tag:blogger.com,1999:blog-90223696961826673782024-03-13T21:05:31.466+00:00Martin WhitlockMartin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.comBlogger42125tag:blogger.com,1999:blog-9022369696182667378.post-40982791985988418922021-06-01T17:28:00.000+01:002021-06-01T17:28:01.757+01:00Bonkers Economics - is it me, or is it the system that is crazy?<div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-PeycPo8qT9Q/YLZfqo0rrYI/AAAAAAAAOOQ/kJZ0w6QR1pgXdRBKjiJHidnXnRmk2wSJQCLcBGAsYHQ/s1920/Thumbnail.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1080" data-original-width="1920" src="https://1.bp.blogspot.com/-PeycPo8qT9Q/YLZfqo0rrYI/AAAAAAAAOOQ/kJZ0w6QR1pgXdRBKjiJHidnXnRmk2wSJQCLcBGAsYHQ/s320/Thumbnail.jpg" width="320" /></a></div><p>This week sees the launch of my new video series, Bonkers Economics. First up, I'm asking why we're all so addicted to rising house prices. I say addicted because rising house prices really are that harmful, even for homeowners, as the video explains.</p><p>The video lasts nine minutes and <a href="https://youtu.be/LjpbUnkQh9c">can be found here</a>. For those who prefer reading or would like a quick synopsis or recap, the key points are as follows:</p><p></p><ol style="text-align: left;"><li>Rents follow house prices: If you own a house but other people in your family - for example your children - are paying rent, then watching the value of your house increase is an expensive entertainment when you consider your family as a whole. Because an increase in value that you're not likely to cash in any time soon is costing your family collectively real money, right now, because rents are so high.</li><li>For those just clambering on to the housing ladder, the rising price of their first home is going to cost them real money going forward. That's because first-time-buyers generally plan to trade up when they can. The following example explains this.</li><ul><li>If the first house costs £200,000 and the second, a few years later, is £360,000, that's another £160,000 they'll need to find. If prices rise 25% in those few years (which they easily might) then the first house will sell for £250,000 but the second will cost £450,000 - an extra £200,000. But if prices fall 25% in those few years, then the first house will only sell for £150,000, but the second one will be £270,000, so the extra will only be £120,000.</li><li>Of course this throws up an issue of negative equity - the mortgage on the first house being more than it sells for. As things are currently organised, that makes it difficult to move house at all. But things can be organised differently, and this is actually a problem that a willing government could easily fix in the interests of making housing more affordable. This will be the subject of the next Bonkers Economics video in few weeks' time.</li></ul><li>Finally, there's the question of mum and dad (or granny and granddad) wanting high house prices in order to pass on as much as possible to the next generation. Even here there's a massive flaw in the common logic. Because the high house prices that boost the value of the inheritance simply mean that the children or grandchildren will have to pay more (and therefore borrow more) than they would if house prices were lower. If a lower inheritance means that houses are cheaper, then the future generations are quids in!</li></ol><div>The bottom line is that most money that goes into housing stays in housing through the generations, and higher prices just result in future generations paying more. At some point this crazy dynamic has got to break, and there are lost of ways that the government could bring down prices without causing a financial crash. There'll be a Bonkers Economics video soon about that, too.</div><p></p><br /><p></p><p><br /></p><p><br /></p><p><br /></p>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-4173817862394141412021-03-03T16:46:00.002+00:002021-03-05T12:44:48.765+00:00Today's budget will raise house prices. That's bad news for everybody, including homeowners.<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-qoCPehMBpFQ/YD-9H6U6VWI/AAAAAAAANgg/qEOVMtzpuRck7zEa9z0jHRp4awbSimlZwCLcBGAsYHQ/s561/Housing.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="561" data-original-width="400" height="200" src="https://1.bp.blogspot.com/-qoCPehMBpFQ/YD-9H6U6VWI/AAAAAAAANgg/qEOVMtzpuRck7zEa9z0jHRp4awbSimlZwCLcBGAsYHQ/w143-h200/Housing.png" width="143" /></a></div><br />The <a href="https://www.bbc.co.uk/news/business-53319433">headlines for home owners in today's budget</a> are an extension to the stamp duty "holiday" and guarantees for 95% mortgages. Neither step will contribute to what should be the overriding policy objective, which is to make homes more affordable.<span><a name='more'></a></span> Instead they will just push prices up still further.<p></p><p> The whole purpose of the so-called holiday is to boost the market by reducing tax on the purchase price. This gives buyers more to spend, which pushes up prices <a href="https://www.theguardian.com/money/2021/mar/02/uk-house-prices-rise-stamp-duty-holiday-covid-19-pandemic">as we have seen</a>. This is a straight transfer of wealth from the common purse to individual property owners, which means less money for the government to spend on things that matter a lot more.</p><p>Guaranteeing 95% mortgages has a similar effect. It plays to the idea of housing as an investment asset, encouraging first-time buyers to gamble vast sums that they don't have on the basis that house prices always rise. Because commercial lenders don't fancy the risk, the government (aka the rest of us) is taking the risk for them.</p><p>In practice, however, for people who actually live in houses and flats the idea of a home as an investment asset is a self-serving myth cooked up by lenders and speculators. Money that goes into housing is usually
never seen again. If it’s rent, it’s gone forever, and if it’s a
purchase the chances are it will be followed by another purchase, since
people need somewhere to live for the whole of their lives.</p><p>When homeowners "up-size" they will always be better off if house prices have fallen. That's because the reduced sale price of the cheaper first home is more than offset by the reduced purchase price of the larger second home. </p><p>Even when
money comes out of housing, when people are downsizing or when they
die, there’s a good chance that much of it will go straight back into
housing for the next generation. If the bank of Mum and Dad - or of Grandma and Granddad - has less in its coffers because house prices have fallen, then that also is offset by lower prices for their children and grandchildren.</p>
<p class="has-text-align-center">Money locked up in housing is frozen
money. It doesn’t flow through the economy helping people to create
wealth. So the less that is locked up, the better for the econ<br />omy,
because more is available to help people do and make things that will
improve the quality of their lives.</p><p class="has-text-align-center">I'd doesn't take a degree maths - or even economics - to work out that people would have more spending money if their mortgages or rents were significantly lower. And you would think that something like that would be politically popular. It doesn't need a sudden price crash - just a gradual readjustment in government policy to bring prices down to something more reasonable.</p><p class="has-text-align-center">Sadly it won't happen within the current neoliberal economic system. For free-market speculators, the UK housing market is the gift that just keeps on giving, with low interest rates, high rental returns and increasing capital values. It will take a new approach to political economy, a more <a href="https://humanpolitics.org">human politics</a>, if we're going to fix this. But fix it we can, if we choose to do so.</p>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-12664039122326268312021-02-25T11:13:00.002+00:002021-02-25T11:20:05.768+00:00A new direction for human politics<h3 style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-10sz-DAcMU8/YDeH1gmEiuI/AAAAAAAANfU/eHzycH7ix-g5_3Y3zYlbuGWy2UpKBI0mACLcBGAsYHQ/s384/%2523HPblog.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="377" data-original-width="384" src="https://1.bp.blogspot.com/-10sz-DAcMU8/YDeH1gmEiuI/AAAAAAAANfU/eHzycH7ix-g5_3Y3zYlbuGWy2UpKBI0mACLcBGAsYHQ/s320/%2523HPblog.png" width="320" /></a></div><br /><div class="separator" style="clear: both; text-align: center;">"What if we ditch the capital letters in Human Politics and reimagine it in lowercase, not as an entity but a concept - as a counter-narrative to neoliberalism?"</div><span><a name='more'></a></span></h3><div>Humanpolitics.org has been around since 2006. It had a major reboot when my book, <a href="https://www.mindhenge.co.uk/p/index.html">Human Politics : Human Value</a> came out in 2014. Now, the combination of the Covid crisis and the Brexit denouement means that change is in the air and I’m keen to see what Human Politics can contribute to that.<br /><br />One thing is increasingly clear. Yet another organisation campaigning for economic and political reform is not what is needed in an already crowded field. There is also a growing number of organisations working hard to connect existing groups and provide shared resources such as training.<br /><br />But what if we ditch the capital letters in Human Politics and reimagine it in lowercase, not as an entity but a concept - as a counter-narrative to neoliberalism? After all, neoliberalism is not a membership organisation; it’s merely a term to describe a particular economic and political framing. Human politics in lowercase can be exactly that: a framing for a set of socio-economic principles that place human and environmental wellbeing front and centre of political endeavour.<br /><br />With this in mind the latest iteration of the human politics website is focused on #humanpolitics as a generic descriptor for a set of economic and political policies and principles that the website sets out. It is not a campaigning platform, but simply a point of reference for anybody wishing to embrace the term.<br /><br />Read our <a href="https://humanpolitics.org/open_letter/">open letter</a> setting out the reasoning behind #humanpolitics and what we think it can do, either on <a href="https://humanpolitics.org/">the website</a> or as a <a href="https://humanpolitics.org/wp-content/uploads/2021/02/Open-letter.pdf">pdf download</a>, and please do share these links as widely as you can through your networks. Help to get people talking and writing about human politics as an expression of the desire we all share to reform the political and economic system now.<br /><br />The #humanpolitics social media pages will now be promoting the humanpolitics hashtag by relaying news items, posts and other media covering the policies and principles that the term human politics describes. The Instagram page will cease for the moment, since it is not the best platform on which to share content.<br /><br />On a personal note, this means that my own political and economic output is migrating to a <a href="http://martinwhitlock.co.uk/">different platform</a>, including my personal social media accounts. I have changed the links on some earlier social media posts so my recent blogs can still be found. To keep in touch, please connect with my <a href="https://www.facebook.com/martin.whitlock.50/">Facebook page</a>, or via <a href="https://twitter.com/MartinMWhitlock">Twitter</a>. <br /><br />I will still have plenty to say, and will continue to reference human politics and promote its adoption as a generic term. But beyond that I give it to the world, and invite the world to make use of it. Thanks for your continued support - let’s seize this moment when the old order is falling apart to usher in a new economy that places humanity (people and the planet on which we depend) before money. <br /></div>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-17452191520907768052021-01-04T17:46:00.002+00:002021-02-23T15:43:00.347+00:00Getting creative<p></p><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://lh3.googleusercontent.com/-RFHc8w0oBt4/YDTrJP-VkxI/AAAAAAAANa0/Xm4-Yk_ZTy0wCFmNFIGYiAvIUiwQ81rKACLcBGAsYHQ/image.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" data-original-height="400" data-original-width="400" height="240" src="https://lh3.googleusercontent.com/-RFHc8w0oBt4/YDTrJP-VkxI/AAAAAAAANa0/Xm4-Yk_ZTy0wCFmNFIGYiAvIUiwQ81rKACLcBGAsYHQ/image.png" width="240" /></a></div><h3 style="text-align: left;">The end of free movement in Europe, coming on top of the Covid shutdown, has left the UK's creative community reeling. But radical reform in both finance and education policy can get it back on its feet.<span><a name='more'></a></span></h3><p></p><p><br /></p><p>Britain’s small fishing ports make great tourist destinations, in which the fishy smells, the colourful nets and lobster pots throw a veil of authenticity over the ice cream stands and nearby beaches. In reality, however, small scale, local fishing is a tiny part of an industry in which the question of what is or is not British becomes hard to discern. <a href="https://www.bbc.co.uk/news/52420116">British vessels are owned by foreign owners, while quotas allocated to British boats have been sold to foreign companies</a>. The fishy denouement to the Brexit negotiations, therefore, had less to do with iconic fishing ports than with the financial interests of the larger fleet operators.</p><!--wp:paragraph-->
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<p>Little about Brexit is quite what it seems, which is why the culture of fish took centre stage while the culture of creativity was strangely neglected. A story of rugged individuals who survive the elements only to be stymied by Brussels bureaucrats has a resonance that powerful media corporations do not inspire. But while it is true that the creative industries are <a href="http://www.newstatesman.com/culture/2020/12/whats-more-important-theatre-industry-or-fishing-industry">many times the size of fishing in money terms</a>, those big corporations are the distributors, not the creators, of the work of artists, actors, musicians, directors, photographers, writers, technicians and others who are mostly self-employed and often live a precarious existence.</p>
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<p>The Single Market is based upon four freedoms of movement: in goods, services, people and capital. From an EU perspective, these freedoms are indivisible. But because Brexit was so bound up with anti-immigrant sentiment the ending of the free movement of people became a key UK objective. So the other three freedoms were lost at the same time.</p>
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<p>The negotiations that went down to the wire at the end of 2020 just about rescued the movement of goods, although now subject to a mass of new paperwork. Capital (aka money) will also tend to find its way to wherever it will make its owner richest. But the movement of services, which make up about 80 per cent of the UK economy and of which the creative industries are a substantial part, are mostly not covered by the exit agreement, while the free movement of people is expressly excluded.</p>
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<p>For many who live on their creative skills, the ability to move seamlessly from country to country is <a href="https://www.theguardian.com/politics/2020/dec/29/uk-performers-raise-alarm-as-brexit-deal-threatens-eu-touring">of huge importance</a>. Whether it’s a band, orchestra or stage show on tour, a multi-location film in production or a solo musician who plays with groups in different countries, artistic and creative work does not fit easily into national boundaries and the loss of Single Market freedoms through Brexit will make life significantly harder.</p>
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<p>The neglect of this sector is a sobering reminder that, while British politicians were focused on headlines, EU negotiators were resolutely focused on commercial advantage. Of goods (including food), <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-7851/#:~:text=The%20EU%2C%20taken%20as%20a,%25%20of%20all%20UK%20imports).&text=A%20surplus%20of%20%C2%A383,billion%20on%20trade%20in%20goods.">we import about £100bn more from the EU than goes the other way</a> every year. Anyone who has tried to buy a UK made washing machine or power tool, or UK-grown tomatoes out of season (or even in season), or who drives a German- (or French-, or Italian- or Czech- or Spanish-) made car will immediately grasp this. So of course we got a tariff-free arrangement for these goods, just as it should be no surprise that<a href="https://www.bbc.co.uk/news/uk-47459859"> UK drivers will continue to be allowed to tour Europe using their UK-issued licences</a>. Britons spend far more money visiting our European neighbours than those neighbours spend visiting us.</p>
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<p>The negotiations turned out that way because, for the UK side, Brexit was never an economic strategy, and it came with no coherent plan attached. That’s because many on the Leave side <a href="https://www.huffingtonpost.co.uk/entry/open-britain-video-single-market-nigel-farage-anna-soubry_uk_582ce0a0e4b09025ba310fce">did not anticipate leaving the Single Market</a>. It was only after the vote, when it became obvious we would have to, that the idea of <a href="https://publications.parliament.uk/pa/cm201719/cmselect/cmfaff/780/78005.htm">Global Britain was hastily invented</a>. The implication, however, that what was lost to the EU would be more than made up for elsewhere, was clearly nonsense. You don’t sever close links with the world’s biggest trading bloc if you’re betting your future on global trade.</p>
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<p>Other strategies, however, are available - strategies that play to Britain’s established strengths in the creative industries while offering a picture of what a sustainably productive economy might look like. How that picture turns out depends very much on how we envisage the world of work in an increasingly mechanised future.</p>
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<p>It’s commonly said of wood stoves that they heat you twice - first when you chop and split the logs and then again when you burn them. The most productive work arises in a similar way, giving pleasure both in its production and its subsequent use. And while it would be naive to assume that all creative activity is satisfying, live-enhancing and stress-free, it is clear that any work that allows people to connect with their inner passions while simultaneously giving sustenance to the needs and interests of others is particularly valuable. It is also least likely to be replaceable by machine learning or algorithms.</p>
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<p>The field of work that this encompasses is a wide one, from conducting ( or composing) a symphony to designing a video game to handcrafting a bookcase (or a house) to nurturing a garden to preparing a special meal at home for one’s family. All these activities are economic in the sense that they create value, but each is doubly valuable for being motivated by an inner desire rather than an outward necessity.</p>
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<p>A government with an inspired vision for the future would look to maximise the opportunities for this sort of work, to unleash people’s creative potential and make the economy truly productive of the sorts of things that enhance the quality of all our lives. This vision requires a complete rethinking of policy objectives, away from a narrow focus on the value of money transactions towards a qualitative evaluation of the usefulness of different categories of work.</p>
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<p>It all starts with two things: a new relationship with money - one in which money becomes a facilitator of wealth production rather than its objective - and a new approach to education, in which the creative activities of doing, making, imagining, performing and experiencing take centre stage. In theory, Britain did not need to leave the EU in order to achieve either of these, but so fixated had our politics become on reductive, money-based economic outcomes that only a severe shock was ever likely to edge the door open to these new possibilities. Brexit (augmented by the Covid crisis) has delivered that shock. The question is whether we have the wit and determination to put a foot in the door and start pushing.</p>
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<p>In the case of money, the shift needed is away from the focus on ownership and possession in favour of the productive good that people can do with it. It is calculated that in the UK the richest <a href="https://www.theguardian.com/inequality/2021/jan/03/richest-1-have-almost-a-quarter-of-uk-wealth-study-claims">1% own a quarter of the wealth</a> in money terms. It’s easy to reflect on that in terms of moral outrage, but the significant fact is not how wealthy a few people are but how little real use they make of their enormous riches.</p>
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<p>Most of that wealth is sequestered away in land, property, company shares and other financial instruments, in the hope that they become more valuable over time. While the rich are pointlessly acquiring even greater wealth in this way, most other people are unable to live the fulfilled, productive lives of which they are capable either because they have no access to money or because too much of their energy is taken up in acquiring the money that they need to survive.</p>
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<p>The real crime of extreme inequality, therefore, is not plain poverty but the colossal waste of human productivity that arises when people do not have access to the tools, both literal and metaphorical, that will allow them to fulfil their creative potential. That is why a <a href="https://en.wikipedia.org/wiki/Universal_basic_income">Universal Basic Income</a> is such an exciting idea. It recognises that having enough money to live on frees up people’s time and energy to do creative, productive things.</p>
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<p>Education is the other vital ingredient for this alchemy, because it provides the opportunity for self-discovery on which all creativity thrives. That the current school system has been reduced to the scoring of a few functional cognitive skills is arguably the biggest barrier to a dynamic, creative society. Children learn in all sorts of different ways, and those with the greatest creative potential are often the least suited to Ofsted’s formulaic prescriptions.</p>
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<p>All people are creative, but Britain’s language, culture and history bestow certain advantages when engaging creatively on a wider stage. Maximising that advantage requires the widest possible participation, which in turn requires a fundamental reform in the way that our financial and educational resources are distributed. If we fail at that, then creative opportunities may be squeezed out of the lives of the majority to become niche activities for a privileged few. If we can manage it, however, we can move on from the setbacks of Brexit and Covid into a virtuous cycle of creation and appreciation in which the UK’s creative sector can truly thrive.</p>
<!--/wp:paragraph-->Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com1tag:blogger.com,1999:blog-9022369696182667378.post-16060845570477933692020-12-31T10:28:00.003+00:002021-02-23T15:42:33.772+00:00Where next, after Brexit?<h3 style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-J0sdWvTaf_I/YDTuMOU14XI/AAAAAAAANbM/_jXqoUxwykUPR2C3nIfaBTnNZ3SZzW1uACPcBGAsYHg/s4608/IMG_20190903_192956.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="2176" data-original-width="4608" src="https://1.bp.blogspot.com/-J0sdWvTaf_I/YDTuMOU14XI/AAAAAAAANbM/_jXqoUxwykUPR2C3nIfaBTnNZ3SZzW1uACPcBGAsYHg/s320/IMG_20190903_192956.jpg" width="320" /></a></div><br /><div style="text-align: center;">Britain is in a unique position from January 1st to become the pioneer of a new economic model, paving the way for a global economy to escape its unsustainable, inefficient ways.<span><a name='more'></a></span></div></h3><div><br />Over the past 250 years Britain has variously been the workshop of the world, its largest economy, its greatest trader, its banker and the source of transformative innovation in agriculture, industry, science, finance, insurance and engineering, among many other fields. It was also, for a period, the dominant naval and military power and ruler of a vast empire, all while modelling - at home, if not in its global possessions - a form of representative, constitutional administration that was at one time the gold standard for good governance in much of the world. There is no question that these small islands have left an indelible legacy - some of enlightenment, some of unforgivable ugliness - that has shaped the contemporary world and contributed directly to much of the good and the bad that is to be found there. <br /><br /><br />This legacy is not easy to escape. It continues to infuse political debate in Great Britain. The horrors of the slave trade and the indelible consequences of racist colonialism have both been active components of the news cycle in recent months. The toppling of monuments to slave traders has a powerful symbolism; the continuing cruel and callous treatment of the Windrush generation is not symbolic but real: an equally powerful and challenging reminder of how the darker aspects of Britain’s legacy retain an active, destructive potential. We remain a long way from what is needed to forgive and forget. So consequential has been the impact of Great Britain on the world that the traces of it will endure not just for generations but for centuries to come.<br /><br />It might be unreasonable to expect sympathy, but this is tough stuff for a nation now so reduced in stature and influence to absorb. It causes disorientation and bewilderment, as the Brexit debate has clearly illustrated. The appeal of Brexit is rooted in a combination of nostalgia and desperation: nostalgia for a half-remembered greatness, and the desperation of a society in which extreme wealth is juxtaposed with extreme poverty and the social institutions that once bound us together are crumbling and falling apart.<br /><br />Britain is the oldest industrial economy in the world by far, and also a pioneering example of how the dynamism of capitalism could be harnessed to the interests of the welfare state. But old things break: they need fixing, or remaking, or even completely replacing from time to time. And because British institutions were the first in so many instances, they have also been among the first to reach the end of their useful lives.<br /><br />Amid this wreckage lies a real opportunity. Britain can still be a pioneer, but pioneering means going forward, reshaping our institutions to meet the challenges of a rapidly changing future instead of succumbing to the receding echo of a romanticised past. Could Brexit contribute to this in a positive way? Clearly not, if our avowed purpose is to take our chances in the global marketplace, since EU membership gave us privileged access to the world’s biggest, richest trading bloc, right on our doorstep. But the global marketplace may already be yesterday’s news. While generating vast wealth in money terms for a lucky few, it has destroyed productive communities, accelerated environmental degradation and led directly to a huge increase in unproductive work. At least since the financial crash of 2008, and for some time before that to sharp sighted observers, it’s been clear that a new approach is urgently needed.<br /><br />The government’s bluster about “global Britain'' cannot disguise the fact that Britain’s trading heft and international status are both degraded by Brexit. Future historians will view it as a curious accident of history unaccompanied by any plan. But accidents can have equally curious consequences: by breaking away from an organisation in which the established economic norms of free market capitalism are so firmly entrenched, Britain could, once again, find itself drawing up a blueprint for the next phase in the human story.<br /><br />That may sound fanciful. It may, at the least, be over-optimistic. The UK is just as likely to lose its way, even break apart, as it is to carve out a new path of economic and social innovation. But the opportunity is there. For a democracy of its size and wealth, Britain has an unusually centralised political structure. Radical policy changes that would be unachieveable in large, politically diverse countries such as the US or India, or even the EU itself, are entirely possible in the UK context.<br /><br />Ironically, Britain, and especially England, is far too centralised both politically and economically, so one of the most productive and radical changes it could make would be to decentralise, bringing funding and decision-making much closer to the people and communities affected. In the same vein, diversifying the distribution of money via regional banks would help to create resilient local economies that are much less dependent on global trade.<br /><br />Having advanced the cause of globalisation for over 200 years, the new focus for a pioneering Great Britain should be regional and local sustainability, including local food production and small-scale, high-tech, regional industrial hubs to supply local consumer needs. Trade in this context would be based on need and availability (bananas from the Caribbean) rather than financial advantage (cheap consumer goods from the Far East), bearing in mind that financial advantage often translates into a cost to the environment from transport, poor working conditions in the place of origin and a loss of productive work in the home economy.<br /><br />This focus on regionalism and local productivity in turn creates an opportunity for the definancialisation of the economy, shifting the emphasis away from money turnover and transactional profit towards the sorts of activity that contributes directly to the quality of people’s lives. Indeed, probably the most transformational use the government could make of its newly-won regulatory freedoms is to change the way that the output of the economy is measured.<br /><br />GDP is hard-wired into the EU’s economic DNA via the mechanisms that control government borrowing and the supply of money, particularly within the Eurozone. But the way it is calculated, adding up all financial transactions irrespective of their usefulness while excluding all the unpaid activity and voluntary work that contributes directly to the nation’s wellbeing, skews political priorities in a way that favours long, wasteful and destructive supply chains over small scale local production. Freed of EU constraints the UK could reform its calculation of economic output and re-prioritise its decision-making based on the needs of the smart economy of the future, not the inefficient, transaction-heavy one that has been dragging us down.<br /><br />That smart economy will turn over much less money but will produce far more of real value on account of it. People will work less but produce more in terms of useful output, and the quality of their lives will increase directly as a consequence. Britain is in a unique position from January 1st to become the pioneer of this model, to pave the way ahead for a global economy to escape its unsustainable, inefficient ways. The opportunity is there to seize. The question is, are we up for it?<br /><div style="background-color: white; box-sizing: inherit; color: #1e1e1e; font-family: "Inter var", -apple-system, BlinkMacSystemFont, "Helvetica Neue", Helvetica, sans-serif; font-size: 21px; letter-spacing: -0.24px; outline: 0px;"><div style="box-sizing: inherit; outline: 0px;"><div style="box-sizing: inherit; outline: 0px;"><div class="block-editor-block-list__layout is-root-container" style="box-sizing: inherit; outline: 0px; position: relative;"><div class="block-list-appender" style="box-sizing: inherit; outline: 0px; position: relative;" tabindex="-1"></div></div></div></div></div><div style="background-color: white; box-sizing: inherit; color: #1e1e1e; font-family: "Inter var", -apple-system, BlinkMacSystemFont, "Helvetica Neue", Helvetica, sans-serif; font-size: 21px; letter-spacing: -0.24px; outline: 0px; position: fixed;" tabindex="0"></div></div>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-52254164443588814392020-11-27T16:48:00.010+00:002021-02-23T15:42:22.425+00:00We need to talk about financial services...<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-hVL9FVgjHa0/YDTynYynQrI/AAAAAAAANb0/tf1QiVAjHPcGMVcH7ScSu3_Ldxg_zGqhACLcBGAsYHQ/s387/Worryblog.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="352" data-original-width="387" src="https://1.bp.blogspot.com/-hVL9FVgjHa0/YDTynYynQrI/AAAAAAAANb0/tf1QiVAjHPcGMVcH7ScSu3_Ldxg_zGqhACLcBGAsYHQ/s320/Worryblog.png" width="320" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><h3 style="clear: both; text-align: center;">Buying British is an uphill struggle. Is the City's vaulted financial services industry to blame?<span><a name='more'></a></span></h3><p></p><p><br /></p><p>Adrian Chiles is<a data-id="https://www.bbc.co.uk/programmes/m000q9g6" data-type="URL" href="https://www.bbc.co.uk/programmes/m000q9g6"> making a radio programme</a> about what happens when he tries to live as best he can wearing, eating and using only things made in Britain. Unsurprisingly, it’s not that easy. Food is possible, particularly if you buy fresh, but you'll have to live with a limited choice. The <a href="https://www.gov.uk/government/publications/food-statistics-pocketbook/food-statistics-in-your-pocket-global-and-uk-supply">latest figures</a> show that only slightly more than half of the food we consume is produced here.</p><p>Meanwhile there has been a modest renaissance in <a href="https://makeitbritish.co.uk/manufacturer-directory/clothing-manufacturers/">UK-based clothing manufacture,</a> but it’s still a niche market. And when it comes to consumer goods, it’s rare to find a “Made in Britain” sticker except on some hand-made and high-end stuff.</p><p>As Adrian points out in his <a href="https://www.theguardian.com/commentisfree/2020/nov/25/britain-still-makes-things-who-knew">Guardian column</a>, manufacturing accounts for about 20% of the UK, economy. But that’s manufacturing in the broadest sense, including construction, mining and energy, as well as making goods for sale. Actual manufacturing is well under 10%. The other 80% of the economy is made up of services, of which wholesale, retail and transport are among the largest components. It turns out that far more of our economy is taken up with getting stuff to us than with making it in the first place.</p><p>Adrian also rightly notes that Britain is strong in the creative industries, tech innovation, engineering and medicine. And, of course, financial services, which he freely admits that he hardly understands. Financial and related services do, indeed, make up the biggest single chunk of the UK’s economic activity.</p><p>In not understanding how financial services contribute to the UK’s wealth Adrian is far from alone. It is taken as a given that the our status as a financial power house is making us rich. In practice, however, financial services don’t really add value, or nowhere near as much as the figures might suggest. Most of what they do is move money from pillar to post, taking a cut on the way. That cut is huge, and makes these services seem very profitable. The trouble is that this profit is coming out of other people’s pockets. Those services are not actually creating anything new.</p><p>And there’s another problem, too, because the financial services industry soaks up a huge proportion of both the money and the human talent that the UK could be investing in its productive economy. In other words, one of the reasons that we don’t make much anymore is because so many of the engineers, entrepreneurs and other talented people who might drive those productive businesses have been creamed off into high paying but unproductive City jobs, and they’ve taken most of the money with them.</p><p><a href="https://www.theguardian.com/commentisfree/2020/may/26/banks-uk-recover-coronavirus">Research shows that only about £1 in every £10 lent by British banks goes to non-financial firms.</a> Most of the rest ends up either in the finance markets or in property. Banks won’t lend to new businesses wanting to do and make innovative, useful things if they can more easily find a home for their money in speculative but well-secured unproductive investments. There's a strong argument, therefore, to suggest that the dominance of the UK’s financial sector is part of what’s dragging the productive economy down.</p><p><!--wp:paragraph-->
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<!--/wp:paragraph--></p><p>I’m looking forward to finding out how Adrian gets on with his eat / wear / use British adventure when it broadcasts in a few week's time. But perhaps he could follow it up with another programme asking how useful really are all those financial services that so few of us understand?</p>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-66886155933060231312020-11-26T11:40:00.006+00:002021-02-23T15:42:07.904+00:00Cutting the aid budget won't help anyone in Great Britain<h3 style="text-align: center;"><br /></h3><div><br /></div><div><!--wp:paragraph-->
<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-Bpk5_zCFD20/YDUb8sPoh_I/AAAAAAAANdg/pUKP4fRSmw8IaWPxFcqzrjR7jG39tk0JgCLcBGAsYHQ/s395/Aid2blog.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="354" data-original-width="395" src="https://1.bp.blogspot.com/-Bpk5_zCFD20/YDUb8sPoh_I/AAAAAAAANdg/pUKP4fRSmw8IaWPxFcqzrjR7jG39tk0JgCLcBGAsYHQ/s320/Aid2blog.png" width="320" /></a></div><br />The government’s decision to <a href="https://www.theguardian.com/global-development/2020/nov/26/uk-aid-cuts-unprincipled-unjustified-and-harmful-say-experts-and-mps">cut the overseas aid budget by about £4 billion</a> has been portrayed as “red meat” to its electoral base, which is presumed to want to put “Britain first”.<span><a name='more'></a></span>The idea is that money currently being spent to save lives in less-developed countries will instead be used to improve the lot of people living in Britain’s more deprived areas.</div><div><br /></div><div><!--/wp:paragraph--><!--wp:list {"ordered":true}-->There are so many problems with this that it’s hard to know where to start. So let’s make a list:<ol><li>Does the UK electorate really not care about the fate of millions of people, especially children, lacking basic healthcare, sanitation, education, clean water and food? That seems unlikely, given the extent of UK-funded charity work in these areas. The suggestion that people are willing to contemplate hundreds of thousands of additional deaths with equanimity is frankly insulting.</li></ol>
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<ol start="2"><li>Insulting <span style="text-decoration-line: underline;">and</span> manipulative, because the idea that this is a choice between British and overseas lives is completely false. It plays to a narrative beloved in Conservative circles that the government’s finances are like a domestic budget. This narrative conveniently forgets that, unlike you and I, a government <a href="https://positivemoney.org/what-we-do/magic-money-tree/">creates the money in the economy</a>, and decides how much of it should be in circulation at any one time. So if it wanted to spend more money to support Britons who are struggling it can do this and maintain the overseas aid budget at its previous level. But given that it’s planning to<a href="https://www.bbc.co.uk/news/business-55083662"> reduce real pay for many public sector workers</a> over the next few years (by applying a pay freeze), it doesn’t feel as if social justice is its top priority. </li></ol>
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<ol start="3"><li>There is a direct connection between the success or otherwise of the overseas aid budget and the bodies of desperate migrants being <a href="https://www.mirror.co.uk/news/uk-news/breaking-body-16-year-old-22534219">washed up on the coasts of the English Channel</a>. At a time when millions of people are displaced or on the move, desperate to escape violence, famine, sickness and other forms of extreme deprivation, it feels beyond shortsighted to cut the money to help them build sustainable lives in the places they already live. </li></ol>
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<ol start="4"><li>The problems of poverty and deprivation in Britain have nothing to do with a lack of money. The UK remains among the very richest countries in the world. The problem has to do with the way the economy is structured. Most UK economic activity involves making money out of money, so it follows that those with money get progressively richer while the rest struggle to catch up. The solution is to change this broken system, <a href="https://humanpolitics.org/money-disease/">and particularly the role that money plays in real wealth- creation.</a> Money should be a useful tool to help everybody to be productive, rather than end in itself to be amassed by the already-wealthy.</li></ol>
<!--/wp:list--></div>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-70893061444488761732020-11-25T16:04:00.004+00:002021-02-23T15:49:53.585+00:00Moving the chairs on the Titanic<h3 style="text-align: left;"> <div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-5lPyOK6NGx0/YDUgO4mYvkI/AAAAAAAANd8/6-7pbAtSA_0fmWF_sAZDm1Lu166OZAWQgCLcBGAsYHQ/s400/Richblog.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="400" data-original-width="400" height="320" src="https://1.bp.blogspot.com/-5lPyOK6NGx0/YDUgO4mYvkI/AAAAAAAANd8/6-7pbAtSA_0fmWF_sAZDm1Lu166OZAWQgCLcBGAsYHQ/s320/Richblog.png" /></a></div><br /><div style="text-align: center;">As Chancellor Rishi Sunak <a href="https://www.bbc.co.uk/news/business-55072447">moved the chairs around on the slowly sinking deck of the UK economy on Wednesday</a>, one thing we can say for certain is that the well-off, and particularly the super-well-off, will come out of the economic downturn very much better off than everybody else.</div><span><a name='more'></a></span></h3><p>There’s a cast iron precedent for this, and also a good reason. For the precedent, look only to the ten years following the financial crash of 2008, during which household wealth - the wealth of people who already owned the most wealth - <a href="https://humanpolitics.org/#wealth_income">increased by 40%, while average household incomes - the money that most people rely on to live - did not increase at all</a>. With <a href="https://www.bbc.co.uk/news/uk-politics-55072987">unemployment set to rise</a> and a <a href="https://www.theguardian.com/politics/2020/nov/25/spending-review-2020-rishi-sunak-key-points">freeze on many public sector wages</a>, this pattern is now nailed on for a repeat performance.<br /><br />As to the reason, it’s very simple. For decades government policy to stimulate economic growth has been to pour money into the private business sector - pouring it into the top of the wealth pyramid in the vain hope that it will somehow trickle down. Some of it does, but far more gets stuck at the top.</p>
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<p>The vast majority of the money that the Bank of England poured into the economy at the government’s behest following the 2008 crash went into assets such as property, stocks and shares, inflating their value enormously but making housing more expensive for everybody else.</p>
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<p>During the Covid-19 crisis we’ve seen profitable contracts for vast sums passed with very little scrutiny to private firms for schemes such as <a href="https://www.theguardian.com/world/2020/nov/04/tory-linked-firm-involved-in-testing-failure-awarded-new-347m-covid-contract">Test and Trace</a> and the <a href="https://www.channel4.com/news/factcheck/factcheck-government-fails-to-follow-own-transparency-guidelines-with-over-200-ppe-contracts">supply of PPE</a>. Both of these would have been far more cheaply and effectively carried out if local and regional health structures had not been starved of money through the years of austerity.</p>
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<p>Who’s to blame for all of this? The odd thing is that it’s not rich people, and it’s not those profitable companies either. They're just doing what the system dictates. It’s not even the government - at least, not the government officials who have to play with the hand they’ve been dealt. To blame is the system, built up over decades of policy decision-making all rooted in the idea that money is the prime motivator for anybody to do anything remotely productive.</p>
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<p>The outcome is that pretty much the only way to make money in the economy is to have money in the first place. And for those who do have money - a lot of money - it is quite difficult not to make more of it as a result of government policy. For example, 0.1% interest rates are no use to people with credit card debt or overdrafts, who are often stung for 20 or 40%. But they're great for company shareholders because they push up the value of their investments.</p>
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<p>Nothing the Chancellor is going to do today or any other day will change this. To achieve an economy that really does level up and work for the great majority of people we need to adopt a different system - <a href="https://humanpolitics.org/question1/">one that thinks about money in a completely different way</a>.</p>
<!--/wp:paragraph-->Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-57674898612544411822020-11-11T12:27:00.003+00:002021-02-23T15:49:31.551+00:00How economic stress is feeding political division<h3 style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-mOeGWMXCN8g/YDUhtWrG8sI/AAAAAAAANeI/kq7L3-0YkoYIDkitjoyu4VTWX7guL9hYACLcBGAsYHQ/s400/Stressblank.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="400" data-original-width="400" height="320" src="https://1.bp.blogspot.com/-mOeGWMXCN8g/YDUhtWrG8sI/AAAAAAAANeI/kq7L3-0YkoYIDkitjoyu4VTWX7guL9hYACLcBGAsYHQ/s320/Stressblank.png" /></a></div><div style="text-align: center;">The deepening divides in both US and UK politics are fuelled not by inequality but by the economic stress to which everyone is vulnerable. To reduce that stress we need to change the system that is creating it. </div><span><a name='more'></a></span></h3><p><br /></p><p>As the US election results unfold, many are asking how it is possible that even more people have voted for Trump, now they have seen what he is capable of, than voted to “give him a try” in 2016. It’s a different version of the question that arose in the context of the UK’s Brexit referendum. How come the UK’s manufacturing and agricultural regions were among the strongest supporters of Brexit, when they are the ones likely to suffer most?</p><!--wp:paragraph-->
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<p>Part of the answer is that all democratic politics is tribal to some degree, so rational analysis often takes second place. Ramping up the divisiveness entrenches allegiances and makes crossing from one side to the other much harder to do.</p>
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<p>But why is this working? Why, in the US, the UK and elsewhere, are people, who, under normal circumstances, are keen to get along, so easily corralled into opposing groups that profess not to understand each other? The easy answer is that it’s economic circumstances - the haves and the have-nots, the privileged and the deprived - but the evidence doesn’t support that. There are deprived Brexiteers and super-rich ones; left-behind rural Trumpists and wealthy urban ones, too. The middle classes in both cases split both ways.</p>
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<p>So maybe it’s “cultural”, but what does that mean? People retreating to their comfort zones, defaulting to conservative or liberal positions on social issues such as crime, race, immigration and national identity. But that’s also too neat: it’s absurd to suggest that there are no socially progressive Brexiteers or that all of the social conservatives in the US default to Trump.</p>
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<p>The truth is that pretty much all politics is economic, because politics has to do with the management and allocation of national resources. The “cultural” trope is a way of obscuring that reality – a classic instance of divide and rule. So probably “economic” was the right answer, but for a different reason. The distinction between well-off and badly-off, privileged and deprived, may just be the wrong way to look at it.</p>
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<p>A better term than “economic circumstances” might be “economic stress”, because that is something experienced across the income range. At whatever level people operate, the fear of dropping below it can mean a constant struggle with long hours, hard work, anxiety and illness, both mental and physical. In the current economic system, most people are experiencing stress of some sort, because that’s how the system works. </p>
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<p>When people are experiencing economic stress they look for a reason, and they are supported in that search through identification with a group. The divisiveness of the Trump presidency and campaign, hugely augmented by the Covid crisis, has raised stress levels greatly, so that group identity has become stronger during the campaign. Which group people subscribe to is a secondary issue. It depends on plenty of factors, including background, temperament and world view, some of which may operate in a random way. The important point is that dependency on the chosen group strengthens as the stress increases. </p>
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<p>Aside from a short-lived surge of relief or disappointment, the Biden victory won’t do much to change this overall picture. That’s because the underlying economic stress is hard-wired into the system. It pre-dates Trump and it pre-dates Brexit. In the UK it’s unrelated to membership of the European Union, and in both countries it arises from economic policies endorsed on both sides of the partisan divide.</p>
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<p>The effect of those policies has been building up for several decades, but since the crash of 2008 it has been particularly marked. The transfer of money out of the real, productive economy into the cold storage of assets such as property, stocks and shares has eliminated much of the usable surplus from people’s lives. Many, even relatively comfortable, families live with little margin of error; indeed the <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874537/frs-savings-and-investments-data-tables-2018-19.ods">latest figures from the UK</a> show that 43% of families have no savings at all, while a further 11% have less that £1,500 to fall back on. And this on top of continually rising levels of household debt. In economic terms that’s the definition of stressful.</p>
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<p>The transfer of money from the real economy in which money circulates to the asset and debt economy where it’s not available for productive use is entirely reversible if the right policies are put in place. This, in turn, would reduce the level of economic stress and dial down the tendency towards divisiveness in our politics.</p>
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<p>That’s a healing process, which is why it’s appropriate to call the stressful economic system in which we currently operate the <a href="https://humanpolitics.org/money-disease/">money disease</a>. The way that money has shifted from being a tool to produce wealth into a means by which wealth can be stored away unproductively has made both people and society sick. The cure cannot come too quickly. </p>
<!--/wp:paragraph-->Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-65803134066360118062020-11-01T17:22:00.000+00:002021-02-23T15:48:22.118+00:00Money talks, but loneliness is silent.<h3 style="text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/-piTpBr3hclc/YDUjj6G1M9I/AAAAAAAANeU/NY8qk3o3w40EZ_QLwKS-QM5iYKsYJ-iuwCLcBGAsYHQ/s394/DiYblog.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="368" data-original-width="394" src="https://1.bp.blogspot.com/-piTpBr3hclc/YDUjj6G1M9I/AAAAAAAANeU/NY8qk3o3w40EZ_QLwKS-QM5iYKsYJ-iuwCLcBGAsYHQ/s320/DiYblog.png" width="320" /></a></div><br /><div style="text-align: center;">How lockdown could help shape a new economy based on the things that people really care about.<span><a name='more'></a></span></div></h3><p><br /></p><p>The arrival of a second lockdown has been pitched as a balance between lives and livelihoods - a big hit to the economy offset by reduction in the total number of Covid-related deaths.</p><!-- wp:paragraph -->
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<p>But is that the right way to look at it? It all depends what that "big hit to the economy" actually means. People need the money to pay their mortgage or rent, to put food on the table and for many other essential expenses. The first priority of the government must be to make sure that everyone is OK so far as the basics are concerned, and the <a href="https://www.theguardian.com/society/2020/nov/01/growing-numbers-newly-hungry-forced-use-uk-food-banks-covid">news coming out about foodbank use</a> suggests that there is still a lot more that it must do.</p>
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<p>The "normal" way that people make their money is when other people spend it. Non-essential shopping, drinking and dining out, and visits to cinemas and public entertainments, all put money in the pockets of the owners of those businesses and the people who work for them. But is an economy that depends on spending a viable model for the future? The lockdowns caused by the Covid crisis are making that question increasingly relevant.</p>
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<p>When a person takes a day off work to spend time at home with their family, the economy shrinks. First because they haven't done any paid work, and second because a day at home generally involves minimal spending. The <em>benefit</em>, however, can be considerable. There is no end of ways in which people create huge value in their lives without earning or spending any money at all.</p>
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<p>To make sense of this the economic system needs to re-think it’s understanding of what it is to be productive. At present it means that something has happened to cause money to change hands. So home cooking, home educating, home exercising, community volunteering, gardening, DiY - all the many unpaid activities that filled up the last lockdown and will no doubt now fill up the new one - are treated as having no productive value beyond the materials they use. For the future, the use of the term “economically productive” must be changed to include them.</p>
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<p>But there's productivity in socialising, too. Some people locked down in their homes may appreciate the extra family time and not miss the loss of spending opportunities. And for those who are more isolated it is a fair bet that it is the company of their families and friends that they will most miss, rather than the spending associated with non-essential shopping, dining out and cinema excursions. Humans have, since the earliest times, been social creatures, whereas we have only recently learned to shop and to pay for our entertainment. So the value of human interactions that contribute so greatly to people's well-being should also feature in the nation's accounts. </p>
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<p>The true trade-off in lockdown, therefore, may turn out not to have been between lives and livelihoods, but between lives and socialising. Whereas money losses can and must be made up for, the loss of social contact has long-term, potentially irrecoverable consequences for people’s mental health and well-being. When the price of Covid-19 is eventually calculated, this is where the real deficit may lie.</p>
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<p>Minimising these social losses should be central to the government’s planning, but because they have no monetary-equivalent they cannot compete with closed bars and shops in the Treasury’s accounting. Money talks, but loneliness is silent. For as long as the economic success depends on people spending money, the voice of social well-being will remain unheard.</p>
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<p>The economic challenges of lockdown are a harbinger of what the future holds even once Covid-19 has been defeated. The environment will not allow us to continue to consume and throw away physical goods at an ever-increasing rate, even if we want to, and there is a limit to the quantity of paid services that each person can make use of. The British economy has long been suffering from a <a href="https://humanpolitics.org/money-disease/">money disease</a> in which the blind pursuit of cash turnover is putting at risk our capacity to produce the real value that improves our lives.</p>
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<p>Future growth in production, therefore, should not depend exclusively on further spending but should come from the work that we do and the actions we take to improve the quality of life within our families and our communities. Structuring the economy so we can spend less cash but still be richer is a key challenge for which the Covid crisis could be useful preparation.</p>
<!-- /wp:paragraph -->Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-24276775617625654442017-06-25T11:18:00.003+01:002021-02-25T12:35:21.521+00:00THE GOVERNMENT IS IN A HOLE OVER HOUSING. TIME TO STOP DIGGING.<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-1dVh6jdeFO0/WU-J1FQ1NmI/AAAAAAAAGTI/ZJ4cNiZyR0gEdsKyHpQaCLMwqhiDe2s8wCLcBGAs/s1600/Upper_Grenfell_Tower.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="288" data-original-width="512" height="180" src="https://3.bp.blogspot.com/-1dVh6jdeFO0/WU-J1FQ1NmI/AAAAAAAAGTI/ZJ4cNiZyR0gEdsKyHpQaCLMwqhiDe2s8wCLcBGAs/s320/Upper_Grenfell_Tower.jpg" width="320" /></a></div>
As the <a href="https://www.theguardian.com/uk-news/2017/jun/24/cladding-27-tower-blocks-fails-fire-safety-tests-grenfell-tower"><span id="goog_1048926288"></span>fallout<span id="goog_1048926289"></span></a> from the <a href="http://www.bbc.co.uk/news/uk-40280169">terrible fire</a> at a tower block in North Kensington continues, it may still be months before we know the precise details of what went wrong. The broader context, however, is already clear. That context is the housing market, which has taken a universal human need and turned it into a financial investment that ever fewer people can afford.<br />
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This picture is clearly painted in a <a href="http://www.resolutionfoundation.org/publications/the-generation-of-wealth-asset-accumulation-across-and-within-cohorts/">new report</a> that shows how older people have stacked up £2.3 trillion in the past two decades through gains in a housing market from which most young people are excluded. It reminds us that buying a home, unlike a conventional purchase, transforms a person's relationship with the money system. From wanting prices to be low, to make a home affordable, they now want them to be as high as possible, both to maximise the value of their asset and and to reduce the proportion of it that they owe to their lender.<br />
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That, at least, is the working assumption of which the politics of housing is based. It is a story of winners and losers in which winners have houses (appreciating assets) while losers rent (handing over money that they will never get back). Since everyone wants to be a winner we are encouraged to think of home ownership as an aspirational norm. Meanwhile, <a href="https://www.theguardian.com/society/2017/jun/24/social-housing-poverty-homeless-shelter-rent">a report from Shelter suggests</a> that more that a million private renters could be homeless by 2020 - the ultimate losers in this divisive system.<br />
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If home ownership is the "norm", it is easy to see how landlords - including the owners of social housing - may view the accommodation they provide as "temporary", and therefore not needing to meet "permanent" standards. It explains why, according to <a href="https://www.citizensadvice.org.uk/about-us/how-citizens-advice-works/media/press-releases/more-private-renters-struggling-with-horror-homes/">this report</a>, one in three private rented properties in England does not meet the minimum standards for a decent home. If renters are merely perched on a stepping stone to home-ownership, why does the condition of their home matter? And if they're stuck with renting for the long term it must be because they're too poor, too disorganised or insufficiently motivated <a href="http://www.democraticaudit.com/2017/06/15/stuck-in-their-ways-how-we-blame-the-poor-for-their-failure-to-embrace-globalisation/">to achieve the market participation that society expects</a>.<br />
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In reality, however, the ownership we're talking about here is not of housing, but of land. Building land is hugely valuable; it represents a high proportion of a home's market value. Government, both centrally and locally, controls the supply of that land through the planning system. It also owns a lot of it, and it used to own far, far more. The sale of public land assets, either directly or via the privatisation of public service companies, has been unrelenting since the 1980s.<br />
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From council housing, railway land, <a href="https://www.theguardian.com/business/2014/nov/11/royal-mail-662m-sale-9-elms-sorting-office">sorting offices</a>, <a href="https://www.theguardian.com/news/2017/apr/25/mod-privatise-military-housing-disaster-guy-hands">army housing</a>, court buildings, police stations, hospitals, playing fields and car parks to other large acreages of the public realm, cash-strapped government departments and local authorities have sought to maximise the short-term value of their land assets. Whether it is true that the cladding at Grenfell Tower was added to make it look more attractive to residents of other, higher value, developments, it certainly rings true. For many local authorities, the supply of so-called affordable housing is contingent upon the returns they can make on high-end property built on formerly public land.<br />
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Now, however, the long term consequences of this short term market opportunism are becoming painfully clear. Land values are such that more and more families have to be housed at least partly at public expense. Through housing benefit, subsidies to developers and homebuyers and grants to housing associations for land purchases, government is paying handsomely for the land value frenzy of the past thirty years. Not to mention the costs that arise in the wider economy when housing takes such a large part of people's incomes.<br />
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When you're in a hole, stop digging. If asset-stripping the public realm for short-term gain is making matters worse, it's time to try different approach. What if, instead of milking it for profit, the government made housing land available at zero cost? Houses would be sold for the value of their bricks and mortar only, on condition that they are only ever re-sold on that basis. The savings in housing benefit and other subsidies from this new stream of ultra-affordable housing would soon outweigh any short term bonanza.<br />
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Over time, this secondary market in zero land cost housing would bring down prices on the open market too. Provided this effect was slow, and managed, would that really be such a bad thing?<br />
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Picture credit: ChiralJon (<a href="https://flickr.com/photos/69057297@N04/35353492476">https://flickr.com/photos/69057297@N04/35353492476</a>) [CC BY 2.0 (<a href="http://creativecommons.org/licenses/by/2.0">http://creativecommons.org/licenses/by/2.0</a>)], via Wikimedia CommonsMartin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-29126749664488197412016-10-25T08:32:00.000+01:002021-02-25T12:38:53.172+00:00Plucky Wallonia exposes the lie at the heart of EU trade policy<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://3.bp.blogspot.com/-bDH3FRIhpd4/WA8KHaw3ZbI/AAAAAAAAF3c/baZba-7Umycs4YK_KnooKf6rjV0vIhm_wCLcB/s1600/Wallonie-panneau-routier.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="217" src="https://3.bp.blogspot.com/-bDH3FRIhpd4/WA8KHaw3ZbI/AAAAAAAAF3c/baZba-7Umycs4YK_KnooKf6rjV0vIhm_wCLcB/s320/Wallonie-panneau-routier.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Welcome to Wallonia....</td></tr>
</tbody></table>
Policy strives to achieve the things that it measures, and nothing is more fervently measured in modern economies than GDP. If increasing GDP is the policy objective, then encouraging trade - any sort of trade - will generally help. GDP measures money transactions, so the more times a product and its components are traded on their journey from producer to consumer, the more GDP is recorded.<br />
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That, in summary, is the basis for TTIP, TPP, TISA and, currently, CETA, the Comprehensive Economic and Trade Agreement negotiated between the EU and Canada, which the regional parliament of Wallonia, in Belgium, <a href="https://www.theguardian.com/business/2016/oct/24/belgium-eu-ultimatum-canada-trade-deal-ceta-wallonia">is refusing to pass</a>. Trade agreements increase activity in global markets, which increases GDP. The size of that increase<a href="http://arstechnica.co.uk/tech-policy/2016/06/ceta-canadian-ttip-what-is-it/"> is much debated</a>, but even a tiny percentage of GDP is a <a href="http://trade.ec.europa.eu/doclib/press/index.cfm?id=974">big number in pounds or Euros</a>, and makes for <a href="https://ukti.blog.gov.uk/2015/03/23/1-3-billion-reasons-to-welcome-the-eu-canada-trade-agreement/">good headlines</a>.</div>
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The extent to which trade agreements actually increase GDP is not, however, the real issue. The lie at the heart of trade policy is much bigger than that. The lie is that increasing GDP makes people wealthier, when it can easily have the opposite effect. As economies grow, what matters most is how that additional wealth is distributed. If most of it goes to the already-wealthy, then the rest of society becomes<i> </i>relatively poorer. Relative poverty is real poverty: when the rich people who hold assets such as shares and property get even richer, then housing, energy and basic services become more expensive and poorer people can buy fewer of them.<br />
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Both statistics and human experience bear out this point. Statistics show that <a href="http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/">median US incomes have not risen since the 1960s</a>, although GDP has more than doubled. Experience in the UK is that while the UK economy is generating plenty of jobs, more and more of these do not <a href="http://www.resolutionfoundation.org/wp-content/uploads/2015/10/Low-Pay-Britain-2015.pdf">pay enough to live on</a>. Poorly paid, insecure jobs generate GDP and make employers richer, but they leave employees with insufficient wealth to live.<br />
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The connection between these outcomes and global free trade has to do with the way in which the nature of trade has changed over the years. Originally its purpose was to exchange things that one could produce for things that one couldn't. This could be driven by variable factors such as climate, environment, natural resources or the availability of expertise and technology. Thousands of years ago the people of Cornwall were exporting tin on this basis, and importing fine quality manufactured goods such as pottery and silverware.<br />
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These days, however, trade is increasingly driven not by need or availability, but by price. The technological capacity of Europe and Canada are similar, and their climates are comparable, too. There is not a great deal that either can produce that the other cannot. There is no reason to suppose, for example, that Europe cannot produce as much pork as it can eat; and yet the people of Wallonia are worried about their pig farmers, because CETA will allow <a href="http://www.theglobeandmail.com/report-on-business/international-business/european-business/explainer-ceta-wallonia-europe-and-canada/article32489554/">unrestricted E.U. access for 80,000 tonnes of Canadian pork</a>.<br />
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The only rationale for shipping 80,000 tonnes of pork thousands of miles across the Atlantic is that, <i>even after the cost of that shipping is taken into account</i>, it will still be cheaper. Which means that its cost of production in Canada is significantly lower, presumably because it is produced on an industrial scale. And cheaper pork is, apparently, good for European consumers, who are feeling the pinch because their own incomes are being squeezed.<br />
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And this is where the real problem with GDP-driven trade policy becomes apparent. Not only does GDP fail to take account of the <i>distribution of wealth</i>, but it also takes no account of the qualitative aspects of people's lives that cannot be measured in money terms. In 2013 the UK government released <a href="https://coanalysis.blog.gov.uk/2014/08/06/wellbeing-measuring-what-matters/">research findings</a> showing that, although GDP had more than doubled in the previous forty years, people's life satisfaction had scarcely changed at all. Living in a country that was twice as rich did not make people happier, because the way in which that "twice as rich" was measured did not capture the things that really mattered to them.<br />
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Raising pigs on smaller farms in Wallonia may be more expensive in crude money terms, but it may also be conducive to a higher quality of life by preserving social and cultural networks in local communities and protecting the environment. These things have value. They can make or break the quality of people's lives, and its sustainability, and yet they have no place in the calculation of the benefits and losses that arise from unrestricted global trade.<br />
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People across Europe are waking up to the fact that economic "growth" as measured by GDP does not make them wealthier in terms that they recognise. Instead, it is disrupting their communities, causing people to trek thousands of miles in search of low-paid, insecure work; it is raising the cost of housing and energy; it is pouring money into the coffers of already-wealthy investors; it is giving multi-national companies more and more power over people's lives; it is depleting public services, as taxes on the wealthy are lowered to encourage investment; it is degrading the environment - not least with the CO2 emissions that will arise from shipping all that pork across the Atlantic.<br />
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Plucky Wallonians have finally said "<i>non</i>" to this madness. Instead of trying to strong-arm them into changing their minds, the Eurocracy would do well to learn from their good sense.<br />
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<span style="font-size: x-small;">Picture by Stephane.dohet (Own work) [Public domain], via Wikimedia Commons</span></div>
Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-40835007899332138062016-10-19T13:26:00.000+01:002021-02-25T12:38:53.228+00:00Immigration is a symptom, not the cause, of our broken economy<div style="line-height: 100%; margin-bottom: 0cm; page-break-before: always;">
<b>Immigration is a symptom, not a cause, of a broken economy</b></div>
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In the flatlands of
Lincolnshire, in eastern England, the town of Boston is a centre
for the industrial scale vegetable farming that flourishes in those
fertile soils. In the EU referendum, it recorded the <a href="http://www.bbc.co.uk/news/uk-politics-eu-referendum-36616740">highest vote for Brexit</a> anywhere in the country.</div>
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The connection is
straightforward. Those farms attract large numbers of labourers from
Eastern Europe to pick and process their produce. This often transient,
alien-sounding workforce is highly visible in an area of limited employment prospects and low pay. It is easy enough to make the case
that immigration is depressing local wages while putting pressure on housing
and other social services such as health. Easy and, at least to some
extent, true.</div>
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<span style="line-height: 100%;">If, however, </span><a href="http://www.newstatesman.com/politics/uk/2016/07/view-brexitland-boston-town-voted-strongest-leave-eu" style="line-height: 100%;">as reported</a><span style="line-height: 100%;">, there are 20,000 economic migrants working in the area, the 6,795 people </span><a href="http://www.ons.gov.uk/file?uri=/employmentandlabourmarket/peoplenotinwork/unemployment/datasets/claimantcountbyunitaryandlocalauthorityexperimental/current/lmregtabcc01september2016.xls" style="line-height: 100%;">in the entire county</a><span style="line-height: 100%;"> claiming unemployment benefits will not be able to fill their shoes. Nor would they want to: the work is hard, often back-breaking stuff: not much fun for anybody. The only way to get it done is to exploit people from far away for whom UK poverty pay and </span><span style="line-height: 16px;">grueling</span><span style="line-height: 100%;"> conditions is still better than they can find at home.</span></div>
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<span style="line-height: 100%;">All of which is odd, because growing vegetables is something that many millions of people do for fun, for no pay at all. </span></div>
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<span style="line-height: 100%;"> much of it seasonal and insecure. It attracts people from the E.U. states in eastern Europe not because they want to see the world and meet new people, but because poverty pay in the UK is still far more than they can earn at home.</span></div>
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<span style="line-height: 100%;">According to </span><a href="http://ec.europa.eu/eurostat/product?code=earn_ses_pub2s&language=en&mode=view" style="line-height: 100%;">Eurostat</a><span style="line-height: 100%;"> (2010 data), median gross hourly earnings in the UK are over three times the rate in Poland and nearly five times the rate in Lithuania. This sharp differential, combined with the availability of ready work, means that workers from those countries are ripe for exploitation. However badly employers or their gangmaster </span><span style="line-height: 16px;">intermediaries</span><span style="line-height: 100%;"> may treat them, the</span><span style="line-height: 100%;"> alternative is probably worse.</span></div>
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<span style="line-height: 16px;">From a traditional </span><span style="line-height: 16px;">perspective</span><span style="line-height: 16px;">, this is a sign of the system working. It reveals the </span><span style="line-height: 100%;">shadow side of the sunny, liberal ideal known as free movement, which has less to do with people going where they like than with business drawing its workforce from wherever it is cheapest. And free movement is not </span><span style="line-height: 16px;">only</span><span style="line-height: 100%;"> about labour: i</span><span style="line-height: 16px;">f, for whatever reason, the immigrant workforce were unavailable, rather than improving pay and conditions to attract UK workers investors could take their capital to cheaper countries, instead. In fact, they might have to: increased overheads making UK production more expensive would soon send the supermarkets chasing cheaper sources of supply abroad.</span></div>
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<span style="line-height: 16px;">The central myth of this system is that low prices benefit people. </span></div>
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This is the
neo-liberal narrative, which seeks out the lowest production costs
possible at every stage along the supply chain. If the UK government
succeeds in reducing the number of immigrants employed in agriculture
and food processing it won't create many jobs. Instead, more food
will be imported and the Uk' balance of trade will deteriorate even
further than it already has. Jobs will be lost and more farmers will
go out of business. </div>
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market solution is
drop in currency, which means less incentive for foreign workers and
lower competition from over seas goods, which which could increase
local wages. The effect of that, however, is inflation, which to
which the standard market response is higher interest rates. Either
way, local people will suffer… especially as prices necessarily
increase of goods that have to come from abroad, such as bananas,
oranges, lemons, etc...</div>
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Nobody enjoys
growing veg in this way; e europeans only do it because they are
forced to by circs. In their own contry, occsioned bu neo-liberal
forces. But we know that at the other end of the spectrum here is a
way of growing veg that people really do like… doing it for
onself, or in small communities or cooperatives. (Same principal as
sandwiches)</div>
Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-12735018553490046552016-08-30T08:34:00.000+01:002021-02-25T12:38:53.269+00:00How Britain's Olympics success makes the case for the Basic Income<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-swi8AJIFXOM/V8ShU0T8ysI/AAAAAAAAFRg/pss10KqlSR4n244-XoQwEHJ0f8-2lWvIwCLcB/s1600/Mo_Farah.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="213" src="https://2.bp.blogspot.com/-swi8AJIFXOM/V8ShU0T8ysI/AAAAAAAAFRg/pss10KqlSR4n244-XoQwEHJ0f8-2lWvIwCLcB/s320/Mo_Farah.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Mo success - Mo Farah shows his double gold at the Rio Olympics</td></tr>
</tbody></table>
One week later, the spectacle of Team GB's Olympics medals triumph seems a distant memory. It was great while it lasted, not least because it was so unexpected, but the British passion for sports has more to do with commitment that results. We like a loser who gives their all just as much as a winner who cruises to victory. So the UK's <a href="https://www.google.co.uk/?ion=1&espv=2&client=ubuntu#q=olympoc%20medal%20table&mie=oly%2C%5B%22%2Fm%2F03tnk7%22%2C1%2C%22m%22%2C1%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2Cnull%2C0%5D">second position in the medals table</a> is of passing interest rather than national significance. It's the sport itself that matters, and in the past seven days the sport has moved on.<br />
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That's my view, but Liz Nicholl, the chief executive of UK Sport, would beg to differ. "<a href="https://www.theguardian.com/sport/2016/aug/21/great-britain-team-gb-second-rio-2016-olympic-medal-table">We invest in medal success to create a proud, ambitious, active, healthy nation</a>", she said, hailing the UK as "a sporting superpower" and promising to build on the team's Rio success at the next games in Tokyo in 2020. Some £350 million will be invested over the next four years to make that happen.<br />
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Everybody knows that money counts in sport. We're told that each medal in Rio 'cost' over £4m, and almost every GB medal winner was on-message to praise the National Lottery funding that makes it all possible. Targeting continuous growth, however, will bring disappointment eventually. Just as the <a href="http://content.time.com/time/magazine/article/0,9171,2019628,00.html">correlation between money and happiness</a> runs out above a certain point, so the British public's love of sporting success soon turns sour once they learn to expect it. Winning predictably is not really the point. Performances that exceed expectation are what sport-lovers crave.<br />
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Nonetheless, the money used by UK Sport to support individual athletes, buying them the time and space in their lives to perfect their calling, has effectively demonstrated an important principle. It recognises that financial security allows people to develop the stuff that they're good at, which, in turn, can have all sorts of social and personal benefits that transcend traditional commercial ideas of value. In a sense, therefore, lottery funding has become a sort of <a href="http://basicincome.org/">Basic Income</a> for the lucky, talented, committed few with serious medal prospects.<br />
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This object lesson in the principle of the Basic Income has its limits, however. For, if "a proud, ambitious, active, healthy nation" is really the purpose of sports funding, then focusing on individual medal prospects is probably not the best way to achieve it. Pride in its good sense means self-esteem and self-valuing; ambition means leading a fulfilled life; active means making decisions for oneself; healthy means having the time and opportunity to prioritise ones physical and mental wellbeing. None of these are achieved by passively watching others excel. All require active engagement, which means structuring society in a way that allows people to participate fully on their own terms.<br />
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Sport is one component of this. If every Briton had time and opportunity (including access to facilities) to participate in sport, the nation's tally of sporting success would be certain to rise. We don't know how many potential Mo Farahs and Jessica Ennis Hills have been lost through a failure of participation, but there must be more than a few. More importantly, many, many people have been prevented by social and financial circumstances from participating at their own level - not competing for a place on the podium, but for the far more vital objective of fulfilling or exceeding their own potential.<br />
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As in sport, so in every aspect of our lives. Whether as entrepreneurs, artists, carers, inventors, makers, designers or anything else, if we are to fulfil our potential and make our contribution to society we need the time and opportunity to develop every aspect of our talents, capacities and personalities. The Universal Basic Income isn't about picking winners, but acknowledging that everybody has the capacity to win - for themselves, for their families and communities, and for wider society. All they need is access to a fair share of the wealth that buys the time and opportunity to make this possible.<br />
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<span style="font-size: x-small;">Picture credit: by U.S. Army [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons</span>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-72250231112440406822016-06-21T14:49:00.000+01:002021-02-25T12:38:53.308+00:00If we want a kinder, gentler politics, we must first shape a kinder, gentler, economic system<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-ktwnpoMIuuk/V2lFnqbcr8I/AAAAAAAAFBk/-JpH5hQUM6UO5Gn_eSwie1NODJBW7Y_nQCLcB/s1600/Seeking_human_kindness.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://3.bp.blogspot.com/-ktwnpoMIuuk/V2lFnqbcr8I/AAAAAAAAFBk/-JpH5hQUM6UO5Gn_eSwie1NODJBW7Y_nQCLcB/s200/Seeking_human_kindness.JPG" width="155" /></a></div>
A member of parliament <a href="http://www.bbc.co.uk/news/uk-england-36565801">is murdered</a> while doing her job. <a href="http://www.itv.com/news/wales/update/2016-06-20/parliament-due-to-be-recalled-for-tributes-to-jo-cox/">Flags fly at half mast, parliament is recalled for tributes</a>, campaigning in the referendum is suspended, the prime minister and the leader of the opposition <a href="http://www.dailymail.co.uk/news/article-3646634/David-Cameron-Jeremy-Corbyn-unite-scene-Jo-Cox-s-death-pay-tribute-unprecedented-joint-appearance.html">share a platform</a> and the challenger parties decide <a href="http://www.independent.co.uk/news/uk/politics/jo-cox-death-conservatives-will-not-contest-murdered-labour-mp-seat-batley-spen-thomas-mair-a7087246.html">not to contest</a> the now vacant seat.<br />
<br />
These are far from empty gestures. At the height of the most divisive, dishonest and ill-informed political confrontation that most of us can remember, it has taken a tragic act of violence to set free the instincts of our common humanity. It has reminded us that to empathise with and care for one another, to support each other and to share in our deepest feelings, whether of joy or of loss, is profoundly normal. As such, it throws into stark relief how entirely <i>abnormal</i> is the institutional behaviour that our political and economic frameworks impose.<br />
<br />
In the House of Commons on Monday, the words of Jo Cox were <a href="https://www.gov.uk/government/speeches/pms-tribute-to-jo-cox-mp-in-the-house-of-commons-20-june-2016">repeatedly invoked</a>, that we "have far more in common with each other than things that divide us”. <a href="https://www.theguardian.com/uk-news/2016/jun/20/mps-pay-tribute-to-jo-coxs-humanity-compassion-and-irrepressible-spirit">Jeremy Corbyn said</a> that her death should mark the start of a “kinder and gentler politics”, a tacit acknowledgement that, for the most part, politicians of all persuasions want good outcomes for ordinary people, but are trapped in a competitive, adversarial system that they believe cannot be changed.<br />
<div>
<br /></div>
Our institutions of governance are adversarial by design. They demand conflict for the explicit purpose of squeezing out human feeling. In politics they set government against opposition, party against party, each fighting to deprive the other of power and control. In the economy they set the owners of capital against paid workers, lenders against borrowers, home owners against renters, shareholders and directors against their employees, corporate interests against social justice, middlemen against both their suppliers and their customers. In the law, they set plaintiff against defendant, the wealthy against the disadvantaged, the state against the dispossessed.<br />
<br />
I am willing to believe that, when David Cameron invoked the "<a href="http://www.bbc.co.uk/news/uk-10680062">big society</a>" before the 2010 general election, he genuinely sought to favour collaboration, sharing and fairness over greed and acquisitiveness. Then, in government, he found himself driving a system so completely in hock to the owners of capital that prioritising their interests became essential. If the current government, neo-liberal to the core as it may be, could see a way towards universal prosperity, greater equality, a better-funded health service, etc., without spooking the markets, I don't doubt that it would take it. But they can't see a way because the system has blinded them with false certainties that they dare not challenge.<br />
<br />
The bizarre consequence is that the government addresses the housing crisis not by increasing low-cost supply, but by <a href="http://www.bbc.co.uk/news/business-35051348">offering cheap loans that force up house prices</a> still further. It addresses poverty not by investing in opportunity, but by making the <a href="https://www.theguardian.com/society/2015/mar/24/benefit-sanctions-trivial-breaches-and-administrative-errors">consequences of unemployment</a> more painful. It addresses economic weakness not by seeking to unleash people's creative energy, but by allowing corporations to profit from <a href="https://www.theguardian.com/commentisfree/2015/jan/19/jobs-agency-workers-britain-economy-insecure-low-paid-work">low-paid, dead-end, insecure jobs</a>, the growth in which it then describes as a success story.<br />
<br />
The arch-marketeer George Soros explains why this is: Britain, <a href="https://www.theguardian.com/commentisfree/2016/jun/20/brexit-crash-pound-living-standards-george-soros">he writes</a>, "is more dependent than at any time in history on inflows of foreign capital". Brexit will reverse those flows, he predicts, causing a 20% drop in the value of sterling, offering rich pickings for speculators while making most voters considerably poorer.<br />
<br />
Even without Brexit, the government is forced to sell or outsource every revenue stream it can come up with, from <a href="http://www.spectator.co.uk/2014/02/why-has-britain-signed-up-for-the-worlds-most-expensive-power-station/">crazily expensive nuclear power contracts</a> to <a href="http://www.bbc.co.uk/news/uk-34341352">national infrastructure</a> to the <a href="http://www.politics.co.uk/comment-analysis/2015/07/27/it-s-official-private-prisons-cost-taxpayer-more-than-state">provision of prisons</a>, and many, many others, in order to keep that foreign capital flowing in. And the more revenue it sells, the more it has to find to sell, because the capital flowing in to buy those streams is more than matched, over time, by the revenue flowing out in the streams themselves. The debacle of the <a href="http://www.dailyrecord.co.uk/news/scottish-news/63bn-pfi-fiasco-revealed-full-7827277#4dqKfH3wfehM0HLW.97">Private Finance Initiative</a> (PFI) is proof of that.<br />
<br />
The British economy is on a treadmill that is running away from it. Some time soon, its feet will not be able to keep up and it will fall over. That time could come on Friday of this week, or it could come in one, two or three year's time. That is why the outcome of the referendum does not hugely matter in economic terms. Soros is right, of course, but for the increasing army of Britons who feel that the economy has abandoned them, a crisis now may be more attractive that one merely postponed.<br />
<br />
In this context, Britain's divisive political establishment looks like a pack of jackals fighting over a rotting corpse. There is nothing good left for anyone. Just as <a href="https://www.opendemocracy.net/can-europe-make-it/vassilis-petsinis/syriza-one-year-on-what-happened-to-radical-left-dream-in-greec">Syriza discovered in Greece</a>, any party in power is faced with the same depressing certainties, the same obligation to conform to the expectations and requirements of the international financial markets.<br />
<br />
Those markets have no morals. If we run our economy on their say-so we must reap what we sow. But if we want that kinder, gentler politics of which Corbyn spoke, we must first shape a kinder, gentler, economic system in which human effort, rather than market capital, is the guiding principle.<br />
<br />
We are already learning what a people-focused economic system looks like. It treats housing as a social need, not a profitable speculation; it <a href="http://www.huffingtonpost.co.uk/martin-whitlock/basic-income_b_10394996.html">invests in people</a>, allowing them to do productive work, whether paid or unpaid; it measures economic activity<a href="http://stop-gdp.org/"> not as GDP does</a>, in terms of money transactions, but in terms of the social and environmental benefits that it brings; it treats money as a <a href="http://positivemoney.org/">tool to facilitate social interaction</a>, not as a vehicle for creating debt owed to vast banking corporations.<br />
<br />
The transition from an economy focused on the capital markets to one focused on people's aspirations, capacities and needs will take time, and careful management. But before all of that, it calls for political determination to work towards a better system. Irrespective of the outcome on Thursday, the lesson of the reaction to Jo Cox's death is that politicians like the idea of working together to build a better society for us all. Maybe on Friday they could get going on that.<br />
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<span style="font-size: x-small;">Picture credit: Enver Rahmanov (Own work) [CC BY-SA 3.0 (<a href="http://creativecommons.org/licenses/by-sa/3.0">http://creativecommons.org/licenses/by-sa/3.0</a>)], via Wikimedia Commons</span>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com2tag:blogger.com,1999:blog-9022369696182667378.post-51873904174617207872016-06-10T11:15:00.000+01:002021-02-25T12:38:53.348+00:00The basic income will make sense when people learn to value their unpaid work<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://4.bp.blogspot.com/-4Te9N91utxI/V1qSrc6vMkI/AAAAAAAAE_s/wL3Fn2P8avst728RPakNPewVLltqGOUrgCLcB/s1600/Housework_%25285978829002%2529.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://4.bp.blogspot.com/-4Te9N91utxI/V1qSrc6vMkI/AAAAAAAAE_s/wL3Fn2P8avst728RPakNPewVLltqGOUrgCLcB/s200/Housework_%25285978829002%2529.jpg" width="138" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Work in progress<br />
(but investment is needed)</td></tr>
</tbody></table>
Which is more remarkable - that 77% of Swiss voters <a href="http://www.bbc.co.uk/news/world-europe-36454060">rejected proposals for a basic income</a> in a referendum last weekend, or that 23% voted in favour? Admittedly the <a href="http://www.swissinfo.ch/eng/results-votes-june-5th-2016-in-switzerland/42153620">turnout was low</a>, probably because there was little realistic chance of the proposal being passed, but the fact remains that nearly a quarter of the votes were in support of a radical, socially progressive idea of which nobody much was talking until very recently.<br />
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A well-executed basic income policy fixes so many socio-economic issues - both present and looming - that it's tempting to think not if, but when. The main barrier, however, may not be demonstrating effectiveness, or even affordability, but overcoming public perception. People are rightly wary of "something for nothing" offers, including the idea that people should be 'paid' without committing to 'work'.<br />
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Such perceptions matter, which is why 'paid' and 'work' are in inverted commas in the previous sentence. We assume that work comes first: once performed, it is valued and remunerated accordingly. In reality, however, money comes first: access to work is filtered through employers, who have the necessary money to invest in a workforce. This is why political rhetoric focuses so obsessively on businesses 'creating' jobs and people 'looking for' work.<br />
<br />
This need to 'find work', however, creates an artificial bottleneck that limits people's productive capacity. Like a litter of piglets crawling over each other to get hold of a nipple, people are only enabled to contribute economically if they can find a point of access to the money system.<br />
<br />
If access to money is what makes economic activity possible, why make it so hard? That's the premise of the basic income, which solves the problem by giving everybody an allowance of the money in the system. This frees up their autonomous capacity to work, without being dependent on the system to fit them in.<br />
<br />
Implicit in this is a reassessment of the way in which we measure economic value. The unpaid economy in the UK is <a href="http://www.neweconomics.org/blog/entry/unpaid-work-is-worth-so-much-to-our-economy">well over half the size of the money economy</a>, and probably much bigger than that in terms of its usefulness, since unpaid work that people <i>choose</i> to do is more likely to result in something that is genuinely wanted.<br />
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The basic income acknowledges this by relegating money from the status of wealth to that of wealth-<i>facilitator</i>. After all, unpaid work also requires money: it needs tools, vehicles, materials, land, accommodation, etc., just as any work does. If the only route to that money is through payment, the amount of economic value that can be created through unpaid work is unnecessarily limited.<br />
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To put that in real terms: a person busy with paid work may be able to afford what is needed to cook wholesome meals, grow vegetables, look after their own children, write novels, learn a new skill, etc., but is unlikely to have the time. A person without work has the time, but may lack the financial resources unless somebody else is able to provide them.<br />
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If that busy worker is well paid, they will buy the meals, vegetables, childcare, etc. that they need. In the low wage, zero hours economy, however, paid work consumes valuable time without producing enough to buy the resources that are needed. Similarly, people required to search interminably for work in return for meagre state 'benefits' have neither time nor sufficient money to cater directly for their own needs.<br />
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Work, essentially, is exactly that - people catering for their own needs. Giving people access to money through the basic income will generate big increases in productive economic activity, but we won't know that unless we measure it. Currently we don't: GDP, which is our measure of economic success, is only interested in paid activity, so a large amount of useful work is systematically ignored.<br />
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Changing public perceptions about the basic income, therefore, depends upon changing our understanding of useful work and the way that we measure it. Since all of us do unpaid work, and none of us could survive without doing it, that ought not to be too hard.<br />
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The crucial point is this. The basic income is not paying people for their otherwise unpaid work: it is providing them with the financial investment that makes it possible for them to do it. Investment in people is not "something for nothing", but sound economic practice. It is also what people deserve.<br />
<i><br /></i>
<span style="font-size: x-small;"><i>Photo credit : Berit from Redhill/Surrey, UK (housework) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons</i></span><br />
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<br />Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com1tag:blogger.com,1999:blog-9022369696182667378.post-30427731549382781602016-05-26T16:59:00.001+01:002021-02-25T12:38:53.389+00:00A national policy framework for independent candidates?<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-CU6EZbglBAE/V0cbYOPBDUI/AAAAAAAAE78/zLdx6O3o20wX0cwi_WoeI4hSmwAoy3d1gCLcB/s1600/512px-A-Block-for-the-Wigs-Gillray.jpeg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="150" src="https://2.bp.blogspot.com/-CU6EZbglBAE/V0cbYOPBDUI/AAAAAAAAE78/zLdx6O3o20wX0cwi_WoeI4hSmwAoy3d1gCLcB/s200/512px-A-Block-for-the-Wigs-Gillray.jpeg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Whigs and Tories - political merry-go-round<br />
By Gilray (image via Wikipedia)</td></tr>
</tbody></table>
Wednesday's meeting in Totnes, organised by <a href="https://www.facebook.com/groups/SouthDevonWatch/">South Devon Watch</a> to discuss strategies for political change, was inspiring and challenging in equal part. The inspiration came from so many committed people, all seeking to bring authentic democracy to a system widely seen as unaccountable, if not corrupt. The challenge is to find a way of beating the current system without repeating its manifest failings.<br />
<br />
The meeting focused on independent candidates, both at local and national level. Among the speakers was <a href="http://www.claire-wright.org/">Claire Wright</a>, the independent Devon county councillor who came a good second in East Devon at the general election last year. Also present was Martyn Greene of the <a href="http://freeparliament.org.uk/">Free Parliament campaign</a>, which is putting up<a href="http://freeparliament.org.uk/ten-thousand-pound-prizes-for-best-independent-candidates/"> serious money</a> to support independent candidates at the next national election.<br />
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There can be little doubt that the <a href="http://www.martinwhitlock.co.uk/2016/05/time-to-challenge-divisive-values-of.html">tribal, adversarial party system</a> typifies much that is wrong with our current politics. If independent candidates are to challenge the party stitch-up, however, they need to work together and show unity of purpose. The distinction between an organised group of independents, working together, and a new party, may not be easily observable to a electorate conditioned to the party system.<br />
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What comes first in politics, people or policies? If parliament were filled with independent members all operating under the<a href="http://www.independentnetwork.org.uk/resources/bell-principles"> Bell principles</a>, it is likely that the quality of discourse and deliberation would be far higher than at present, but would effective policy, leadership and decision-making necessarily emerge?<br />
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One approach would be to elect government and parliament separately, the former on the basis of its policies, the latter on an independent, non-party basis. The current framework, however, doesn't work like that: when people go to the polls they suppose that they are voting for the government they want. Government means a combination of policy solutions and the people with the leadership qualities to put those policies into effect.<br />
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In response to this, independent-minded political reformers could work together to draw up a national policy framework in they key areas of the economy, health, education, etc., which independent candidates could use as part of their campaigning message. Instead of supporting a party, they would be advocating for a coherent set of policies, the essence of which they would undertake to support in parliament.<br />
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In the trade-off between independence and coherence, it makes no sense for every stand-alone candidate to have to reinvent the national policy wheel. A shared set of policies could give national traction, provide a clear story for the media and ensure that the electorate have a better idea of what they are getting.<br />
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<br />Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-53953815816785101552016-05-20T15:50:00.000+01:002021-02-25T12:38:53.429+00:00EU referendum: a false dichotomy obscuring a far more vital struggle<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-I6gYYdJdntE/Vz8jqkVP02I/AAAAAAAAE6w/qbk2AwE4S9kvsyUA_Z34efX_HUmj5ArtQCLcB/s1600/Referendum%2Bleaflet.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="190" src="https://3.bp.blogspot.com/-I6gYYdJdntE/Vz8jqkVP02I/AAAAAAAAE6w/qbk2AwE4S9kvsyUA_Z34efX_HUmj5ArtQCLcB/s200/Referendum%2Bleaflet.png" width="200" /></a></div>
Continuing the <a href="http://www.martinwhitlock.co.uk/2016/05/brexit-debate-plague-on-both-their.html">Referendum theme</a>, a friend wishes they knew what the E.U. really does for us. This is not a <i><a href="https://www.youtube.com/watch?v=7Oor7fAmmiQ">Life of Brian</a></i> moment but a measured desire to understand the pros and cons in order to make an informed decision.<br />
<br />
The <a href="http://www.aboutmyvote.co.uk/__data/assets/pdf_file/0010/203410/EU-Referendum-voting-guide_England-and-Scotland.pdf">leaflet circulated to every household</a> by the Electoral Commission offers little help. The page on the Yes side says "More jobs. Lower prices. NHS protected." while the one for No says "Our last chance to take back control". Yes is appealing to economic self-interest, No to a sense of nationhood. Such different value systems are difficult to compare.<br />
<br />
This was reinforced in a research paper by <a href="https://uk.linkedin.com/in/neil-smith-6b651460">Neil Smith</a> that came my way this week. It makes the fascinating point that the UK is a member of the European Economic Area (EEA, which includes EU members and a few non-EU countries such as Switzerland, Norway and Iceland) independently of its membership of the EU, so leaving the EU does not, legally speaking, mean leaving the single market.<br />
<br />
If so, the outcome of the vote will change Britain's economic relationship with Europe very little. The referendum question, as Neil points out, is essentially political. Once we understand it as such it becomes much easier to parse. Two visions are on offer, one nationalist, the other <i>inter</i>nationalist. What confuses the picture is that each vision separately embraces a wide range of political perspectives.<br />
<br />
Internationalism is a central tenet of the socialist movement, for whom solidarity among working people transcends borders. But the capacity to operate internationally is also of key importance to corporate capitalism. This is why the traditional socialist Jeremy Corbyn is lined up with free marketeer David Cameron on the Remain side.<br />
<br />
Nationalism also has its different facets. It embraces a spectrum from nasty racism to idealistic self-sufficiency. The leave side unites opponents of globalisation with neo-liberals who think that EU regulation is a drag on free market capitalism.<br />
<br />
Given these odd associations of bed-fellows, anyone wanting to make a measured decision is entitled to be confused. The referendum has set up a false dichotomy which does not reflect a far more vital struggle - one that pitches the values of global corporatism against those of human-scale relationships. Looked at like that the question for 23 June is simple: do we want to wage that struggle on our own, or in partnership with our European neighbours?Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-53083836690752268612016-05-17T09:55:00.000+01:002021-02-25T12:38:53.467+00:00In a single sentence, the DfE tells us everything that is wrong with both the education system and our socio-economic structures“The evidence is clear that every extra day of school missed can affect a pupil’s chance of gaining good GCSEs, which has a lasting effect on their life chances.” So said the Department for Education, responding to a High Court judgement that children who regularly attend school may be permitted family absences.<br />
<br />
Let's think that through. Start with the assertion that a person's "life chances" depend on their GCSE results. Is that by accident, or design? If by accident, then it is high time that we do something to correct the error; but if by design then how come we've created a system that values only the narrow range of not particularly useful and sometimes harmful attributes that GCSEs assess.<br />
<div>
<br /></div>
<div>
The ability to memorise, for example, and then reproduce in a specified format some pre-cooked "facts" that can easily be looked up on a smartphone does not seem like an essential life skill. The "skill" of suppressing ones enthusiasm - ones desire to innovate, question and create - in favour of sticking to the predetermined script, also seems to have limited merit. A tolerance of lone, silent study, eschewing the virtues and possibilities of creative collaboration, does not seem the most promising mindset for a fulfilling life. A willingness to be stressed, anxious and self-critical, accompanied by a clear message that this state is both appropriate and necessary, is a recipe for a similarly anxious, stressful life. And yet all of these the GCSE system is imbuing in our children.</div>
<div>
<br /></div>
<div>
The government is right that GCSE results are affecting children's life chances, but not in a good way. They tell us almost nothing about the potential for life that a young adult holds in their being, but that have a dangerous capacity to prevent them from fulfilling that potential. But since they are the only certification that the system allows of eleven years of statutory education, the preparation for them must start at the age of five. What other construction can be placed on the claim that even a day off school at any age can impact these exam results? </div>
<div>
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Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-61928287097567137402016-05-13T13:22:00.002+01:002021-02-25T12:38:53.507+00:00Let's not weep for the departing oligarchs - resilience begins at home<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://3.bp.blogspot.com/-AmUNoXfVuBc/VzXGR4oHjkI/AAAAAAAAE5g/jBqEnu3PoH0DfHtLK6angk1wS1LdI_HGwCLcB/s1600/Belgravia._London..jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="150" src="https://3.bp.blogspot.com/-AmUNoXfVuBc/VzXGR4oHjkI/AAAAAAAAE5g/jBqEnu3PoH0DfHtLK6angk1wS1LdI_HGwCLcB/s200/Belgravia._London..jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Posh London addresses...</td></tr>
</tbody></table>
Yesterday, <a href="http://www.martinwhitlock.co.uk/2016/05/extreme-wealth-is-not-victimless-crime.html">billionaire hedge fund managers</a>; today, the <a href="http://www.theguardian.com/world/2016/may/12/super-rich-may-sell-london-homes-under-anti-corruption-rules">nameless super-rich buying into London's property market</a>. All our instincts are screaming that these people do not operate in the best interests of society, and yet the refrain is the same: the rich are "wealth-creators" and we should be grateful to them rather than making them account for their wealth.<br />
<br />
The rich are not wealth-creators, but wealth accumulators, and buying premium London property is part of that process. Having to reveal themselves under Cameron's <a href="http://www.bbc.co.uk/news/business-36272225">much touted anti-corruption measures</a>, will, it seems, frighten them off. Estate agents and lawyers - and doubtless interior decorators, security companies, limousine drivers and many others - fear for the crumbs that drop their way from these rich people's tables.<br />
<br />
The UK is a dependent economy. It<a href="http://www.independent.co.uk/news/business/news/the-chart-that-shows-the-uks-trade-performance-is-now-the-worst-its-been-since-the-financial-crisis-a7022261.html"> imports far more than it exports</a>, and somehow it has to pay for it. Like those estate agents to the oligarchs it cannot operate without a steady flow of foreign money to balance the books.<br />
<br />
Whether it's Chinese participation in <a href="http://www.bbc.co.uk/news/uk-34341352">HS2</a> and<a href="http://www.theguardian.com/uk-news/2016/may/12/china-may-take-over-hinkley-point-nuclear-project-claims-lord-howell"> nuclear power stations</a>, or secretive investors snapping up posh London addresses, or <a href="https://weownit.org.uk/privatisation-doesn%E2%80%99t-work/whats-problem-outsourcing-companies">public services outsourced</a> to multi-national corporations, or <a href="https://www.theguardian.com/business/2015/oct/12/royal-mail-government-sell-remaining-stake-shares">public institutions</a> auctioned off to the highest bidder, almost everything in Britain that can generate an income stream has been sacrificed to keep the cash flowing in and make investors richer.<br />
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It's not sustainable and it's not resilient. Instead of <a href="https://en.wikipedia.org/wiki/Hinkley_Point_C_nuclear_power_station">Hinkley C</a> we need local energy production; instead of <a href="https://england.shelter.org.uk/professional_resources/policy_and_research/policy_library/policy_library_folder/report_the_forced_council_home_sell-off">selling off council housing to the highest bidder</a> we need locally affordable homes. so let's not weep for the departing oligarchs - resilience begins in communities providing for themselves.<br />
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<span style="font-size: x-small;"><br /><br />Picture: Amanda Slater (Flickr: Belgravia. London.) [CC BY-SA 2.0 (<a href="http://creativecommons.org/licenses/by-sa/2.0">http://creativecommons.org/licenses/by-sa/2.0</a>)], via Wikimedia Commons</span>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com1tag:blogger.com,1999:blog-9022369696182667378.post-1588695877701150462016-05-11T14:45:00.000+01:002021-02-25T12:38:53.546+00:00Extreme wealth is not a "victimless crime"<div class="separator" style="clear: both; text-align: center;">
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-SFszLuur4j8/VzM3AtdTQUI/AAAAAAAAE5M/Vp4taP5x9MkPnCUtNqqhfDXg53o65V0jwCLcB/s1600/care%2Bhome.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="212" src="https://2.bp.blogspot.com/-SFszLuur4j8/VzM3AtdTQUI/AAAAAAAAE5M/Vp4taP5x9MkPnCUtNqqhfDXg53o65V0jwCLcB/s320/care%2Bhome.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Warning! Wealth-creators at work!</td></tr>
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Twenty-five hedge fund managers took home $13 billion in earnings last year, <a href="https://www.theguardian.com/business/2016/may/10/hedge-fund-managers-salaries-billions-kenneth-griffin-james-simon">according to a new report</a>. Easy enough to be appalled, outraged, disgusted - or even impressed - but what does this really mean for the rest of us?<br />
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The assumption is that these people with the Midas touch are applying their hard work, ingenuity and good fortune to generating vast quantities of wealth, of which they then take a substantial cut. They are merely the most successful of the millions of people across the world who are trying to make money in investment markets.<br />
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But that phrase "generating vast quantities of wealth" is misleading. The wealth that comes through managing investments is not "created" or "generated" from new, but is reallocated away from other people. This might mean other professional investors losing out, but more often it means society at large. As employees, customers and tax-payers we all contribute to investor profits.<br />
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Politicians on all sides have for decades peddled the idea that encouraging people to get extremely rich is good for the rest of us. Whether it's Boris Johnston "<a href="http://www.telegraph.co.uk/comment/columnists/borisjohnson/10456202/We-should-be-humbly-thanking-the-super-rich-not-bashing-them.html">humbly thanking the super-rich</a>" or Peter Mandelson famously "<a href="http://www.theguardian.com/politics/2008/jan/12/tonyblair.labour">intensely relaxed about people getting filthy rich as long as they pay their taxes</a>", we've been led to believe that rich people have to "make" wealth before the rest of us can have a share in it.<br />
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The reality is quite the opposite. Wealth is created by people making and doing things that other people want and need. Things like growing food, making furniture, laying bricks, cooking meals, looking after each other, writing books, cleaning toilets, teaching young people, healing sick people, giving care to the elderly. Investors get rich by buying up this wealth-creating work as cheaply as possible, then creaming off as much of its value as they can.<br />
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Extreme wealth is not a "victimless crime". It's everybody else's wealth, concentrated into the hands of a small number of people, encouraged by the economic system. That system has had its day. It is time for change.<br />
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Photo: © CQC/Joe D Miles - ImageCapture via Flickr under <a href="https://creativecommons.org/licenses/by/2.0/">this licence</a>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-52935789341156747932016-05-09T16:13:00.000+01:002021-02-25T12:38:53.584+00:00Housing crisis: there's only one boat, and we're all in it.<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://4.bp.blogspot.com/-pwJaKEdmwpg/VzCp8eyA46I/AAAAAAAAE4s/gXirznacAPkSESaiTgsHxQCCyYCMwuRkgCLcB/s1600/for%2Bsales%2Bsigns.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="133" src="https://4.bp.blogspot.com/-pwJaKEdmwpg/VzCp8eyA46I/AAAAAAAAE4s/gXirznacAPkSESaiTgsHxQCCyYCMwuRkgCLcB/s200/for%2Bsales%2Bsigns.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Prices are rising, but who is winning?</td></tr>
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Having spent the weekend debating the divisiveness of party politics, let's cut to the chase and talk about one of the big political issues of the day, which is housing. Conventional political thinking assumes that this is a generational matter, pitting the interests of older house owners against those of younger renters. Since older people are more likely to vote, that makes for a political no-brainer.<br />
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We could buy into that convention, which would make this an issue of inequality, or rich versus poor. This is what the political establishment would like us to do, because it suits the adversarial framing of party politics (in which the rich generally win). Or we could look at it another way, and try to work out what would be in everyone's best interests.<br />
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<a href="http://www.bbc.co.uk/news/business-36181318">Research published last week</a> shows that the "Bank of Mum and Dad" will help to finance 25% of all UK mortgage transactions in 2016, to the tune of £5 billion. To add to the picture, it is <a href="https://www.theguardian.com/business/2016/may/09/nationwide-raises-mortgage-borrowing-age-limit-to-85">reported today</a> that Nationwide is to offer mortgages that are funded through to age 85. So it's not only mum and dad, but also granny and granddad, who are using the value of their houses to raise finance for the younger generation.<br />
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It's pretty clear, therefore, that so far from having different financial interests, the generations in a family are all in the same boat together, each with a hand to an oar. For the oars to be effective, however, they need to be pulling in the same direction, and this is where the politics of fear come in. The older generations may think (or be persuaded to believe) that high house values are essential for them to be able to afford the help the children need.<br />
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The maths, however, says that the reverse is the case. Lower prices help everybody, reducing costs both for the first-time buyers themselves and the people who are helping them. Total borrowing, whether by older or younger, is less overall, so the only losers are the banks and lenders.<br />
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Lower house prices should bring hope, not fear, but that's not an easy message to convey to generations of established home-owners. I'll post some sums later, to illustrate the logic, but can anyone think of a more powerful way to make this convention-busting point?
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<span style="font-size: x-small;">Photo credit: copyright <a href="http://www.geograph.org.uk/profile/21474">Terry Robinson</a> and licensed for reuse under this <a href="http://creativecommons.org/licenses/by-sa/2.0/">Creative Commons Licence</a></span>Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-55850214822300447642016-05-07T16:10:00.000+01:002021-02-25T12:38:53.622+00:00People don't vote, because the system offers no solutions<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-842-RDCTVOw/Vy4EUhO7OAI/AAAAAAAAE4M/2T801DhStRkF8fhKfu9WNjH3LpCZg6EswCLcB/s1600/512px-Polling_station_6_may_2010.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="150" src="https://2.bp.blogspot.com/-842-RDCTVOw/Vy4EUhO7OAI/AAAAAAAAE4M/2T801DhStRkF8fhKfu9WNjH3LpCZg6EswCLcB/s200/512px-Polling_station_6_may_2010.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Limited attraction: <br />
"Did not vote" the biggest winner by far</td></tr>
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In our<a href="http://www.martinwhitlock.co.uk/2016/05/time-to-challenge-divisive-values-of.html"> tribal, divisive electoral system</a> it's no surprise that the biggest group of all is completely absent. In London on Thursday, 54% did not vote; in Scotland the figure was 44% and in Wales 56%. In English local elections the figures are similar or worse. And these figures are for registered voters. They do not include the<a href="http://www.independent.co.uk/news/uk/home-news/conservative-changes-to-voter-registration-leave-800000-off-election-rolls-a6845796.html"> hundreds of thousands of (generally young) people of voting age who do not make it onto the electoral roll</a>.<br />
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Meanwhile, two election stories are dominating the news cycle. One is the failed Conservative <a href="http://news.sky.com/story/1691786/tory-slams-partys-dog-whistle-campaign">"dog whistle" campaign</a> against Sadiq Khan; the other is the "<a href="http://www.independent.co.uk/news/uk/politics/uk-elections-2016-jeremy-corbyn-scotland-wales-england-london-mayoral-election-a7016021.html">state of the parties</a>" - who's up, who's down and can Labour win the next General Election under Jeremy Corbyn (or anyone else). Actually, they're the same story. Politics in the media is all about big-name politicians and the parties they belong to, rather than improving the quality of people's lives.<br />
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No wonder that a young person I met felt too uninformed about the issues and the candidates to cast a meaningful vote. They reasoned that they would unfairly dilute the votes of people who did know what they were talking about. Such faith in ones fellow citizens is admirable in one sense but almost certainly misplaced. Most people vote for party, not policy. Non-voters are left powerless and dispossessed, because they don't identify with any of the tribes.<br />
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In tribal politics, innovation is avoided for its risk of alienating core supporters. So the <a href="http://www.theguardian.com/society/2016/apr/14/unicef-report-criticises-government-response-to-rising-child-inequality">economy remains broken and unfair</a>, the education system is <a href="https://www.tes.com/news/school-news/breaking-news/wilshaw-backs-tougher-key-stage-1-tests-pupils-strike">dragged back to the nineteenth century</a> and the NHS is starved of resources in the interests of tax cuts, because no party dares propose radical change. But radical political and economic change is precisely what we all (and especially young people) need.<br />
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Transformative policies, such as a viable<a href="http://www.basicincome.org/basic-income/"> basic income</a> and truly affordable housing, will allow lives to be shaped by people's creativity rather than by debt and insecurity. The party system won't deliver them, but a new, values-based politics designed to engage those absent voters potentially could.<br />
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<span style="font-size: x-small;">P</span><span style="font-size: x-small;">icture: secretlondon123 (originally posted to Flickr as Polling station) [CC BY-SA 2.0 (<a href="http://creativecommons.org/licenses/by-sa/2.0)">http://creativecommons.org/licenses/by-sa/2.0)</a>], via Wikimedia Commons</span><br />
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Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-40495866029416000212016-05-05T10:51:00.001+01:002021-02-25T12:38:53.662+00:00Time to challenge the divisive values of party politics <table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://3.bp.blogspot.com/-_GfUu0jtKKc/VysUYbD9VXI/AAAAAAAAE3Y/MHRVk3PAwBEoj8noMzkVw8-gcBA4nNEJACLcB/s1600/2015UKElectionMap.svg.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="195" src="https://3.bp.blogspot.com/-_GfUu0jtKKc/VysUYbD9VXI/AAAAAAAAE3Y/MHRVk3PAwBEoj8noMzkVw8-gcBA4nNEJACLcB/s200/2015UKElectionMap.svg.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Winners take all?<br />
How the UK is divided by the party system.</td></tr>
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Allegations that the Tories<a href="https://twitter.com/Channel4News/status/723194930676391936"> stole the last election</a> by <a href="http://news.google.com/news/url?sr=1&sa=t&ct2=uk%2F0_0_s_1_0_t&usg=AFQjCNEfVcCibG-LN4TCrhNWHpjzGCZu_g&did=4542d1ae575479da&cid=52779099700417&ei=IworV8jHCobO1Qa4oKywBg&rt=STORY&vm=STANDARD&url=http%3A%2F%2Fwww.bbc.co.uk%2Fnews%2Fuk-politics-36203093">cheating on their spending</a> are far more than a storm in an over-heated social media teacup. They point to an overweaning sense of entitlement in a system that disproportionately favours the big parties. The Conservatives, as the richest party, feel the most entitled, and their dismissal of the cheating claim as an "administrative oversight" suggests that they see rules as an irritation to be brushed off rather than an attempt to level an ever more uneven playing field.<br />
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Today is polling day. some people, in Scotland, Wales, London and elsewhere, have important decisions to make. Me - I get to vote for a Police and Crime Commissioner and my first instinct is not to bother, but then I'm reminded that alongside candidates from the main parties is an independent who looks like they know what they're doing. Here's a chance to challenge the system, and with turnout expected to be low my vote could make a difference.<br />
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Party politics is divisive and sectarian. Conservatives for those of us well served by the status quo. Labour for those of us in paid work, seeking a bigger share of the cake. Lib Dems? Hard to say any more (although hard-right "neo-liberals" have given the l-word a bad name). Greens for those of us worried about the environment. UKIP for those of us who feel dispossessed. However you look at it the entire system is designed to set people in opposition to one another, as if their interests as human beings are not essentially the same.<br />
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Trust in politics has rarely been lower, but to change things we have somehow to participate in the system, however rotten it may be. News that the proposed trans-Atlantic corporate takeover called TTIP <a href="http://www.independent.co.uk/news/world/europe/ttip-talks-france-francois-hollande-deal-agreement-transatlantic-trade-partnership-a7011986.html">may finally have been seen off</a> shows that popular political action can be effective, as campaigns on <a href="http://www.bbc.co.uk/news/uk-politics-34915218">tax credits</a>, <a href="http://www.theguardian.com/environment/2016/apr/07/ministers-abandon-plan-to-scrap-farm-animal-welfare-codes-chicken-farming">animal welfare</a> and <a href="http://www.dailymail.co.uk/news/article-3573053/David-Cameron-announces-major-U-turn-refugee-children-opens-door-living-camps-inside-Europe.html">child refugees</a> have also shown. But single issue campaigns, however much of a struggle, are always easier that systemic transformation.<br />
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The key to that transformation is to rethink our values. For so long as wealth and money are equated, the system will always seek to divide and rule. If we wish to challenge that assumption we need a new economic model - one dedicated to human wellbeing, in which <a href="http://stop-gdp.org/">value is measured</a> not in money or numbers, but in the quality of our relationships, our collaboration and sharing, our sense of fulfillment, our health and, above all, our capacity to care for ourselves, each other and our natural environment.<br />
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<span style="font-size: x-small;">Picture credit: <span style="text-align: center;">By Brythones, recoloured by Cryptographic.2014 (This file was derived from: 2010UKElectionMap.svg) [CC BY-SA 4.0 (<a href="http://creativecommons.org/licenses/by-sa/4.0">http://creativecommons.org/licenses/by-sa/4.0</a>)], via Wikimedia Commons</span></span><br />
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<br />Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0tag:blogger.com,1999:blog-9022369696182667378.post-65594471734320015892016-05-03T16:10:00.000+01:002021-02-25T12:38:53.701+00:00Education is a relationship between pupils, parents and teachers. The government should keep out.<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-85-0WxI9SJ0/Vyi7IKyXgMI/AAAAAAAAE3I/2GmX3hLU3FcC6FqM2_MJG829mL7ZDgpnwCLcB/s1600/Guernsey_Grammar_School.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="240" src="https://1.bp.blogspot.com/-85-0WxI9SJ0/Vyi7IKyXgMI/AAAAAAAAE3I/2GmX3hLU3FcC6FqM2_MJG829mL7ZDgpnwCLcB/s320/Guernsey_Grammar_School.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><b>So that's what it means..</b>.<br />Photo: BenLaParole (Own work)<br /> [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)],<br />via Wikimedia Commons</td></tr>
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<br />If you missed the days at school when you would have learned to identify a determiner, a modal verb or a subordinating conjunction (which I fear I must have), you will drop a lot of marks in the new “harder” <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/493928/2015-5203_GPS_paper_1.pdf">KS 2 SATs</a> that are <a href="http://www.bbc.co.uk/news/education-36188634">causing such controversy</a>. Fortunately, these are useless pieces of knowledge, of significance only if one treats education as a form of mass-production in which the absence or misplacing of any one pre-determined component is a total fail.<br /><br />This, presumably, is where schools minister Nick Gibb is coming from when <a href="http://www.theguardian.com/education/2016/may/03/labour-criticises-sats-changes-as-parents-plan-kids-strike-over-exams">he says</a> “it simply isn’t fair on children to deprive them of a day of their education.” Shadow education secretary Lucy Powell also does not “condone children being taken out of school”. In this way they encapsulate the politician's view of education as a rigid framework of inputs selected and provided by the state, for which parents should be silently grateful.<br /><br />This view reflects the patrician origins of public education. As each generation was better educated, parents were marginalised on the assumption that they had nothing to offer. If that were ever true, which I doubt, it clearly is no longer. Today's highly-educated parents are well able to assess their children's best interests, and to suggest that a day out of school is a “deprivation” is an outrageous slur on the value of the parent-child relationship.<br /><br />Teachers, also, should be treated with respect. For pupils arbitrarily to miss a carefully crafted lesson is impolite, at best. Education is a partnership between parents and teachers, designed to help children to flourish in their own, unique ways. It's a vital engagement upon which government is systematically trampling, kicking both parties with equal vehemence with its oversized boots.<br /><br />For this reason today's “<a href="https://letthekidsbekids.wordpress.com/what-you-can-do/">Kids Strike</a>” has a much wider significance than the grotesque new SATs that have provoked it. It heralds a battle to wrest control of education out of the hands of government and to embed it where it truly belongs - in a creative relationship between children and their parents and teachers. Martin Whitlockhttp://www.blogger.com/profile/16267247882932539004noreply@blogger.com0