blog action day 2014…

Posted on October 16, 2014 by Chris Goan

We used to talk about equality a lot in the UK. After the war there was a political consensus around the need to flatten inherited hierarchies of opportunity, health and living standards. I was a social studies student in the 1980s, when even at the height of the Thatcherite government we still were interested above all in how we understood the causes of poverty and the perpetuation of wealth and privilege. We cared that women were disadvantaged in work, or that young black men packed our prisons and our secure psychiatric hospitals. It bothered us that poor people died younger and that if you had a particular accent you were not welcome on the BBC.

On a previous Blog Action Day post I mentioned the infamous Black report, that encapsulated much of the research around this time in these areas.

Something has happened since then however. The Blair government stopped talking about poverty, changing the language to ‘inclusion’. The focus went from the role of government to deliberately intervene in order to equalise, towards ‘Education, education, education’- as if we had to give up on the current generation and blame the next for their failure if they do not take the chances offered to them (we have learned nothing from the failure of every previous attempt to engineer through education; poor kids always do less well, despite individual successes.) The agenda changed- market and consumer forces now set the agenda. Economic forces became our master, not our servant.

The Market decides, so we are told. Equilibrium will always be found by The Market, unless we meddle with in in which case things will go badly wrong. So we watch a narrow selection of indicators of The Market’s healthiness (inflation/economic growth/unemployment/public borrowing) in order to gauge how happy The Market is. If it is not happy we feed it human sacrifices in the form of austerity packages, slashing at those unproductive leaches on the underbelly of the proud beast that is….The Market.

Although no-one quite knows for sure what keeps The Market happy (S/he being a capricious God) we suspect that The Market likes inequality. It keeps people hungry for more, and so The Market remains exalted. Without personal individual aspiration (sometimes understood as greed) how will we feed the voracious appetite of The Market? Casualties may fall by the wayside but The Market rises still…

Some ideas become so ingrained in our cultural consciousness that any challenge seems impossible; countering them seems foolish, dangerous even. So it is with those who want to de-throne The Market; those who see it as a kind of conspiracy against the common good in which profits are ruthlessly privatised whilst losses are socialised. We have accepted a myth as truth- the myth of the wealth-creators, whose aspirations to accumulate are the engine of our national success.

The work of French Economist Thomas Piketty, whose book Capital in the Twenty-First Century has taken the issue of inequality on directly- so much so that the book has become something of a sensation- entering the best selling list alongside the latest blockbusting novels.

He has carefully analysed data from about 200 years of capitalist expansion, and came to this rather startling conclusion;

Capital, he argues, is blind. Once its returns – investing in anything from buy-to-let property to a new car factory – exceed the real growth of wages and output, as historically they always have done (excepting a few periods such as 1910 to 1950), then inevitably the stock of capital will rise disproportionately faster within the overall pattern of output. Wealth inequality rises exponentially.

Piketty tells us that in a society where The Market is god, rich people get richer, and the poor get poorer. This was a short period after the last world war when this seemed to have been moderated in the UK- there was a convergence of wealth as progressive taxation and a rise in living standards of the lower classes overturned the power of The Market. However, this has now been totally forgotten. Now the gap between the rich and the poor is increasing and those who benefit from austerity are clearly the top 1% whose share of national wealth has greatly increased.

Oxfam, The Trussel Trust and the Church Action on Poverty recently released a report entitled Below the Breadline, the relentless rise of food poverty in Britain. It makes for sobering reading;

Although the UK is the seventh richest country in the world, it is also deeply unequal, and millions of families across the UK are living below the breadline.

Oxfam and Church Action on Poverty have calculated that 20,247,042 meals were given to people in food poverty in 2013/14 by the three main food aid providers. This is a 54 percent increase on 2012/13.

George Monbiot wrote this recently;

One of the remarkable characteristics of recent growth in the rich world is how few people benefit. Almost all the gains go to a tiny number of people: one study suggests that the richest 1% in the United States capture 93% of the increase in incomes that growth delivers. Even with growth rates of 2 or 3% or more, working conditions for most people continue to deteriorate, as we find ourselves on short contracts, without full employment rights, without the security or the choice or the pensions our parents enjoyed.

Working hours rise, wages stagnate or fall, tasks become duller, more stressful and harder to fulfill, emails and texts and endless demands clatter inside our heads, shutting down the ability to think, corners are cut, conditions deteriorate, housing becomes almost impossible to afford, there’s ever less money for essential public services. What and whom is this growth for?

It’s for the people who run or own the banks, the hedge funds, the mining companies, the advertising firms, the lobbying companies, the weapons manufacturers, the buy-to-let portfolios, the office blocks, the country estates, the offshore accounts. The rest of us are induced to regard it as necessary and desirable through a system of marketing and framing so intensive and all-pervasive that it amounts to brainwashing.

A system that makes us less happy, less secure, that narrows and impoverishes our lives, is presented as the only possible answer to our problems. There is no alternative – we must keep marching over the cliff. Anyone who challenges it is either ignored or excoriated.

So, is the battle for greater equality worth fighting? Has it not already been lost?

Research would suggest that there is little doubt that the more equal a society is, the healthier it tends to be for its citizens, whilst the more unequal a nation is, the more prevalent these things tend to be mental illnesses, obesity, ill health, crime, infant mortality etc. By enthoning The Market, we make ourselves sick it seems…

So, how do we achieve it?

My suggestion is that we need to look back, and look forward.

We need to look back to a time when people tried hard to achieve some kind of convergence within a liberal democratic tradition- using a consensus around progressive taxation, Market regulation and state sponsored health and welfare. We need to treasure this as part of our UK heritage- to be proud that our people achieved this, whilst learning from the mistakes we made too, in anchoring ourselves to an economic model based around unsustainable ‘growthism‘.

In looking forward however, we also have to remember that issues of inequality are not restricted to our own national borders. The single greatest threat to the stability of our planet is the destructive and exploitative effects of The Market on a global scale. Wars fought around oil deposits, mineral rights. Poor southern countries providing natural resources and a labour force in order to sustain the avarice of the rich north. Starting to tackle this kind of equality requires a much greater leap, towards living more simply, more sustainably, more collectively…

The first step however is to do one simply thing- dethrone The Market.

Start to imagine what we might exalt instead of The Market. What values do we want to live by- do we want our children to live by? What currency might we measure success with other than these inhumane ones concerned only with finance/growth/consumption?

In this, my friends, there is a kind of grace that goes deeper into who we are as humans.

Monbiot again;

Thus the Great Global Polishing proceeds, wearing down the knap of the Earth, rubbing out all that is distinctive and peculiar, in human culture as well as nature, reducing us to replaceable automata within a homogenous global workforce, inexorably transforming the riches of the natural world into a featureless monoculture.

Is this not the point at which we shout stop? At which we use the extraordinary learning and expertise we have developed to change the way we organise ourselves, to contest and reverse the trends that have governed our relationship with the living planet for the past two million years, and that are now destroying its remaining features at astonishing speed? Is this not the point at which we challenge the inevitability of endless growth on a finite planet? If not now, when?

We made The Market. It should not make us.

Time to look to the left…

Posted on October 8, 2014 by Chris Goan

In the wake of the Referendum debate up here, we are all wondering if the remarkable upsurge of political engagement can actually lead to real change, and what new/old political or social movements might be the vehicle that will allow this change to take place.

My feeling is that despite all the noise and smoke, real change is not inevitable. This is partly because maintaining momentum is a challenge, (particularly in the wake of the NO vote) and perhaps even more because there is no real clarity over WHAT people want to change. There has been a clear expression of dissatisfaction- both with the current socio-political status quo, and with Westminster (which was usually seen to be English) in particular, but the Yes campaign up here seemed to me a combing together of very great complexity under the deceptively simple duality of yes/no. People were able to invest hopes and dreams along with a way to vent their spleen, but consensus over the sort of society/economy/community that should replace the one we are part of now? This is a wholly different issue.

Regular readers of this blog will know that I was not convinced by the nationalist argument, but that I am desperate for change. The process of engaging with the referendum has therefore been a painful one for me- one that I feel to have driven wedges between myself and things I hold dear- as well as people I hold dear. Aside from the personal aspects of this however, to a certain extent, what has happened is what always seems to happens in the UK- it has become another means by which the political left splits itself apart.

The challenge then for radicals on both sides of the referendum campaign is to find a way to come together again. If the real issue was not nationalism, but a desire to be in charge of shaping things towards our own destiny, then what happens now that these things need to be filtered again through the current political machinery? For the NO voters like me, now that we have rejected one possible change process, what are we going to put in its place?

I have spent hours and hours since the referendum reading stuff about alternatives, and how policy might be different. If you are interested, here are a few links;

The New Economics Foundation. A collection of ideas on how to achieve greater environmental, social and economic justice.

Countless articles in Newspapers (mostly The Guardian, which is the only one to give voice to persistent thoughtful radicals.) Including this one–

The big idea of the three main parties is the same: not capitalism, or neo-liberalism, or social democracy – but growthism. This term was coined by the author Umair Haque to describe the pursuit, above all other things, of economic growth. Never mind who it benefits, who gets left behind or what it destroys; never mind if its practices are unfair or unsustainable: if the numbers go up, everyone is happy, and if they’re not happy, give them a tax break.

Common Weal. “…a vision of what Scotland can be if it rejects the failed Me-First politics that left us all in second place and instead builds a politics that puts All Of Us First.” A collection of reports on a range of political and economic solutions.

The Green Party. The only UK political party that has a comprehensive set of radical policies on everything from social welfare and defence- not just the environment! I confess that as a lifelong (albeit latterly reluctant) Labour supporter, I am on the cusp of making the leap towards the Greens. I am gathering a clarity over the changes I long for and the Greens seem to have most of these things as policy objectives. A change from Growthism to sustainability, and emphasis on social justice and progressive fair taxation, and a defence policy that is as radical as almost anything I have ever seen- a real movement away from the military industrial machine.

I had a long discussion with a friend recently- someone still heartbroken and raw from the referendum. One of the things we talked about was whether change had to be local or more global. My feeling is that it has to be both. Activism has to be rooted in real community, local connection, but it needs to be connected to something bigger- to leadership, creativity and passion that has a wider expression. This is what the Left has failed to achieve for some time- possibly because Labour (ostensibly a Leftist party, but actually as rooted in the accommodation of growthism as any party) was seen as offering all that the Left could offer. However, also this might have something to do with it too;

“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum….”
― Noam Chomsky, The Common Good

We need to forge local connections, but we also need to look beyond them. Part of this might well require healing some of those divisions with our political allies. When we look to the left, let us see people of hope, not people of division.

To succeed is to destroy ourselves; economic growth and fossil fuels…

Posted on May 28, 2014 by Chris Goan

We all kind of know that the system of economic growth we are hooked on is not sustainable. However, it is so pervasive in how we understand the world that envisioning life without it is almost impossible. Take the concept of ‘economic growth’. Put simply, without growth we stagnate. Without an overall increase in the stuff we consume, own, or waste year on year, quarter by quarter, our economy is seen to be failing. In fact our politics dwells in the ever present fear of the spectre of of this terrible thing called recession. So much so that we allow them to sacrifice support to the poorest and weakest of our number by cutting social supports in the name of ‘stimulating growth.’

There was a brilliant article by George Monbiot in The Guardian yesterday in which he said this;

Let us imagine that in 3030BC the total possessions of the people of Egypt filled one cubic metre. Let us propose that these possessions grew by 4.5% a year. How big would that stash have been by the Battle of Actium in 30BC? This is the calculation performed by the investment banker Jeremy Grantham.

Go on, take a guess. Ten times the size of the pyramids? All the sand in the Sahara? The Atlantic ocean? The volume of the planet? A little more? It’s 2.5 billion billion solar systems. It does not take you long, pondering this outcome, to reach the paradoxical position that salvation lies in collapse.

To succeed is to destroy ourselves. To fail is to destroy ourselves. That is the bind we have created. Ignore if you must climate change, biodiversity collapse, the depletion of water, soil, minerals, oil; even if all these issues miraculously vanished, the mathematics of compound growth make continuity impossible.

Put like that, the whole pursuit of economic growth is madness right? Monbiot says more than this however, he points out this kind of economic growth was only ever possible because of the fossil fuels that we have been burning for the last 300 years or so;

Economic growth is an artefact of the use of fossil fuels. Before large amounts of coal were extracted, every upswing in industrial production would be met with a downswing in agricultural production, as the charcoal or horse power required by industry reduced the land available for growing food. Every prior industrial revolution collapsed, as growth could not be sustained. But coal broke this cycle and enabled – for a few hundred years – the phenomenon we now call sustained growth.

It was neither capitalism nor communism that made possible the progress and pathologies (total war, the unprecedented concentration of global wealth, planetary destruction) of the modern age. It was coal, followed by oil and gas. The meta-trend, the mother narrative, is carbon-fuelled expansion. Our ideologies are mere subplots. Now, with the accessible reserves exhausted, we must ransack the hidden corners of the planet to sustain our impossible proposition.

How do we stop this? Monbiot thinks that first of all we have to SEE it, but most of us simply do not;

The inescapable failure of a society built upon growth and its destruction of the Earth’s living systems are the overwhelming facts of our existence. As a result, they are mentioned almost nowhere. They are the 21st century’s great taboo, the subjects guaranteed to alienate your friends and neighbours. We live as if trapped inside a Sunday supplement: obsessed with fame, fashion and the three dreary staples of middle-class conversation: recipes, renovations and resorts. Anything but the topic that demands our attention.

Statements of the bleeding obvious, the outcomes of basic arithmetic, are treated as exotic and unpardonable distractions, while the impossible proposition by which we live is regarded as so sane and normal and unremarkable that it isn’t worthy of mention. That’s how you measure the depth of this problem: by our inability even to discuss it.

Step forward then the politician who is prepared to say that economic growth is no longer desirable nor advisable, and that we need to learn to love what we have, to mend stuff, to share stuff and to live within our localities.

Who is going to vote for such heresy?

Or shall we just blame it all on the immigrants?

Who wants to be a billionaire?

Posted on May 13, 2014 by Chris Goan

It is official. The UK has more Billionaires per head of population than any other country. London alone has 72. Makes you proud to be British doesn’t it? The nation where the rich get richer (because they deserve it) and the poor get poorer (serves them right; lazy scroungers that they are.) More locally, to me at least, Scotland has 7 Billionaires, up from 6 last year. This from the BBC;

The Grant-Gordon whisky family tops the Scottish element of the list with a fortune of £1.9bn.

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There are now 104 billionaires based in the UK with a combined wealth of more than £301bn, the list says.

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The Grant-Gordon Banffshire distilling family have ousted Mahdi-Al Tajir from the top spot in Scotland. Al-Tajir, whose interests include a development of luxury homes at Gleneagles, is worth £1.67bn, according to the list.

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Sir Brian Souter and Ann Gloag, the siblings who founded the Stagecoach transport empire, have become members of the billionaire club for the first time. They share a fortune of £1bn – an increase of £270m on last year.

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Other Scots on the super-rich list are Sir Ian Wood and family whose £1.32bn fortune comes from oil services and fishing, and the Thomson family, owners of publisher DC Thomson, who are worth £1.2bn.

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Former Harrods owner Mohamed Al-Fayed, who owns an estate in the Highlands, is estimated to be worth £1.3bn, while Jim McColl, of engineering business Clyde Blowers has an estimated fortune of £1bn.

Setting aside the morality of concentrating so much wealth in the hands of individuals, two questions seem important-

Do these people create prosperity for the nation- for working people- commensurate with the position their own assets gives them?
Does their wealth produce anything of worth?

As you look down the short list of Scottish Billionaires, the arguments supporting positive answers to these questions seem weak. Whisky, posh flats, posh shops, mega profits from former privatised industry (transport) paid for by subsidies from the tax payer. There are a couple of industrialists there however. It is impossible to look at this list and not feel that Piketty’s analysis of how wealth rises exponentially, like some kind of run away greed machine, in capitalist economies. I quoted this previously;

Anyone with the capacity to own in an era when the returns exceed those of wages and output will quickly become disproportionately and progressively richer.

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The incentive is to be a rentier rather than a risk-taker: witness the explosion of buy-to-let. Our companies and our rich don’t need to back frontier innovation or even invest to produce: they just need to harvest their returns and tax breaks, tax shelters and compound interest will do the rest. Capitalist dynamism is undermined, but other forces join to wreck the system.

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Piketty notes that the rich are effective at protecting their wealth from taxation and that progressively the proportion of the total tax burden shouldered by those on middle incomes has risen. In Britain, it may be true that the top 1% pays a third of all income tax, but income tax constitutes only 25% of all tax revenue: 45% comes from VAT, excise duties and national insurance paid by the mass of the population. As a result, the burden of paying for public goods such as education, health and housing is increasingly shouldered by average taxpayers, who don’t have the wherewithal to sustain them.

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Wealth inequality thus becomes a recipe for slowing, innovation-averse, rentier economies, tougher working conditions and degraded public services. Meanwhile, the rich get ever richer and more detached from the societies of which they are part: not by merit or hard work, but simply because they are lucky enough to be in command of capital receiving higher returns than wages over time. Our collective sense of justice is outraged.

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The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war.

Piketty fears a repeat.

Perhaps then we need to watch carefully for those who tell you that the poor and broken are the problem- they are not, they are the consequences of unsustainable wealth creation by the few. Watch too for the convenient scapegoat-makers, the border-closers, the nationalists. They tend to play right into the hands of the super rich. It is a distraction from the real operation of capital, and a convenient way to wall wealth away from taxation. It also pretends that the problem of austerity is caused by the poor outsider, come to steal our jobs, our houses, our NHS facilities. Blessed are the poor, but who wants to be poor? We all want to be Billionaires…

Economic lie no.6; inequality of wealth creates incentive and effort…

Posted on April 14, 2014 by Chris Goan

(The last posts in this series are here and here. Post no.4 dealt with similar territory. These posts are part of an on going attempt to search for alternatives to the economic status quo, which I would contend is costing the earth at the expense of the poor.)

A recent book by French economist Thomas Piketty (Capital in the Twenty-First Century) has taken the issue of inequality on directly. So much so that the book has become something of a sensation amongst the movers and shakers of the economic world.

To recap- the world is becoming increasingly unequal. This from The Guardian;

Inequality of wealth in Europe and US is broadly twice the inequality of income – the top 10% have between 60% and 70% of all wealth but merely 25% to 35% of all income. But this concentration of wealth is already at pre-First World War levels, and heading back to those of the late 19th century, when the luck of who might expect to inherit what was the dominant element in economic and social life. There is an iterative interaction between wealth and income: ultimately, great wealth adds unearned rentier income to earned income, further ratcheting up the inequality process.

…the period between 1910 and 1950, when that inequality was reduced, was aberrant. It took war and depression to arrest the inequality dynamic, along with the need to introduce high taxes on high incomes, especially unearned incomes, to sustain social peace.

Now the ineluctable process of blind capital multiplying faster in fewer hands is under way again and on a global scale.

Take a moment to think about this- the rampant growth in the wealth of a tiny super rich elite has now taken us more or less back to the division of wealth that would have been familiar to an Edwardian farm worker or mill worker before the first world war. A world of vast country estates and stately homes serviced by an army of domestics. This is the world we are heading back to it seems.

How did this happen?

Consider the recent political reaction to the financial crisis- austerity hits public spending projects aimed at the poorest sections of society, whilst at the same time lowering inheritance taxes, refusing to reshape the council tax and boast promote ‘business-friendly’ low capital gains and corporation tax regimes.

They can get away with this for one simple reason- we have accepted a myth as truth- the myth of the wealth-creators, whose aspirations to accumulate are the engine of our national success. Set this in the context of the other myth- that national economies operate like household budgets, and the sense of looming crisis has meant that the current government has been able to slash and burn, whilst letting lose the greed of the few.

But back to Thomas Piketty. He has carefully analysed data from about 200 years of capitalist expansion, and came to this rather startling conclusion;

Capital, he argues, is blind. Once its returns – investing in anything from buy-to-let property to a new car factory – exceed the real growth of wages and output, as historically they always have done (excepting a few periods such as 1910 to 1950), then inevitably the stock of capital will rise disproportionately faster within the overall pattern of output. Wealth inequality rises exponentially.

The process is made worse by inheritance and, in the US and UK, by the rise of extravagantly paid “super managers”. High executive pay has nothing to do with real merit, writes Piketty – it is much lower, for example, in mainland Europe and Japan. Rather, it has become an Anglo-Saxon social norm permitted by the ideology of “meritocratic extremism”, in essence, self-serving greed to keep up with the other rich. This is an important element in Piketty’s thinking: rising inequality of wealth is not immutable.

Societies can indulge it or they can challenge it.

Piketty goes further however- he argues that this indulgent greed, this ‘meritocratic extremism’ will be the end of Capitalism itself. Those of us familiar with the Marxian view of the progression of history will remember this- how eventually those of us with little will get sick of a society that requires us to work to maintain the wealth of the few.

Anyone with the capacity to own in an era when the returns exceed those of wages and output will quickly become disproportionately and progressively richer. The incentive is to be a rentier rather than a risk-taker: witness the explosion of buy-to-let. Our companies and our rich don’t need to back frontier innovation or even invest to produce: they just need to harvest their returns and tax breaks, tax shelters and compound interest will do the rest.

Capitalist dynamism is undermined, but other forces join to wreck the system.

Piketty notes that the rich are effective at protecting their wealth from taxation and that progressively the proportion of the total tax burden shouldered by those on middle incomes has risen. In Britain, it may be true that the top 1% pays a third of all income tax, but income tax constitutes only 25% of all tax revenue: 45% comes from VAT, excise duties and national insurance paid by the mass of the population.

As a result, the burden of paying for public goods such as education, health and housing is increasingly shouldered by average taxpayers, who don’t have the wherewithal to sustain them. Wealth inequality thus becomes a recipe for slowing, innovation-averse, rentier economies, tougher working conditions and degraded public services.

Meanwhile, the rich get ever richer and more detached from the societies of which they are part: not by merit or hard work, but simply because they are lucky enough to be in command of capital receiving higher returns than wages over time. Our collective sense of justice is outraged.

The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war.

Piketty fears a repeat.

His solutions- a top income tax rate of up to 80%, effective inheritance tax, proper property taxes and, because the issue is global, a global wealth tax- are difficult to imagine at present. The elite are too comfortable in their neo-Georgian luxury.

But if Pinketty is right, the seeds of destruction are at the heart of capitalism- and it is the result of greed.

Jesus would have a few words to say about this too I think…

Economic lie no. 5; competition can solve all our problems…

Posted on December 16, 2013 by Chris Goan

Some ideas are so central to our world view that everyone just assumes them to be fact. The domination of so called free market economics have forced quite a few of these kind of ideas into our thinking- one of them is the absolute necessity of competition.

Without competition we become flabbily inefficient, like some kind of state run farm in the old Soviet Union. Without competition we will never become the best that we can be, either as individuals or as countries. Without competition, we are told, all human endevour atrophies. All science is still born, all education is weak and pointless.

A what is more, without competition, there is no fun, no sport, no football no (Lord save us) cricket.

Be honest, at an economic level, do you think this is a closed argument? It might surprise you then to hear that there the value of competition in economics can be regarded as something of a mixed bag. Sure, it might drive down prices, but it might also drive down quality. It will ensure too that devices will lack interoperatability- each new produce will lead to the need for a new device- leading to huge waste and cost.

It might also deliver more choice for consumers (choice being another one of those current cultural holy cows) but this often leads to huge complexity, confusion and again much more waste.

What about competition pushing technology forward? We appear to be seeing unprecedented advances in computing at present. People are upgrading and renewing computers faster than ever before. Rather than buying a machine and using it for 8 years, people are renewing every 3 years, often due to the lower build quality, and cheaper parts end up breaking sooner. Again this is leading to huge wastage, not to mention the environmental impact of all those rare earth metals– which seem to be increasingly dumped in poor countries. There is now huge pressure to buy a new computer at the slightest problem, rather than fix the old one- they are cheap enough and new formats (netbooks, tablets, wrist) are made to look like essential accessories.

Competition might also be regarded as aiming to destroy the opposition. So a powerful company (say IBM) might ensure that their computer platform overcomes other ones. They are removed from the marketplace, even if the technological solutions they contained were better, more useful. The story is often told of computers that used to boot up in seconds but the company that won the competition went a different route.

Am I suggesting that competition is bad then? It would be possible to make a strong case; what is the root cause for war if not competition? Does it not create far more losers than winners? Might competition not be dragging us headlong towards the end of our civilisation because of the damage being done to our environment? But this would be every bit as simplistic and one sided as the competition-is-always-good hegemony. What I would argue for however is the urgent need to look at the holy myth of competition and expose it to a measure of healthy doubt.

Clearly competition delivers huge benefits, but at what costs? I have mentioned potential environmental costs, but there are other more human ones too. The dream of success stalks us all- our huge need for measurable, quantifiable, objective evidence of our place in the human race. But in order for some to win, many must fail. And so we will do what we can to be one of the winners, not losers. However it has never been a level playing field; some will always be able to control the game on behalf of themselves and their families/friends. At present, by almost every measure, the world is providing less chances for those who have little than previously. We are discarding countless Einsteins, Beethovens, Marie Curies every day.

You could argue that even the costs of failure (our current banking crisis) has been outsourced. Those suffering from all the adversity programmes slashing our welfare, health and education budgets were certainly not the cause of the problem- in fact they were not even in the competition.

As someone who tries to follow after Jesus, it seems rather obvious that he did not seem to regard the winning of competitions as any kind of priority. In fact he seemed to favour the opposite; turning the other cheek, the first becoming the last, the lion lying down with the lamb. I know that neo-liberal economists do not tend to use Jesus as their major source material, but nevertheless it is strange how these ideas co-exist within so called Christian cultures. Perhaps the Jesus way of doing things is not really a good way for our children to get ahead?

Which brings me to my final point- the education of our children. When I was a kid back in the increasingly distant 1970’s, competition was bad. Enlightened parents and teachers tried to emphasise non-competitive games, encouraging co-operation and the shared experience. To be honest it was a bit shambolic, not much fun and the urge to compete was so strong in most of we kids that it was pointless anyway. Since then the whole attempt to imbue education with egalitarian principles has been totally abandoned in the UK. Competition is most certainly good- the more the better it seems, particularly under our current government.

The fear we live with as parents is that we do not skew the scales as far towards our own kids as we possibly can. The pressure is on to equip them for success in each and every exam, so that they can succeed in life. There is some evidence for the truth of this. Expensive private education hot-houses kids to exam success, and privately educated kids crowd the top professions in this country, particularly the political class.

Here is the rub though- as we start to look back on lives (rather than imagine forward into the lives of our kids) what successes do we most appreciate? What gives us most pleasure, satisfaction? Which of them might be regarded as having been worthwhile- not just for ourselves but for the world we were part of? If you are like me, this has little to do with money or exam results or career. It is much more to do with family, friends, community, creativity, love, kindness. Is it possible that competition mitigates against some of this? Is it not at least a distraction, or perhaps given too much weighting in the choices we make for both ourselves and our kids?

Competition is saving us. Competition is killing us. Both are true, and neither.

Competition is overvalued, and needs to be subordinate to grace.

Economics students rebel…

Posted on November 14, 2013 by Chris Goan

I tweeted this story a couple of days ago.

Then I heard about the revolting students of Economics from the University of Manchester , who have accused their lecturers of blinkered adherence to the very economics that got us in the trouble that we are in. So much so that they started a group called The Post-Crash Economics Society;

We are The Post-Crash Economics Society and we are a group of economics students at The University of Manchester who believe that the content of the economics syllabus and the way it is taught could and should be seriously rethought.

We were inspired to start this society when we heard about a Bank of England Conference called ‘Are Economics Graduates Fit for Purpose?’ At this event leading economists from the public and private sphere came together to discuss whether economics undergraduates were being taught the right things in the light of the 2008 Financial Crisis. This chimed with some of our frustrations about the economics we were learning and so we decided to set up a society that would through doing research, organising events and running workshops seek to bring this discussion to Manchester. That was at the start of the 2012/13 academic year.

As of today we have a fully-fledged society, a book club, an incredibly successful launch event led by world class economists, many student and academic supporters, a petition that is constantly gaining signatures, links with a national network of economic societies and organisation and even more passion and determination to change the current state of economic education!

Where do we find the new economic thinking then? What alternatives are there to the Neo-Liberal hegemony that grips our political an economic establishments so firmly that anything else seems to lack ‘common sense’?

Today Radio 4’s ‘Thinking Allowed’ programme carried an extended discussion about Neo-liberal economics, defined interestingly NOT as a kind of super conservative laissez faire free market thing, but rather as a hyper interventionist big government approach that promotes a certain kind of economic policy (aggressive venture capitalism) to the exclusion of all others. Impose a certain kind of market society, because the market can process information much better than individual human beings. Any problems with markets can be fixed by the evolution of new markets.

There was an interesting discussion led by Robert Sidelski, who described John Maynard Keynes prophecy that by now we should all be working a 15 hour working week, as individual wealth would have increased 8 fold (Written back in the 1030s.) Living standards have indeed gone up but we remain caught in wage slaving. There have been endless improvement in productivity, but we never seem to have enough. Sidelski called this ‘insatiability’, which has been unleashed as never before by capitalism.

Why?

Is this about greed, and the almost total lack of moral controls on this? Sidelski suggested that greed has become the lodestone of our culture. All other standards yield to the need to make money.

He also suggested that society gets richer, relative wants become more important than absolute needs– so the real issue is how we consume relative to others- leading to us all comparing what we have relative to what others have constantly, a madness that is stoked and fed by advertising.

Is there any economic alternative to this? Marx would say this is unsustainable delusion, and it is very hard to argue that he was wrong. It is not as though this wealth brings happiness or satisfaction!

Everything has been reduced to gadgets- leisure has been commoditised by gadgets. Leisure is not easily seperated from consumption. We seek to make time (particualarly holidays) SPECIAL by increasing consumption and gadgetisation, not seeing them as about activity unyoked from purpose.

Sidelski quoted Keynes from 1930, reflecting on the possibility of people set free from all this consumption and pursuit of money;

I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue-that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable, that those walk most truly in the paths of virtue and sane wisdom who take least thought for the morrow. We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.

From Economic Possibilities for our Grandchildren (1930)

Do you think the Post-Crash Economics Society are looking for this kind of economic theorising?

I hope so, and may their voices become louder…

Economic lie number 4; inequality is good for the system…

Posted on March 21, 2013 by Chris Goan

The whole Capitalist system is dependent on aspiration, or so we are told. Our Chancellor of the Exchequer has just heralded his 2013 budget as something for an ‘aspiration nation’- seeking to help those who want to help themselves- those who want to own their own houses.

Without the wealth creators (business entrepreneurs) there can be no long term prosperity. All that you will have is stagnation- look what happened in the old soviet bloc countries.

Without greed we have bad cars, cabbage soup and bureaucrats in stone washed denim.

Except that the rich are getting richer, even WITHIN our western economies. This from The Telegraph;

The world’s rich are getting richer. The Forbes billionaire list was published this morning (there are now 1,426 of them globally in dollar terms, with 210 new entrants in the last year), and collectively they are $800bn richer than they were a year ago. Each billionaire is, on average, $100m richer than in 2011, with an average wealth of $3.7bn.

And the poor poorer; The Institute of Fiscal Studies forecasts that, as a result of UK tax and benefit policies, there will be significant increases in child poverty in the coming years. In Scotland alone forecast trends would suggest between 50,000 and 100,000 more children being pushed into poverty by 2020. (See here.)

And what is more, the argument can be questioned even by people on the inside;

There is the opposite argument too- that the more equal societies are in terms of income, the better its citizens seem to do. This from here;

In The Spirit Level Wilkinson and Pickett base their analysis on data from 23 rich countries as well as data from the 50 American states. They say that in the main this shows that the following problems are much more pronounced in countries with higher levels of income inequality.

Health inequalities: At the end of the 1990s there was an average gap of 7.3 years in mortality between rich and poor people in unequal societies. This can rise to as much as 28 years in some American states. They argue that research shows these differences cannot simply be explained by differences in health behaviours.
Mental illness: They argue that ‘inequality is causally related to mental illness’; that rates of mental illness are five times higher in the most unequal societies compared to the least unequal. Illegal drug taking is also higher.
Obesity: Unequal societies are more likely to have higher levels of obesity, with poor people most at risk, partly because of the attractions of ‘comfort eating’. Indeed the rate of obesity is six times higher in the most unequal, compared to the least unequal, societies.
Divorce rates: There have been larger rises in more unequal societies. This then creates more stress for children.
Teenage pregnancy: This is more prevalent in unequal societies. Indeed in the USA the rate of teenage pregnancy is four times the EU average.
Violence: Wilkinson and Pickett argue that the strongest evidence or the negative effects of inequality is violence figures. The reasons for this are explored below.
Imprisonment: Unequal societies are more punitive. People are five times more likely to be imprisoned in the most unequal societies than the least unequal.
Social mobility: Inequality leads to less social mobility. Inequality ‘solidifies the social structure’ and also depresses educational attainment for the poor.
Women’s position: In general women are less likely to be in higher status jobs in unequal societies and they also have worse health than women in more equal societies.

Wilkinson and Pickett argue that the problem of inequality is not just for poor people: everyone suffers. The life expectancy figures even for rich people is lower in unequal societies than more equal ones. The reason they advance for this is that unequal societies have lower levels of trust than more equal societies. This lack of trust leads to more hostility, fear and lower levels of community participation. In this way everyone suffers.

In the data they present the societies which are most unequal, and have the biggest health inequalities and social problems, are the USA, the UK, Portugal, Australia and New Zealand. The least unequal are the Scandinavian countries and Japan.

Ecomonomic lie number 3- austerity affects us all…

Posted on March 9, 2013 by Chris Goan

Back to my little mini series about economics. Don’t expect deep learned insights- I did study economics as part of a social science degree 25 years ago, but I was a very poor student. However, there are many approaches to economics- here are a few;

Technical/systematic- clever people who claim to understand the ebb and flow of the complex currents that move in the deep oceans of international finance. They know the difference between M1, M2, and M3. They advise the powerful and hold the fate of millions within their sterile computer generated models. Here, the economy is a desperately complex, ever changing thing, that is not just human in origin, it is supra-human. We are all subject to it, in the same way as the Ancient Greeks lived in the shadow of Mount Olympus. The gods are capricious, mysterious, vengeful and unmoved by ephemera. Our high priest-economists are expected to placate the gods, but they are after all gods and so there is the constant threat of earthquake wind or brimstone…

Political- I contend that most politicians know very little about point 1. They have to pretend they do, like the emperor and his new clothes. They have to pretend to be in control of the gods. They have to present deep ocean complexity in the form of simplistic decisions. All the better if the issue can be polarised, and if their are people/groups to be blamed. So we see two narrative techniques being employed at present-

The economy is constantly compared to a household spending plan. It has to be about prudence, good management, respectability- the image is a solid middle class family who budget carefully for their two holidays, their new sofa and retirement plan. Except that the economy bears no resemblance to a middle class household budget. Houses can not print their own money for a start. They can not set their own tax rates, they can not invest huge sums in education or health or in nuclear arsenals. And of course not all households are the same. Some are broken, bankrupt.

The other narrative I have already hinted at- it is the narrative of blame. Our lifestyles are under threat from the fecklessness of the poor or the tidal wave of immigrants- the strivers are carrying all these skivers on their backs. We no longer talk about social class because stratification in our society has fragmented- but in case you are in any doubt, check out any mumber of tabloid newspapers- the Express, the Mail, the Sun. They are full of stories of benefits dodgers, single mothers getting posh social housing, dark skinned swarthy outsiders who are clogging up our hospital wards. For a while, the bankers got some mud thrown at them- but mud does not stick to shiny power for long.

The economics of justice- There is another approach to economics of course- one which both politicians and technical economists are aware of, some even motivated by- it is the analysis of the flow of capital from the poor to the rich, and the operation of the machine that makes this happen. It points us to the conquest of poor countries, whose raw materials are used to make the toys of the rich. It also points us to the remarkably persistent and stable gulf between the rich, healthy, educated minority and the rest- both globally and locally. I make no excuse for this statement; these are the economics of the Kingdom of God.

Two stories sum up this gulf within the UK at the moment. Firstly, this one;

The eurozone may still be in recession, but there is little gloom at the Geneva motor show, where Lamborghini, Ferrari, McLaren and Rolls-Royce have launched luxury supercars costing up to £3m each.

While European car sales dropped by 3.3m last year – the equivalent of a car company the size of Fiat failing to sell any cars at all – super-luxury cars are rolling out of the showrooms in ever increasing numbers.

“Most the world is suffering from recession, yet there are clearly people who can buy a Lamborghini at €3m (£2.6m) a pop,” said Paul Newton, auto analyst at IHS Global Insight. “Bentley, McLaren, Rolls are all doing well. There is clearly a market for the most expensive of cars, whereas the mass market manufacturers are nearly all suffering, especially in Europe. It’s the definition of a two-speed economy.”

Philip Harnett, product manager of Rolls-Royce’s latest €245,000 Wraith model, launched at the Geneva show on Tuesday, said that while the global economy was in the doldrums “some people are doing very well and they want to reward themselves”.

He said it was important for staff morale that high-flying company executives continue to buy the most luxurious cars. Executives told him that “the day I turn up for work in a Morris Minor is the day the staff will start to worry”.

(From the Guardian Tuesday 5 March 2013.)

Then, by way of contrast, this story;

One of the most acute concerns about the government’s so-called “bedroom tax” – which from April will force anyone “underoccupying” social housing to either downsize to a smaller property or face a cut in their housing benefit – is the severe shortage of smaller properties available to move to.

The National Housing Federation suggests there are 180,000 social housing tenants underoccupying two-bedroom homes in England, yet fewer than 70,000 one-bedroom properties are available.

From 1 April, anyone living in social housing who has one unoccupied bedroom will have their housing benefit cut by 14%, rising to 25% for households with two spare bedrooms.

Maureen Hagan, 58, lives in a three-bedroom property in Grangetown, Middlesbrough, with her 18-year-old granddaughter, whom she took in five years ago. She will now see her housing benefit cut by 14%, even though she says she requires the extra bedroom in order to meet standards set by social workers, as she is fighting to bring another young relative out of foster care and into the family home.

She feels that the welfare reform is out of sync with the rate of inflation, and calls for the government to prolong the introduction of the cuts. She spoke of her recent struggles to meet utility payments: “That was before that bedroom tax on top of everything else. What am I going to do then?”

Hagan expects to face a £14 cut to her housing benefit each week – more than half her weekly shopping budget.

“I can’t afford to buy makeup. I’d like to buy it but I can’t. I’d like to buy my own clothes; the charity shop’s my clothes shop, and it has been for a number of years.”

(The Guardian, Friday 8 March 2013)

Both of these extremes are a direct result of the current economic circumstances affecting us all. One part of our society profits- gets richer, amuses themselves with more toys.

The other folk (whilst watching Top Gear on Sunday night) have decisions to make about whether they move house because they are mere grit in the cogs of the system. Their fate is irrelevant to the ultimate prize. If they can not consume, they have no value.

We are not all ‘tightening our belts’, or ‘feeling the pain’. We are not all making the same sacrifice.

There are of course other possibilities. Some are about managing the economy better- taking a Keynesian approach to stimulating our economy again. But this does little to change the game- it just clarifies a few of the rules.

Poverty is not a choice, it is an economic necessity to ensure growth. The alternative is revolution- if not of the Marxist kind, then perhaps the Jesus kind, which takes the emphasis off power, and puts it on love. Against this there is no law.

The false-god of economic growth…

Posted on February 28, 2013 by Chris Goan

Interesting article in the Guardian today about this book;

Interesting title- considering discussions about apocalyptic end times obsessiveness in some parts of the Christian world. A timely reminder of how we can get snarled up in religion at the expense of hope for the future this beautiful planet.

The book opens up again the question about what we can do as a nation to break economic mono culture that we have spent ourselves into. Here is a quote from the article;

Consume less, he says. Be sceptical about new technology. Slow down. And do not fall for the modern political class’s post-Blair belief that history is bunk, and to draw on the past is to be a hopeless throwback: it is only a comparative blink since the second world war found millions of people reshaping their lives in the cause of a common endeavour, and the same thing could yet happen again.

And then there is the fetish of growth, or rather growth-ism. As Simms points out, the idea that economies necessarily have their limits was being voiced when capitalism was still young: in 1848, John Stuart Mill argued that “a stationary condition of capital and population implies no stationary state of human improvement”. A century and a half later, Adair Turner, a former director of the CBI, told Simms that if anyone thinks “the most important objective of public policy is to get growth from 1.9 per cent to 2 per cent and even better 2.1 per cent”, they’re worshipping a “false god”, and “extra growth does not automatically translate into extra human welfare and happiness”.

These are pretty ordinary thoughts, but ones that the dull noise coming from Westminster renders almost exotic – and essential.

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