Worth starting out with a lie then?

I am reposting this from the Commonspace website, which is mainly targeted at a Scottish audience, who published it yesterday afternoon:

ECONOMIC EXPERTS Professor Richard Murphy

Hmm. And in more detail:

Murphy argued that there are other measures which would better reflect how well the economy is doing in tangible terms: “We now know that GDP is a poor indication of well-being. In particular, the share of wages in GDP has been falling steadily over time whilst that of profits has been rising.

“It is the increase in profits that have pushed up UK GDP as a whole – reflecting the activity of the City of London – whilst real wages have been stagnant or falling when adjusted for inflation. If you want to know what is really happening in Scotland look at employment data, average wages and changes in them, and how this data compares to the UK.

Ah, yes, the economic expert. Wages aren’t the important part, the labour share is. Further, there’s no evidence at all – that we’ve seen at least – that the profit share is rising compared to the labour share. There is evidence that the labour share is falling as a result of a rise in the mixed in come and subsidies and tax share.

But then that would require actually understanding the national income accounts, something that an economic expert appears not to need.

6 comments on “Worth starting out with a lie then?

  1. I am reposting this from the Commonspace website, which is mainly targeted at a Scottish audience, who published it yesterday afternoon:

    ECONOMIC EXPERTS Professor Richard Murphy

    Ah, the land of my ancestors. Proof positive that it was only the dim ones stayed in the Old Country.

  2. @ Tim
    Please start calling it “labour share” in quotation marks since so much of self-employment income is just disguised wages from jobs whose values are too low for an employer to pay NMW plus NI. It’s time someone did an analysis to show what an adjusted “labour share” would be.

  3. Dennis,

    Commonspace is funded by Commonweal, who are an outcome driven evidence generator for the outcome of “independence by any means”.

    Anything not directly to do with independence is usually linked to the most wooly-thinking examples of idiot socialism. Almost a corporate reverse-Mr Ecks.

  4. He says this

    “Murphy argued that there are other measures which would better reflect how well the economy is doing in tangible terms: “We now know that GDP is a poor indication of well-being. In particular . . .”

    And the goes and uses GDP to say

    “. . .the share of wages in GDP has been falling steadily over time whilst that of profits has been rising.”

    is an indicator of poor well-being.

  5. So Snippa is saying that GDP growth figures can be seriously misleading, and saying they might not really matter.
    With a little help from Sergei and Larry I can find taxresearch posts saying:
    “GDP growth’s falling: the economy’s a mess”
    “Growth was 50% better under Labour”
    and
    “As the GDP data makes clear, if there is an economic plan it’s definitely not working”
    I suspect that in 2015 UK GDP was calculated the same way as Scottish GDP is today, but what do I know, I’m not even worth Labour’s national living wage so shouldn’t have a job.

  6. “Growth was 50% better under Labour” – but only for insolvency practioners and tax consultants (lawyers and accountants, such as Murphy, Deeks, Nolan) who advised people how to avoid tax.
    “Real” Growth under New Labour was overstated by c.1% pa due to an error in the calculation of RPI, understating inflation by c.1%, introduced in the autumn of 1997 and only corrected in autumn 2010 [Source “Significance” published by the Royal Statistical Society and the American Statistical Association].
    For some reason, ONS, while recognising that there had been an error, chose not to recalculate and restate historical RPI data.

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