wages

Desperate Tories Now Using Smear Manuals against Labour and Lib Dems

Published by Anonymous (not verified) on Thu, 05/12/2019 - 4:15am in

I love the smell of Tory fear in the morning! You can tell how desperate the party of Thatcher and Johnson are when they’re reduced to lies and smears. Not that they were above them anyway, but now they seem to be rapidly abandoning any attempt at fair play. Mike reports that an article in today’s Groaniad reveals that the Tory party is equipping its doorstep campaigners with special dossiers they are to use against their opponents. There’s a 17 page one for Labour, and a 19 page one for the Liberal Democrats. These manuals contain such fictional statements that Labour’s immigration policy would open the door to 840,000 migrants a year, and that the Lib Dems are trying to push sex work as an appropriate career for schoolchildren and policies that are pro-pimp.

Mike comments that people seem to believe some of this nonsense, but that it isn’t putting them off voting Labour. Someone had tweeted him personally that in spite of Labour’s ‘open door policy on immigration’, they were still going to vote for the party. As this person was doing the right thing, Mike didn’t correct them.

See: https://voxpoliticalonline.com/2019/12/03/not-sporting-not-working-tories-are-using-manuals-to-smear-rivals-but-they-arent-changing-minds/

Okay, the accusation that Labour is in favour of open door immigration and this country being swamped with non-White immigrants has been a staple of the right and the far right since forever and a day. It’s one of the constant lines – or lies – repeated by newspapers like the Heil, for example. The other stereotypical smear against Labour, and one which Private Eye has parodied mercilessly in the past, is that a Labour government will bring mortgage prices down. I haven’t seen jokes about that line recently in the magazine, perhaps because if the Heil actually did run, the exorbitant house prices at the moment would mean that Labour’s vote would actually go up.

But the accusation that the Lib Dems are promoting pimping and prostitution is a new one. I think it comes from a conference the Lib Dems held a year or so ago, which was about improve conditions for sex workers. One of the talks was about taking the stigma out of it. But the Lib Dems don’t seem to pushing pro-pimp policies or encouraging schoolgirls to get jobs as prostitutes.

But it does seem more than a tad hypocritical on the part of the Tories as they are and have been.

Way back in the 1980s, when Maggie Thatcher that was unchaining the power of private industry, one industry that a certain section of her minions definitely wanted unchained from state prohibition was prostitution. There was a certain section within the Tory party, as I recall, that wanted it legalised. I think they used the same arguments for it that have been around ever since the late 17th century-early 18th century economist Bernard Mandeville put them forward. Mandeville was an early advocate of free trade against the prevailing mercantilism, in which the state rigidly regulated trade between nations and colonies. Mandeville wanted publicly funded brothels. These, he argued, would allow the men, who used prostitutes to satisfy their lusts legally, while protecting decent women from their attentions. I think the Lib Dems, who set up the conference also had a feminist angle. They seem to have felt that if prostitution was legalised, it could be properly regulated to keep the prostitutes themselves safe. I think the models for such legislation are the continent and Australia. I’m sceptical that these arguments actually work in practice. But the main point here is that the Lib Dems haven’t necessarily promoted anything that the Tories weren’t debating nearly forty years ago.

But the Tories are forcing people into prostitution.

It is by and large the last refuge of the poor and desperate, women and men who can’t make ends meet any other way. Under Thatcher there was a series of scandals in which Tory politicos were caught using rent boys. So much so that there was a sketch on Spitting Image in which a Tory politician, explaining what his government has done to the nation, declares that it has opened lots of work for young men to a lad. When the lad asks what work it is, the Tory replies that it is as a rent boy, and he’ll see him later.

More recently, there were reports a few years ago about female students turning to prostitution in order to pay the tuition fees that New Labour introduced, but the Tories and Lib Dems increased.

And let’s not forget another incident, in which a Jobcentre had to apologise for suggesting that work in sex shops was a suitable occupation for women wishing to get off the dole.

I don’t know, but it really wouldn’t surprise me if there had been an increase in prostitution in general as women were forced to turn to it simply to keep body and soul together through the poverty Tory welfare cuts, wage freezes and zero hours contracts have caused.

The Lib Dems may not have been actively promoting prostitution with their conference, but the Tories have also openly advocated it and their policies are pushing vulnerable women into it through the poverty they’re creating.

Astronomer Vladimir Firsoff’s Argument for Space Exploration as a Positive Alternative to War

Published by Anonymous (not verified) on Mon, 02/12/2019 - 11:58pm in

Vladimir Firsoff was a British astronomer and the author of a series of books, not just on space and spaceflight, but also on skiing and travel. He was a staunch advocate of space exploration. At the end of his 1964 book, Exploring the Planets (London: Sidgwick & Jackson) he presents a rather unusual argument for it. He criticises the scepticism of leading astronomers of his time towards space exploration. This was after the Astronomer Royal of the time had declared that the possibility of building a vehicle that could leave the Earth’s atmosphere and enter space was ‘utter bilge’. He points out that the technology involved presented few problems, but that ordinary people had been influenced by the astronomers’ scepticism, and that there are more pressing problems on Earth. Against this he argued that humanity needed danger, excitement and sacrifice, the emotional stimulation that came from war. Space exploration could provide this and so serve as a positive alternative, a beneficial channel for these deep psychological needs. Firsoff wrote

The traditional planetary astronomy has exhausted its resources. No significant advance is possible without escape beyond the Earth’s atmosphere. The orbital observatories to come will reveal much that is now hidden about the other planets. Space travel is a short historical step ahead. The basic technical problems have been solved, and the consummation of this ancient dream is only a matter of a little effort, experiment and technical refinement. When Bleriot flew the Channel the Atlantic had already been spanned by air lines. And so today we have already landed on Mars – even Triton and Pluto have been reached.

But do we really like to have our dreams come true?

Possibly that happy extrovert the technologist has no misgivings. He sees the Solar System as an enlargement of his scope of action, and has even suggested preceding a descent on Mars by dropping a few bombs, “to study the surface” (this suggestion was widely reported in the press). Yet the astronomer does not relish the prospect of leaving his ivory tower to become a man of action. He is troubled by this unfamiliar part, and a small voice at the back of his mind whispers insidiously that his cherished theories and predictions may, after all, be false. The dislike of space travel is psychologically complex, but there is no mistaking its intensity among the profession.

The general public shares these enthusiasms  and apprehensions, more often than not without any clear reasons why. The Press (with a very capital P) feeds them with predigested mental pulp about what those ‘wonderful people’ the scientists have said or done (and not all scientists are 12 feet tall). At the same time the scientist is a ‘clever man’, and the ‘clever man’ is traditionally either a crank or a scoundrel, and why not both? Whatever we do not understand we must hate.

Of such promptings the fabric of public opinion is woven into varied patterns.

“Space flight is too expensive. We can’t afford it”… “What is the point of putting a man on the Moon? It is only a lifeless desert.”… “We must feed the backward nations, finance cancer research” (= in practice “buy a new TV set and a new care”)…

Wars are even more expensive and hugely destructive, and cars kill more people than cancer and famine put together.

And yet before 1939 Britain ruled half the world, her coffers were stuffed with gold, she also had 5 million on the dole, slums, an inadequate system of education, poverty and dejection. Came a long and terrible war, a fearful squandering of resources, the Empire was lost, and in the end of it it all the people “had never had it so good”, which for all the facility of such catch-phrases is basically true. Not in Britain alone either-look at West Germany, look at the U.S.S.R.! One half of the country devastated, cities razed to the ground, 30 million dead. BHut in Russia, too, the “people had never had it so good”.

In terms of ‘sound economics’ this does not make any sense. 

The reason is simply: ‘sound economics’ is a fraud, because Man is not an economic animal, or is so only to an extent. He needs danger, struggle, sacrifice, fear, loss, even death, to release his dormant energies, to find true companionship, and-oddly-to attain the transient condition of happiness … among or after the storm.

That German soldier who had scribbled on the wall of his hut: “Nie wieder Krieg heisst nie wieder Sieg, heisst nie wieder frei, heisst Sklaverie” (No more war means no more victory, means never free, means slavery) was a simple soul and he may have survived long enough to regret his enthusiasms among the horrors that followed. Yet the idea, distorted as it was, contained a germ of truth. For heroic endeavour, which the past enshrined as martial valour, is as much a necessity as food and drink. We must have something great to live for.

Hitler’s ‘endeavour’ was diabolical in conception and in final count idiotic, but it cannot be denied that it released prodigious energies both in Germany and among her opponents, and we are still living on the proceeds of this psychological capital.

What we need is a noble uplifting endeavour, and even if we cannot all take direct part in it, we can yet share in it through the newspapers, radio and television, as we did, say, in the epic rescue operation during the Langede mining disaster. It became a presence, everybody’s business-and I doubt if it paid in terms of £ s.d…

You will have guessed what I am going to say.

Mankind needs space flight. Let us have space ships instead of bombers, orbital stations instead of ‘nuclear devices’. The glory of this great venture could do away with war, juvenile delinquency and bank raids. It could be cheap at the price.

It is a fallacy to imagine that money spend on developing spaceflight is lost to the nation; it is only redistributed within it, and it is much better to redistribute it in the form of real wages than in unemployment relief. Besides, real wealth is not in a ledger; it is the work and the willingness to do it.

Yet if we go into space, let us do so humbly, in the spirit of cosmic piety. We know very little. We are face to face with the great unknown and gave no right to assume that we are alone in the Solar System.

No bombs on Mars, please.

For all that they are well meant and were probably true at the time, his arguments are now very dated. I think now that the majority of astronomers are probably enthusiasts for space flight and space exploration, although not all of them by any means are advocates for crewed space exploration. The Hubble Space Telescope and its successors have opened up vast and exciting new vistas and new discoveries on the universe. But astronomers are still using and building conventional observatories on Earth. Despite the vast sums given to the space programme during the ‘Space Race’, it did not solve the problems of crime or juvenile delinquency. And it was resented because of the exclusion of women and people of colour. Martin Luther King led a march of his Poor Peoples’ Party to the NASA launch site to protest against the way money was being wasted, as he saw it, on sending White men to the Moon instead of lifting the poor – mainly Black, but certainly including Whites – out of poverty. And as well as being enthused and inspired by the Moon landings, people also grew bored. Hence the early cancellation of the programme.

And people also have a right to better healthcare, an end to famine and a cure for cancer. Just as it’s also not wrong for them to want better TVs and cars.

But this isn’t an either/or situation. Some of the technology used in the development of space travel and research has also led to breakthroughs in other areas of science and medicine. Satellites, for example, are now used so much in weather forecasting that they’re simply accepted as part of the meteorologists’ tools.

But I agree with Firsoff in that space is an arena for positive adventure, struggle and heroism, and that it should be humanity’s proper outlet for these urges, rather than war and aggression. I think the problem is that space travel has yet to take off really, and involve the larger numbers of people in the exploration and colonisation space needed to make it have an obvious, conspicuous impact on everyone’s lives. There is massive public interest in space and space exploration, as shown by Prof. Brian Cox’s TV series and touring show, but I think that to have the impact Virsoff wanted people would have to feel that space was being opened up to ordinary people, or at least a wider section of the population than the elite scientists and engineers that now enjoy the privilege of ascending into Low Earth Orbit. And that means bases on the Moon, Mars and elsewhere, and the industrialisation of space.

But I think with the interest shown in the commercial exploitation of space by Jeff Bezos and Elon Musk, that might be coming. And I certainly hope, with Firsoff, that this does provide a proper avenue for the human need for danger and adventure, rather than more war and violence.

Private Eye’s Demolition of Cameron’s Book about His Government

Way back at the beginning of October, our former comedy Prime Minister, David Cameron, decided to give us all the benefit of his view of his time in No. 10 with the publication of his book, For The Record by William Collins. The review of it in Private Eye was not kind. Reading it, it appears that Cameron was deeply concerned to present a rosy, highly optimistic view of his years as Prime Minister. His was a government that gave Britain prosperity and growth, and had improved conditions in the NHS. The current, wretched economic and political situation is all due to everyone else, not him. It’s entirely false, as the Eye’s review made abundantly clear, citing Cameron’s book again and again as it he tries to claim success in tackling an issue, only to show the present grim reality and how Johnson actually made it all worse with Brexit.

The review, titled ‘Shed tears’, in the magazine’s issue for 4th – 17th October, runs

John Wilkes Booth’s assassination of Abraham Lincoln at a Washington theatre inspired the quip: “Apart from that, Mrs, Lincoln, how did you enjoy the play?” David Cameron’s autobiography leaves the reader asking: “Apart from Brexit, Mr Cameron, how did you enjoy being prime minister?”

“I liked it,” he declares, and so should we. At 800 pages, this account of his generally tedious career – apart from Brexit – is only 200 pages shorter than Churchill’s Second World War memoirs. Indeed, Dave may have originally matched Winston, for the Mail reported his publishers cut 100,000 words from the manuscript.

The verbose special pleading William Collins so sadistically allowed to survive tries to anesthetise readers into accepting that – apart from Brexit – they should applaud his playing at being prime minister too.

When Cameron stood for leader of the Conservative Party in 2005, he recalls, “Everyone said that I was too young. That I had no ministerial experience.” Instead of worrying that a gentleman amateur would lead the country to perdition, we should have rejoiced. “However new and inexperienced” he was, young Cameron saw himself “inheriting the mantle of great leaders like Peel, Disraeli, Salisbury and Baldwin.”

In 2010, with the world in crisis, he followed his illustrious predecessors and produced one of the “most stable and I would argue, most successful governments anywhere in Europe”. That Brexit has subsequently produced a paralysed parliament, culture war without end in England, the highest support for Welsh independence ever recorded, a revitalised Scottish National Party and a clear and present danger to the peace in Ireland must be someone else’s fault.

Only Ukraine is a less stable European country now. Not that Cameron can admit it. The Brexit referendum was “a sore confronted”, he says, as if he were a doctor who had healed wounds rather than a quack who had opened them. His greatest regret is for himself, not his country. “I lament my political career ending so fast,” he sighs. Brexit ensured that he went from private citizen to national leader to private citizen again in 15 years. “I was a former prime minister and a retired MP at the age of 49.”

He shouldn’t despair. His work experience on the British now completed, Cameron could be ready to hold down a real job should one come his way.

As for his supposed successes, in his own terms he would have a point – were it not for Brexit. “When I became prime minister my central task was turn the economy around,” he says. Now the British Chambers of Commerce reports that companies are living through the longest decline in investment in 17 years. He left Downing Street in 2016 “with the economy growing faster than any other in the G7”, Cameron continues, showing that whatever else he learnt at Eton, it wasn’t humility. The UK is now bottom of the G7 growth table, while the governor of the Bank of England is warning a crash out could shrink GDP by 5.5 per cent.

By the time Brexit forced his resignation, “hospital infections, mixed-sex wards and year-long waits for operations were off the front pages.” In the very week his book appeared, patients were preparing as best they could for a no deal Brexit cutting off drug supplies, while NHS trusts were wondering what would happen to the 8 percent of health and social care staff they recruit from the EU.

“It was clear to me that reasserting Britain’s global status would be one of our biggest missions in government,” Cameron says of the premiership, while failing to add that the Britain he left was both a warning and laughing stock to the rest of the world.

Regrets? Come off it. “One of the core ideas of my politics,” Cameron tells those readers who survive the long march through his pages,m “is that our best days are ahead of us and not behind us, I don’t think Brexit should alter it.” The bloody fool does not realise his best days are behind him  and he (and the rest of us) have nothing to show for them – apart from Brexit.

It’s not the comprehensive demolition that Cameron’s mendacious book deserves. It hasn’t just been Brexit that’s caused mass poverty, starvation, despair and misery to Britain. It was the policies he and his government both inherited from New Labour, and ramped up and added a few of their own. He continued the Thatcherite policy of the destruction of the welfare state and the privatisation of the NHS, as well as the wage freeze and pushing zero-hours and short term contracts. As well as allowing firms to make their workers nominally self-employed, so they don’t have to give them things like sick pay, holidays or maternity leave. Thanks to his policies, as continued by Tweezer and then Boris, a quarter of a million people have to rely on food banks for their daily bread, 14 million people are in poverty and an estimated number of 130,000 people have died after being found ‘fit for work’ by the DWP.

As for the tone of lofty self-assurance with which Cameron makes his assertions, that can only come from someone, who has enjoyed immense privilege throughout his life, and never suffered uncertainty due to the advantages bestowed by his background. He got a job at Buckingham Palace, remember, because they actually rang him up and asked for him. Thatcher’s former Personal Private Secretary, Matthew Parris, in his book Great Parliamentary Scandals observes that MPs, contrary to received wisdom, are not polished all rounders. Rather they are more likely to be the lonely boy at school. They have huge, but fragile egos due to the respect the public gives them tempered with the humiliation they receive at the hands of the whips and the awareness of how little power they really have. All the decisions are made by the Prime Minister. Parris’ own career as a cabinet minister came to a sharp end when he sent a rude reply to a letter sent to the former Prime Minister. Clearly, Cameron himself has never suffered, or appears not to have, from any kind of personal or professional uncertainty. He’s always been supremely confident in his own ability, choices and decisions. It’s this arrogance that has caused so much suffering to the country and its working people. But he certainly hasn’t suffered the consequences. Instead of trying to do something about the mess he created with Brexit, he left it for others to do so. And we’re still grappling with that problem nearly four years later.

Cameron’s was the start of a series of Tory governments that have actually left this country far worse than Tony Blair’s administration. Blair was determined to sell off the NHS, but he kept it well funded and he had some success in tackling poverty. It was the Tories who massively expanded the use of food banks instead of giving the disabled, unemployed and poor the state support they needed.

Cameron’s book is therefore one mass of self-delusion and lies. As have all the statements about how well the country is doing from his successors. Don’t vote for them. Vote for Corbyn instead.

 

It May Be Profit Season for US Companies, but Workers Are Left in the Red

Published by Anonymous (not verified) on Sat, 30/11/2019 - 12:00am in

Today is Black Friday, the start of the holiday shopping season. Retail workers will leave their Thanksgivings early—if they enjoy one at all—to start long shifts for too little pay in order to support the consumer binging that is America’s holiday season. The deals for shoppers may be sweet, and the profits for companies will be exponentially sweeter; but the cost for workers will be steep, a symptom of a sector and economy that are stacked against workers, and especially against women workers. 

The boon of Black Friday and the month of holiday shopping it launches contribute to the retail sector’s role as a pillar of the US economy. In recent decades, however, retail jobs have become increasingly precarious. One in ten US workers have jobs in the retail sector, and over 60 percent of US workers will have a frontline retail job early in their careers. Retail employers chronically pay poorly, and they fail to offer employee benefits and predictable or reliable schedules. The median hourly wage of retail workers is just $11, and one in three jobs in the retail sector are part time. When adjusted for inflation, the average hourly pay for retail workers has fallen by $2 since the early 1970s. 

Meanwhile, the cost of fundamental needs—including goods, housing, transportation, health care, and education—have markedly increased, meaning that all of these trends put a secure and stable life further and further out of reach for retail workers. 

The majority of retail workers you’ll see today and throughout the holiday season will be women, who are disproportionately represented in the lowest-paying retail jobs and in low-wage work more generally. Women are 60 percent of workers in the low-wage workforce, and nearly 70 percent of these workers make less than $10 an hour, with Black and Latinx workers overrepresented in those jobs. As the Center for Popular Democracy illustrated, in general merchandise stores, such as Target and Walmart, women make up more than 80 percent of cashier workers, the lowest-paid position in the sector. In recent years, retail work has become even more precarious for women, who have lost jobs in the retail sector while men have gained them. 

The rush of holiday consumerism that starts today will help to fuel sky-high corporate profits, few of which will trickle down to workers (or toward business investments like innovation that help consumers). But it hasn’t always been like this. There was a time when retail workers were more economically secure and more likely to be able to purchase the goods they were selling for their own families. 

During the mid 1900s, a stronger labor movement meant that many retail employers provided a better workplace experience, including reliable schedules and benefits like vacation days. During this time, 35 percent of all workers were in unions. Today, fewer than 7 percent of all workers and 4.5 percent of retail workers are organized; as a result, workers are far less likely to have jobs with solid pay, schedules, and benefits. 

While secure work has been eroded for retail workers, the people who employ them are doing better and better. Since 1978, CEO pay has grown 940 percent while typical worker compensation has only seen a mere 12 percent bump—though in some industries, it has declined. Last year the 30 highest-paid retail CEOs each made more than $15 million, and many made a lot more than that. While workers of color scrape by, runaway CEO pay lines the pockets of overwhelmingly white men

These trends are not inevitable. They are the result of bad choices made by those in power. One of those choices is the proliferation of stock buybacks, which occur when a company buys back its own shares from the open market and artificially increases share prices. This is a wonky concept that most of us think has little to do with average workers, but many companies are spending billions of dollars on buybacks instead of putting that money toward raising wages for the workers without whom their business would fail. With the money they spent on buybacks in recent years, Starbucks could have increased compensation for its nearly 300,000 workers by $24,729, and Walmart—the country’s largest retailer and the largest private employer of women, Black, and Latinx workers—could have increased the hourly wages of its more than 1 million hourly workers by more than $5 with the $10 billion it spent on buybacks. But they didn’t. 

As millions enjoy the deals of Black Friday, retail workers and their families will pay the price this holiday season and throughout the entire year. It is long past time that employers and our society more broadly put workers—the backbone of US companies and our economy—first. This shift would help ensure that workers aren’t left behind when the rest of us have the chance to save a few bucks.

The post It May Be Profit Season for US Companies, but Workers Are Left in the Red appeared first on Roosevelt Institute.

Oh No! ‘I’s’ Simon Kelner Now Criticises Chief Rabbi for Attack on Labour

I don’t really have any time for Simon Kelner. If I recall correctly, he started out as a reporter on the mid-market Tory tabloids before moving to the I. He’s very much a Tory, and has been one of those pushing the anti-Semitism smears against Labour in that newspaper’s pages. He has frequently cited his own Jewishness as some kind of proof of his assertion that Corbyn’s Labour is anti-Semitic, even though there are very many other Jews, who know that Corbyn isn’t and never has been, and could use the same argument to back up their beliefs. But it seems that yesterday’s remarks in the Times by Chief Rabbi Ephraim Mirvis repeating the smears were a step too far even for him. In today’s edition, Kelner has written an article, ‘The Chief Rabbi is wrong to preach about Labour’ criticising Mirvis and his comments. He still seems to be trying to peddle the line that Labour is anti-Semitic and Corbyn is deeply distasteful to Jews. But he realises that if Corbyn and Labour do come to power, they aren’t going to persecute the Jewish community.

He begins the article by quoting Mirvis’ own remark that  by convention, the Chief Rabbi should be above party politics, commenting that

it’s safe to say that the spiritual leader of Britain’s Jews understands that his treatise on anti-Semitism in the Labour party – on the very day that Labour launched its faith and race pledges – was unprecedented, unconstitutional and potentially divisive.

He then goes on to talk about Mirvis’ better qualities – he isn’t a self-publicist, has encouraged equality for women in orthodox synagogues, supported LGBT students and promoted interfaith understanding. He’s addressed a Church of England synod, and an invited an imam to talk to his congregation while he was a rabbi in Finchley. Mirvis declared in his article that challenging racism was above party politics, before going to talk about how the overwhelming majority of Jewish Brits were afraid of Corbyn and Labour getting into power.

Kelner continues

In fairness, I don’t think they are the only community gripped by anxiety about such an outcome, but his point is that Labour’s failure to deal properly with the anti-Semitism in its ranks reveals a deeper and wider threat to the fabric of society. “Be in no doubt,” he says, portentously, “the very soul of our nation is at stake.”

Has Rabbi Mirvis overstepped the mark with such a politically incendiary contribution? If politicians don’t “do God”, should men of God do politics? It depends entirely on whether you agree with the Rabbi’s viewpoint, and, in this, and as a Jewish person myself, I find it hard to get behind him.

Yes, the Labour hierarchy has, at the very least, been found wanting in the way it has dealt with accusations of anti-Semitism within the party. It has done too little, too late, and this has been extremely bad politics on Labour’s part. It deserves to be castigated for this,. But does it amount to an existential threat to British Jewry, as Rabbi Mirvis warns?

I would suggest not. “What will become of Jews and Judaism in Britain if the Labour Party forms the next government?” he asks. Well, nothing much, would be my answer. There will be no pogroms in north London, and having Jeremy Corbyn in No 10 will not immediately legitimise anti-Semitic sentiment and unleash a new hatred against Jews. There may be many reasons why you wouldn’t vote for Labour on 12 December, but the fear of Jews being drive to the edge of society should not be one of them.

I understand why many Jews of my acquaintance feel a distaste for Corbyn’s brand of politics, and the Chief Rabbi is, of course, entitled to his opinion. Given his position of privilege and influence, however, I rather wish he had heeded his own words and kept it to himself.

There are a number of issues to be raised here. Firstly, his statement that Labour hasn’t done enough to tackle anti-Semitism is a flat-out lie. Labour has just about bent over backwards to tackle the issue. They’ve ordered inquiries and suspended and expelled members. Indeed, they’ve conceded too much. The real reason for the anti-Semitism allegations has always been political. The Israel lobby are frightened of Corbyn, because he wants justice for the Palestinians and an end to Israeli apartheid and their slow-motion dispossession and expulsion. It is definitely not because he’s anti-Jewish. Indeed, his record in tackling anti-Semitism and racism is exemplary. For the Tories, Lib Dems and Blairites in Labour, the anti-Semitism allegations were nothing but a useful tool to force him and his supporters out. Hence the entirely fake allegations and kangaroo trials of decent people like Mike, Jackie Walker, Tony Greenstein, Marc Wadsworth, Ken Livingstone, Chris Williamson and many, many others. The Thatcherites – and this include the Lib Dems and the Blairites – simply want to get rid of Corbyn and his supporters because they want to restore the welfare state, revitalise the NHS and public services by ending privatisation and bringing them back into public ownership, and give working people proper rights at work, decent wages and strong trade unions to defend them.

The various communities Kelner claims are also afraid of Labour coming to power are, I would say, those of rich industrialists, newspaper proprietors, editors and right-wing journalists, afraid of this attack on their wealth, power and profiteering.

Kelner has also shown that he’s afraid that by opening his mouth, Mirvis has opened the door to other religious leaders making party political statements. And the Tories are particularly vulnerable to this. They’ve had numerous very public disputes with the Church of England and several archbishops ever since Dr. Robert Runcie and the Church published a report in the 1980s about how Thatcher her policies were causing massive poverty in Britain. Clearly Kelner’s afraid that Mirvis is in danger of setting a precedent for more religious criticism of Thatcherism.

And Mirvis himself is a prime target for such criticism, as he’s a friend of Boris Johnson who congratulated him on becoming Prime Minister.

He also seems to be worried about how Mirvis’ sputterings about racism look compared to Labour. Mirvis made his remarks on the day Labour published its pledges on race and faith, promising fresh legislation to tackle racism and revising the school curriculum so it covered the British Empire, colonialism and slavery.  Corbyn himself is a determined anti-racist activist, who was arrested protesting against apartheid outside the South African embassy.

And what has Mirvis done?

Well, zip, as far as I can make out. And worse than zip. Tony Greenstein has put up an article today revealing that Mirvis joined the former Chief Rabbi when the latter took a party of British Jews to join the March of the Flags in Jerusalem a few years ago. This is the occasion when Israeli bovver-boys parade through the Muslim section of the Holy City waving Israeli flags, vandalising Palestinian homes and property, chanting ‘Death to the Arabs’. He also supported Norman Tebbit’s infamous ‘Cricket Test’. Tebbit, a former Cabinet minister under Thatcher, had a simple rule for determining who was properly British: they should support England at Cricket. If Blacks and Asians didn’t, they weren’t British. And Mirvis apparently agreed with him.

See: http://azvsas.blogspot.com/2019/11/the-hypocrisy-of-ephraim-mirviss.html

And it also appears that Kelner is worried about the consequences for the Jewish establishment – which includes not just the Chief Rabbinate, but also the Board of Deputies of British, Jewish Leadership Council and so on – if Corbyn does come to power. Because he knows full well that Corbyn isn’t an anti-Semite and won’t launch pogroms. British Jews will carry on with their own business and lives untouched and unmolested. And that’s a danger to the Chief Rabbinate and other official organs of the Jewish community, because their scaremongering against Labour will be shown to be mistaken at best. At worst it will reveal that the Jewish establishment is politically motivated and biased, and its accusations against Labour are unfounded and profoundly deceitful.

And this, it could be argued, would be far more damaging to the Jewish establishment than any threat Labour supposedly represents.

Labour Planning New Anti-Racist Legislation, Aim to Make Equalities Commission Independent of Government

Here’s another piece of news from today’s I, for 26th November 2019, which may have some bearing on Chief Rabbi Ephraim Mirvis’ latest smear against Jeremy Corbyn. According to the paper, Labour plan to introduce a raft of legislation to tackle racism, including monitoring the wage gap in ethnic minorities. But what seems to have alarmed the Tories and their supporters, John Woodcock and Ian Austin, is that they have raised questions about the political independence of the Equalities of Human Rights Commission, and plan to make it truly independent of government appointment. The article by Jane Merrick, runs

Labour has provoked controversy by questioning the independence of the equality and race relations organisation which is investigating the party over anti-Semitism.

Jeremy Corbyn will launch Labour’s Race and Faith Manifesto alongside Diane Abbott and Dawn Butler today with policies to tackle discrimination and under-representation of black and ethnic minorities in government, the workplace and schools. But the manifesto contains a move to make the Equality and Human Rights Commission, the body conducting an inquiry into Labour, “truly independent”. This reform would “ensure it can support people to effectively challenge any discrimination they may face”, the party said.

A Labour government would also change the national curriculum so that colonialism, slavery and the role of the British empire were taught in schools.

Pay gap reporting,currently limited to gender, would be extended to black and ethnic minority workers in businesses of 250 employees or more, while a race equality unit would be set up in the Treasury to review spending announcements for their impact on these communities.

But the measure to reform the EHRC proved controversial last night. The body started an investigation into allegations of anti-Semitism in Labour earlier this year. The organisation’s commissioners are all experts in equality and the law and are appointed by the government.

The former Labour MP John Woodcock said: “The decent people in Labour need to disown this appalling attempt to smear the EHRC or accept that they are complicit in it.”

The former MP Ian Austin, who left the Labour party over anti-Semitism, said: “No one is going to listen to a lecture about racism from Jeremy Corbyn when Labour is the only part in history to be subjected to a full inquiry by the EHRC.”

Ms Butler, shadow Equalities Secretary, said: “Labour’s Race and Faith Manifesto takes us beyond what we’ve previously committed in hos we’ll radically shift policies to ensure the economic, social or structural barriers faced are addressed. It’s time for real change.”

Labour would also end what it calls “rip-off” charges for passports, visas and other tests from the Home Office.

Both Woodcock and Austin are Blairites, and the real reason for their departure from the party probably has less to do with anti-Semitism and more from their determination to unseat Corbyn and carry on with Blair’s Thatcherite campaign of privatision, including that of the NHS, and the destruction of the welfare state for corporate profit.

As for the independence of the Equalities and Human Rights Commission, we’ve seen how the allegations of anti-Semitism against Corbyn and his supporters personally, and the Labour party generally are very much politically motivated. Especially as Chief Rabbi Ephraim Mirvis, who spewed more smears in the Times today, is a friend of Benjamin Netanyahu and Boris Johnson. Which, like the rest of the  Tory press, has had nothing to say about the islamophobe Tommy Robinson urging everyone to vote Tory. Strange that.

Frankly, I don’t believe the EHRC can be trusted in the hands of a Tory government. They will abuse it to smear their enemies. Considering how serious the issue of racism is, it is quite right that it should be independent.

Sad Ultra-Zionist Actress Claims to Have Left Labour Party Again

The election’s on, the Tories are clearly scared of Corbyn, as they’re lying and publishing fake news, and almost inevitably, they’re trying to revive the old anti-Semitism smears. According to Zelo Street, the Scum’s deputy political editor, Matt Dathan, published a piece claiming that ‘life-long Labour supporter’ Maureen Lipman has left the Labour party. Apparently she’s recorded a mock version of her adverts for BT, in which she attacks the Labour leader’s economic plans and accuses him of having an ‘ology’ in extremism. This isn’t news. Lipman left the Labour party way back in 2014 when its leader was Ed Miliband. Who was Jewish. She was furious at his backing for a symbolic vote in the Commons recognising Palestine as a state.

Tom London, who is Jewish, tweeted back a reply to Dathan putting him right:

“I remember Maureen Lipman very publicly protesting and leaving the Labour Party when it was led by (the Jewish) Ed Miliband, in protest over his policy on Israel/Palestine. This policy reflected Miliband’s absolutely proper concern for Palestinian human rights”.

Socialist Voice also reminded people how she had left the Labour party back then under Miliband, who was also himself the victim of anti-Semitic attacks in the Tory press.

And the tweeter Darius Faruz also pointed Lipman’s double standards in her attacks on Labour, while she was silent about the greater amount of racism rampant in the Tories:

“Maureen Lipman stays SILENT on the greater levels of antisemitism in the Tory party? Silent on the Conservative party of #Windrush, dog whistle racism … Silent on Johnson’s Islamophobia – letterbox / bank robbers, watermelon smiles, picaninnies”.

But she had the support of Mike Gapes, Michael Gove, the mainstream media and the Scum. Almost like the latter three were all connected, as another tweeter pointedly observed.

See: https://zelo-street.blogspot.com/2019/11/maureen-lipman-leaves-labour-again.html

There was a time when I liked and admired Maureen Lipman. She’s an extremely talented comic actor, and I’ve enjoyed her performances about another great British actor and comedian, Joyce Grenfell. But here she shows real moral squalor. She left the Labour party when Miliband moved slightly further left than the old Blair and Brown regime. Which means she’s quite happy seeing Britain’s public services delivering poor service in order to boost the profits of the private companies that own them. She’s quite happy to see the NHS, schools and colleges privatised, with students lumbered with crippling debt. With increasing numbers becoming homeless and house prices at unaffordable levels to create a ‘generation rent’. With wages so low the majority of people using food banks are actually in work. And a brutal sanctions regime that has seen tens, if not hundreds of thousands of people thrown into despair and poverty, because they’ve been declared ‘fit for work’ when they are anything but, or the Jobcentre decided they were going to cut of their jobseeker’s allowance on some flimsy excuse.

She’s ignored the way Corbyn has stood up for Britain’s Jewish community, and has enjoyed the support of many of its members. Like Jewdas, Jewish Voice for Labour, the Jewish Socialist Group and the Haredi community. No, he – and Ed Miliband before him – are terrible anti-Semites because they recognise the Palestinian people’s right to their own state. Or want to end the decades-long system of apartheid, land seizures and aggressive expropriation and colonisation in Israel itself. An apartheid which viewed the mizrahim – the indigenous Jews of the region – scarcely human.

She’s just another shabby ultra-Zionist, no different than the other fanatics and smear merchants. Zelo Street concluded their article about this sorry episode with

‘Maureen Lipman slagging off Labour is old news. And tediously predictable with it.’

Absolutely. And with her absolute lack of any genuine concern for Britain’s working people, and skewed hypocritical attitude on racism, I doubt many people miss her in the party either.

See: https://zelo-street.blogspot.com/2019/11/maureen-lipman-leaves-labour-again.html

We don’t need a perfect world; we need a fairer and more equitable one. Understanding how money works is the first step.

Published by Anonymous (not verified) on Sun, 24/11/2019 - 12:02am in

Person at the bottom of stairs climbing from darkness into the lightPhoto by Free To Use Sounds on Unsplash

As the election campaign rolls on and party leaders battle it out on our television screens, the Liberal Democrats commit themselves to more austerity and Paul Mason, left-wing journalist and former music teacher, indulges in some fantasy explanations of how money works. More on that later….

In yet another indication of how the austerity has not only done grave damage to those who least deserve it, but also to the economy, two more reports have been published to add to the already long list exposing the consequences of cuts to public spending.

The Scottish based Poverty Alliance organisation which published its report Righting the Wrongs: A manifesto to tackle poverty is urging the next Government to ‘put solving poverty at the heart of all that it does, including by creating a more compassionate social security system, [and] building a labour market that works for everyone….’

When confronted with the realities of people’s lives through their stories we can see the real tragedy behind the policy decisions and cuts to public spending of the current Conservative government.

Jamie from Glasgow struggling to raise a family on a low income described it as ‘like being stuck in the middle of a spider’s web with no escape route’ and Jackie, a community activist commenting for the Poverty Alliance report, said that ‘more and more people are being locked into poverty by jobs that are low paid and insecure. When people can barely afford to put food on the table and when parents working full-time are struggling to cope, there is something very wrong that we have to put right.

An analysis published by the TUC, also this week, has revealed that the number of children growing up in poverty in working households has risen by 38% over the last decade, bringing it to 800,000 since 2010.

The study also showed that government policies account for the majority of rises in child poverty, with more than 485,000 children (in working households) having been pushed below the breadline, not only as a direct result of the government’s in-work benefit cuts but also as a consequence of other major factors which include weak wage growth and insecure work. The report also noted that over the past decade workers have suffered the most severe wage squeeze in two centuries and although wages have just started to grow, weekly wages are still £14 below pre-crisis levels.

Frances O’Grady, the TUC General Secretary, commented about the report that no child in Britain should be growing up in poverty and cuts to in-work benefits have come at a terrible human cost.

Overall the poverty figures are shocking. As GIMMS reported earlier this year following a report by the Social Metrics Commission, there are now around 14.3 million people living in poverty, of which 8.3 million are working-age adults, 4.6 million children (of which around 2.9 million are in working households as identified in the later TUC report) and 1.3 million pension age adults.

Aside from these shocking statistics which represent avoidable and unnecessary human degradation, the combined effects of government policies and cuts to spending on public services have had a damaging effect not only on the lives of those caught in the austerity crossfire but also on the economy as a whole. A decaying public and social infrastructure and toxic welfare reforms have had a significant impact on poverty and inequality and show clearly in whose interests the government has been acting. The promotion of individualism and self-reliance, along with decreasing state intervention to replace our public infrastructure with private, profit-motivated services has been a long-standing agenda of successive neoliberally inspired governments.

Access to high-quality health and social care, education and training, well-paid secure work and good quality, affordable housing all play a vital role in the health of the nation and its economy. When people are denied those basic support systems it can only, in the end, lead to more deprivation, ill health, hunger, homelessness and increased crime, the consequences of which ripple into every part of society burdening it with both additional financial costs and societal breakdown.

As was reported by the BBC only this week more than 2 million adults are unable to see a dentist either because they can’t afford treatment, find an NHS dentist or get care where they live as a result of underfunding and recruitment problems. It is claimed that many people are being reduced to practising self-dentistry to alleviate the pain of rotten teeth which can cause all sorts of other problems like periodontal disease which can, in turn, lead to an increased risk of heart disease.

After nine years of cutting NHS spending in real terms, creating a pressured working environment for staff, capping their pay, stopping nursing bursaries and driving people away because of stress, senior NHS leaders are warning this week that hospitals are so understaffed lacking sufficient doctors, nurses and other health professionals to provide services that the ‘safety and quality of care are under threat.’ The latest figures show that the performance against key waiting times for A&E, cancer treatment and planned operations have fallen to their worst-ever level and that this could deteriorate even further as winter approaches.

NHS mental health services which have borne the brunt of cuts have become little more than a firefighting service to deal with the ever-growing numbers of people needing support.

Earlier this month the organisation State of Hunger published its report, drawn up in conjunction with Heriot-Watt University and the Trussell Trust. It revealed that more than half of households referred to foodbanks were affected by poor mental health, predominantly anxiety or depression, while 23% of people referred to foodbanks were homeless. The report gives a voice to those people who have paid the price for austerity and welfare reform – the worry about paying bills, keeping a roof over one’s head or having a job which pays enough.

“If I don’t pay my bills, then I’ll get the house taken off me. After paying arrears, I’ve got £8 a fortnight and that’s to pay for gas, electric, water. It’s just impossible, it really is. I go to bed at night wishing I won’t wake up in the morning.”

 

“I’ve used the food bank because I was on such a low income before I got my disability benefit… I had a mental breakdown because basically the amount they give me doesn’t cover the costs of my rent.”

 

Education joins health in forming the backbone of a functioning economy and societal well-being and yet, it too has suffered from crippling cuts to spending. Kevin Courtney, the joint general secretary of the NEU said this week that ‘The future of education hangs in the balance’.  Despite government promises of more money, the School Cuts Coalition made it clear only last week that four in five state schools will be financially worse off next year than they were in 2015 and this will affect schools in areas where there are already high levels of deprivation.

Even with the additional funding promised by government, there will still be a shortfall of £2.5bn in the year ahead after years of already damaging cuts. The consequences for schools are grim. More pupils per class, fewer teachers and support staff and reduced curriculums with subjects like music, language, art and design being cut as a result of the pressure, not to mention the reduction in capital expenditure on schools’ estate which has left it in a bad state of repair and not fit for purpose.

Our children represent the future and yet they are the ones that will bear the brunt of lack of adequate government spending and planning for an education and training system to meet the challenges they will face in the future.

A healthy economy demands a healthy and educated nation as a prerequisite. It demands quality housing, good secure jobs and pay. The last nine years of austerity and forty years of the pursuit of neoliberal dogma have pulled that rug from under people’s feet, leaving them in a world of increasing uncertainty.

It is regrettable in this respect that the notion that the state has a responsibility to ensure the health and well-being of all its citizens through the provision of universal services and other state-provided interventions is being mistaken for a ‘nanny state’ rather than acknowledging the value of such investment in society and its economy.

Whilst government has pursued its handbag economic strategy and ignored monetary realities for the lie of balanced budgets, it has failed in its duty as an elected body to serve the interests of citizens and the economy as a whole.

Whilst pursuing austerity, it has ignored the fundamentals of macroeconomics which it won’t hurt to repeat. Spending, wherever it comes from, creates income for someone else, whether that’s government which starts the ball rolling by creating the money into existence to pay for its needs which flows in turn right down to businesses, working people or even those having the misfortune to be involuntarily unemployed or coping with a disability or illness which prevents them from working. Through its obsession with austerity and lowering deficits at a time when it should have been spending more, it has weakened the economy and wilfully left people without the means to provide themselves with sufficient income to meet their daily needs.

As data from last year shows, it has left British households collectively supporting their spending through reducing savings (if indeed they had any) and taking on more debt. Quite simply government austerity has transferred the burden onto households which as private debt levels rise will prove unsustainable.

The fragile house of cards which represents the economy after nine years of government folly will either stagger on or fall into another recession unless the next government deficit spends sufficiently to promote full employment and serve the public purpose.

In the light of this, it is all the more incredible to note that after Ed Davey, deputy leader of the Lib Dems said earlier this month that Labour and the Tories were ‘writing promises on cheques that will bounce’ they have decided to make austerity their USP (unique selling point) for their election campaign. Yes, you read that right!

In his recent speech he positioned the Liberal Democrats as the ‘party of fiscal rectitude’ and the Conservatives and Labour as the ‘parties of fiscal incontinence’. Davey is proposing to adopt a fiscal rule for day to day spending aiming for current account surpluses in every year of their five-year costings.

With yet more household budget accounting and to meet its objective will require tax rises and yet more spending cuts. Furthermore, on the basis that achieving a surplus is not a saving and removes money from the economy and if our trading partners don’t spend all they earn thus taking even more out of our economy the net result will be a severe recession (as if we weren’t already heading in that direction). A bit of an own goal and a very foolish one at that!

And yet depressingly it has to be said another own goal was scored this week by the journalist and self-styled economist Paul Mason who presented a short promotional video for Novara Media explaining the deficit and debt in the language narrative of overdrafts, loans and mortgages along with that old ‘canard’ about paying for public services by taxing the very rich.

This is indeed ‘fantasy economics’ of the most damaging kind.

In response, the economist Professor Bill Mitchell explains it very succinctly and it is worth printing it here in its entirety:

‘This is the classic ‘soft’ mainstream macroeconomics that assumes the government is financially constrained and is thus not dissimilar to a household.

It is ‘soft’ because, unlike the hard-mainstream positions, it allows for deficits (‘funded’ by debt) to occur in a non-government downturn but proposes them to be offset by surpluses in an upturn, irrespective of the overall saving position of the non-government sector.

None of this framing or language is what I would call ‘progressive’.

It has the hallmarks of the way neoliberals construct the concepts and the narrative.

The inferences are also plainly false when applied to the British government.

  1. It is not financially constrained in its spending.

The constraints relate to real resource availability.

In terms of restaffing the NHS, for example, are there qualified labour resources available? What training would be required? Would this mean that British Labour is also going to be advocating open borders to ensure the staffing is available? [….]

  1. There is no meaningful knowledge that be gained by comparing a household with a home mortgage and a currency-issuing government spending its own currency.

The household is the currency user and the government is the currency issuer.

Totally different constraints apply.

  1. It is false to claim that it is virtuous to ‘tax the rich’ in order to fund essential health and welfare services.

This is one of the worst frames that the progressives now deploy.

The British government might want to tax the rich to reduce their power and influence (exercised via their spending habits) but it never has to do that in order to fund essential services.

The only constraint that exercise involves is the availability of real resources.’

  1. The British government does not have to issue debt to ‘fund’ its deficits. The capacity of the non-government sector to purchase the debt derives from past deficits that have not been taxed away yet.

Even if the government issues debt to match its investment in essential infrastructure to deliver better housing, transport health care, and engage in climate action etc, this investment is not linked at all to the current interest rates in place.

 

There is no meaning to the term “cheap” finance, when the spending does not need to be financed (in the currency the government issues).

The issuing of risk-free debt from a currency-issuing government really amounts to the provision of corporate welfare and no progressive should advocate its continuance.

  1. There is no meaning in saying the recurrent deficit is like an overdraft or the capital deficit is like a mortgage. Those terms gain meaning when applied to units that are financially constrained.

While left-wing progressive parties continue to frame their election campaigns in neoliberal terms and thus erect unnecessary financial barriers to spending that will prevent them from achieving their goals, the public will also remain in the dark about a subject which is of vital importance; how to answer the question about how government really spends, how its policies can be paid for and what  the real constraints are.

That said and despite the deliberate misleading of the public by Paul Mason, the UK needs a progressive government prepared to act in the public interest through investment in our public and social infrastructure and ready to take action to tackle social injustice, ensure a more equitable distribution of wealth and address the biggest challenge we face – climate change.

 

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The post We don’t need a perfect world; we need a fairer and more equitable one. Understanding how money works is the first step. appeared first on The Gower Initiative for Modern Money Studies.

Productivity Does Not Explain Wages

Published by Anonymous (not verified) on Fri, 15/11/2019 - 6:44am in

Does productivity explain income? I asked this question in a previous post. My answer was a bombastic no. In this post, I’ll dig deeper into the reasons that productivity doesn’t explain income. I’ll focus on wages.

The evidence

Let’s start with the evidence trumpeted as proof that productivity explains wages. Looking across firms, we find that sales per worker correlates with average wages. Figure 1 shows this correlation for about 50,000 US firms over the years 1950 to 2015.

sales_wages Figure 1: The correlation between a firm’s average wages and its sales per worker. Data comes from Compustat. To adjust for inflation, I’ve divided wages and sales per worker by their respective averages (in the firm sample) in each year. I’ve shown stock tickers for select firms.

Mainstream economists take this correlation as evidence that productivity explains wages. Sales, they say, measure firms’ output. So sales per worker indicates firms’ labor productivity. Thus the evidence in Figure 1 indicates that productivity explains (much of) workers’ income. Case closed.

The problem

Yes, sales per worker correlates with average wages. No one disputes this fact. What I dispute is that this correlation says anything about productivity. The problem is simple. Sales per worker doesn’t measure productivity.

To understand the problem, let’s do some basic accounting. A firm’s sales equal the unit price of the firm’s product times the quantity of this product:

Sales = Unit Price × Unit Quantity

Dividing both sides by the number of workers gives:

Sales per Worker = Unit Price × Unit Quantity per Worker

Let’s unpack this equation. The ‘unit quantity per worker’ measures labor productivity. It tells us the firm’s output per worker. For instance, a farm might grow 10 tons of potatoes per worker. If another farm grows 15 tons of potatoes per worker, it unambiguously produces more potatoes per worker (assuming the potatoes are the same).

The problem with using sales to measure productivity is that prices get in the way. Imagine that two farms, Old McDonald’s and Spuds-R-Us, both produce 10 tons of potatoes per worker. Next, imagine that Old McDonald’s sells their potatoes for $100 per ton. Spuds-R-Us, however, sells their potatoes for $200 per ton. The result is that Spuds-R-Us has double the sales per worker as Old McDonald’s. When we equate sales with productivity, it appears that workers at Spuds-R-Us are twice as productive as workers at Old McDonald’s. But they’re not. We’ve been fooled by prices.

The solution to this problem seems simple. Rather than use sales to measure output, we should measure a firm’s output directly. Count up what the firm produces, and that’s its output. Problem solved.

So why don’t economists measure output directly? Because the restrictions needed to do so are severe. In fact, they’re so severe that they’re almost never met in the real world. Let’s go through these restrictions.

Restriction 1: Firms must produce identical commodities

To objectively compare productivity, you have to find firms that produce the same commodity. You could, for instance, compare the productivity of two farms that produce (the same) potatoes. But if the farms produce different things, you’re out of luck.

Here’s why. When firms produce different commodities, we need a common dimension to compare their outputs. The problem is that the choice of dimension affects our measure of output.

To see the problem, let’s return to our two farms, Old McDonald’s and Spuds-R-Us. Suppose that Spuds-R-Us produces 10 tons of potatoes per worker. Tired of growing potatoes, Old McDonald’s instead grows 5 tons of corn per worker. Which workers are more productive?

The answer depends on our dimension of analysis.

Suppose we compare potatoes and corn using mass. We find that Spuds-R-Us workers (who produce 10 tons per worker) are more productive than Old McDonald’s workers (who produce 5 tons per worker).

Now suppose we compare potatoes and corn using energy. Furthermore, imagine that corn has twice the caloric density of potatoes. Now we find that workers at Spuds-R-Us (who produce half the mass of food at twice the caloric density) have the same labor productivity as Old McDonald’s workers.

The lesson? Unless two firms produce the same commodity, productivity comparisons are subjective. They depend on the choice of dimension.

Restriction 2: Firm output must be countable

When you read economic textbooks, it’s clear that the discipline of economics is stuck in the 19th century. Firms, the textbooks say, produce stuff.

But what about all those other firms that don’t produce stuff? What is their output? What, for instance, is the output of Goldman Sacks? What is the output of a high school? What is the output of a hospital? What is the output of a legal firm?

Yes, these institutions do things. But it defies reason to give these activities a ‘unit quantity’. In other words, it defies reason to quantify the output of these institutions.

Restriction 3: Firms must produce a single commodity

Complicating things further, we can objectively measure output only when firms produce a single commodity. If a firm produces two (or more) commodities, its output is affected by how we add the commodities together.

To see the problem, let’s return to Old McDonald’s and Spuds-R-Us. Suppose that both farms have diversified their production. Spuds-R-Us produces 5 tons of potatoes and 1 ton of corn per worker. Old McDonald’s produces 1 ton of potatoes and 5 tons of corn. Which workers are more productive?

The answer depends on our dimension of analysis. In terms of mass, both farms produce 6 tons of food per worker. So labor productivity appears the same. But suppose we measure the output of energy. Again, we’ll assume that corn has double the caloric density of potatoes. Suppose corn contains 2 GJ (gigajoule) per ton, while potatoes contain 1 GJ per ton. Now we find that Old McDonald’s workers are about 60% more productive than workers at Spuds-R-Us. Here’s the calculation:

Spuds-R-Us:
5 tons potato × 1 GJ / ton + 1 ton corn × 2 GJ / ton = 7 GJ

Old McDonald’s:
1 ton potato × 1 GJ / ton + 5 ton corn × 2 GJ / ton = 11 GJ

This ‘aggregation problem’ is why the neoclassical theory of income distribution assumes a single-commodity world — a world in which everyone produces and consumes the same thing. In this one-commodity world, we can measure productivity unambiguously. In the real world (with many commodities) productivity depends on our choice of dimension.

The severity of the problem

Let’s take stock. If we want to measure productivity objectively, the restrictions are severe:

  1. Firms must produce the same commodity
  2. This commodity must be countable
  3. Firms must produce only one commodity

These conditions are so stringent that they’re rarely met in the real world. This is a bit of a problem for neoclassical theory. It proposes that everyone’s income is explained by their productivity. But only in the rarest of circumstances can we measure productivity objectively.

It’s hard not to laugh at this predicament. It’s like Newton proclaiming that gravitational force is proportional to mass. But in the next sentence he realizes that mass can be measured only in the rarest of circumstances.

The neoclassical slight of hand

Neoclassical economists don’t think of themselves as Newtons who can’t measure mass. Instead, economics textbooks don’t even mention the problems with measuring productivity. In these textbooks, all seems well in neoclassical land.

But all is not well. Neoclassical economists perpetuate their fantasy by relying on a slight of hand. Here’s what they do.

First, economists argue that the purpose of all economic activity is to give consumers utility. Buy a potato and you get utility. Buy a cigarette and you get utility. Utility, economists say, is the universal dimension of output. By measuring utility, we can compare the output of any and all firms (no matter what they produce).

After proclaiming that utility is the universal dimension of output, economists pull their trick. Utility, they say, is revealed through prices. So a painting worth $1000 gives the buyer 1000 times the utility as a $1 potato.

With this thinking in hand, economists see that a firm’s sales measure its output of utility:

Sales = Unit Price × Unit Quantity

Sales = Unit Utility × Unit Quantity = Gross Utility

So sales become a universal measure of utility, and utility is the universal measure of output. Now, when we compare sales per worker to wages (as in Figure 1), economists proclaim that we’re comparing productivity to wages.

Except we’re not.

The problem is that this whole operation is circular. The idea that prices reveal utility is a hypothesis. And as every good scientist knows, you can’t use your hypothesis to test your hypothesis. But that’s what neoclassical economists do. They assume that one aspect of their theory is true (the link between prices and utility) to test another aspect of their theory (the link between productivity and income). This is a big no no.

Why do economists use this circular reasoning? Probably because they don’t know they’re doing it. Economists take as received wisdom the idea that prices reveal utility. But this is just a hypothesis. In fact, it’s a bad hypothesis. Why? Because we can never measure utility independently of prices.

Why are sales related to wages?

Whenever I go through the logic above, mainstream economists will retort: “But look at the correlation between wages and sales! How can this not show that productivity explains wages?” Their reasoning seems to be that, absent an alternative explanation, this correlation must support their hypothesis.

In No, Productivity Does Not Explain Income, I gave an alternative explanation. The correlation between wages and sales per worker, I argued, follows from accounting principles.

Sales isn’t a measure of output. It’s an income stream. Once earned, this income gets split by the firm into different categories. Some of it goes to workers. Some of it goes to other firms (as non-labor costs). And some of it goes to the firm’s owners as profit.

Dividing an income stream

Figure 2: Dividing a firm’s income stream. Accounting principles dictate that a firm’s sales get divided into profits and wages.

By definition, the terms on the left must sum to the terms on the right. So it’s not surprising that we find a correlation between wages and sales. They’re related by an accounting identity.

In comments on No, Productivity Does Not Explain Income (and on other sites), some economists pounced on this argument, saying it was fatally flawed. And in hindsight, I admit that I wasn’t clear enough about my reasoning. I was thinking about the real world. But the economists who critiqued my reasoning were thinking in terms of pure mathematics.

To frame the debate, let’s think about something more concrete than income. Let’s think about volume. In rough terms, the volume of an object is the product of its length, width and height:

V = L × W × H

Now, let’s pick a dimension — say length. Will the length of an object correlate with its volume? In general terms, no. I can make an object with any volume using any length. I just have to adjust the other dimensions appropriately. By doing so, I can make a cube have the same volume as a box that is long and thin.

So in pure mathematical terms, the accounting definition of volume doesn’t lead to a correlation between length and volume.

But when we look at real-world objects — like animals — we will find a correlation. If we took all the species on earth and plotted their length against their volume, we’d expect a tight correlation. A bacteria has a small length and a small volume. A blue whale has a big length and a big volume. Fill in the gaps between and we should get a nice tight line.

The reason for this correlation is that animals cannot take any shape. You’ll never find an animal that is a mile long and a few micrometers wide. Such a beast doesn’t exist. Yes, the shapes of animals vary. But in the grand scheme, this varation is small. As a first approximation, animals are roughly cubes. Or, if you’re a physicist, they’re spheres.

With this shape restriction, it follows from the definition of volume that animal length should correlate with animal volume. We’d be astonished if it didn’t.

So too with the correlation between sales per worker and wages. True, this correlation doesn’t follow purely from accounting principles. It follows jointly from accounting principles, and the fact that firms can’t take any form. We don’t find firms that pay their workers nothing. That’s slavery and its illegal. Similarly, we don’t find (many) firms that pay their workers the entirety of sales. That leaves no room for profit.

So in the real world, there are restrictions on how firms can divide their income stream. Here’s what these restrictions look like. In Figure 3, I’ve plotted the distribution of firms’ payroll as a portion of sales. This is the portion of sales that goes to workers. Across all firms, it’s a pretty tight distribution, clustered around 25%.

payroll_frac
Figure 3: The distribution of firm payrolls as a fraction of sales. Data is for US firms in the Compustat database over the years 1950–2015.

Yes, it’s theoretically possible for a firm to give any portion of its sales to workers. But this isn’t what happens in reality. In the real world, most firms give between 10% and 50% of their sales to workers. Just like with the shape of animals, there are real-world restrictions on the ‘shape’ that firms can take.

Given these restrictions, it’s not surprising that we find a correlation between sales per worker and wages. When a firm’s income stream grows, so does the amount going to workers.

None of this has anything to do with productivity. It’s all about income. Sales are the firm’s income. And wages are the portion of this income given to workers.

Prices … the elephant in the room

Let’s conclude this foray into neoclassical thinking. The reason that sales don’t measure firm output is because they mix unit prices with unit quantities. Yes, sales per worker correlates with wages. But the elephant in the room is prices. Greater sales may be due to greater output. But it can also be due to greater unit prices.

In many cases, price differences are everything.

Imagine that a lawyer and a janitor both work 40 hours a week as self-employed contractors. The lawyer charges $1000 per hour, while the janitor charges $20. At the end of the week, the lawyer has 50 times the sales as the janitor. This difference comes down solely to price. The lawyer charges 50 times more for their hourly services than the janitor.

The question is why?

Neoclassical economists proclaim they have the answer. The lawyer, they say, produces 50 times the utility as the janitor. Ask economists how they know this, and they’ll answer with a straight face: “Prices revealed it.”

It’s time to recognize this slight of hand for what it is: a farce. The reality is that we know virtually nothing about what causes prices. And we will continue to know nothing as long as researchers believe the neoclassical farce.

Further reading

The Aggregation Problem: Implications for Ecological and Biophysical Economics. BioPhysical Economics and Resource Quality. 4(1), 1-15. SocArxiv Preprint.

Ordinary Peoples’ Tales of Despair urging You To Vote Labour

Published by Anonymous (not verified) on Sun, 10/11/2019 - 9:49pm in

Mike posted this story up four days ago on Thursday, and it’s another good one. It not only shows how the Tories are pushing ordinary people into real poverty and despair, but also how people are trying to fight back against them and a mendacious, compliant media. The Mirror ran a story about a grassroots campaign in Britain by ordinary people, in which they write out their stories and then pin them on public noticeboards, photograph them, and then share them on social media. Mike has put up several of the photos on his blog. Here’s just one of them.

They’re all heartrending. Mike begins his article with one about the way the Tories have decimated acute mental health services so that people with problems don’t get the help they need. This was from someone, whose brother committed suicide. And incidentally, their story also puts the lie to all the Tory claims that they’re putting more money into combating mental health problems.

People are having to do this because, with very few exceptions, the media is Tory owned, Tory controlled, and determined to stop Labour getting in. Despite the wide reporting of problems like welfare cuts, suicide, zero hours contracts, the increased use of food banks among people in work, let alone the unemployed and disabled, the privatisation of the NHS, our media carries on pushing for a Tory government which will continue these policies and make them worse. Because ‘work pays, and is the best way out of poverty’ or other versions of the Nazi slogan ‘Arbeit Macht Frei’ as it was blazoned over the concentration camps. IDS even began one of his wretched articles for the Tory press a few years ago by supporting that very slogan, until someone told him he’d just shot himself massively in the foot. The paragraph suddenly disappeared from the online version of the article soon after.

Mike in his article encourages others to join the #Torystory online campaign, if they want to. They might swing the result for Labour.

So please do so, if you want to. Because this is another sign that people are fed up with the Tories and fed up with their despicable media.

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