The shift in the share of GDP from labour to capital has been dramatic over the last few decades and now amounts to maybe hundreds of billions a year.

That’s the shift that hasn’t happened then? A shift away from labour, yes, but the shift has been toward government – increased VAT and NI being the major suspects.

The reality is that this shift has not happened so much within employment generating business, but within the non-employment generating (in the main) parts of the economy. They are the rental economy, the IT economy (where software rental is now massively extractive) and in banking, where financial services have sucked the financial resources of many.

Software as a service is extractive now, is it? It’s not just the absurdity of it it’s where in buggery did he get the idea from in the first place? What is it that he’s misunderstood to make that statement?

18 thoughts on “Oh Dear”

  1. I suspect he’s forgotten, or never knew, that “extractive” is an economic term relating to resource exploitation. He’s just using the term in his context of wealth being shifted (extracted) from labour.

    I doubly suspect it’s because he’s personally finding it tough to keep using software he started renting during better times.

  2. I’m not sure how anyone who suggests that the ‘rental’ economy, the ‘IT’ economy and the ‘Banking’ economy, don’t generate employment when giving the public sector (by far the biggest extractor of resources for non -productive purposes) a free pass expects to be taken seriously. His knowledge truly is without beginning

  3. I find even intelligent people, unless they’ve actually looked at economics, believe that money is a zero sum game between labour and capital and that’s that. It’s probably folk Marxism, which seems to be even worse than the real thing.

  4. God only knows what he’s managed to completely fuck up now, but software was always “as a service” in terms of the licensing, even if you go back to the bureaus and Ye Olde Lyons Tea Shoppe.

    I had some (quite old) notes somewhere about oddities in software pricing; if I remember, price signals are screwy, desktop generic applications hide an awful lot of TCO, open-source is much worse in terms of importing unknown risks. And licences can be viewed as similar to employment contracts, which can be nicely vague – “any other duties as required form time to time”, that sort of thing.

  5. Yes, software —and even hardware— has always been a service. Until the 1980s IBM were still leasing rather than selling hardware. Thus making for conditions such as, you must buy your punched card stock from us and have our service contract.

  6. Nearly all “owned” software is just a license to use within limitations, but the reality for users is that it’s theirs to use as long as they have a computer that can still run it. Rental software literally stops working if you don’t keep paying, and is a completely mad option for anyone who might not be able to maintain a suitable income. Quite a lot of people have suddenly found themselves in that situation.

  7. Murphy and other lefties can *always* claim there has been a shift from labour to capital “over the last few decades” if (is that “if”, usually it’s just “because”) they start from the Wilson/Healey nadir when the share of GDP going to capital was negative.
    The answer should always be – “So you want to go back to the mass unemployment under Ramsay MacDonald then?”

  8. I’m trying to think of software he would be ‘renting’ and I’m struggling. Anti-virus software perhaps, £30 for two years.

    He is welcome to install Open Source if he wants, it is out there.

  9. Speaking of the “extractive industries”, I wonder what view donors to charities and taxpayers and other funders of third sector bodies would have if they were fully aware of parasitic grifters like Murphy sucking funds from them, sometimes by use of artificial and abusive arrangements to preserve limited liability?

  10. Rob – Office would be the biggie. Adobe Creative Cloud stuff – although that’s extremely unlikely, I’ll admit.

  11. Rob/Ducky

    Between you I think you have identified the two areas he’d be looking at I think. IF he is using more expensive software packages then neither his website nor anything else he ‘produces’ shows evidence of that!

  12. I paid for Office 2000 over 15 years ago, and it’s never asked me for another penny, and it just keeps working. Ones and zeros don’t wear out.

  13. VP – Nah, he’s just learnt a new word this week, and is trying it out.

    There’ll be more to come, as it’s only Tuesday, after all.

  14. If he’s using something other than ‘home’ version of windows then there’s also licensing for that.
    My guess would be that as he’s using stuff as a business user he can’t just rely on the free versions so is having to pay to upgrade for Zoom etc and none of this ‘professorships’ includes supplying with organisational accounts or limits what he can do with them so he can’t use them for other pieces of work he’s doing

  15. Tim,
    Do you have the data to show the increase in share of gdp to government?

    It might shut Murphy up!

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