There seems to be a general expectation, at least in the “developed “ world, that each generation can and should “do” better than the one before it. Parents expect that their children will have a “better time of it” than they had.
At first sight that seems to imply a higher physical quality of life – more “stuff ” - bigger house, kitchen refitted every five years, bigger cars changed more often, more foreign holidays, more gadgets, more bread and circuses.
The "more leisure" that Keynes anticipated doesn’t seem to have caught on, (other than more phone time).
As I don’t have any children I can’t be said to have a dog in the game, but If I had I think I should be reasonably happy if they had the quality of life that I’ve had: never been hungry (in spite of being brought up during the war;) a free primary and secondary education which, for the time, were regarded as “good quality;” several stints of higher education either free or with token fees; never been unemployed; have been privileged to work in three of the five continents and visited a fourth; enjoyed good health with free or only token payments when treatment needed; never homeless; plenty cultural activities to my liking; vigorous engagement with the political system, and a comfortable retirement.
What strikes me about that list is that most of what has contributed to my ”good life” has been provided by the public rather than the private sector. Not all, course. The private sector has provided some bouts of employment, food, housing, transport, cultural activities - all largely paid for out of my own pocket. But the key features of my “good life” have been provided by the public sector.
At the top of the list of our desires for succeeding generations must be “peace in their time” and a planet on which people can live comfortably and in harmony.
These will not be provided by the private sector.
Succeeding generations in the UK will not have such easy access to housing as mine has. The Tories, following Mrs Thatcher turned it over to the private sector and we see that the private sector has not provided. Some ideas on what to do about it are dealt with in the previous post.
Beyond that we must surely recognise that the health services, the educating, the community harmony and the liveable environment we want for future generations rely largely on the public sector.
But in the UK we resolutely refuse to pay the taxes necessary to finance their future
The World Inequality Lab, co-directed by the French economist Thomas Piketty, has published a Global Justice Report (rhttps://globaljusticeproject.wid.world/global-justice-report) which outlines a viable way forward.
The report criticises our over-materialistic emphasis on our ambitions and suggests how we (and that incudes everybody, not just the already rich world,) can enjoy a prosperous and healthy lifestyle without constantly striving to accumulate more material possessions that degrade the natural world on which all life depends.
They report calls it “sufficiency.”
Among their suggestions are that :
We halve our average working time;
Eat less red meat;
Refocus our economies towards low-consumption activities.
The “Nanny State “ taunters will have a field day.
But these are the areas we should be discussing if we want a decent future for the next generations..
And there’s not much sign of in Britain’s political debate as yet.
Post script (added 9th June)
The Guardian today has a leading article disussing the WIL report which has a fuller description of its contents than given above: see
https://www.theguardian.com/commentisfree/2026/jun/08/the-guardian-view-on-climate-equality-a-richer-life-and-real-public-abundance-not-just-more-stuff
Key sentences are:
"The challenge is to build a practical politics amid today's billionaire -backed nationalist backlash" and,
"The standard of living at which the report wants the world to converge is not one of endless private consumption, but of secure public services, increased leisure and climate stability."
Yes, indeed.
What strikes me about that list is that most of what has contributed to my ”good life” has been provided by the public rather than the private sector.
ReplyDeleteDo you not realise that everything provided for by the public sector has to be paid for by taxes collected from people who work in the private sector?
You are basically boasting that you have spent your life being a parasite, leeching off the hard work of others.
I dunno about you but I wouldn't find that something to be proud of.
What I would be proud of would be having provided for myself, through my own hard work, and not having had to have anything provided for me.
If I had had everything in my life provided for me, instead of working for the things in my life for myself, I would be ashamed of that, not proud.
I was interested in your post to Peter Wrigley pointing out that “you have spent your life being a parasite, leeching off the hard work of others.” when Peter admits that much of his own “good life” has come from the public sector.
DeleteLet’s look at few more examples of public sector leeches, shall we?
There’s the primary school teacher helping young kids read and wroite and develop social skills.
There’s the nurse in the local hospice supporting someone with a terminal illness and their families
There’s the surgeon helping improve and save people’s lives
There’s the police officer and social worker supporting victims of domestic abuse and trying to ensure it doesn’t happen again
There are those serving in the armed services helping protect citizens
All these leeches work in the public sector and were probably trained in the public sector. Of course we recognise them as parasites adding little or no value to our lives.
It’s only those in the private sector who have meaningful jobs and make a real contribution to our economy and society isn’t it?
You may want to read Graebers Book Bullshit Jobs in which he argues most of the non-value adding jobs are in the private sector
PS leeches actually do a lot of good work – they’re critical for the survival of wetland ecosystems and they’re often used in health care treatments.
Carry on the good leech work Peter!
And who pays for the salaries of the teachers, the nurses, the surgeons, the policemen and the squaddies?
DeleteIt’s the taxes from people in the actual productive bits of the economy.
Without people in the private sector actually making stuff that people want, there would be no public sector.
If you think of the economy as a company, the public sector is things like HR, the IT department, office managers, receptionists, and so on: necessary support staff to enable the real work to be done, but ultimately a cost centre rather than the productive bits, and if you let them get bloated and take resources away from doing the actual work you’re in serious trouble.
But, if you read what I wrote, it wasn’t people who work in the public sector I was calling parasites. They aren’t parasites, of course: they are selling their labour like anyone in the private sector.
DeleteThe parasites are the people who expect things to be provided for them by the public sector, rather than paying for them themselves. They are the ones who are living off the taxpayers, not the people who work in the public sector.
"Without people in the private sector actually making stuff that people want, there would be no public sector."
DeleteOf course. And without the public sector providing things the private sector needs there would be no private sector - an educated workforce, a healthy workforce, efficient and effective infrastructure, the list goes one
The two sectors are intertwined - there's a symbiosis that exists
"The parasites are the people who expect things to be provided for them by the public sector, rather than paying for them themselves."
DeleteIt's not about payment - it's about contributing back for what you get.
For better or worse we've created a society in the UK where some groups feel they - quite literally - have no stake in that society, they're outsiders or forgotten or not cared about by the powers-that-be. As a result such people understandably focus on taking what they can regardless rather than giving something back in return.
The solution depends on your own belief system - either stop them from taking or somehow persuade them to give back in return and that they do have a stake in the future.
And without the public sector providing things the private sector needs there would be no private sector - an educated workforce, a healthy workforce, efficient and effective infrastructure, the list goes one
DeleteAs per my follow-up, that was my point — although a lot of things the public sector currently provides could and should be provided privately, because they aren’t non-excludable non-rivalrous goods off the sort that have to be provided by taxes or they won’t be provided at all.
The leeches are the ones who expect the public sector (ie, other people’s taxes) to provide things for them instead of working hard so they can buy those things (like education for their children, healthcare, etc) with their own money.
The solution depends on your own belief system - either stop them from taking or somehow persuade them to give back in return and that they do have a stake in the future
DeleteRight; so how do we stop the writer of the original article appearing to be proud that he leeched so much off taxpayers (like his education, his healthcare, etc etc) instead of paying for itself like a proper independent person should?
@ Anonymous: Everybody benefits from the public sector: even successful entrepreneurs with thriving businesses and huge profits. For example, they benefit from a legal system which protects their property and patents, enables them to enforce their contracts, provides them with an educated and healthy workforce, a transport network on which to deliver their products and an ordered society in which to enjoy their comforts.
DeleteThere may be one or two unfortunates at he bottom of the pile who milk provision without making enough effort to play their part (though the recent report on NEETS by Allan Millburn says this is not a significant problem) but, if so, rejoice that you're not one of them. Think: "There but for the grace of God go you!"
Everybody benefits from the public sector:
DeleteOf course they do; it’s the most efficient way of providing non-excludable, non-rivalrous goods, like national defence and a legal system.
However having to rely on it for something that you really should be paying for yourself, like housing, healthcare, education, or whatever, is a sign that you have failed to be a functioning member of society who can stand on your own two feet, and instead you need to leech off others.
It’s not something to be proud of; if you need to take charity from taxpayers to survive or thrive, as apparently you did, at least have the decency to be ashamed of it rather than parading your inadequacies as if it’s something to be proud of.
"so how do we stop the writer of the original article appearing to be proud that he leeched so much off taxpayers".
DeleteI don't read it that way.
I suspect Peter - like myself - is grateful that public sector organisations in the Uk were there which gave him opportunities that he would not otherwise have had. Thanks to the public sector at the time I got to go to a "good" secondary school; got to go to university without ending up in debt; didn't have to worry about falling sick ..... none of which could have been provided by my parents who, although both worked full time, would today be classed as "poor" As a result I've had a great career - partly in the private sector - and have been happy to pay high taxes so others can have the same opportunities. However we now have in the UK an increasing economic divide with an ever increasing group underclass and a diminishing public sector which gave me a hand up (rather than a handout) several decades ago
"providing non-excludable, non-rivalrous goods"
DeleteAs I said in another post much depends on your belief system. In the UK at least there are long historical reasons why the public sector gets involved in services other than these and economic arguments why it is economically justified in doing so. If you're a right wing free marketeer on the other hand your belief system in terms of what the state should and shouldn't do is different.
Because of my own background I'm with Peter and the "there but for the grace of god ..." school of thought
Thanks to the public sector at the time
DeleteNo. Not thanks to ‘the public sector’. Thanks to taxpayers — people who did actual productive work to earn the money that was then taken from them and used to pay the people who did for you the things that you should have provided for yourself but were unable to.
You're missing the point. The taxpayer - including public sector workers - simply provides the finance. The public services are then provided by the public sector/state. The private sector by definition could have used that finance itself to provide the same services but chose not to - out of economic self interest. Example: social housing (which is what I and my parents lived in for many years). Local capitalist employers could have built such housing and then rented out to their workers (and in Victorian Britain many did, not out of the goodness of their hearts but to lock in the workforce). Such housing was often sub-standard (with all the subsequent problems of health, disease etc) to minimise costs and tied to employment (lose your job and you lose your house) and often had exorbitant rents. This also causes problems for the wider economy in terms of economic mobility etc etc.
DeleteSolution: raise tax revenue so public sector housing can be built at affordable rent and to an acceptable standard.
As I said, all depends on your belief systems as to how much the state should do for its citizens
Back to the them of Peter's original post Sustainability (linked to climate change)
DeleteIt makes no economic sense for the private sector to pursue a sustainable agenda in terms of the goods/services it produces unless ALL companies do so. To do so alone means you put yourself at a competitive disadvantage in the marketplace as you increase your costs. keep using oil and gas as they're cheaper; don't bother recycling; let others worry about climate change; exploit natural resources to their maximum....
Such actions are detrimental to a private sector organization and contrary to their own interests.
A paradigm shift is needed away from ever-continuing "growth" in economic output.
But I don't see any sign of it happening
You're missing the point. The taxpayer - including public sector workers - simply provides the finance.
DeleteNo, you are missing the point. The point is that it’s not ‘simply’ provides the finance. The finance is the most important bit. Without the finance none of the rest of it can happen. Without the finance there is no public sector. The entire public sector depends for its entire existence on the extraction of taxes from the people who actually do the hard work to earn the money to support and provide for themselves. The productiveness of the private sector taxpayer is the foundation of the whole system. Without real people doing real useful work to support themselves, and then having some of the fruits of that work seized in the form of taxes, there could be no public sector at all.
So anyone using public services for something they should be paying for themselves, like housing, is really just picking the pocket of taxpayers. Because yes the taxpayers ‘simply’ provide the finance, but without the finance the public sector ‘simply’ would not exist.
To do so alone means you put yourself at a competitive disadvantage in the marketplace as you increase your costs.
DeleteBut that doesn’t matter if enough customers are willing to pay a premium for goods produced whatever nonsense way you set up your hipster company to do. That’s the point of the market. You sell your expensive organic recycled oil-free toilet paper, and someone else can sell the cheap sort, and we find out which people really want by their revealed preferences when given the choice.
And if they choose price over feel-good then that is their right and therefore what the market should give them. Nobody, least of all supercilious busybodies like you who think they know what people ought to want, should have the right to force people to not have choices (like cheap food rather than ‘sustainable’ food) that the people actually want.
Oh dear. The consumer is always right syndrome and has perfect information to make the "right" decision every time. The planet is doomed.
DeleteThe consumer is always right syndrome
DeleteIf the customer isn’t right, who is? You? Arrogant much? Think you’re a superior class?
here's a conundrum. How do you see your perfect free market resolving this?
DeleteClassical economics refers to resources used as land, labour and capital.
We're already seeing in western economies a major shift away from labour as a resource in general with only certain key skills required. This will be exacerbated with AI where increasing numbers of employees will find themselves not need in the labour market.
So there will be an increasing number of people who can't find work of any description (we're already seeing this in the UK amongst younger people) and who have no realistic way of earning an income. How do you see market economics dealing with this? (Save me the free market platitudes please)
So there will be an increasing number of people who can't find work of any description (we're already seeing this in the UK amongst younger people) and who have no realistic way of earning an income.
DeleteEvery time people have forecast that some technology or dovish change or other will mean that there will be mass unemployment. And every time not only have they been wrong, but the need for people has actually increased. The invention of comprised spreadsheet, for example, didn’t put accountants out of business, as was predicted; instead it generated a demand for even more accountants. And the same has been true for every such change: in the long term it leads to greater demand for stuff and therefore for labour, not less.
Why, having been wrong every single time before, do you think your prediction will be right this time?
(The problem we’re seeing amongst young people isn’t a lack of vacancies, it’s that the wage compression cause by the increasing minimum wage has meant that it’s almost as expensive to hire a young person with no experience as it is to hire an older, reliable person. In that situation of course any sensible employer will hire the older person, won’t they? You would. But if that regulation were removed so that employers could hire younger people much more cheaply than older, you’d soon see lots more young people hired as employers decided the savings were worth the increased risk.)
as I thought no idea as to how to solve the forthcoming problem.
DeleteBTW it's not MY prediction but that of most of the reputable forecasting outfits (all private sector)
And yes it IS lack of entry level vacancies - the start of the AI trend - check with teh recruitment agncies
BTW the spreadsheet actually de-skilled - people who weren't accountants could now do what accountants used to do without the cost (I know I was there) . We're seeing the same with AI - people and their skill sets are increasingly redundant.
as I thought no idea as to how to solve the forthcoming problem.
DeleteYou still haven’t given any convincing evidence that there is a forthcoming problem.
BTW it's not MY prediction but that of most of the reputable forecasting outfits (all private sector)
And most of them predicted mass unemployment from computers; they were wrong. Mass unemployment from assembly lines; wrong. Mass unemployment from the Industrial Revolution; wrong. Mass unemployment from any number of technologies in between; wrong, wrong, wrong again. Wrong every time.
So why would they be right this time?
And yes it IS lack of entry level vacancies - the start of the AI trend - check with teh recruitment agncies
You’ll have to enlighten me as to how ‘the AI trend’ (or, more accurately, fad) is taking entry-level retail and delivery jobs, let alone personal care jobs.
BTW the spreadsheet actually de-skilled - people who weren't accountants could now do what accountants used to do without the cost (I know I was there)
It didn’t de-skill, it just changed the skills required. It meant that analysis became a valuable skill; precision arithmetic not so much. Same as the tractor changed the skills required in farming from raw strength to ability to work heavy machinery.
We're seeing the same with AI - people and their skill sets are increasingly redundant.
Oh dear, if you’re gullible enough to fall for the sci-fi hype about us all having robot butlers then there’s no helping you, I’m afraid.
Oh dear mor bland generalisations with no evidence to back up your arguments
Deletehere's some AI generated info
Key statistics and projections include:
Current Displacement: AI has replaced an estimated 16,000 jobs per month in the US
Sector Risk: Back-office, entry-level, and part-time jobs are most exposed, with up to 8 million UK jobs potentially at risk if AI is deeply integrated.
Future Outlook: Predictions vary widely; some experts foresee 30% unemployment in specific sectors within five years
Mitigation: Workers who engage in retraining and move into roles requiring abstract skills and human judgment tend to experience better long-term economic outcomes.
So please tell me, assuming this happens, how will your invisible hand free market cope with this? Remember also these people are also your current customers buying your goods and services - but they won't have the income to do that in the future
Details please - it's put up or shut up time
entry level jobs disappearing - let's look at call centres in the UK
DeleteThese relied heavily on part time workers - often students, women with families - and those getting a foot on the employment ladder and a job to put on their CV
Entry-Level Contraction: Since 2021, the number of call centre workers has contracted by 19%, and telephone salespersons by 23%. These roles are being hollowed out as AI handles routine queries.
Hiring Freezes: A significant driver of job loss is not just redundancy but a freeze on recruitment. 38% of employers plan to hire fewer graduates specifically due to AI, and vacancy levels for administrative and customer service roles have dropped significantly.
Long-Term Forecasts: Analyst firm Forrester predicts that AI could reduce contact centre jobs by up to 50% by 2030.
Source: ask an AI bot
here's some AI generated info
DeleteDo you not realise that ‘AI generated’ means ‘essentially meaningless’? Do you not know how language models and weighted next token generators work? Clearly not, because if you did you wouldn’t present ‘AI generated info’ as if it was anything other than a computer doing Dadaist poetry. I suggest you learn about what you are using before you make more of a fool of yourself.
assuming this happens, how will your invisible hand free market cope with this?
You might as well ask ‘assuming space dragons arrive and eat the moon, how will the free market cope?’ or ‘assuming the dead rise and start to eat the brains of the living, how will the free market cope?’, seeing as you seem to be getting your ideas from sci-fi B-movies. The fact is that in all real scenarios the free market has proven to be the best way of finding an optimum distribution of resources. Given that I don’t think there’s any need to respond to your wild and ridiculous hypotheticals.
I do wish you'd do proper research before posting
Delete"Same as the tractor changed the skills required in farming from raw strength to ability to work heavy machinery."
Yes it did. It also contributed to a huge drop in agricultural labour - around a 50% reduction over a 20 year period in the 1950's. And it's not just the numbers it's the wider disruption this causes and its wider effects - depopulation of rural areas, migration to towns and cities, social disruption of communities ...
AI is going to have similar - if not greater - effects and I'm still waiting to hear a sensible explanation of how your free market system will cope with this
Yes it did. It also contributed to a huge drop in agricultural labour - around a 50% reduction over a 20 year period in the 1950's.
DeleteI never said it didn’t. But the point is that as the demand for agricultural labour collapsed, the demand for other types of labour increased, often in ways that were previously impossible but had been unlocked by the very new technology that was displacing the older types of labour.
Job types will shift in the future, of course they will. They always have. Many of the jobs people do now will not exist in the future. But that doesn’t mean there will be fewer jobs. It just means there will be different types of jobs. Our grandchildren will be doing jobs that don’t exist now, that we can’t even imagine, in the same way that we do jobs that our grandparents couldn’t have imagined, even as the jobs our grandparents did do no longer exist.
"Given that I don’t think there’s any need to respond to your wild and ridiculous hypotheticals."
DeleteMeaning you can't.
I suggest we take an Economics 101 class (at least) before joining posts like this again
Meaning you can't.
DeleteWell, indeed. No one can. Because, as I say, you’re getting your information from science fiction. Nobody can respond to something so vague and ridiculous, because there just isn’t anything concrete to respond to.
If you give me a plausible, detailed scenario then I will respond. But how can I — how can anyone — respond to what amounts to, ‘Well, what if this magic thing causes all the lessons we’ve ever learnt from history to become invalid? What then? Eh? Eh? What if a wizard waves a magic wand and nobody has a job any more? What then?’
I will respond to concrete situations, but no, of course I can’t respond to wild fever dreams and science fiction. No one could respond to that.
So here's a concrete situation
Deleterecent report states that over half (52%) of UK companies are struggling to recruit staff with the right digital skills to capitalize on AI
https://www.aboutamazon.co.uk/news/aws/new-aws-report-reveals-that-nearly-two-thirds-of-uk-organisations-now-use-ai
There's clearly a training & retraining need but who should step up and meet it (and pay for it)?
The public sector?
The private sector - and if so how and when?
I'd argue the public sector is best placed to do this given the existing education infrastructure (schools, colleges, accreditation systems, quality control etc) that's in place.
Your argument is .... ?
and here's another concrete situation
DeleteThe UK is losing more jobs than it is creating because of artificial intelligence and is being hit harder than rival large economies (from Bloomberg).
British companies reported that AI had resulted in net job losses over the past 12 months, down 8% – the highest rate among other leading economies including the US, Japan, Germany and Australia
You're free market response presumably is - well just let it happen. Too bad for the folks affected but that's the free market for you.
There's clearly a training & retraining need but who should step up and meet it (and pay for it)?
DeleteI don’t understand the question. Why should there be one ‘somebody’ who pays for ‘it’?
If you’re a company and you need someone to do a job, you either hire someone who already has the skills you need; or if you can’t find them, you hire someone who doesn’t, pay them less, and spend the difference on training them.
Or if you’re looking for a job, you can invest in training yourself with a new skill, which is an up-front cost, but then you get hired at a higher rate and make it back.
Surely that’s obvious?
British companies reported that AI had resulted in net job losses over the past 12 months, down 8% – the highest rate among other leading economies including the US, Japan, Germany and Australia
DeleteRemember that self-reported statistics are not reliable because people have an incentive to tell the surveyors whatever makes them look best, rather than the truth. So I would take that explanation with a pinch of salt if I were you.
Surely that’s obvious?
DeleteI'm afraid what's obvious is that you have no real understanding of economics - I assume you've browsed Economics for Dummies some time ago,
To point out the "obvious" - there's clearly been a free market failure by definition. There's a specific skills shortage that the private sector has failed to address - perhaps because it can't make enough money out of this.
And it's worth reminding you that much of what the public sector now does is in response to previous market failures over the decades
The public sector provides education because the private sector failed to do so for the majority
The public sector provides health care because the private sector failed to do so for the majority
The public sector regulates extensively in response to private sector failings - health & safety, environmental ....
The public sector generally steps in when the private sector has screwed up - because your invisible hand free market system doesn't function as well as you reckon it does
There's a specific skills shortage that the private sector has failed to address - perhaps because it can't make enough money out of this.
DeleteIf it can’t make enough money out of this, that means that it costs more to train someone to have this skill than them having the skill will boost productivity. In other words, the return on the investment of the training is negative.
And of that’s the case, then not providing the training is not a ‘market failure’, it’s a market success. It’s the market correctly identifying that, if the training costs more that you will get return, then it’s a waste of money to train someone to do that job.
That doesn’t change if you push the cost onto the taxpayer (and again, remember, there’s no such thing as ‘the public sector’, there is only money that has been taken from hard-working taxpayers). It just means that it’s the taxpayer’s money being wasted.
Wasting taxpayers’ money is a bad thing and you shouldn’t do it.
The public sector provides education because the private sector failed to do so for the majority
The public sector provides health care because the private sector failed to do so for the majority
And there’s certainly an argument for basic taxpayer-funded education or medical services to ‘fill in the gaps’ in market provision.
But the problem is that we’ve ended up in a situation where the public sector is almost (not quite, but almost) a monopoly provider in those sectors, with all the problems that causes. And there is no need for that. It would be quite possible, and much better, to have private competitive markets in both education and medicine, together with a basic bare-bones safety net to catch those who are unable to provide for themselves and ensure universal service so no one has to go entirely without, but no one would want to use the basic service unless they had no choice because they absolutely could not provide for themselves.
"much better, to have private competitive markets in both education and medicine"
DeleteAs in the US you mean?
Where large chunks of the population simply can't afford even basic health care - and disproportionally even more of the ethnic minorities?
And what on earth is a "basic bare-bones safety net" - free sticking plasters and a cardboard coffin?
Thatcher would be proud of you.
The market failure is that of sub-optimal efficiency due to the shortage of skilled labour - firms are performing less well because they can't get key staff (sounds familiar after Brexit does it?)
Yes the market will respond by offering ever higher salaries in a competitive labour market but that won't increase supply in the short or medium terms given the lead time needed to train additional people
In the meantime individual firm productivity suffers as does the wider economy.
Individual self interest - which is what the free market is all about - then results in collective sub-optimality. (Maybe Economics for Dummies didn't include that).
Pursuing optimality at the micro level doesn't guarantee optimality at the macro level, in fact there's often an inherent conflict between the two.
As in the US you mean?
DeleteMore like Germany, I would say, or Australia.
Yes the market will respond by offering ever higher salaries in a competitive labour market but that won't increase supply in the short or medium terms given the lead time needed to train additional people
Of the bottleneck is the time needed to train people then nothing can increase supply in the short to medium term. So I don’t understand your issue here.
Pursuing optimality at the micro level doesn't guarantee optimality at the macro level,
Maybe not, but it sure does a lot better at getting an optimal macro outcome than any form of central planning.
and where's you're evidence for that?
Deleteand where's you're evidence for that?
DeleteFor what exactly? That free markets are a lot better are getting closer to an optimal macro outcome than central planning?
Only all of history.
You know the story of the Soviet administrator who visited London and grew more and more amazed at the shops overflowing with food, when at home the shelves were all bare, until eventually he blurted out, 'Please, please, take me the meet the man in charge of the bread supply for London so that I can ask him what his secret is!'.
(Or if you prefer a longer version with more rigour than anecdotes, you could read The Constitution of Liberty)
DeleteOh all of history?
DeleteSo the UK should have left WW2 to the free market?
And the Great Depression?
And rebuilding the UK post war?
and as I've repeatedly commented there's more to economics than just efficiency and optimality - there's your own belief system as to what is "right"
DeleteThe free market is based on self-interest and the devil take the hindmost.
There's little role for the public sector and the disadvantaged and vulnerable are screwed
.
Some of us believe life should be better for all not just for some and the invisible hand doesn't deliver that
Count your own blessings that you're not in the disadvantaged/vulnerable group
So the UK should have left WW2 to the free market?
DeleteAnd the Great Depression?
And rebuilding the UK post war?
I don’t really understand what ‘leaving WW2 to the free market would have meant, but the other two, absolutely. Especially rebuilding after the Second World War. If the economy hadn’t been stifled by high taxation and central planning in the fifties to the seventies we probably would have seen growth rates that would have been the envy of the world, instead of being the sick man of Europe.
Some of us believe life should be better for all not just for some and the invisible hand doesn't deliver that
DeleteLet me ask you a question.
Imagine (for the sake of this question, and to avoid being into the mess of real currencies) we can numerically grade people’s wealth in terms of ‘wealth units’.
Imagine a free market society would lead to a case where the bottom, say, 5% have 10 WU each; the next 25% have 100 WU; the next (middle) 40% have 500 WU; the next 20% have 1,000 WU; the next 9% have 10,000 WU; and the top 1% have 1,000,000 WU, and some have much much more.
Whereas a centrally planned society could get to a state where the bottom third have 90 WU each, the middle third have 200 WU each, and the top third have 500 WU each (and nobody has more that 1,000 WU)
I get the impression that — if those were the only two options — you would think the centrally planned society was the better one.
I think that’s mad. Obviously the first society is the better one.
as I've said repeatedly it depends on your belief system. These are totally arbitrary numbers.
DeleteI have no problem with some people having obscenely high levels of income (as long as it's been earned) as long as those at the bottom of the income groups have an income that allows them to have an adequate lifestyle (and I'm ducking the question of what's adequate) - they don't have to use foodbanks, sleep rough, turn off the power when they run out of credit ... etc etc
But a free market system that you advocate has no interest or mechanism for enabling that. As I've said it's a devil take the hindmost system. If that's what you want then accept the consequences for the disadvantaged and marginalised in society.
And let me ask a question in return.
For those who are born with physical or mental disabilities which means they can't earn an adequate income in your free market system - who should support them?
These are totally arbitrary numbers.
DeleteNo, they are not. They are carefully picked numbers to illustrate relative amounts without tying it to any particular currency.
Anyway can I take it I am wrong and you actually agree with me that, with the relative wealth levels as shown, the first system is obviously superior?
But a free market system that you advocate has no interest or mechanism for enabling that.
Surely what matters is the actual outcome, not whether the system has any particular 'interest or mechanism'. If a system in practice has the outcome that nobody is in poverty, what does it matter whether the system had an 'interest or mechanism' for enabling that?
Or do you think that process matters more than outcomes?
For those who are born with physical or mental disabilities which means they can't earn an adequate income in your free market system - who should support them?
Those who can look after themselves have a duty to look after those who cannot. (Obviously those who could look after themselves, but chose not to -- people who are physically able to work but who would prefer to spend their time, I don't know, playing music with their mates -- should starve.)
"If the economy hadn’t been stifled by high taxation and central planning in the fifties to the seventies we probably would have seen growth rates that would have been the envy of the world, instead of being the sick man of Europe."
DeleteAnd yet from 1951 to 1964 we had Tory govts - free marketeers to a man. What happened there then?
And in Germany - which became the economic powerhouse of Europe - huge public sector investment (sorry - taxpayers' money) through the Marshall Plan and a very interventioist German govt. Didn't do too badly there then?
"the first system is obviously superior"
DeleteOnce again it's muddled thinking from you.
One issue is what type of economic system is "superior" at maximising output.
The second issue is how is that output best shared amongst the population?
Since WW2 (and before) the economic mantra has been to maximise GDP (with an expectation that somehow this will lead to "better" standards of living for the majority. In the Uk - and most western economies) there's no doubt that standards of living have increased enormously for most (I personally have no wish to go back to the 50;'s when I grew up)
However, Peter's original post reflects a view that such an economic objective is no longer sustainable for largely for environmental and climate change reasons and that a major change in economic and political paradigm is needed.
The free market system that you support won't deliver that turkeys don't vote for Xmas.
That leads to the second issue about who gets what
We obviously see different scenarios for the future - as I've said previously I see the free market system creating a large underclass with all the economic and social disruption that will cause (think Imperial Russia, Post WW1 Germany. post WW2 China ....)
You envisage a different scenario but no no evidence only comments that "well the experts got their predictions wrong before didn't they?"
Like Brexit perhaps?
And yet from 1951 to 1964 we had Tory govts - free marketeers to a man. What happened there then?
DeleteThose weren't free market governments. And you know that because above you wrote: 'So the UK should have left [rebuilding the UK post war] to the free market?'
In other words you are aware that 'rebuilding the UK post-war' -- which was done in the fifties and sixties -- was not 'left to the free market', which it would have been if those have actually been free market governments.
(The mere fact they were Conservative governments doesn't mean they were free -market governments; the Conservative party has always had a strong anti-free-market faction in it, right back to the Corn Laws, and sometimes the free-market faction is on top, and sometimes the anti-free-market faction is on top, and sometimes there is an uneasy, and always temporary, truce between the factions).
And in Germany - which became the economic powerhouse of Europe - huge public sector investment (sorry - taxpayers' money) through the Marshall Plan and a very interventioist German govt. Didn't do too badly there then?
The Marshall Plan was American taxpayers' money -- of course if you can get a foreign population to hand you cash that will help! Not often an option though.
But mainly, the post-war West German government wasn't very interventionist. It was certainly less interventionist than either the British or the French governments of the period, which is probably why it did so much better. It didn't 'pick winners' or invest in 'national champions' in the way that the French government did, for example, and neither did it establish state monopolies like the NHS, British Rail, British Steel, Leyland, etc etc: it encouraged competition and let companies fight it out.
One issue is what type of economic system is "superior" at maximising output.
DeleteThe second issue is how is that output best shared amongst the population?
That is exactly what my example was meant to show. A free-market system is best at maximising output, and does not distribute that output equally. A planned system distributes equally, but is less good at maximising output so there is less to distribute.
Given those are the two choices, which do you think is better? I say obviously the first; because although some people are worse off than they would be in the planned system, overall almost everyone is at least as well off as they would be in the planned system and some people are much better off.
It seems mad to me to suggest that a system where everyone is poorer, but equally poor, is the superior one. But that seems to be what you are saying. Are you mad?
"the Conservative party has always had a strong anti-free-market faction"
DeleteOh really? Who?
"Given those are the two choices, which do you think is better?"
DeleteAsk the people using the food banks and sleeping rough
Oh really? Who?
DeleteI suggest you read about the Corn Laws. In modern times? Well, Ted Heath. There were famously the 'Wets' whom Mrs Thatcher was constantly battling. In 2020 an anti-free-market faction of Conservative MPs forced the Johnson ministry to back down on planning reform.
Ask the people using the food banks and sleeping rough
DeleteSo you are claiming that 'everybody poor, but at least we're equally poor' is better than 'unequal, with a few people much worse off, but most people as well off or better off'?
Well, glad we have established that you are mad them.
Ted Heath?
DeleteYou're kidding me right?
"Elected in 1970 on the "Selsdon Manifesto," Heath initially promised a radical free-market agenda, including tax cuts and an end to industrial subsidies. "
However, economic events at the time forced him to abandon the free market agenda as industries collapsed and unemployment boomed. He was faced with the realties of market failure.
Heath initially promised
DeleteI believe that politicians should be judged on what they do, not what they say. Do you not?
Lots of politicians say on thing to get elected and then do another once in office. If someone claims to be a free-marketeer to get elected but then pursues anti-free-market policies in office then they were not free-market politician; they just, like many politicians, hid their true agenda to get elected.
Peter, thanks for your initial post. I have to declare an interest before I comment, both as one of your former pupils and also as a retired economist with similar neo-liberal leanings.
ReplyDeleteThe apparently consensus mantra of “more growth” in the UK continues to depress me and is little challenged.
It’s a populist mantra that appeals to politicians and public alike – vote for me and I’ll make you and your kids better off. As you point out it’s both dysfunctional and unsustainable. The UK is a rich country and making the country economically richer will not bring about a better life for most - even in a material sense given the inherent inequalities that exist.
But the alternative message – vote for me and you won’t be any better off but other people will be – won’t get you elected.
Unfortunately I can see no realistic solution.
@Mik. Good to hear from you: remind me in what years were you a pupil. I think the media, and in particular the print media, have a lot to answer for. The latter are largely owned by the "haves" who tend to over-emphasise the "have " point of view becasue its in their selfish interests to do so. The government should do more to regulate press ownership (and such as GB News) and do more to ensure the public broadcasters make it clear where "think tanks" whose views they report get their money from.
DeletePeter I was at BGS from 61 to 68. Took your British Constitution class at A level (got a grade A thanks to you). No exaggeration to say that you changed my life! Many thanks.
DeleteThat's very generous: thanks. But I rather suspect your brains and efforts had a lot to do with it. I'm please you appreciate that you (and I) were lucky to be born in a country that had the services to enable us to live full and satisfying lives. We both seem happy to support the similar good fortune to future generations.
ReplyDeleteYes, but I suspect we're a dying breed and smaller in number all the time. Particularly since Thatcher we seem to have moved to a very self-centred society and lost the idea of looking out for the other fella when we can
DeleteI've just added a PS to the original post. A leader in today's Guardian discusses the WIL report and come to the same conclusion that we have. See:
ReplyDeletehttps://www.theguardian.com/commentisfree/2026/jun/08/the-guardian-view-on-climate-equality-a-richer-life-and-real-public-abundance-not-just-more-stuff
Worth a look.
The Guardian agrees with you, shock. But it does point out that do one will vote for such a vision (I certainly won’t) so it won’t happen.
DeletePeter
DeleteThanks for the link
We’re both at an age were we’ve seen similar reports come – and unfortunately go
The problems the world faces are well documented by those who care and solutions explored but with no progress.
As our Anon poster comments there’s no real public acceptance of these global problems and therefore no appetite for abandoning the self-centred attitudes that many now have – me, me, me and more, more, more
This is compounded by the lack of any real political leadership not just in the UK but globally with politicians focussed on how they can best get elected next time round leading to short-term, reactive and populist policies.
I’m afraid I’m increasingly pessimistic about the future (although I won’t be here to see much of it) and I’m glad that I have no children who will have to bear the brunt of what is to come.
I’m glad that I have no children
DeleteI wonder whether, if you did have children, you would think differently about looking them in the eye and telling them they must accept that they can never have a better life than you.
Who knows?
DeletePerhaps I'd try to get them to understand that "better" doesn't necessary equate to "more"
The World Happiness Statistics seem to sho that people in those countries with a better functioning public sector and a smaller gap between the richest and the poorest are happier. This surely supports MiK W's suggestion the "more " private stuff doesn't necessarily mean a "better" life.
ReplyDeleteSelf-reported happiness is almost precisely one-to-one correlated with GDP: https://ourworldindata.org/grapher/gdp-vs-happiness
Deleteand yet the richest country in the world - USA - is only 23rd happiest about the same as the UK. As the mantra goes - correlation doesn't mean causation
DeleteThe United States isn't the richest country in the world, it's 11th: https://www.worldometers.info/gdp/gdp-per-capita/
DeleteNow okay some of those top 10 are tiny tax havens with skewed statistics (Cayman Islands, Monaco, Ireland) but there are some proper countries there too (Luxembourg, Iceland, Singapore, Switzerland, Norway).
As the mantra goes - correlation doesn't mean causation
DeleteWell yes, except that the initial comment above was attempting to claim that a correlation between 'countries with a better functioning public sector and a smaller gap between the richest and the poorest' and 'happier' showed that greater equality caused greater happiness. Was it not?
Which is it? Does correlation indicate causation or not? Or is it that correlation indicates causation when you like the correlation, but when you don't like the correlation, it's just happenstance?
Statistics for dummies 101
DeleteThe correlation coefficient simply shows the strength of any linear association between two given variables - as one variable changes value does the second.
It does NOT show whether one variable "causes" the other - ie any implied cause/effect relationship
If you want to test for a cause effect relationship then you need to use advanced statistical modelling such as regression
I can recommend books on the subject if needed (including several of mine)
It's largely misunderstood
It does NOT show whether one variable "causes" the other - ie any implied cause/effect relationship
DeleteRight. So:
'The World Happiness Statistics seem to sho that people in those countries with a better functioning public sector and a smaller gap between the richest and the poorest are happier. This surely supports MiK W's suggestion the "more " private stuff doesn't necessarily mean a "better" life.'
is wrong. The observed correlations between 'better functioning public sector' (I don't know what quantitative measurement is even being used for that) and 'smaller gap between rich and poor' with self-reported life satisfaction do not in fact support the suggestion that those things cause higher life satisfaction scores.
(I suppose you could claim that technically if you read literally the suggestion was not that those things caused higher satisfaction but only that they were not incompatible with higher satisfaction. But (a) I think the implication was clearly that there was some causality there, and (b) the literal statement falls into the 'true but trivial' category, because lots of things are not incompatible with higher satisfaction, like longitude and number of native bird species.)
We are all wealthy when you focus on the baseline - nothing. Wealth only looks scarce when you measure it against someone else’s pile. Measured from zero — from hunger, danger, and lack of agency — most of us live in extraordinary abundance. The moment you stop letting politicians and pundits define “wealth” as whatever you don’t have, you realise you’re not deprived, you’re already far above the line that actually matters. Teach that to the kids.
ReplyDelete"Wealth only looks scarce when you measure it against someone else’s pile."
DeleteThere are a variety of different ways of defining/measuring wealth - not all of them are comparative against other people.
there's also a definition of the term as used in economics (which is different from that used in finance and in common parlance) (Look it up)
However, as usual you're off the point - which is that an ever-increasing pursuit of wealth is not sustainable
which is that an ever-increasing pursuit of wealth is not sustainable
DeleteIf we define 'wealth' as 'increasing standard of life' then that is not true. It's entirely possible for an ever-increasing standard of life to be perfectly sustainable, as resources are used ever more efficiently so the that same amount of resources used generates more and more quality of life.
The term wealth has different meanings depending on context
DeleteIn economics it's generally understood to refer to a situation where there is an abundance of resources which have an economic value and can refer to personal wealth or to collective wealth. The term abundance itself is used to describe a situation where supply significantly exceeds demand.
This implies that a wealthy person/economy has more than it actually needs.
However the term is also used in relation to social wealth (the collective value and well-being of a community) and to cultural wealth
The phrase man cannot live by bread alone springs to mind.
A wealthy person/society needn't be measured simply in terms of what it produces
In economics it's generally understood to refer to a situation where there is an abundance of resources which have an economic value
DeleteIn which case the claim that 'an ever-increasing pursuit of wealth is not sustainable' is certainly not true. Because it's entirely possible for the supply of resources which have an economic value to keep ever-increasing as ways are discovered to both extract and use resources more efficiently, and to use more and different resources.
we live in a closed loop economy - the planet.
DeleteGod isn't making any more of those scarce resources that we're consuming at an ever increasing rate. You're pinning your hopes on assumptions that more and more experts say are unrealistic (and save me the platitudes about what do the experts know).
Better book a seat on Musk's starship
we live in a closed loop economy - the planet.
DeleteThe planet is quite obviously not a closed loop economy: it has a massive daily energy input from the fusion reactor that sits in the middle of the solar system, without which none of us would be here. So that's one thing.
God isn't making any more of those scarce resources that we're consuming at an ever increasing rate.<./i>
But both our use of resources, and our ability to extract them, are getting more and more efficient all the time. And as well as that we are discovering ways to use previously-unusable resources. Before the mid-twentieth century, for example, uranium was just a heavy rock. Now it could, if we were sensible and actually built the right kind of power plants, supply, with just the known-to-exist stocks, all our energy needs for the foreseeable future.
We'll be fine.