The Guardian reports this morning that:
Overall, during the year [2022-23] 12 million people were in absolute poverty [in the UK] – equivalent to 18% of the population, including 3.6 million children – levels of hardship last seen in 2011-12 after the financial crash.
Growth will not solve this. We know that wealth never has and never will trickle down.
Sigh.
Ignorant, ignorant, twat.
I heard someone burbling on about “absolute poverty” on R4 yesterday. I had got used to people moving the goalposts regarding relative poverty, and indeed studied under Peter “Poverty Millionaire” Townsend who did so much to put them on castors. But I didn’t realise that the term “absolute poverty” had followed suit. When Rowntree defined the term in 1900, it was to do with bare physical subsistence; any less dosh and you couldn’t get enough calories to stay healthy. Now, apparently, it’s income worth less than 60% of median income in 2011. Or somesuch. Who cares providing it sounds bad?
“income worth less than 60% of median income in 2011”
I started work decades before 2011 so there must be a fair chance I was in absolute poverty for a time. Yet it didn’t feel like it.
For reference:
“Absolute low income takes the 60% of median income threshold from FYE 2011 and then fixes this in real terms”. It’s all relative to an arbitrary 2010 income number.
Not really absolute then is it!
Plus there are about 20% fewer now than in 2010.
Those low income families are getting richer faster than average. Income increasing above inflation.
https://www.gov.uk/government/statistics/households-below-average-income-for-financial-years-ending-1995-to-2023/households-below-average-income-an-analysis-of-the-uk-income-distribution-fye-1995-to-fye-2023#low-income-indicators
Curious – anybody know if they’re using the usual tick of not including all the gov’t bennies that “poor” people get – in the U.S. that would be food stamps & housing assistance, etc.
I’d also note that studies routinely show that many (most?) of the “poor” are living much better lives than their official income would provide.
My theory is that c.15% of people are below 85 IQ. Such people will always struggle in an increasingly complex society that appears to require more and more brain power just to stand still, let alone ‘get on’. Thus you will always have c.15% of people living lives of grinding poverty, because regardless of what you do to help them they just don’t have the ability to cope with modern society.
@Jim
The 15% could always become economists?
I thought it had to be lies when I read the headline.
Indeed, ‘absolute’ has been redefined as ‘relative’ poverty. Humpty-Dumptyspeak.
I doubt anyone in the UK is in absolute poverty, except perhaps a few who choose it. Try Haiti.
The media seem to be reacting to their increasing irrelevance by doubling down on the lies and nonsense.
@jim
For clarification, the way IQ is calculated means 16% of the population definitely will be below 85 IQ. (& similarly 16% above 115 at the other tail end of the distribution).
Let’s assume that the statement was true. Then the logical conclusion would have to be that the political decisions in the years leading up to that period were bad? So we should have avoided lockdown and spending like drunken sailors?
At the global level absolute poverty means <$1.95 a day (in consumption as many are subsistence farmers). That's ~£565 per annum or getting about one hour's living wage per week. The local beggars get more than that, so whatever they're talking about isn't absolute poverty in any meaningful sense.
Does an immigrant family receiving free housing, generous regular cash payments and access to all state systems count as being in absolute poverty?
If so what is the correct term for those hundreds of thousands of indigenous Brits looking on in envy as any available housing is given to the newcomers?
Why is this measure lower Before Housing Costs? Sounds like we’re paying too much for our housing.
Growth will not solve this. We know that wealth never has and never will trickle down.
What’s the fun in ending poverty if you can’t coerce and confiscate?
You actually missed the rather more interesting post from yesterday – it deserves quoting at more length although as ‘Andrew C’ points out he is a man whose Greatest hits get extensive replay:
So why don’t I believe in growth?
Firstly, that is because the way we record growth does not in any way indicate the value of economic activity . As I used to say to students when I was talking about this subject, one of the easiest ways to deliver growth would be for everyone in a society to get divorced. The expenditure on legal fees and splitting up of households would significantly boost GDP, but the sum of human happiness would undoubtedly reduce.
You could argue who determines what constitutes ‘value’ and who determines it. I would say lectures around fantasies like ‘Net Zero’ and ‘MMT’ have no intrinsic value but am guessing he’s disagree. He remains the Uk’s pre-eminent manufacturer of Straw Men
Then there is the matter of distribution . Most measures of growth are not even related to GDP per head. Worse still, very few provide any indication as to who has enjoyed the benefits of that growth. The best example of the resulting nonsense is found in Ireland. Approximately one quarter of its GDP is made up of the profits of multinational corporations recorded in that country, none of which are attributable to any person living there. In that case, GDP growth in Ireland might bring no benefit whatsoever to its population as a whole, let alone any one Irish person in particular. More commonly, elsewhere, when we know that most GDP growth goes to those already wealthy, it is a particularly poor target for any society.
I am guessing my Irish colleagues at the Multinational bank I work for will be interested to know them being employed brings ‘no benefits’ to the country as a whole. I’m also visualizing the bars and restaurants that are around the office in Dublin are banking on the groups coming over on the boats, most of whom don’t drink alcohol or eat meat to keep them in business..
Then there is the sustainability issue. As a simple matter of fact, we cannot consume ever more physical resources on a finite planet without destroying its capacity to sustain us.
He really is the worst combination of Socialism, Green and Authoritarian I have ever seen – hence why he is often seen as a satire. It’s hard to imagine there is someone out there that embodies every loathsome characteristic in modern political discourse. Surely he can’t be real?
But most of all, I do not believe in growth, because I do not think that it is nearly as important as the goal of meeting needs.
We all know what needs are. We require clean air and water. Good food is essential for a good life. So too is warm shelter. And we need education so that we can integrate in our communities, and help advance their understanding.
The last sentence is particularly amusing. You need clean air, water, food and shelter – and maybe lectures from some fat bastard in an academic role – said noone ever.
And when the events that require a personal healthcare intervention also very largely arise as a result of randomised risk, it is always the case that the community as a whole is the agency best able to carry that risk, and so meet it. The same is true for so many other needs that have to be addressed if we are all to have access to a reasonable quality of life.
I don’t know what the f^&K the above means? Anyone?
Nothing about this denies the existence of wants. Meeting needs does not say that wants should not be fulfilled. But there is an order of priority here. The meeting of wants is not nearly as important as the meeting of needs.
Economics 101 – courtesy of that shining house on the hill
For those who think that this suggests that we will have a miserable existence, think about what it is that have created all the most valuable memories and experiences in your life. I can almost guarantee that none of them related to material consumption that satisfied a want. Almost all of them will relate to an occasion when you shared an experience with others, whether that was an intimate moment, or a family event, or a concert, or some similar experience, such as the celebration of an achievement. What all these things have in common is that each also relates to the meeting of the need, whether that be be for emotional, intellectual, or spiritual well-being.
So we had parties and concerts or events with no food, no drink, no gifts, no entertainment, but hey we had fun – indeed he seems to be saying ‘you will have fun’ or else.
Meeting those higher order needs is harder, however, if our material needs are not met . It is very hard to be joyful when you are hungry, cold, destitute, or are living in fear. Meeting need is, then, the precondition of happiness. Supplying the wants of some, at cost to meeting the needs of others must always, in that case, be a sub-optimal objective. GDP growth is, in that case, always the wrong goal in economics.
I’m thinking tents and soup kitchens all round might be the long term goal. I’m wondering if Murphy has seen the recent film ‘The Zone of Interest’ and based on his realization that ‘he could have been in Dachau’ sees himself in the Rudolph Hoess role?
That economics has moved far from its roots in moral philosophy is evident from its focus on growth . It needs to go back to its roots and talk about what is right. Meeting everyone’s needs is the right goal for economics. It is what any government should do. And that is why I will criticise any government that fails to achieve that, most especially if it does not even try to do so.
I would call this naive if the author was 16. Hearing such gibberish from a man within 5 years of pensionable age is frankly embarrassing.
Abject buffoon is being generous. A moron of unparalleled capacity for evil and malice is closer to the mark.
Excellent post as always VP, thanks for sharing his latest rantings.
That this delusional, unqualified fat fuck is allowed to talk to students continues to be a stain on UK education.
When he does these posts it seems like he’s writing in great prophet mode. Maybe he’s writing the Ely Manifesto or Mein Kampf II – this time I’ll get the neoliberals.
VP
I have only one observation to make on your typically peerless analysis:
man within 5 years of pensionable age
I believe Murphy is one or two months away from a state pension. I myself am four months away.
As I used to say to students when I was talking about this subject, one of the easiest ways to deliver growth would be for everyone in a society to get divorced. The expenditure on legal fees and splitting up of households would significantly boost GDP, but the sum of human happiness would undoubtedly reduce.
God help his students! He’s totally overlooked opportunity cost. Those lawyers bills & household costs would be coming out money that would be otherwise spent on something else. So in straight terms, the effect on GDP would be neutral. In reality of course, the inevitable disruption in people’s lives would reduce productivity.
Definitions of “poverty” which rely on a definition of 60% of median income are utterly ridiculous. You could establish a tax regime that would hammer the people in the middle income bands so push down the median without impacting either the high or low owners. The result would be a big drop in median income thus technically lifting “millions” out of poverty without putting an extra penny in their pockets.
BF
My bad – also illustrates where the Time goes – I thought he’d barely turned 60 and he’s 66! Jesus! His Wikipedia entry is live (had been disputed a few years back) so there’s no excuse!! I do find it amusing that he has so little pension provision he is still grifting at 66….
BiS
I don’t think he recognises opportunity cost – thinks it’s ’old Economics’ and doesn’t match the real world
@VP/BraveFart
Murphy is 66 and is now getting his state pension
https://www.t*xresearch.org.uk/Blog/2024/03/21/on-being-officially-old/
O/T
El Reg Q
Anyone remember the name of the Scottish guy at El Reg who built a robot lawnmower, did long distance P2P Wi-Fi and more?
I’m looking for the Robo Mower series and no success
Cheers
60% of median income in 2011 in today’s money. So, that’s around-ish £20,000. My last year of full-ish employment my total income was £19,000, this year it’s closing on £11,000. I’M IN ABSOLUTE POVERTY!!!!!!! I’m in such dirt-eating level of poverty I have a second home, until a couple of months ago I had a car, I have a dozen computers that I do fancy coding with, I splurge on going to computer club meets, I threw away and replaced a phone charger last month instead of repairing it, I keep buying second-hand books I can’t read faster than I buy them. WON’T SOMEBODY PLEASE SAVE ME!
And when the events that require a personal healthcare intervention also very largely arise as a result of randomised risk, it is always the case that the community as a whole is the agency best able to carry that risk, and so meet it. The same is true for so many other needs that have to be addressed if we are all to have access to a reasonable quality of life.
I don’t know what the f^&K the above means? Anyone?
The first part is :
If you have a random accident, society (I assume he means government) is the best insurer/best to pay for it.
The second I think is that other basic needs should also be provided by government to ensure everyone can live to the same reasonable standard.
Very Soviet.
At least, that’s my interpretation.
@Pcar,
I remember the story about the microwave wifi. Author was Bill Ray:
https://www.theregister.com/2010/12/03/not_spot_diary/
@Silverite
Many thanks
I’m still looking for where Friedman, Hayek, Stigler, Sowell, Bob Murphy or any rightist economist claimed that wealth “trickles down”. The left attack it for claiming that it doesn’t do what the right never said it would do in the first place.
@Esteban: These figures are income after council tax, income tax and NI are deducted and include state benefits. Interestingly, to me at least, they’re also net of occupational pension contributions, which makes sense as pension payments are counted as income. They don’t appear to be net of private pension contributions, though private pensions are counted as income. See notes here – ONS is generally quite good at explaining precisely what they are measuring/estimating.
Chernyy Drakon
As ever you are ‘The man’ in every sense. That would make sense – for him, ‘the community’is synonymous with the state. I have often said he uses North Korea as A model. He’s a bit corpulent and too tall to be inconspicuous amongst the coterie of military men around Kim Jong un but that’s certainly where a government with any guts would be sending him – on a one way ticket.
Even ‘relative poverty’ is too mealy mouthed, perhaps intended to sneak some do-gooding past the audience. Relative to what? What is included?
Call the figure ‘Arbitrary Poverty’ and the hand-waving nature of the measure is more visible even if the ‘value’ is not.
@Emil – “Then the logical conclusion would have to be that the political decisions in the years leading up to that period were bad?”
No. The fact that you get a bad result after doing something is not sufficient to conclude that you would have got a better result by no doing that thing. You might have got an even worse result.
@John – “what is the correct term for those hundreds of thousands of indigenous Brits looking on in envy”
I believe the modern term is “entitled”.