Proof the robots will make us richer

Had an email asking me for some thoughts on this. So, here’s the proof that the robots will make us richer in aggregate.

GDP is production, consumption or income. The sum of all of them in the economy. And by definition they are equal to each other. Production equals consumption equals incomes.

And I think we all agree that the robots are going to increase production, yes? Thus they must increase incomes and consumption, cannot be any other way.

Sure, that still leaves the question of the income distribution but it’s market competition which leads to consumers getting the bulk of that.

Pound plunges!

The Guardian’s got a picture of the exchange rate plunging as we await May’s announcement – perhaps of a snap election.

Plunging I tell ya. All the way from 1.259 to 1.252 or so.

Film at 11.

Nice to confirm it of course

Men who were born after the Black Death were taller than men who lived through the Industrial revolution, a study revealed.
The height of men has fluctuated throughout history, according to scientists who analysed 4,700 skeletons over the last 2,000 years.
They found that men were shorter in the Dark Ages than they were during the Roman occupation.
Other peaks were found after the Norman Conquest in the 11th century and between the 1400s and the early 1650s.

But really this is just Malthus all over again.

Richer times mean children are better nourished. This shows up as their being taller – but also as more surviving to have children. Population increases and per capita living standards decline to subsistence once again. At which point adults are shorter again.

Twats they are again

A leading thinktank has urged the government to spend billions of pounds helping poorly skilled workers in the less prosperous parts of the UK cope with the threat of the looming robot revolution.

The left-leaning Institute for Public Policy Research (IPPR) said in a new report that those most at risk from automation were concentrated in low-skill sectors of the economy and were least able to adapt to change.

More than 10m jobs in the UK – a third of the total – are thought to be at risk from automation within the next two decades and the IPPR said the scale of the challenge required urgent action.

Some 10% of all jobs are destroyed every year and then recreated. There#s a technology shift in each such change.

10 million gone in 20 years is is less than the 60 million change we expect anyway.

I wonder if Owen has ever thought about this

It’s difficult to disentangle this result from the fact Sheffield is the low-pay capital city of the country: its average hourly rates are 10% below the British average.

Is the cost of living in Sheffield 10% lower than the national average? More than that perhaps?

I’d think it entirely possible, using some local area PPP adjustments, that many areas of the south offer less disposable income after housing costs….

In cities such as Sheffield, low-paid and insecure jobs have filled the vacuum instead. A young woman speaks to me as she pushes a pram. She was a duty manager at a supermarket. Even though she had many responsibilities and “worked all the hours God sent me”, she languished on the minimum wage. They make a lot of money, these big supermarkets, I say. “Yes – off people like me, working their arses off.”

What, 3%, 4% of turnover?

Cheryl is right, of course. The research on immigration does suggest it can suppress wages at the bottom end of the labour market.

Without an inspiring message from the left, the danger is that backlash against immigrants will grow. Blaming foreign workers for shrinking wages is, after all, a simple and easily digested message.


You’re not really understanding economics matey, are you?

Progress has been made – fur farms were banned in the UK in 2003, and selling cat, dog and seal products is also illegal. But imported fur from other species, including fox, rabbit, mink, coyote, raccoon dog and chinchilla, is still allowed. And this week an investigation by Sky News found that supposedly “fake fur” products, including gloves, hats and shoes, at leading retailers actually contain real fur from cats, raccoon dogs, rabbits, mink and fox.

This discovery has upset shoppers who thought the fur they were buying was synthetic. Never mind the labels, they assumed the cheap price tags alone meant the fur couldn’t be real.

If you restrict the markets for real fur then it becomes cheaper…..

Oxfam are just amazing

Companies were able to lower their rates in part by stashing $1.6 trillion offshore and relying
on a massive network of 1751 subsidiaries in tax havens. This marks a $200 billion increase
in funds stashed offshore and 143 additional subsidiaries in tax havens disclosed by these
companies since Oxfam’s 2016 report.

So, the stashing is $200 billion a year.

Rigged tax rules cost Americans approximately $135 billion each year in corporate tax
dodging and sap an estimated $100 billion every year from poor countries.

$200 billon in stashing a year causes $235 billion of tax revenue losses each year.

They’re not even reading their own shit, are they?

The Doughnut Economy

George Monbiot is very taken with a new book, the Doughnut Economy.

So what are we going to do about it? This is the only question worth asking. But the answers appear elusive. Faced with a multifaceted crisis – the capture of governments by billionaires and their lobbyists, extreme inequality, the rise of demagogues, above all the collapse of the living world – those to whom we look for leadership appear stunned, voiceless, clueless. Even if they had the courage to act, they have no idea what to do.

The most they tend to offer is more economic growth: the fairy dust supposed to make all the bad stuff disappear. Never mind that it drives ecological destruction; that it has failed to relieve structural unemployment or soaring inequality; that, in some recent years, almost all the increment in incomes has been harvested by the top 1%. As values, principles and moral purpose are lost, the promise of growth is all that’s left.

Richer countries tend to have better environments, unemployment is falling, so is global inequality. The really remakable thing about the last 40 years of economic growth is how pro-poor it has been…..yep, reality ain’t getting a look in there, is it?

We cannot hope to address our predicament without a new worldview. We cannot use the models that caused our crises to solve them. We need to reframe the problem. This is what the most inspiring book published so far this year has done.

In Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, Kate Raworth of Oxford University’s Environmental Change Institute reminds us that economic growth was not, at first, intended to signify wellbeing. Simon Kuznets, who standardised the measurement of growth, warned: “The welfare of a nation can scarcely be inferred from a measure of national income.” Economic growth, he pointed out, measured only annual flow, rather than stocks of wealth and their distribution.

And absolutely everything in the book is standard economics. It’s a slightly different emphasis, yes, but that’s all it is. Sure we should be using NNI not GDP and so on but it’s a tough thing to calculate and it takes some years. Thus as a management tool it’s not all that good. Why not value household labour as well? We know how to do that, it’s at minimum wage. Yes, externalities exist and we’ve known for a century how to deal with them, Pigou Tax.

It just ain’t different.

But the opening chapter is absolutely glorious. She notes that since 1990 extreme poverty has halved around the world – you know, this neoliberal globalisation thing, the greatest reduction in human misery in the history of our species.

Therefore, and it is therefore, we must entirely change economic policy.


Unfair, eh?

An Italian court on Friday banned the Uber app, saying it contributed to traditional taxis facing unfair competition, local media reported.

We’d better get back and ban that Spinning Jenny, most unfair to hand spinners that was.

Could someone define fake news for me?

The billionaire founder of eBay is to donate $100 million to fund investigative journalism and to combat the spread of misinformation online.

Pierre Omidyar, one of the world’s richest men, aims to tackle the “global trust deficit” by giving money to projects around the world.

The funds will be dispersed over the next three years through the Omidyar Network, the philanthropic investment firm which he and his wife founded in 2004 and which has committed more than $1 billion to good causes.

Perhaps a red flashing cop light beside an article which contains any of the following lies?

The minimum wage does not cause job losses.

Corporations should pay more tax.

Global inequality is rising.

US child poverty is over 20%.

We have widespread poverty in the UK.

17% of UK families cannot afford enough food.

Just to give the answers

Yes, it does, but low ones cause low job losses

Corporations never bear the economic burden of any tax

Global inequality is falling, as is global poverty

That’s measuring child poverty before all the things we do to alleviate it. The correct number is 2 or 3% or so.

We have no poverty at all in the UK, we do have relative poverty, or as it is otherwise known, inequality.

The way the claim is presented it’s that 17% are in food poverty, missing a meal etc, at any one time. Actually, the statistic is calculated as anyone in a family or household who was in danger of having to skip a meal in the previous 12 months though lack of cash.

But then there’s no one out there willing to put up the cash to fight those sorts of lies, is there?

On the subject of economics from the New Economic Foundation

This was a single instance of a wider phenomenon occurring in the US under Roosevelt’s New Deal, which was on one level a grand political exploitation of new technologies. FDR sought to rebalance the economy and rescue the country from mass unemployment through public works, which were only made possible by rapid technological advances – not just the advent of electricity, but the engineering techniques associated with highway-building, hydroelectric dams and other major infrastructure.


As Keynes himself pointed out the unemployment was caused by advancing technology in the first place.

And as to the underlying idea. We should be progressive by protecting Britain’s professions?

This is a first from the New Economic Foundation

As an Economist in our team you will be a key part of building the case for a new economy and should share our outlook and priorities . You could be working on projects in housing, finance and monetary policy, environment or any other area of our work. You should also be looking to deepen and expand our work and coming up with original ideas as to how to do so.

You will be able to write accessibly for both policy and general public audiences and be comfortable representing NEF in external networks and in the media.

If you are interested in joining us and believe you can help us to shape the economy to enable real change to real people we want to hear from you.

If you would like an informal discussion, please contact David Powell on 0207 820 6362 (

Please send a completed application form and equal opportunities form in Word format to by 9am, Monday 24 April 2017.

Interviews will take place on Thursday 4 May 2017 at our London office.

Be the first time they’ve had someone on the team able to tell their arse from the economy, won’t it?

So, it’s starting, is it?

South Africa’s rand tumbled on Monday afternoon after credit rating agency Standard & Poor’s downgraded the country’s the credit grade to junk status, saying a cabinet reshuffle by President Jacob Zuma last week had put fiscal and growth outcomes at risk.

The agency said the downgrade reflected its view that the divisions in the African National Congress (ANC) government, especially the firing of respected finance minister Pravin Gordhan, who was replaced by an ally of Zuma last week, have put policy continuity at risk.

Or continuing perhaps.

Unlike some around here I’ve never been worried about black power. But putting liberation communists in charge always looked like a bad idea.

Oh dear, oh dear

The Observer manages to get things rather the wrong way around here:

Setting aside the reasons why countries all over the world mostly export to their neighbours (it’s cheaper, and there are shared histories and cultures) and try to do so within free-trade blocs (profits are higher when tariffs are low and regulations are harmonised). let’s consider the question of how fat and lazy business has become. Is it ready to accept Fox’s challenge?

One way of making an assessment is to examine the health of exporting hubs around the UK, and the readiness of employers and their workers for the task ahead.

OK, let’s do that:

As an economy, the West Midlands should be revving its engines quietly in readiness for Brexit. But the ONS figures show the region has fundamental weaknesses that few would expect, especially when it lays claim to have the UK’s second city at its heart, with hi-tech manufacturing to rival the German Ruhr.

One basic measure of economic readiness is the percentage of people in employment. The national average is 73.9%. Of all the combined authorities, the West Midlands has the lowest at 65.1%. It also comes at the bottom of the pile on the ONS measure of labour productivity, with output per hour lower than in Manchester, Liverpool and the rest.

One explanation for the low productivity figures might be found in the education sector, where the West Midlands achieves another low. According to the ONS, it has more than three times the average share of population with no qualifications, and a relatively low proportion of residents with a degree-level qualification.

The West Midlands, a centre for traditional engineering and manufacturing industries, also has the worst female employment rate of the six authorities. Whatever the reasons, the lack of female participation in the workforce has a significant knock-on effect on average household disposable incomes, which are also the lowest of the six combined authorities.

Low female labour participation, low productivity, low labour force participation generally and low productivity.

Excellent! Not, as The Observer concludes, oh dear, this means it can never work.

We have unused and underused resources. This means we can employ them and ramp up production. We can use the usual Keynesian macro thinking if we like. The whole point of which is that when we’ve un or under used resources then we can stimulate the economy to use them. That Brexit depreciation is such a stimulus, Hoorah!

We can also analyse using micro principles. We can get economic growth from more inputs or from having better inputs and thus more productivity. We’ve that unused labour so we can use more of it, we can train it too, meaning we can make it a better input.

Precisely the things the Observer are using as reasons why it won’t work are the reasons why it’s easier than if we had entirely full employment of highly trained people already.

And this is just absurd:

But that says much about the failures of policymakers. It says that Birmingham, as the region’s driving force, wasted the Millennium money thrown at it by Gordon Brown in the 10 years before the financial crash in a way that Leeds, Newcastle, Manchester and Liverpool didn’t. Sadly, Birmingham’s leaders were unable to construct a living city with a public transport system that knitted the region together.

And it shows that the mayor will need more money than is currently on offer, especially when another 10 years of austerity was the main course on Philip Hammond’s budget menu.

You mean the people proven to be spendthrift wastrels should therefore get more money?


Take the pharmaceutical industry. Companies like GlaxoSmithKline and Pfizer regularly unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture medications that resemble what we’ve already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers, and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the result of a tiny pinch of innovation and fistfuls of rent.

And we deliberately engineer it this way too you idiot.

Depending upon who you believe it costs $800 million to $2 billion to get a new drug approved by the FDA. If there were no method of extracting a rent from having done so no one would do so. Thus we create patents in order to produce that rent.

There are other solutions of course – blowing up the FDA is one of them. But to complain about the rent when it’s deliberately engineered into the system because of the public goods problem is, well, it’s stupid, isn’t it?

This is rather the point

EU legislation has not assisted the sleepers in their battle with the planes and high-speed trains. Particularly unhelpful was 1995 Railway Directive 95/19, which required train operators to pay “track access charges” to infrastructure providers. The measure shone a harsh spotlight on loss-making services – such as the sleepers – raising the question: “Are they worth paying the charges?” The answer has frequently been: “No.”

Which is why we do such things of course. If something is making a loss it is making us all poorer. More value would be created by the same resources being used to do something else. Thus why we uncover the pricing of things, in order to work out what we should stop doing because it’s making us poorer.

Just morons, morons

Sustainable degrowth is a downscaling of production and consumption that increases human well-being and enhances ecological conditions and equity on the planet. It calls for a future where societies live within their ecological means, with open, localized economies and resources more equally distributed through new forms of democratic institutions. Such societies will no longer have to “grow or die.” Material accumulation will no longer hold a prime position in the population’s cultural imaginary. The primacy of efficiency will be substituted by a focus on sufficiency, and innovation will no longer focus on technology for technology’s sake but will concentrate on new social and technical arrangements that will enable us to live convivially and frugally. Degrowth does not only challenge the centrality of GDP as an overarching policy objective but proposes a framework for transformation to a lower and sustainable level of production and consumption, a shrinking of the economic system to leave more space for human cooperation and ecosystems.

What in buggery do they think the economy is if it isn’t human cooperation?


My learning disability doesn’t mean I should be paid less. I’m furious
Ismail Kaji

Of course we should not make fun of the afflicted. That is reserved for those who are stupid and or malevolent like Spud, not those who are truly afflicted. But…

Less than 6% of people with learning disabilities who are known to social services are in employment, but many more can work, and want to do so.


The biggest barriers we face are negative attitudes and the idea that learning disabled people are not capable of work, or that it will be too time-consuming to employ them, or it will cost the company a lot of money.

So reduce one of those barriers maybe?

Below the line we get some marvelous Graudianista:

No one should be paid less due to any form of physical and or mental health disability or illness

Rent/ mortgage,food,transport etc etc etc is the same price for everyone or have I missed something?