Community creates value

Community creates value

Cory Doctorow comments on Games Workshop’s latest legal initiative against its fans, I chose some quotes from the article, including the allegation that they behave like sociopaths and created their IP in exactly the way they're pursuing others for. I conclude with, the probably not original statement, "Open source campaigners have always argued that community creates value, here's another battleground where it will be tested.".

Meals Ready to Eat. Not!

Meals Ready to Eat. Not!

Reuters reports on a meeting between food distribution industry representatives and DEFRA. Using the Army was only one idea expressed, and it’s an indicator of the com9ing food shortage crisis created by Priti Patel & Boris Johnson’s “controlled border” policy and Brexit. One of the massive labour shortages at the moment is HGV drivers, and we can’t get the food to the supermarkets, even if we can pick it from the fields. The problem is compounded by the relatively low wages paid these people . UK PLC is failing because its low wage economy cannot get people to work for it any more.

from team voyas, via unsplash

My evidence for the coming crisis is that. in Tesco’s yesterday, there was no cabbage. and the garlic came from China. (I have grown garlic in my garden in previous years, so there is a food miles carbon cost thing here too..) …

Why inflation?

Why inflation?

Have we returned to the Phillips Curve which described a macro-economic policy choicei.e a trade off between inflation and unemployment? The Bank of England predicts an inflationary blip, and yet labour shortages in the UK seem endemic. The Govt’s policy is to constrict labour supply by restricting immigration which is increasing wage costs and effectively reducing gross national product. It’s not wages that are problem, although in many sectors they remain are too low and subsidised by in-work benefits, but a lack of workers. Time for the QMT loonies to pull their heads in, as explained by Simon Wren Lewis in his near rant on the elitist pessimism of the inflationary hawks.  …

On economic migrancy

On economic migrancy

The dirty secret that makes a non-racist immigration policy difficult is that economic migrancy is demand led. Post Brexit, we are short of farm workers, lorry drivers, hospitality workers, and health workers because they’ve gone home and aren’t allowed back in or don’t want to come because of the xenophobia. All of this is causing food shortages, price increases and reduced and delayed health delivery.

On the whole immigrants are younger and of working age; as our population ages we need more people of working age, to produce stuff, deliver services and pay for the pensions of our old and education of our children. The quid pro-quo must be that we offer them citizenship and treat them as neighbours, not to harass them using the hostile environment laws.

A further problem is that the work not being done reduces the tax income of the treasury.

Migrants and young workers pay old people’s pensions.

I salute those who made the single market and freedom of movement the centre of their opposition to Brexit; the facts on the ground today show them to be right, and this is before we consider those Brits in Europe who’ll have to give up their homes and jobs, and those people who travel to Europe for work, such as musicians and actors and others, it’s not just building workers anymore.

If it’s in our interests to welcome migrants, then there’s only one reason for behaving as our government is!

ooOOOoo

The ageing of the global north, and its funding sustainability was observed and publicised by the IMF in the paper,  “Immigrant Swan Song”. For more, from me see tag:immigration

I was thinking of linking to a video clip from “Auf Wiedersehen, Pet”, but the quality on youtube is not good and it’s probably not as funny or insightful as I remember. …

Crisis in the hospitality business

Crisis in the hospitality business

While it seems people are desperate to get back to the pub, the staff don’t seem so keen. Across the country, pubs and restaurants are having difficulty in recruiting staff. Here’s the BBC, here’s the FT and again, here’s the Manchester Evening News. Even Tim Martin, the arch Brexiteer Weatherspoons boss is complaining. This is another lesson to us about how our economy is out of kilter, essential work is not well paid!

While much of the reporting suggests a desire for a better life work balance, I wonder how much Brexit and the end of Freedom of Movement has to do with this.  …

More nonsense on Bitcoin

The Indy reports on Bailey of the Bank on Bitcoin, who warns, “Cryptocurrency has ‘no intrinsic value’ and investors will ‘lose all your money’, says Bank of England chief” I add, “Bitcoin only works because the ‘proof of work’ is so expensive and time consuming; and its also destructive of the environment due to its useless power consumption. (It’s also very slow, doing 700 TPS, that’s not enough for a business, let alone an economy.) …

It’s demand stupid

It’s demand stupid

Simon Wren Lewis tweets on the Budget, the full thread talks of macro-economic illiteracy, the need to stimulate demand and the fact that this is a budget for austerity. He writes more on his blog, mainly macro where he talks about the need to spend more on those with less savings i.e. the poorer 20% of our society because their multiplier is higher as is their need. He also repeats the Economics 101, that fiscal policy is about growth and monetary policy about inflation. I also link to Paul Mason's comment which reinforces the need to concentrate on demand.

Is there a storm coming?

Is there a storm coming?

In an article on CNBC, with an article entitled, Bank of England's Haldane warns on inflation; bond yields move higher (cnbc.com), they summarise the article, "In a recorded lecture, Haldane noted that there were both upside and downside risks to the inflation outlook, but cautioned that an inflationary “tiger” had awoken. ... Global markets have been jittery over the past week due to a spike in the U.S. 10-year Treasury yield, driven in part by rising expectations for inflation and economic growth. I review the comments and look at the basics, present some charts on employment, inflation, growth and investment and ask if this is just fear mongering by monetarists ....

Brexit, the next trade deadlines

Brexit, the next trade deadlines

Brexit is not yet done, this, from the Institute of Govt., shows the upcoming deadlines for further agreement. most importantly in the short term, financial services equivalence and data adequacy. Slightly later in the year, is the new definition for food safety documentation required to export British food to the EU and Northern Ireland.

I might say more when I have studied it, but I have written recently about financial services, and extensively on the need for & likelihood of a data adequacy agreement. …

Thinking about macroeconomics with Anneliese Dodds

Thinking about macroeconomics with Anneliese Dodds

While writing, Responsible Opposition, about Sir Kier Starmer’s 1st speech of the year, I pointed out that Anneliese Dodds would be giving the Mais Lecture, which had been previewed in the Financial Times (paywall). They said that she will,

 …  call for a ‘responsible fiscal framework’ based on ‘pragmatism, not dogmatism’  … [and] … signal … that the Labour party is backing away from the hard-left economic policies of former leader Jeremy Corbyn, seeking instead to fight the Conservatives on economic competence and protecting the UK’s recovery from the damage caused by the Covid-19 pandemic.

Chris Giles – Financial Times

The speech has now been delivered and I heard/watched it live. The first thing to say is that I do not consider this to be a repudiation of late stage Corbynomics.

I needed help to work out what was said, it was a very low key speech, certainly not in the style of a UCATT shop steward, more in the style of one of the academics from the cast of Inspector Morse. There was no emphasis and so we need to work out what’s important and what is just said in passing. Stephen Bush points out the unusual nexus of welcome from James Meadway & Chris Giles, he writes,

… [ the speech] attracted a glowing write-up from the FT’s influential economics editor Chris Giles and an approving tweet from James Meadway, the adviser who more than anyone bar John McDonnell himself shaped the Labour Party’s economic strategy under Corbyn

Stephen bush – New Statesman

Meadway’s tweet was trolled by Richard Murphy, who was one of the authors of Corbyn’s original Corbynomics manifesto and is a supporter of modern monetary theory (MMT), but Labour stepped away from these monetary & fiscal policy  ideas after 2016.

I found the speech underwhelming, almost academic in its tone, which given the host may have been appropriate. I am certainly of the view that it is not a step away from or a rejection of McDonnel’s policies. If anything, the call for a ‘responsible fiscal framework’ based on ‘pragmatism, not dogmatism’ is an attack on Osborne and the politics of austerity and his remaining fans in the Tory party. She praised the independence of the Bank of England, but this has had its problems; it failed in 2008 and it was politicians that rescued the economy and the argument for its independence is based on the argument that politicians and their electors can’t be trusted to make the right decisions. If those decisions are painful, why should they? Independence is a way of baking in neo-liberalism. She was clear however that monetary policy is not enough to build a successful macroeconomy.

Over-relying on monetary policy levers for economic growth – as the UK has arguably done for the past decade – can lead to undesirable outcomes. Without accompanying fiscal action, low interest rates and gargantuan quantitative easing programmes can exacerbate inequality and concentrate economic gains in the hands of those who were already asset-rich, at the expense of those who rely on income from their labour. Risky indebtedness, especially combined with a highly unequal distribution of assets, can exacerbate inequality.

Anneliese Dodds

She spoke on fiscal policy; did she repeat McDonnel’s Golden rule? If she did, she qualified it by saying that borrowing to invest is only available because of the low interest rates. I have two things to say, firstly, I thought interest rates are a policy instrument, so if a government which is a currency sovereign wants them low, then low they are! Secondly, defining what is current account expenditure is not simple. Why is the education budget not considered an investment in human capital?

Is this as good as it gets? We are to be grateful that a Labour Shadow Chancellor still intends to borrow to invest and that monetarism is no longer part of Labour’s macro-economic tool kit.

On the upside she mentioned wealth inequality and aggregate low wages as constraints to growth but no mention of remediation which would be an effective wealth tax, a better minimum wage, reformed procurement policies and labour law reform. She also mentioned critically the growth in value of unproductive assets, such as art and wine; but surely this is the result of quantitative easing and a side effect of the increasing marginal propensity to save by the rich, again addressable by a wealth tax.

She announced a series of technical changes to the budget management process, all of which are good, but not particularly left wing and so likely to be nicked by the Tories. These consist of ensuring equality & carbon impact analyses on the budget and spending plans and placing a longer term time frame on the budget together with using more very long term bonds.

I also noted that while it seems that Labour is committed to a high wage, high skill economy, our reticence to talk about the means by which we select the short and medium term winners is not talked about; under Corbyn’s leadership, the new National Investment Bank was to be the instrument for seeding innovation and new jobs, but the means of funding it, and the way in which loans and grant were to be allocated remains unclear.

I submitted a question on this i.e. selecting industrial and innovation winners, which the moderator, Prof. Barbara Casu put as her first question; if Anneliese Dodds had wanted to talk in detail, this would have been in the speech, it wasn’t and her answer to Professor Casu’s question added no clarity.

It was a very technocratic speech, delivered in a technocratic style, presumably designed not to frighten the horses. It was a rejection of both modern monetary theory (MMT) and fiscal consolidation but not a manifesto for socialism.

ooOOOoo

The speech was introduced by the Dean of Faculty at CASS, Paulo Volpin, and the questions moderated by the Professor of Banking, Barbara Casu. Both would seem have been initially educated in Italy, I hope that the new immigration rules post Brexit will allow others to follow their route and come to the UK to teach.

I have written previously about Corbynomics on this blog and also on MMT on my bliog, and on my wiki, and on QMT in my obituary on David Graeber, on the blog. …