Surely Owen Jones, of all people, understands his Marx?

Owen Jones tells us that Brexit requires stronger unions. If he actually understood the Marx he derives so many of his prejudices from he’d understand that Brexit is the cure for the very thing he bemoans:

Workers, after all, had been stripped of bargaining power when it came to demanding higher wages. Simplistic generalisations often made about the triumph of leave should be avoided – most full-time and part-time workers voted to remain, as did a majority of those whom pollsters classify as working class under the age of 35 – but that real wages had fallen or stagnated for so long fuelled the disillusionment that Brexit fed on. When rightwing Brexiteers argued that migrants were undercutting wages, they were redirecting blame away from the weakening of unions and the so-called “flexible labour market” – but they had a receptive audience. In many ex-industrial areas, the replacement of jobs that had security and prestige with ones lacking both fed that disenchantment: the ingenious slogan “take back control” appealed to many for a reason.

It is one of those - rare - areas of economics that Marx did get right. The wages of the workers are determined by the bargaining power of the workers. Unions are only a minor part of this though, an artificial creation of said bargaining power. The real influence is that reserve army of the unemployed. As and when there are those willing to work for any crust going then employers both don’t have to raise wages to gain more labour, nor do they have to raise wages to keep the labour they currently employ.

So, rises in productivity flow into the pockets of the capitalists and not into those of the workers. Unions are indeed a potential response to this. But they only work to benefit those in the union, leaving those in the reserve army quite out in the cold. The answer, as is obvious from Marx, is the absence of the reserve army - full employment is what raises the workers’ wages.

We had full employment among people actually in Britain pre-covid. But we also had 450 million people in the European Union who could join that British labour force by hopping on a £50 flight. That is, stagnation of wages didn’t stem from “the immigrants taking all our jobs” but from the existence, in parts of Europe, of a substantial reserve army of the unemployed.

The end of the free movement of labour rather solves this point. Yes, we do indeed prefer free movement ourselves and we’d not regard this change as a justification of anything. But it does actually solve the problem Jones is complaining of. The annoyance here being that if Jones actually understood that Marxism he gains such impetus from then he’d grasp this - in a manner that he clearly doesn’t.

It is, after all, one thing to be a socialist, or a Marxist, and quite another to actually understand either.

Only bad policy can follow from generally believed untruths

Policy is not one of these things where we can, randomly, alight upon the correct answer. It is necessary to understand the problem, even to work out whether there is a problem, that needs to be dealt with before the correct solution can be crafted.

If, for example, the gender pay gap is about children and their care then that is where any solution needs to be found, not in reports about the size of the gap. If Covid death rates vary by Vitamin D levels then that is where the solution is to be found, not in tirades about racism. Note the if there - the if being that important point. If those are not the causes of the perceived problems then the solutions will be found elsewhere.

So it is with these food restrictions:

Supermarkets in England are to be barred from displaying unhealthy food and drinks at checkouts or using them in buy one, get one free offers, as part of a proposed government crackdown on obesity.

The planned restrictions were praised by health campaigners as a “bold first step” in Downing Street’s promised campaign against obesity.

The checkout restrictions will apply to other sales-boosting locations such as the entrances to stores or at the end of aisles. Similar rules will apply for websites, banning sales links to unhealthy foods on places such as homepages, or at checkout or payment pages. Restaurants will no longer be able to offer free refills of sugary drinks.

There must, for this to be allowable in a free society, be some significant justification. The problem with this being that not only is there no such justification, the one on offer is not in fact true:

Prof Graham MacGregor, the group’s chair, said: “Finally, Downing Street is acting decisively with a bold first step to restrict the sale of junk food on multi-buy offers and at checkouts, and taking on one of the biggest threats to Britain’s future health – childhood obesity.”

We’d not support such restrictions even if childhood obesity were a real problem. But that’s the thing, it isn’t anyway:

In England 63% of adults are classified as overweight or living with obesity, while a third of children leave primary school overweight or obese.

That number given for children simply is not true. And yet it’s a widely believed number and is one that - quite obviously from the above - is used to drive policy. As Chris Snowdon has been pointing out over the years.

It just isn’t true that one third of children are obese. Therefore this untruth cannot - sorry, should not for of course it is being - be used to justify policy. The argument in favour of this sort of technocracy, that the wise will save us from ourselves, is that the technocrats be both wise and informed. When their heads are filled with blatant lies then the system not only doesn’t work it has entirely lost its justification, hasn’t it?

The joys of government planning. Again.

The argument in favour of government planning things is that only those looking from the disinterested and Olympian heights can possibly take all societal interests into account. If mere economic actors, those who would be directly affected by decisions and actions, were to decide what is to be done then important larger considerations would be ignored.

Then we have the reality of government planning:

Up to one in five train services will be axed next year under radical plans being considered by ministers to prevent a multi-billion-pound taxpayer bill spiralling out of control.

Whitehall officials are considering proposals to cut Britain’s rail capacity to around 80pc of pre-Covid level, The Sunday Telegraph has learnt.

Nothing wrong with that as a proposal nor action. A smaller economy will have fewer people travelling. It will have less money to subsidise those who do. We’ve all had a taste of working from home and some at least - enough to shade the numbers travelling - have found that both it and we work when we do so.

However, this is being done at the same time as HS2 starts, that plan to expand the capacity of the network, for commuters, at the cost of £100 billion and counting.

That is, government planning doesn’t mean disinterested decision making from those Olympian heights. The why being that HS2 or not, or more train capacity or not even, has become a political argument not a rational one. HS2 doesn’t even pass its own cost benefit test but tribes are lined up on either side and they shout at each other. Who wins, whether it goes ahead or not, is based upon who can shout loudest - who has the political power.

This being the problem with political direction of the economy. It always does come down to politics. Debate and persuasion are good and useful things in their place but as it turns out they’re not good ways of spending money.

But what sort of diversity is to be championed?

The BBC has this office, and officer, to champion diversity:

If there’s one thing that unites Tory MPs, it’s mistrust of the ‘north London liberal elite’. Members of this shadowy group live in Islington, voted Labour and Remain, and hold highly-paid jobs in metropolitan institutions where their decision-making shapes the direction of the country.

So, I venture to June Sarpong, director of creative diversity at the BBC, and former face of the Britain Stronger in Europe campaign, as she speaks to me from her home in Islington: "I think they might be talking about you."

The important question is clearly well, what sort of diversity is it that is being championed?

But Ms Sarpong is in no doubt that white privilege is a fact of life. “There is unfairness baked into our system,” she says, and while the “elite white male” is at the top of the tree, even the white working class has an advantage over people from black and Asian backgrounds.

Ah, that kind. Something of a pity. An insistence upon a certain ideological view - this white privilege - is not what we’d consider to be a useful or interesting form of diversity. Even if it were true, an objective fact - not something we think it is - that British society is engrained with this institutional racism it is still true that diversity of ideological view on this, as with any other matter, is the useful and interesting form of said diversity.

In fact, we’d say that an office, or department, of diversity that actually has an ideological view is in itself missing the point of the existence of the office.

But what if it's actually true?

Sure, many people insist that this isn’t true:

Yet without a draft paper even being discussed by his fellow commissioners, he said the report would “challenge perceptions of racism” and that “our early findings suggest that life chances are more influenced by age, sex, class, and geography rather than race”. In other words, despite the massive increase in awareness of racism all around the world this year, the government inquiry will tell us race is a minor consideration.

We have excellent evidence that geography is the most significant influence over lifetime income for example. Which country you’re born into has more effect than anything else - class, gender, race, anything - over how much you earn. Being born into a rich country puts you well up the listings, into a poor one well down them.

This all being rather important. Take the analagous gender pay gap. If this is the result of direct discrimination against women then the solution will require one set of actions. If, instead, it’s about children, childcare and sexually dimorphic responses to those pressures then the solution will lie elsewhere. Even, it would be possible to ponder whether a solution was necessary.

So too with any considerations of race or anything else. If we spot differential outcomes then we need to know why. Appalling inner city schools perhaps, being from recent immigrant families, linguistic skills, and, yes, consider actual and direct racism as a cause. But only when we’ve done so and narrowed down the cause can we get anywhere close to evaluating a useful solution.

Simon Woolley is the director of Operation Black Vote. He was chair of the No 10 race disparity unit until July 2020

Ah, we might not have the most open of minds considering this issue then.

An answer and a question for Owen Jones

Owen Jones wants us all to know that the British response to the coronavirus has been worse, vastly worse, than that anywhere else. We’d at least start to argue that the vaccine results belie that but then that’s when government has sensibly leveraged the private sector and of course Jones isn’t going to accept that.

It is possible though to give and answer to part of his lament:

Those who support the Conservatives – the party most likely to wrap itself in the flag and denounce the left for doing Britain down – are most likely to damn the public for the steep rise in Covid cases. Presumably they believe that Germans, South Koreans, Australians and New Zealanders have a superior national character to the reckless Brits, rather than governments that did not lock down too late, prematurely reopen the economy without a functioning test-and-trace system and allow the constant re-importing of the virus through a lack of border checks.

We are talking about health care here so the first stop would probably be to examine the health care systems in each country. None of the four mentioned have anything like the National Health Service even as all have universal health care systems. If the health care response has been institutionally terrible then perhaps it’s the health care institution that’s responsible for the response having been terrible?

This might even be true and certainly there’s enough logic there for us to examine the point, no?

It’s the question for Owen that we think is more interesting though. Assume that the analysis is correct, that the British state simply is incapable of dealing with matters more complex than MPs’ pensions. Why then does Owen want it to be responsible for ever more of our lives rather than our switching to a system of societal management that doesn’t rely upon this incompetence?

Why Pakistani workers are making 29p an hour sewing for boohoo

Whether or not anyone at boohoo knew that people in Pakistan were being paid 29p an hour - as The Guardian alleges - is not the important point. Nor even is it that such a sum would be below the Pakistani minimum wage:

The fast fashion brand Boohoo is selling clothes made by Pakistani factory workers who say they face appalling conditions and earn as little as 29p an hour, an investigation by the Guardian has found.

In interviews in the industrial city of Faisalabad, workers at two factories claimed they were paid 10,000PKR (£47) a month, well below the legal monthly minimum wage for unskilled labour of 17,500PKR, while making clothes to be sold by Boohoo.

The important line is this:

One of more than a dozen workers interviewed said: “I know we are exploited and paid less than the legal minimum, but we can’t do anything … if I leave the job another person will be ready to replace me.”

The important thing to acknowledge, to know, is that £47 a month is a step up for many people in that country. It is only by grasping that that it is possible to gain that better world - the one with less poverty in it - that we all desire. For it is as Paul Krugman pointed out:

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.

As that unnamed worker points out, these sweatshop jobs are better:

Workers in those shirt and sneaker factories are, inevitably, paid very little and expected to endure terrible working conditions. I say "inevitably" because their employers are not in business for their (or their workers') health; they pay as little as possible, and that minimum is determined by the other opportunities available to workers. And these are still extremely poor countries, where living on a garbage heap is attractive compared with the alternatives.

We are in that Marxist world of there being a considerable reserve army of labour willing to do whatever in order to gain access to an income.

These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better.

Or as Deirdrie McCloskey has been known to note, the only thing worse than being exploited by a capitalist is not being exploited by a capitalist.

Sweatshop jobs are better than no-sweatshop jobs. We all do indeed desire that the poor of the world become richer. The manner by which we do so is to buy goods made by poor people in poor countries. For that increases the demand for labour there, something which solves that Marxian problem and raises wages.

Sweatshop jobs are, that is, the solution to the identified problem of poverty. We might prefer to be fastidious and skate over that fact but it is still a fact. After all, Bangladesh has followed this route and GDP per capita - not everything but a good guide to living standards - has tripled in recent decades. Not just improving lives there but reducing global inequality at the same time.

For sustainability's sake we need more industrial agriculture and more supermarkets

There is often a certain gap between the results of scientific inquiry and what we’re told are said results. The idea that all the people to come will eat the fluffy animals out of house and home being a case in point:

The global food system is on course to drive rapid and widespread ecological damage with almost 90% of land animals likely to lose some of their habitat by 2050, research has found.

A study published in the journal Nature Sustainability shows that unless the food industry is rapidly transformed, changing what people eat and how it is produced, the world faces widespread biodiversity loss in the coming decades.

The study’s lead author, David Williams from Leeds University, said without fundamental changes, millions of square kilometres of natural habitats could be lost by 2050.

He said: “Ultimately, we need to change what we eat and how it is produced if we are going to save wildlife on a global scale.”

Likely suggestions are that we all go vegetarian and also that there be “international planning of agricultural land use”. We would translate that last as the revival of colonialism. White folks in the global north - possibly located in Leeds - get to tell poor brown folks in the global south where they can plant their half acre of maize. We suggest that this is not an advance in human civilisation. That even before we consider the success of all those Soviet attempts at the planning of farming. Tsarist Russia exported grain, today’s same areas export grain, the interim, when it was all planned, imported grain.

However, the paper itself tells us something different:

The projected severity of agricultural land-cover change on habitat area means that proactive policies to reduce future demand for agricultural land will probably be required to mitigate widespread biodiversity declines. To investigate the potential of such proactive approaches, we developed a scenario that implemented four changes to food systems: closing crop yield gaps globally, a global transition to healthier diets, halving food loss and waste, and global agricultural land-use planning to avoid competition between food production and habitat protection.

OK:

The impacts of individual approaches varied regionally. Closing yield gaps was projected to have the largest overall benefits

Right:

Transitioning to healthier diets and reducing food waste were projected to have considerable benefits,

Excellent:

In contrast, projected benefits from global land-use planning were far smaller,

So the colonialism part is the least effective and therefore - obviously - is the bit that should be done last if there is still some gap to be filled. The we all become vegetarians bit is also a second order success. We can leave that to one side perhaps until we’ve, again, seen whether there is a gap that still needs to be filled.

Filling the yield gap is code for “industrial farming”. Instead of those poor, brown, global south, folk trying to raise maize on a half-acre with nothing but hand tools and sweat we want 500 acre fields and vast tractors like they use in Iowa. For that’s how we raise yields to those of Iowa.

Food waste, as the FAO keeps telling us, comes in two flavours. Yes, there’s the mystery pizza at the back of the fridge that’s a result of the hyper-consumerism of the BOGOF sale. But this is trivial in comparison to the 50% of all food wasted between farm and fork in places without supermarkets. For properly defined a supermarket is the efficient logistics chain that gets food from farm to fork. to fork from farm

So, our first two answers are fire up the monster tractors, GM the heck out of the crops, call Monsanto for the herbicides, spray the land with fertilizers, and get Sainsbury’s, Tesco, Walmart and Carrefour - possibly Dreyfus, Bunge and Cargill as well - handling that job of moving the resultant greater production around. That is, we’d like more industry, more technology, more capitalism, more markets in our food system. Entirely the opposite of what is usually suggested of course.

And here’s the thing. That is the scientific answer. Raise yields, waste less and then see what fraction of the problem still remains. And aren’t we all supposed to follow the science these days?

Well, if you start from a foolishness

Starting out with a foolishness is not - probably not perhaps - the correct way to go about understanding the world around us. At which point we give you Richard Murphy:

So, if the ONS claim the national debt is around £2.1 trillion at present, it isn’t. Allowing for the UK government owning around £800 billion of its own debt the figure reduces to maybe £1.3 trillion, give or take a bit. But that, I hasten to add, is not the end of the story.

....

And remember, government backed saving is so popular that right now people will buy government gilts, or bonds, due to be repaid in 40 years time with a negative interest rate, which means they will get back less than they actually save now. And people still buy it.

It is possible to believe one or other of those two things but to believe both at the same time might require three whole professorships of illogic.

For note the second thing being said. That even at current prices people are just gasping to own gilts. Note then the first thing - so few people wish to own gilts that the government has had to buy a third of them to make sure they actually get sold.

That is, the reasoning is being done from a manipulated price. This does not work.

Start again from a more rational point. What would be the price of gilts if the government did not own one third of the issuance? Rather higher we would say. So, what’s the real price which illustrates the private sector demand for gilts? Rather higher than the current one. We cannot, therefore, use the current, manipulated, price of gilts to illustrate the gasping desire of the private sector to own gilts. For to do so is to reason from the manipulated price, something that will always lead us into error.

It isn’t, of course, just Murphy making this mistake. It’s a general societal delusion. Government borrowing is cheap right now so why not do more of it? Perhaps, maybe, that’s even the right thing to do. But we cannot reason to that point from the current price of government borrowing. Because that is, worldwide, a manipulated price.

Don’t forget, the whole point and aim of QE is to manipulate the price of money. We cannot then go around using that manipulated price as an input to our decisions about the use of money or debt issuance. To do so is to fail to understand the most basic thing about a price system - it is market prices that are the necessary information source, not manipulated ones.

We consider this to be something of a victory actually

There is often value in inverting an argument to see what falls out of the pockets. As with this:

The number of children living in temporary accommodation has risen by more than 75% since the Tories came to power in 2010, despite the government’s repeated claims to be tackling homelessness and child poverty.

We’d insist upon claiming that as a victory.

Figures unearthed by Labour from the Ministry of Housing, Communities and Local Government show the number of children without a permanent home rose from 72,590 in the second quarter of 2010 to 128,200 in the first quarter of 2020.

Imagine the absence of the Tories’ tackling of homelessness. There would, presumably, be 128,200 children sleeping on the streets. Or, a more limited claim, 40% more than there would have been under previous policies to provide temporary homes. Reading Mayhew or Dickens we get at least the impression that the past was in fact like that in certain times and places.

So, the Tories have saved 130,000, or perhaps 50,000, children from that fate. We do not consider this a failure of policies against homelessness. Nor should anyone else of course.

The larger point here being that the number of people being aided by a welfare state is not evidence of the failure of that welfare state. It’s evidence of the effectiveness of course. We do not say that the NHS is failing because it provides more hip replacements. We do not say the education system is a failure because more children are taught to read - although it would be a nice surprise to be told that the NHS was providing more such operations, the schools producing more literates.

A rise in the number of beneficiaries of a welfare system is not evidence of the paucity of that system, it’s evidence of the effectiveness of it - or at least its generosity.