The Media & Mrs May’s Manifesto Mayhem

It is already apparent the BBC are going soft on the Conservative/Mrs May manifesto.

  • No in depth questioning on what the level of means testing for winter fuel allowance.
  • No in depth grilling on why they’ve basically ditched the Dillnot report on social care funding.
  • No in depth attack over seven years of failed immigration pledges.
  • No mocking of the immigration job tax for those needing employees outside the EU (coz we were supposed to be welcoming these!)
  • No constant questioning as to why students are being included in immigration cap no numbers and promises
  • no dissenting voices over the cuts to pensions.
  • hardly a whimper about cutting free infant lunches.

And!

  • nothing about there being not one single costing in the manifesto whatsoever!!!

Nope. Instead, were hearing a lot about “difficult decisions”, “balancing acts”, “keeping brexit voters happy”, “being bold” and so on.

A little different to how the reporting and interviewing around Labour’s manifesto was conducted.

But then, I’m told I’m just a paranoid lefty for expecting even handed and impartiality from the BBC and media.

The Labour Manifesto and the Myth of “Free Stuff”

I keep hearing and seeing  people saying “Labour just want to give everyone free stuff.” Let’s briefly take a look at this.

• Good Education for all benefits all of us and leads to greater prosperity for everyone;

• well funded health ensure that all of us benefit, being happier, more productive, and living more fulfilled lives. That benefits everyone;

• fairer benefits mean that if sickness, disability and unemployment should come, no one will be left destitute. We all benefit;

• higher minimum wage means more money to spend in the economy. We all benefit by this increase. 100 years ago even Henry Ford knew that if workers are paid more, they buy more of your goods. More jobs;

• mass machine automation is coming: we need to rethink how we structure work, payment and society. These will be in so called middle class jobs too, disrupting everything we know about how work, earnings, profit and reward are understood;

• water companies being owned by the regions means the profits get ploughed straight back in to those communities. Everyone benefits.

And so on.

The phrase “Free stuff” is utter nonsensical term. Everyone pays in one form of another, everyone benefits. If “free stuff” were even a true statement, then how would one describe the situation in Norway, Iceland, Denmark, Sweden, Germany and so on, where tax is higher, public services and ownership so much better provided for, and quality of life, productivity, and satisfaction is very high.

What a basket case.

Labour will enact a Robin Hood Tax on financial transactions

Modern “neoliberal” capitalism requires constantly increasing velocity and atomisation of transactions. A #robinhoodtax at 0.5% is nominal and fair. Capital cannot remain stateless and boarderless.

Consider what VAT is: a regressive tax on the transaction of purchasing goods set at 20% (with exceptions). 0.5% on financial transactions is fair and reasonable, will raise £26bn.

There is already a transaction tax, it’s just the proceeds for this go to the big financial institutions. Every transaction has a cost. That’s how modern capitalism works. 0.5% per transaction is effectively a micro payment. Remember these banks make hundreds of billions, and caused a world wide financial crash. It’s about time we stopped being so deferential to them and make capital contribute to the security of the societies they effectively leech off.

Workers, wealth and tax

Today the Telegraph called those in £80,000 and above “workers.”

Now, whilst many of them do work, the telegraph aren’t trying to invoke any sense of that understanding. What they are doing is a typical right wing “reframing” of language. The “working class” and “working people” has always been understood to include mainly blue collar and lower paid jobs, where as someone on £80k or above would be very comfortably “middle class” and likely to be in mainly high management, directorships, and successfully “entertainment” roles.

The reality is that this group of people have received thousands of pounds in tax cuts over the last 6 years, AND seen their income rise whilst the rest of the population has seen their income frozen and effectively going backwards, losing 10% of their value in the same time.

Taxation is not just about paying for things, it’s also a significant way of balancing an economy, redistributing money and wealth, and by doing so actually works to the benefit of the whole of society.

A different perspective on modern economics (revised)

Part of an ongoing “Economic Myths Debunked” series.

Economics is often portrayed as being independent, devoid of value judgements, and immune to ethical or ideological influence. Over the past thirty years our politicians and policymakers, many economists in the media, and most economics textbooks have encouraged us, in the words of Harvard professor Dani Rodrik (2009),  “to think of economics as a discipline that idolizes [sic.] markets and a narrow concept of (allocative) efficiency.”

The mainstream view

The general public, media and indeed economic students have all been subtly indoctrinated with an emphasis on demand and supply (also called the model of perfect competition) as the central theoretical structure of an immutable reality: “…a world of perfect markets in which given resources are allocated as if by an invisible hand in a way that maximizes[sic.] the value of total production. The belief that this model approximates how markets operate in the real world is often referred to as ‘market fundamentalism’.” (Hill and Myatt, 2010, p.4)

[It is essentially a laissez-faire view. The core belief is that markets are efficient and that governmental attempts to ‘interfere’ with markets necessarily create inefficiencies. (ibid, p.264) They give the impression that markets generally are sufficiently competitive that (for the most part) they lead to efficient outcomes; that minimum wages and unions are harmful to workers themselves; and that government regulation is either ineffective or harmful. (ibid, p.1)]

Further still, most are under the impression “that economics is a value-free science; that economists have an agreed-upon methodology; and they know which models are best to apply to any given problem.” (ibid, p.1)

Most of this is myth.

The reality

“Value judgements pervade economics and economic textbooks. These value judgements reflect a social and political philosophy and can be called an ideology or world-view. It is one that textbook writers are implicitly attempting to persuade the reader to accept.” (ibid, p.1)

The point is not so much to claim that this ideology is wrong, but simply to point out that it exists, and that there are always alternative views that one ought to consider. Hill and Myatt agree with Rodrik (as quote in the first paragraph) that the typical text offers a view that ‘idolizes markets’ – “usually not in a crude way, but in a subtle way through its choice of themes, and through its emphasis on demand and supply (also called the model of perfect competition) as the central theoretical structure.” (Hill, 2010, p.4)  Australian economists Prof. Steve Keen goes further, implying that because the values that pervade the textbooks are so subtly woven through they present themselves as  neutral, yet only by absence of alternative views. A whole generation now exists that thinks  “neoclassical economics [is] economics.” (Keen, 2011, p.9)

Neoclassical, mainstream, economics  presents hypotheses and policy prescriptions with surprisingly little or no supporting evidence, or (worse) it ignores inconvenient contrary evidence. Indeed, what neoclassical economists don’t admit is that even their fundamental “totem of supply and demand” (as Keen refers to it) is based on an initial assumption that would leave the most ardent supporter of “free-markets” with their jaw planted firmly on the ground.

“Scientists … check their theories and models against observations of the real world at every opportunity. The central theory of the currently dominant stream of economics has not been properly checked against real economies for over a century. If it had, it would long-since have been abandoned.” (Davies, 2012)

Particularly, many  supporters of market fundamentalism, the modern free-market theory (or academically, the neo­clas­si­cal theory), are actually ignorant (or misinformed) about the foundations this theory is built upon and the assumptions of its economic models. It comes as a shock for many when they find how little this widely revered theory has to do with science and reality in the real world. When people who seem to vehemently support ‘free-markets’ start stating how they think they work and the basis of their understanding, they don’t realise that they ironically showing how much they don’t support market fundamentalism!

In 2000, a group of economics students in France circulated an open letter to their professors declaring ‘We wish to escape from imaginary worlds!’ and deploring the ‘disregard for concrete realities’ in their teaching.  They asked for less dogmatism and more pluralism of approaches. Since then, petitions and open letters have appeared in the United Kingdom and in the United States. (For details, see www.paecon.net.)

Forthcoming blogs

My aim with the forthcoming blogs on economics topics is to open up your views on economics; to see things in broader terms; to understand the differences and similarities in the many schools of thought outside of the current neoclassical dominated world view and hopefully to think more critically when presented with economic ‘facts’ and ‘discussions’ by the media, economists,  and politicians.

Contradictory to what neoclassical economists insist, economics is not an immutable science or natural force with set physical laws; it is socially and philosophically driven, morally adaptable and is fundamentally controllable. The “free market” as is defined by the political ‘right’ and neoclassical economics is not natural or inevitable, and does not exist outside government. Markets aren’t “free” of rules; the rules define them.

I want you to imagine how you believe economics should look and behave; and then be an influence that can make that change. In the words of Akerlof and Shiller (2009, p.173):

‘There is then a fundamental reason why we differ from those who think that the economy should just be a free-for-all, that the least government is the best government, and that the government should play only the most minimal role in setting the rules. We differ because we have a different vision of the economy.’

Postlog: Myth of the ‘free-market’

ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley, http://www.huffingtonpost.com/robert-reich/free-market_b_3935173.html (extract)

Who should decide on the rules [of the ‘free-market’], and their major purpose? If our democracy was working as it should, presumably our elected representatives, agency heads, and courts would be making the rules roughly according to what most of us want the rules to be. The economy would be working for us; we wouldn’t be working for the economy.

Instead, the rules are being made mainly by those with the power and resources to buy the politicians, regulatory heads, and even the courts (and the lawyers who appear before them). As income and wealth have concentrated at the top, so has political clout. And the most important clout is determining the rules of the game.

Not incidentally, these are the same people who want you and most others to believe in the fiction of an immutable “free market.”

If we want to reduce the savage inequalities and insecurities that are now undermining our economy and democracy, we shouldn’t be deterred by the myth of the “free market.” We can make the economy work for us, rather than the other way around. But in order to change the rules, we must exert the power that is supposed to be ours.

Bibliography and Cited Works

  1. Akerlof, G. A. and R. J. Shiller (2009) Animal Spirits: How human psychology drives the economy and why it matters for global capitalism, Princeton, NJ, and Oxford: Princeton University Press.
  2. Davies, G. (2012) The nature of the Beast – How economists mistook wild horses for a rocking chair, Ebook, Online: Geoff Davies.
  3. Hill, R. and Myatt, T. (2010)  The Economics Anti-textbook: A critical thinker’s guide to microeconomics, Black Point, Nova Scotia: Fernwood Publishing.
  4. Keen, S. (2011) Debunking Economics: The naked emperor dethroned?, London and New York: Zedbooks.
  5. Rodrik, D. (2009) ‘Blame the economists, not economics’, Guatemala Times, 11 March, available at www.hks.harvard.edu/news-events/news/commentary/blame-the-economists

If you have an area of economics, or political philosophy that you would like to see discussed in these blogs, or questions that you feel need to be addressed, please let me know via the comments below.

Tory criticism of UN report on UK social housing policies

You would be hard pressed to have missed the controversy that Raquel Rolnik, UN special rapporteur on adequate housing, seems to have caused on her mission to examine the effects of the bedroom tax on the people of the UK.

Grant Shapps, chairman of the Conservative Party (or ‘Michael Green’, or whatever he is calling himself today) made assertions on the morning of 11th September that:

  • Raquel wasn’t invited by the government;
  • she didn’t visit government offices;
  • and she did not use the proper terms for government policies.

These points were proved wrong by the afternoon in Raquel Rolnik’s press statement.  In no uncertain terms.

I have been following the detail of the “tax” since the beginning; I have read her report (linked above); I have heard  the governments petulant response. Far be it from me to call Right Honourable Members of Parliament liars, or even to accuse them of untruths. But let’s look at the UN statement.

Uninvited?

At the top of her report, Raquel says, “From 29 August to 11 September 2013, I undertook an official visit to the United Kingdom of Great Britain and Northern Ireland at the invitation of the Government.”

Round One: Raquel (of the UN).

Ignored Government?

Straight away the report say, “I wish to start this statement by expressing my gratitude to the various Government Departments, for the cooperation and hospitality extended to us during the organization and throughout the development of this fact-finding visit. ”

Pretty clear. But just incase you were still in any doubt:

“I have had the opportunity to meet with numerous Government officials, including some Ministers. In England I met with the Department for Communities and Local Government, the Department for Environment, Food and Rural Affairs, the Ministry of Justice, the Department of Work and Pensions, the Homes and Communities Agency, the Department for International Development and the Manchester City Council. I also met with officials from the Department of Housing and Regeneration from the Welsh Government.

“In Scotland, I met with the Scottish Government, including the Housing Services and Regeneration, the Housing Supply, the Homelessness and Equality Policy Departments; and with the Scottish National Housing authorities and Planning and Architecture Division. In Northern Ireland, I had the opportunity to meet with the Department for Social Development, and with the Northern Ireland Housing Executive.”

Round Two: Raquel (of the UN). Not looking as if the government are being all that honest so far. So now on to:

Proper Terms?

Of all the criticism of their housing policy, this seems to be the one that riles them the most. It goes something along the lines of, “It’s not called the bedroom tax! It’s called the ‘Under occupancy penalty’ (sometimes they say it’s a charge or reduction.) We didn’t call it a tax, so it’s not a tax!” An so on, ad hominem.

Firstly, let’s look at the direct point: did she use the ‘correct terms’?

“Especially worrisome in this package is the so-called “bedroom tax”, or the spare bedroom under occupancy penalty.”

So, she did use the term ‘bedroom tax’! Hang on though, she prefaces it with “so-called” and then goes on to use its Government sanctioned name. (It get’s petty doesn’t it when the government dismiss your criticism because you use the wrong name, even if it is politically charged name.) Shapps’ complaint to the UN secretary general will come to nothing because he doesn’t have a leg to stand on.

Now for the detail of what this policy is regardless of its name.
The amounts of so-called “subsidy” removed from a persons benefit are not negligible to those on benefit, as it in many cases it amounts to a reduction of around 35% of what is a very small income.

Shockingly, the Government policy seems to be about efficient reallocation of housing resource on a national scale, moving people and families around like a theoretical big puzzle to be solved with zero regard for family, social or community ties, responsibilities, suitability, job availability, and children’s education, together with the upheaval caused and the Scarce provision of small properties at affordable rents.

The policy treats people inhumanly on every level possible. She is right to point out that the basic human right to affordable shelter “is not at any cost” – the cost being that which I outlined above – and the government has a duty under human rights laws not to retrograde its provisions in meeting the law, but to seek ways to always improve.

Let’s be clear. A right under law isn’t self entitlement, it is a right. And all have a right to affordable shelter, something that doesnt exist in this country. Society through the structures of the rule of law and government must always make sure those less well off are looked after as right, and not as charity, for it we are all peers, and should be dignified with rights as opposed to begging or being left destitute.

However, one thing remains true, and no amount of government bluster and spite can alter basic logic.

A penalty that is unavoidable by most is a tax by any other name.

“Let them eat left-overs” – is UK Food Waste too high?

The government’s minister for Food has been urging us to eat our left-overs and pay more attention to how we store food to keep it longer. He says that during these times when most people’s budgets are squeezed, due to depressed wages and rising prices since the start of the financial crisis, we should adopt a more frugal approach to our food waste.

I don’t particularly like, or trust, when government ministers start micro-managing our lives, even if it is good advice. I find it all just a bit patronising really. I saw his comments as nannying and called it ‘humiliating.’ I may have over reacted, but my assertion was that families were already cutting costs by choosing cheaper foods and that people on tight budgets were not going to waste food. But I decided to look into this matter further.

As prime minister, around the start of the financial crisis in the summer of 2008, Gordon Brown also took on the cruse of urging us all to stop wasting food. Back then, The Guardian reported, “The Cabinet Office review of food policy states that the UK throws away an annual 4.1 million tonnes of edible goods, the equivalent of £420 for every home,” and quoted Brown as saying:

“If we are to get food prices down, we must also do more to deal with unnecessary demand – such as all of us doing more to cut food waste which is costing the average household in Britain around £8 per week.”

Brown’s implicit assertion that unnecessary food demand (ie: waste) was causing high food prices is really quite a peculiar in many ways. As this chart from BBC News shows, 2008 saw an unusually high peak in food prices which ‘corrected’ back to the average by around March 2009. That he attributed the high price to high demand fits within his economic paradigm as a ‘supply side’ economist, but that it was attributable to ‘waste’ is debatable seen as it would be hard to show that the price ‘correction’ was because of reduced demand due to tackling waste.

World Food Prices

Currently, according to The Telegraph the government is now saying “that discarding food costs the average household £480 a year, rising to £680 for a family with children, the equivalent of about £50 a month.” However, the total amount thrown away is now quoted at 7.2 million tons, or 6.5 metric tonnes. (The Telegraph likes using imperial measures; they are after all British, what.)

Just to confuse matters, the “Love Food, Hate Waste” website states that household food waste is around 7.2 million tonnes. (I presume that the Telegraph is just incompetent.) More shocking still, household food and drink waste is reported as being only 49% of the total that is wasted in the UK. The website says that 3.2 million tonnes is wasted just in the manufacturing and processing of food!

I was struck by the close similarity in the 2008 and current stated values of the discarded food, having risen by about 14%, and yet the quantity had risen by nearly 60%.

So, using an inflation calculator, I worked out that the current discarded food value figure was probably achieved by taking a crude rounding of the 2008 value after adjusting for inflation. (According to This is Money, inflation from 2008 to 2012 is probably somewhere between 12.6% and 16%.) As we can see from the volatility in the world food prices between the summer of 2008 and now, employing such a straight calculation of 2008’s discarded food values in to today’s values would not be realistic at all.

As for the increase in the quantity of food discarded by households, this could be accounted for by either an increase in purchases or an increase in household, by 60%. That’s a lot. According to the Office for National Statistics, in 2012 there were 26.4 million households in the UK. [http://www.ons.gov.uk/ons/dcp171778_284823.pdf]  up from 25.0 million households in 2008, a rise of only around 3%. [www.ons.gov.uk/…/social-trends-41—household-and-families.pdf] So, the rise in waste isn’t due to an increase in the number of households. Figures were not so easy to find on food demand over the last 5 years, but it is probably safe to say that the quantities in weight have not gone up by 60%.

How have these figures been calculated and what are their source?

A 2011 study by the Swedish Institute for Food and Biotechnology (SIK) attempted to quantify food losses and wastes. They modeled the quantification based on “available data and [there own] assumptions,” providing the model equations in the annex of that document (if you want to check their working out.) SIK calculated the per capita food wasted by consumers was around 95-115kg per year by Europeans. Taking the upper bound of that figure and multiplying by the estimated population of the UK you get – did you guess? – around 7.2 million tonnes.

A DEFRA press release in 2008 stated, “WRAP studies issued in 2007 found that UK households create 6.7 million tonnes of food waste each year, some 19 per cent of municipal waste.  This figure means that we are throwing away one third of the food we buy (16.5 kg\hh\wk bought – 5.2 kg\hh\wk thrown away.” This appears to be at variance with the amount of waste reported by the Guardian and others in 2008, but compares better with the SIK study from 2011.

These are still astonishing numbers. The SIK study works out at around between 260g and 315g waste per day per person. That seems a lot. The DEFRA study seems to suggest around 290g per person per day.

So, despite my annoyance at this issue being pointed out by the government, when I’d much prefer they did something about jobs, growth and the crisis in capitalism, I have to swallow my pride and admit (damn it) – there does seem to be an issue in the UK with households wasting food.

So, get along to www.lovefoodhatewaste.com and find out how you can reduce the amount of food you waste. And if it’s not you wasting it, then let’s do what what we’ve been trained to do by this government, and point the finger at the neighbour with the most bin bags outside on collection day…

Updates

Since writing this blog entry, the other newspapers have picked up on the story with negative and bemused responses from all outlets. The prime minister has said that the information has been taken out of context, and that it doesn’t look good.

It gets worse though. Many people in the media and on Twitter have pointed out that the Tory MP, who has accused the very poorest families of “wasting” to much food, has a personal fortune of £110 million!

I’ve thought more about this too. Have the researchers from DEFRA taken in to account standard food wastage from the parts that either can’t or don’t normally get eaten? For potatoes peelings, carrots peeling and topping, oranges peel, apple cores, the odd rotten whatever, because no matter how hard you try to look after fruit, veg, bread, it happens. How about tea bags? And of course, the parts of food you can’t eat when preping, such as the eye of the lettuce, the base of cauliflower, fat off the chop, and bones of the turkey?

Whilst we all need to be less wasteful, in all areas of our consumption and not just food, I generally believe that most people really do try their best not to waste food. I know I’m just going to keep an eye on it myself.