Does Owen Jones actually read his own columns?

Enquiring minds would like to know:

If any good is to come from this national disaster, it is to re-evaluate every aspect of our society, including allowing greater flexibility for workers: a happier, less-stressed worker is more productive, if an economic case is needed to strengthen the human argument.

The age of coronavirus has exposed multiple injustices in British life, not least the total lack of protection afforded many workers. From the precarious lives of the gig economy workforce to the greater death toll among poorer workers, the consequences of stripping workers of rights and security could hardly be starker.

The gig economy might not be perfect but it is most certainly an increase in the flexibility of the lives of the workers. Presumably this makes gig economy workers happier, less-stressed and more productive. Why then the opposition to this desirable state of affairs in the very next paragraph?

To be ever so slightly more serious, yes, increased flexibility does mean less security. So, which is it that is desired, should be aimed for? Our own prejudice would be that the economy contains a multiplicity of options so that both employers and employees can self-sort into whichever blend they themselves desire. You know, a market economy, where there is a market in the structure of employment.

Of course, that not just implies but ensures liberty which presumably is why the opposition to it.

Now it's the stiff upper lip that must be abolished

Apparently the children of Britain are terribly upset. The cause?

“Children and young people talk a lot about the pressure that get placed on them to do well,” said Richard Crellin, one of the authors of the report. “We reflected this could be linked to a pressure in British society to take things on the chin and have a stiff upper lip. Young people across the UK told [how] they feel judged if they don’t succeed first time.”

Mark Russell, chief executive of the Children’s Society, added: “As a society we can’t be content with children in the UK being the most unsatisfied with their lives in Europe. It has to change.”

That does rather misunderstand the stiff upper lip part, which is that we shouldn’t let anything so transient or feeble as other peoples’ opinions of us to make any difference. The injunction is not, as they seem to think, not to emote, but rather not to worry about such foolishness.

Still, we think it rather an insight into the size of the project being demanded. This isn’t about the economy, or even economics, the task is to dig up the entire society. Still, one point we can make in mitigation. The claim is that children don’t enjoy their lives in Europe, something already solved when we left Europe back on Jan 1 this year.

Just something that annoys

The act of a stock market listing does not create millionaires. The act of building something that is worthy of a stock market listing does:

The Hut Group is expected to pull the trigger today on a £4.5 billion stock market listing that could put the online retailer’s founder in line for one of the largest windfalls in corporate history and promises to create hundreds of British millionaires overnight.

Matthew Moulding, 48, who started the fast-growing company in 2004, will be awarded shares worth about £700 million if the company’s valuation reaches £7.25 billion in the next two years as part of an incentive scheme.

Mr. Moulding’s deal post-flotation is not the bit that we’re grumbling about. Rather, that part about creating hundreds of millionaires overnight.

No.

The company has been handing out equity to the people that work there all along. OK, fine. That equity has some value when the company is still private. Sure, the flotation gives a public calculation of that value. It might even increase the value as a result of greater liquidity and so on. But those employee stakes in the company are not worth nothing the day before flotation and then millions the day after it.

The value created has come from building the company, not from floating it. Therefore it is the building of the company that creates the millionaires, not the flotation.

This is more than mere pedantry and sniping at journalistic language. If we don’t all understand where value comes from, how it is created, we’re never going to get questions like the taxation or other treatment of value right, are we? Let alone how to set up the system so as to create more such value.

Cunning Tory Plan to Offload Scotland

The Chancellor has a mighty task to restore the economy and then balance the budget.  The cost of keeping the Scots in the style to which they have become accustomed is one item on the Treasury hit list. The Barnett formula hands Scotland an extra £6.5bn, paid for by the rest of Britain, not to mention this year’s unprecedented package of support for Scottish businesses and around 900,000 individuals. How can those costs be recovered?  

If the UK Government were to agree to the SNP demand for a second referendum and recommend independence, the contrary Scots would immediately vote for retaining the Union. One is reminded of the 40 year old still living in the parental home and complaining about the catering.  Saying “leave” does not work.  In our case, changing the locks did and we are still family.  

Throughout the pandemic, Scotland’s First Minister has demonstrated her enthusiasm for upstaging the Westminster government in much the same way.  If Scottish independence is to be brought about, it must look as if she has won against all the odds. 

The UK Government has made it clear that the Scotland Acts reserve decisions on independence referendums to Westminster.  Their position is that it is outside the competence of the Scottish Parliament to legislate for, and hold, such a referendum. That is undoubtedly so for decisive referendums, i.e. ones that would commit both governments to Scottish independence, but it may not be so for advisory ones, which could be regarded as glorified market research. Some lawyers believe the existing legislation to be unclear on the matter. 

According to the House of Commons library briefing paper What’s the process for a second independence referendum in Scotland?: “It is not clear as a matter of law, however, if the Scottish Parliament can unilaterally hold a referendum on independence. Only if it was judged that such a referendum ‘relates to’ the Union would it likely fall outside competence. Importantly, this debate has not been resolved.” 

This view is supported by the Institute for Government: “However, the matter has never been tested in court, so there remains some uncertainty about whether Holyrood could hold an advisory referendum without consent.” Remember that the 2016 Brexit referendum was, technically, only advisory but once approved, unstoppable.  

Here is how the offloading Scotland plan would work.  When the Scottish Parliament passes legislation for an advisory referendum, Nicola Sturgeon will make a big fuss about democracy and freedom but Boris Johnson will reject the demand citing the grounds above. It is reported that she will take legal action, presumably escalating the issue to the Supreme Court which now has two Scottish judges. The Supreme Court is not known for rubber-stamping the UK government’s legal interpretations. Remember proroguing. Johnson will grandstand his shock and horror when Sturgeon wins. 

But the plan is a bit more cunning than that.  The future EU trade deal is stuck on EU fishing rights in UK waters; solve that and a deal should fall into place.  The UK should compromise by allowing EU fishing in Scottish waters but not in those of the rest of the UK.  It should be signed and sealed before the end of 2020. The Scots voted to stay in the EU so they should be delighted by that. 

Nick Sibley has an alternative plan for the same outcome. Brexit would be cancelled; England and Wales would secede from the union leaving the United Kingdom of Scotland and Northern Ireland with the UK’s international obligations including the EU membership which both nations so much desire and the national debt. 

Putting levity to one side, Downing Street either wants to retain, indeed bolster, the union or it wants Scotland to leave. If the former is the case, ignoring the warnings that the door may be open to a Scottish unilateral advisory referendum, smacks of General Percival’s 1942 defence of Singapore. He refused to listen to intelligence that the Japanese were coming from the north when he knew they would attack from the south.  It would be a simple matter to pre-empt any Supreme Court ruling by passing fresh legislation reserving any Scottish independence referendum, including advisory and parliamentary polling, to the Westminster Parliament. 

If Downing Street is not that foolish, and surely it cannot be, then the only logical alternative is that it has a cunning plan, perhaps along the lines of the one outlined above, to offload Scotland.

To argue with George Monbiot

Monbiot is still getting the basic environmental question wrong:

The formula for calculating people’s environmental footprint is simple, but widely misunderstood: Impact = Population x Affluence x Technology (I = PAT).

He then goes on to claim that people using higher technologies have greater environmental impact. This is wrong. The T should be used to divide, or perhaps the T should be a number less than one if we are to multiply.

This is, after all, the only way the equation makes any sort of sense at all. The base human technology is hunter gatherer - this existed in our ancestors before hom. sap. did. If there were 7 billion of us trying to be hunter gatherers then the entire environment, tree trunks, seaweed and grasses all, would be eaten within a month. We 7 billion of us using higher technologies than that base one are indeed having an environmental effect but rather less than that. T moderates the effect of P and A upon I, not multiplies it.

Getting this wrong means absolutely every conclusion drawn from the mistake somewhat suspect.

Still, there is comfort here:

But, as there are some genuine ecological impacts of population growth, how do we distinguish proportionate concerns about these harms from deflection and racism? Well, we know that the strongest determinant of falling birth rates is female emancipation and education. The major obstacle to female empowerment is extreme poverty. Its effect is felt disproportionately by women.

So a good way of deciding whether someone’s population concerns are genuine is to look at their record of campaigning against structural poverty. Have they contested the impossible debts poor nations are required to pay? Have they argued against corporate tax avoidance, or extractive industries that drain wealth from poorer countries, leaving almost nothing behind, or the financial sector in Britain’s processing of money stolen abroad? Or have they simply sat and watched as people remain locked in poverty, then complained about their fertility?

We point out - again correctly - that it is the rising incomes that enable that female economic emancipation. It’s only when human muscle power is not the energy source for production that women do indeed have an equal chance. Which is why we have, all along, gloried in that economic development of those poor places precisely because it leads to that emancipation - and, as Monbiot points out, solves that population problem if indeed there is one. You know, that neoliberal globalisation which has produced, in this past generation, the greatest reduction in absolute poverty in the history of our species.

Not that anyone will ever be able to convince Monbiot of that but the rest of us should take note.

Jobs are a cost not a benefit

We seem to be at the “Now That’s What I Call Economics” stage of repeating our greatest hits. Here it is Richard Murphy and Colin Hines who need to be reminded of the basics of economics - jobs are a cost of doing something, not a benefit.

Richard Murphy and Colin Hines stress the importance of the government spending money on creating jobs as well as on infrastructure to deal with the impact of coronavirus on people and the planet

No, we never do want to “create jobs”.

The catalyst for this is the need for new jobs in every community to counter the political, economic and personal trauma that will come in the wake of the coming tsunami of lost livelihoods across the country.

This is to entirely miss the vital distinctions necessary.

We desire that all be able to consume, that’s true. This means both that things are produced so they may be consumed and also that people have incomes so they may collect those things that they consume. This is not, absolutely not, the same as the desire to create jobs.

A job is the use of human labour to do something. We would much prefer - for we like leisure - that the consumption and the intermediary, the income (or, given that a real income is by definition what can be consumed, these two being the same thing) could be achieved by not having to employ that cost, the human labour.

We would, as we have been doing these past couple of centuries, like the machines to be doing the work.

This insistence upon “creating jobs” is to make the mistake Milton Friedman warned against. We want the ditch dug, certainly, we want everyone to be able to consume but issuing teaspoons isn’t the way to do it.

Jobs, the uses of human labour, are a cost of doing something, not a benefit. Thus those prancing about shouting about how many jobs their scheme will provide are preening themselves on how expensive their plan is. Which is not, when we come to think of it, very economic.

Is it capital income or labour income?

That people should become rich - richer - by deploying their capital doesn’t seem all that bad to us. The system is, after all, called capitalism. There are those who disagree of course. With that disagreement though comes the question of, well, are these people actually becoming rich through their deployment of capital, or through their labour?

The answer seeming to be that in many to most cases it’s labour:

Rising capital income has raised the possibility that the financial-capital rich may now dominate the ranks of America’s highest earners instead of the human-capital rich, but testing this has been challenging due to data issues around the classification of top-end business income. This paper analyzes deidentified administrative tax data, and estimates that for the typical top business owner about three-quarters of pass-through profits are returns to owner human capital rather than financial capital. The typical top earner, it seems, is still human-capital rich.

Is Jeff Bezos rich because Amazon always was going to conquer all merely by existing or has Amazon conquered because of Jeff Bezos? Given the number of people who have tried to conquer the retail world we have to assume that Bezos and his labour have at least something to do with it.

This, of course, having substantial impacts upon what tax policy should be. We don’t want to insist, through high tax rates, that these very productive people can’t be bothered to go to work after all. A world in which it is the entrepreneurs who are piling up the pilf and gelt is substantially different from one in which the capitalists are that is.

Well, yes, this is rather the point

Clearly there would be whining but this is rather the point of the exercise:

Health secretary Matt Hancock was under mounting pressure last night to say who will take responsibility for the national fight against obesity after his controversial decision to close down Public Health England caused dismay among experts.

Today shadow health secretary Jonathan Ashworth is writing to Hancock to demand answers, amid fury from campaigners and officials, who point out that it is less than a month since Boris Johnson, the prime minister, launched a national anti-obesity strategy, claiming it was crucial to the fight against Covid-19 and the nation’s health.

But last week Hancock pulled the plug on Public Health England, the body that has been responsible for fighting obesity, and announced that it would be replaced by the National Institute for Health Protection that would focus on external threats to the UK, pandemics and infectious diseases, but not inherit the public health protection roles of PHE.

The justification for government action - whether that be in limiting the freedoms of those being directed, or the spending of those taxed to pay for it - is third party effects. What individuals do which affects only those individuals is no damn business of government in a liberal and free polity.

Yes, this does indeed mean that those who wish to eat themselves into a pile of blubber get to do so.

Public Health England has rather missed this base and basic point. Which is one of the reasons for doing away with it. It is not just that is has been provably incompetent when there actually was a pandemic, it’s that it’s been poking its nose in where public health has no business.

Do please note that, as we’ve been saying for well over a decade now, obesity does not in fact cost the NHS money - the third party justification oft used. As the obese die younger in a lifetime health care system this means they save, not cost, the NHS money.

The aim of having a new organisation is to be able to get around having to slice off, excise, those overweening parts. Instead it’s possible to only pluck out the needed parts - pandemics etc - and tell the rest to go hang.Perhaps more politely than we would but that is the point and aim.

That there won’t be a national obesity strategy, nor a bureaucracy in charge of it, is the very point.

It is of course possible that we’re mistaken in this but if we are then someone’s missed a damn good trick.

Just imagine how ecologically pure and poor we all can be

It appears that the ecological footprint of humanity has shrunk this year:

According to research conducted by Global Footprint Network, an international research organisation, coronavirus-induced lockdowns led to a 9.3% reduction in humanity’s ecological footprint compared with the same period last year. However, in order to keep consuming ecological resources at our current rate we would still need the equivalent of 1.6 Earths.

As all should know the Global Footprint Network is less than rigorous in its analysis. Starting in a not very good PhD thesis it measures nuclear power plants as having the same emissions a a coal plant - ludicrous. Further, it insists that land, its unit of measurement, can only be used for one thing. If food is being grown on it then it cannot be used to absorb CO2 from other activities. Although, of course, the CO2 absorbed by the plants we eat is indeed absorbed from all the varied activities. It’s thus a gross overestimate. Finally, the only actual resource it’s measuring as being in excessive use is that ability of the carbon cycle to absorb more emissions. Yes, we know that, we can see atmospheric CO2 rising. It’s not, in short, worth the electrons used to propagate it despite that PhD having been transformed into a nice little earner.

The truly important thing to note though is that UK GDP fell by 20% in order to gain this 10% reduction in resource usage. According to that 1.6 Earth measure we need to reduce consumption by 40%. Which would seem to mean that we need to wipe out our economic activity entirely. This being something we’re not going to do and we wouldn’t survive at all if we did.

It’s not just a flawed measure it’s one leading to an idiot conclusion.

Welcome to running a business

The Guardian tells us of the perils of being a touring pop musician:

“It’s possible to make money over a festival season, but with touring, most people I know are really lucky if they break even,” says Alexandra Denton, better known as Shura. After she released her second album, Forevher, in August 2019, her planned promotional campaign around a run of 2020 festivals “evaporated overnight”. With paltry royalties from streaming, touring is now seen as musicians’ primary income. But from the 30 tour dates Shura performed before lockdown, she estimates her overall profit at £2,300 – after takings had been chipped away by the expense of a live band, accommodation and staging, all paid at a fixed rate. “Genuinely, if you can finish a tour and say: ‘We didn’t lose any money’, it’s a real win,” she says. “But for 30 shows, as a single-entity musician, I’m making less than anyone else working on the tour.”

This being precisely and exactly how every business in the world is run. The entrepreneur faces those costs determined by others - the market prices for labour, premises, equipment - and it’s the bit left over, if there is any, which is their income. Or, as we also call it, the profit of the enterprise.

We can go further, this is also how all capitalism works. Here the capital is the human capital of the lead singer/musician. The income to capital is what is left after everyone else has got paid at those market prices. If there is no value added then there ain’t no money for the capitalist nor the entrepreneur.

The rest of the piece is about how we’ve got to work out some manner of shovelling more money to these capitalists. Which really is an odd thing for The Guardian to be recommending really, even though we do agree that if the capitalists don’t make money then things provided by capitalists won’t be provided. You know, that larger lesson that the newspaper will never agree applies.