Freeports, fracking and trickle-down tax cuts wrapped in workfare austerity? Liz Truss latest Ode to Growth sounded so out of tune with realities, even the money markets didn’t know if they should laugh or cry at this eye-wateringly incompetent re-hash of 1980’s neolibbery. Neither FT nor Economist were amused, and the polls seemed to be shouting: “Wrong! Wrong! Wrong!”
ft.com 8-10-2022 1-10-2022 How Liz Truss is out of sync with the British public
economist.com 1-10-2022 The fallout from Kwasi Kwarteng’s mini-budget continues
economist.com 8-10-2022 Liz Truss turns to accidental austerity
ft.com 8-10-2022 Truss vs the ‘anti-growth’ coalition
The UK government’s spectacularly anti-green dash-for-growth may have earned F-grades all round for its flippant incompetence.
But GdP-growth is the oxygen of the Status Quo: “There must be growth, and growth means GdP, and GdP is all there’ll ever be…” the incumbent mainstream chorus chants. After all: “There is no Alternative!”
“Wrong! wrong! wrong!”, you may want to object, pointing to the regressive inequalities and destructive eco-crises after half a century of free market orthodoxy. Indeed the public seems to be more aware of the contextual complexities:
economist.com 1-10-2022 What British people think about economic growth – Liz Truss has made growth her defining mission. Britons have other priorities
Facts are, there better be alternatives given that we are doomed if we don’t grow, and doomed if we do. As the Economist put it:
“We must face is this fundamental truth: The dream of a planet of almost 8bn people all living in material comfort will be unachievable if it is based on an economy powered by coal, oil and natural gas. The harms from the cumulative emissions of carbon dioxide would eventually pile up so rapidly that fossil-fuel-fired development would stall.”
economist.com 30-10-2021 why-the-cop26-climate-summit-will-be-both-crucial-and-disappointing
Stuck between the economic necessity of continuous GdP-growth and its ecological impossibility, humankind urgently requires a serious re-think of its political economies, not some lazy Last Hurray for GdP-growth.
Just follow the money…
see also – UK growth
theconversation.com 29 -3-2023 Why economic growth alone will not make British society fairer or more equal – by Stewart Lansley read here
theconversation.com 24-3-2023 Four ways the UK economy is being hampered by the private sector – by Alan Shipman
…”…In 2016, when UK business investment finally recovered to levels similar to those before the 2008 financial crisis (around 10% of GDP), growth didn’t pick up as conventional forecast models had expected. Trends are worsening further as the recovery from the devastating impact of COVID stalls. One cause appears to be what’s referred to as “financialisation”: when non-financial firms chase profit through financial and real estate investment, instead of spending on more productive new equipment and innovation. But this is often risky when interest rates rise or asset prices fall. … Ministers and the Bank of England have urged employees to keep pay rises below inflation, to avoid a “wage push” that might keep inflation high. Though many protested in an ongoing strike wave, on the whole, wages have not matched inflation. In the year to January employees got an average wage rise of 7% in the private sector and just 4.8% in the public, compared to consumer price inflation of 10.1%. In contrast, the speed with which companies raised prices to match (or even exceed) their rise in costs, suggests the “profit push” has been stronger than any wage push in driving inflation upwards….”…
ft.com 8-10-2022 Five ideas that might actually boost UK growth
independent.co.uk 10-2022 The real ‘anti-growth coalition’: Five biggest barriers to the UK’s economic growth – We need a government that can focus on detail, not one that spouts ideology – by Hamish McRae
“What on earth are we to do about growth? Liz Truss railed against the “anti-growth coalition” in her speech to the Tory party conference, and met with a robust response. But there is a huge problem with the relatively slow rise in real living standards in the UK, with the poor performance dating back many years. …”…
see also – GdP-growth, green-growth, degrowth
…”…As to the money system requiring monetary growth derivatively divorced from “real value”, here is Mark Carney’s statement (later echoed by Rishi Sunak)
“We need to rewire our economies … not to be judged on style or black box ESG ratings …but hard numbers for true sustainability. … To make all this add up we must build a financial system entirely focused on net zero.”…ft.com 30/10/2021 Mark Carney
I hope Mike Carney is not literally equating sustainability with net zero? I also hope that by hard numbers he means real socio ecological quantities, not their monetary valuations.
It is production that has got to go green, let alone fair. Not just the narratives of valuation but production itself. Production pre-cedes and feeds consumption. Ultimately to consume sustainably I need to consume sustainable products. Sustainable eco valued products replacing unsustainable ones is presumably part of any transition.
Measuring pollution via the personal footprint of consumption is to fall for a calculus that distracts from the real source of pollution, ie the product and its reproduction. When used as a metric for status rankings, personal eco-footprints turn into weapons of the divide-and-rule variety, unleashed perhaps by fears of overpopulation or product transparency?
It is products that need to be valued independently of price. I don’t want transparent people but transparent products. I don’t need to know about corporate commitments. I need to know the product’s composition. I don’t care about the brand’s philosophy but I want to know how much irresponsibly mined copper, non recyclable plastic and dehumanising labour are contained in my next electric toothbrush? I want hard ESG type numbers processed from real hard data to signal the product’s relative virtue for real. Or rather the anti-virtue or disutility in terms of global unsustainability. Read this as a story about paying back a loan from the planet, or more to the point: spelling out the costs to the products eco-social contextuals, ie ultimately the human planet. Think of it as the globe taxing the unsustainable processes of production. Many ways to do it. Plenty of precedents for turning debt into money. Including the monetary status quo with it’s 97% credit money.
Lately economists have rallied around a carbon tax. Having preached “Tax is Evil” for 50 years, perhaps not surprising no one has been listening to the new sermon. As Black Rock ESG dissident Tariq Fancy reminded us, this is capitalism, if you want to stop production of something, you got to make it unprofitable. So you tax it. …
… Carbon tax is better than zero tax, let alone the existing subsidies. Nonetheless the Davosian net zero ambitions smell of a fishy portfolio cop-out, externalising pollution to infidel investors or shell covered funds: “Ooops, I honestly never knew I still had money in slavery?” Unless net zero refers to the absolute global eco-physical balance it’s just privatised financial absolution: “I still use slaves but I don’t actually own them any longer?” That’s just part of why net zero is potentially counterproductive. Also there is a lot more to the climate crisis than carbon…”…
…”…Refreshing as Branco Milanovic’s contributions are relative to the irrelevance of can’t-do-macro 101 ortho-economics, he nonetheless fails to appreciate the gravity of economics having lost all measure of value. Positioned on the plinth of mainstream respectability he is generously eccentric to even engage with the naively unrealistic hetero doughnut economist Kate Raworth. Having praised her for being marginally more reasonable than most other curveball cranks, he nonetheless feels compelled to cite her “agnosticism on GdP” as undermining her “Doughnut Equilibrium Model”.
Such is the realistic gravity of Capitalism Alone. Infused with an apparently Leninist conviction in the necessary unfolding of history, one does not even bother to deny one is under the spell of TINA, in this case objectifying a 3rd-rate operational definition into the naturalised real: because GdP is the only metric we have, it must measure something relevant and real. Or at least correlate with it, as Tim Harford recently tried to reassure us...”…
…”…There is something airily apolitical about DeGrowth at times. But this naivete needs to be put in perspective. As Benedikt Schmitt reminds us “Scholarship on transformation … is challenged to formulate how change beyond growth-dependent and “capitalist” modes of social organization might unfold. Trapped between the double utopia of the current situation: While it is clearly an illusion that society can continue , fundamental change beyond capitalism seems equally implausible.”
Perhaps even more poignantly, the naiveties of alternative imagined futures should be compared to those of the present “realistic” status-quo-forever unfolding. Like imagine the existing global GDP economy progressing nicely and greenish along the present trajectory to eradicate poverty at $1.25 a day. Apparently it would take more than 100 years. And at a slightly more real $5 a day level, it would take 207 years. “Global GDP would have to increase to 175 times its present size, ” writes Jason Nickel, “…driving global per capita income up to $1.3 million. In other words, the average income would have to be $1.3 million per year simply so that the poorest two-thirds of humanity could earn $5 per day.” This “extremely optimistic scenario” is the best we can expect from the business-as-usual trajectory of the development industry…”…
…”… With her short sharp questions, Losmann drills her way through the particular perspectives of the participants to shed light on the trinity of money, debt and growth. Thanks to Losmann’s heterodox approach this trio is changing before our eyes. Since she does not burden herself with the orthodox bullionist or commodity theories of money, she travels unveiled on a chartalist credit card of debt-money: Debt is money and money is debt, as the case may be.
So the triptychon is dynamized into a ménage à trois, where perpetual growth drives the other two to grow in tandem, recurrently re-declaring themselves as either credit or debit. How exactly remains rather mysterious. It becomes clear, however, that wealth is made from owning debts and that as the amount of debt increases, the Matthew effect becomes a hockey stick. As an upper wealth advisor explains: with larger sums, even small percentages make a lot of extra wealth. … Mysterious as the motor of growth remains, making profits cannot be it. Depending on the level of education and positioning, the finance professionals have different views on how profits are made. But everyone agrees on one thing: you absolutely need growth…”…