This is a first from the New Economic Foundation

ECONOMIST
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 (David.Powell@neweconomics.org)

Please send a completed application form and equal opportunities form in Word format to recruitment@neweconomics.org 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?

Sigh

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

Definition
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?

Facepalm

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.

Right….

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?

Sigh.

The lesson every college student should know

This is alarmingly self-referential but this is also the one major thing that every student should know. Everything else pales in comparison when we consider economics and economic stories:

Our world has, over your lifetime, undergone the greatest reduction in poverty and misery in human history. Heck, more people have been lifted out of poverty over that time than in all the rest of human history. That’s a story that every college student should know by heart.

And again:

If you care about people, the economic growth over the last generation is one of the most important stories in all 5,000 years of human civilization. Every economic issue discussed in our recent election cycle pales in comparison.

Or as I am quoted saying:

But bugger me, it is working. Ain’t that fucking grand?

Oh dear

So, then: who actually owns this place? That’s what I’ve set out to investigate with my blog, Who Owns England?. I started it last summer, post-referendum, determined that if Brexit really meant “taking back control of our country”, then I’d like at least to know who owns it.

So, Snowflake has been studying this subject for 9 months now.

Understanding who owns this country has been a utopian project for at least a century and a half. In 1872, in an effort to disprove radicals’ claims that only a tiny elite dominated the landed wealth of the nation, Lord Derby – a major landowner himself – asked the government to undertake a proper survey. The Return of Owners of Land – or “Modern Domesday”, as it became known – was the first comprehensive assessment of land ownership in Britain since William the Conqueror’s swag list after the Norman conquest. But far from dousing the demands of the radical land reformers, the survey lit a fire under the issue.

The Return showed that just 710 aristocratic individuals owned a quarter of the entire country. Popularised by the author and socialite John Bateman in a bestselling book, The Acre-Ocracy of England, who owned land suddenly became the talk of the town. But it wasn’t just the gentry keeping up with the Joneses; land reform had become the political issue du jour. After all, this was a time when you couldn’t vote unless you owned property; when tenant farmers were struggling under a severe agricultural depression;

After 9 months studying the subject our Snowflake still doesn’t know that county tenants in various forms were granted the franchise 50 years before and that some boroughs had had tenant electors all along.

Hmm. Sterling work there, eh?

And he’s not really quite right about Henry George being all that radical. Yes, of course an LVT is a good idea. But then feudalism ran on much the same idea, didn’t it?

So this is not Lake Wobegon

“In fact, we know most companies have below-average levels of productivity

Andy Haldane.

Firms which do not export are poor at raising productivity, which Mr Haldane believes may be because they are not as heavily exposed to foreign competition.

Similarly it can help if firms have foreign owners who are used to competing against the best the world has to offer.

Actually, the Treasury had this right in their Brexit document. Imports expose firms to that foreign competition and thus they up their productivity or go bust. This is one of the ways that imports make us richer….

So, Steve Keen then

A professor of economics has turned to crowdfunding to pay his salary because universities “no longer provide the time and freedom they once gave to original thinkers”.

Steve Keen, who is currently employed full time at Kingston University but expects to remain there next year on a quarter-time basis only, hopes to raise enough money via the Patreon website to enable him to continue his work as a public intellectual.

He is initially hoping to raise $10,000 (£8,232) a month, which he says would allow him to work full time on the third edition of his book, Debunking Economics, plus a series of papers, and to continue producing videos for his YouTube channel, which has more than 10,000 subscribers.

Well, good luck to him, obviously. Although there is that slight question of why he’s not using more traditional methods. Say, gaining an advance for that book on economics. Heterodox is a pretty successful area these days, I’m told that Ritchie’s last (not current) went into 5 figures in sales. Tim Harford is approaching a couple of million on his first. And Keen’s hardly unknown in that heterodox world.

He’s also a contributor at Forbes and I know very well that a decent living can be made there.

Fun comment at that link through:

One might almost suggest that he is motivated by self-interest. But mainstream economics has been debunked yes? What a puzzlement…

Denis Kucinich has it all sorted out

The privatization of the money supply is one of five major factors in poverty and inequality today, the other four being the emergence of the military-industrial-intelligence-congressional complex, the maintenance of the for-profit health-care system, and the erosion of public education through the creation of charter schools and the tremendous lifelong debt burden placed on those seeking higher education.

The clarity of the economic thought there is amazing, isn’t it?

So, if we returned to Congress creating money, imported the NHS system, cut the Pentagon, insisted upon only public schools and had free college then there would be no inequality nor poverty in America?

I’m absolutely certain that some of the poverty and inequality is caused by the public school system myself…..

Possibly, maybe, a comment upon Peter Navarro

Somewhere, in an alternative universe, there’s a PhD economist and university professor with head in hands, weeping bitterly, and wondering why he did it.

“I just wanted a gig right? Sell a few books to the rubes feeding their fantasies. Make a movie or two and meet hot actresses. And it worked, they lapped it up.

“But now the President of the Free World actually believes this dreck I’ve been schleppoing as that gig. He’s hired me to put all that nonsense into action.

“Why, why did I do it? Shoulda’ taken that Rolling Stone offer to investigate rape on campus. That turned out way less embarrassing”

I think this man does not understand

What’s so bad about wealth without labor? It depends on who owns the wealth. Under capitalism, wages are how workers receive a portion of what they produce. That portion has always been small, relative to the rewards that flow to the owners of capital.

Actually, I think he’s an idiot.

Think about it just for a second. The capitalist makes how much from each worker? No, not the aggregate income of the capitalist, but how much from each worker? More or less than the worker?

We can even check this at the aggregate level. The capital share of the economy is usually in the 20-30% range, the labour share in the 55-65% range (no, rightly they do not sum to 100%). And the capital share includes paying for depreciation.

Who is getting more of the pie?

Man’s an idiot. For it gets worse, next sentence is:

And over the past several decades, it’s gotten smaller: the share of the national income that goes to wages has been steadily shrinking, while the share that goes to capital has been growing.

That sentence linking to this research which states:

The OECD (2012) has
observed, for example, that over the period from 1990 to 2009 the share of labour
compensation in national income declined in 26 out of 30 advanced countries for which
data were available, and calculated that the median (adjusted) labour share of national
income across these countries fell from 66.1 per cent to 61.7 per cent.

The labour share is more than half the economy. Thus the workers cannot be getting less of the value add than the capitalists, can they?

These people are insane

The living wage in Bangladesh is €260 a month apparently.

No, that’s at market exchange rates. A country where GDP per capita is around €1500 a year should be paying a low end worker €3,100 a year before overtime.

At PPP exchange rates they’re saying that somewhere at about $3,300 per capita GDP should be paying $8,700 a year.

They’re just fucking insane these Clean Clothes people.

Entry level garment maker should, before overtime, get 150% of the salary of a high school teacher in the private sector.

Insane.

Anyone know the answer here?

How difficult is a gear system to make? No, not cars, bicycles?

Just a very simple 3 gear system to place upon a rickshaw. One thing I noted and did not understand – and despite explanations I still don’t get my head around – is that all of them were one gear only, direct drive I suppose. And it’s hellishly high physical effort that way.

Import duties mean that sending them in wouldn’t work (they’re insane, 300% and the like duties at times) but it’s a pretty simple technology isn’t it? They do, after all, already make the current chain, two umm, whatchamacallits front and back. A gear system is only making the same pieces but in different sizes and a system to switch between them.

Seriously, how tough is this? Labour’s damn near free, there’s a thriving set of workshops making the things in the first place. It’s almost doing the design work and then giving it out if not setting up a small shop to make them at local prices.

The thing that makes me think though is it’s such an obvious technological step. Thus the question isn’t whether it should be done but why hasn’t it already happened? Isn’t it worthwhile? Is it actually too expensive?

There’s a significant part of me thinking that some rich bloke with $50 k really should throw it at the problem. No, not to study it, to go and do it as an experiment. Design some, make some, start selling them (at those local prices, £5 tops for the system installed, £2 better). If it doesn’t work then it doesn’t work, we’ve learned something. If it does then great. There’re a lot more places where it would be of benefit too.

So, what is it that I am missing here? It must be something because I was only in country 48 hours and it puzzled me, better and more informed minds than mine must have pondered this before.