By Richard Murphy, CPA and Political Economist. He has been described by the Guardian newspaper as an “anti-poverty activist and tax expert.” He is Professor of Practice in International Political Economy at the City University of London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally posted on UK tax investigation
I mentioned yesterday that I was going to a model railway show. I did so duly, and had a lot of fun.
A thought inevitably occurred to me as I wandered. In economic terms, model making (and many other hobbies) must be among the least productive things we can do. Typically, large amounts of effort go into very small amounts of material inputs with a result that, if it were to be sold, rarely reflects the value of that time. And yet, what is produced is of great value to those who make it.
This is virtually the exact opposite of what the economist values. They want to minimize labor input into any product, always looking to maximize material input instead. The result is a deeply homogenized product that is actually said to be of only marginal value.
And first of all sys I’m playing with words in making that last statement, of course I am. And yet, in doing so, I seem to find an inner truth: Most of what you can buy actually seems to have little attached value. That is why we live in such a disposable society.
Other thoughts followed, of course. One was that until we cure the world of economists’ obsession with productivity that maximizes material input in proportion to labor cost, we will not solve three problems.
One is sustainability. Productivity as defined by economists requires that we consume more and more material resources in proportion to human effort. We know that is not possible now. It is literally killing us.
Second, we need to find ways to create meaningful work, which seems to me one of the great problems of our time. David Graeber described the world of work as full of bullshit jobs. He would just call them bullshit jobs, because that’s what they are.
These jobs treat people as if they were material inputs in a process. Impossible demands are made (I have never been able to reconcile the commonly made demand of team players simultaneously having a high degree of individual creative talent). Worse yet, the meaning is absent. That’s what productivity demands.
Third, public services and most valuables are destroyed. I refer, of course, to what is called Baumol’s Law.
What this economic law says is that while the private sector improves productivity, as it has been able to do by destroying the planet and creating shitty jobs, those who are dedicated to the public sector, the arts and other creative sectors such as education have not been able to match those productivity gains.
A 50 minute therapy session still takes 50 minutes. Doubling the speed of most music doesn’t make it better. I suspect that the time it takes to explain algebra to a child who struggles with it is pretty much a constant.
However, wages in the private sector have increased over time because productivity has increased. As a result, those in the public, creative, educational and other sectors must do so too or the people involved in them will have to move into the private sector. Politicians miss the point when they demand higher productivity in exchange for those public sector wage increases: that supposed increase in productivity actually destroys the service that the public and other similar sectors provide.
The reality is that the public sector cannot and will never match the productivity gains that can be achieved in the private sector as a result of the destruction of the planet. But that doesn’t mean we should abandon public sector services as unaffordable, which is the supposed logical consequence that economists now say follows because those services have apparently become unaffordable. Instead, it means that we should now accept that a greater proportion of labor resources must go to the state to provide those essential public services that we have always enjoyed, with the consequent increase in the cost that we must now pay. It’s either that, or we destroy everything of value.
Can we expect politicians to understand this obvious idea? Or should we accept that what was once totally affordable is now less so because the costs of destroying the planet are not factored into economists’ (and accountants’) productivity estimates?
What is to be? A sensible economy that says we need to stop trashing the planet so that we not only have a chance to survive but also have the things (like the NHS) that we value, or we’re going to live in a literally disposable society where anything goes Will the penalty end up abandoned and destroyed?