By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, 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 published at Tax Research UK
I mentioned yesterday that I was going to a model railway show. I duly did so, and greatly enjoyed myself.
A thought, inevitably, occurred to me as I was wandering around. In economic terms, model making (and many other hobbies) must be amongst the most unproductive things we can do. Vast amounts of effort is usually put into very small quantities of material input 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 making it.
This is virtually the exact opposite of what the economist values. They want to minimise labour input into any product, always seeking to maximise the material input instead. The result is a profoundly homogenised product that they actually say has only marginal value.
And before anyone sys I am playing with words when making that last claim, of course I am. And yet when doing so I seem to find an inner truth: most of what can be bought actually appears to have little value attributed to it. That is why we live in a such a throwaway society.
Further thoughts followed, of course. One was that until we cure the world of the economists’s obsession with productivity that maximises material input in proportion to labour cost we will not solve three problems.
One is sustainability. Productivity as defined by economists demands we consume ever more material resources in proportion to human effort. We know that is not possible now. It is, literally, killing us.
Second, we need find ways to create meaningful work, which seems to me to be one of the great problems of our age. David Graeber described the world of work as being full of bullshit jobs. I would simply call them shit jobs, because that is what they are.
These jobs treat people as if they are material inputs into a process. Impossible demands are made (I have never yet been able to reconcile the commonly made demand for team players who simultaneously have a high degree of individual creative flair). Worse, meaning is absent. That is what productivity demands.
Third, public services and most things of value are destroyed. I refer, of course to what is called Baumol’s Law.
What this economic law says is that as the private sector improves productivity, as it has been able to do by destroying the planet and creating shit jobs, those engaged in the public sector, the arts and other creative sectors like 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 does not make it better. The time taken to explain algebra to a child struggling with it is pretty much a constant, I suspect.
However, wages in the private sector have risen over time because productivity has increased. As a result those in the public, creative, education and other such sectors must do so as well or people engaged in them will have to move to the private sector. Politicians miss the point when they demand increased productivity in exchange for those public sector pay rises: that supposed increase in productivity actually destroys the service the public and other such sectors supplies.
The reality is that the public sector cannot and never will match productivity gains that can be achieved in the private sector as a result of destroying the planet. But that does not mean we should abandon public sector services as unaffordable, which is the supposedly logical consequence that economists now says follows from this because those services have, apparently, become unaffordable. Instead, it means that we should now accept that a higher proportion of labour resources must go to the state to supply those essential public services that we have always enjoyed, with a resulting increase in cost that we need to now pay. It’s either that, or we destroy everything of value.
Can we expect politicians to get their heads around this very obvious idea? Or should we accept that what was once entirely affordable is now not so entirely because the costs of trashing the planet are not taken into account in economists’ (and accountants’) estimates of productivity?
What is it to be? A sane economics that says we must stop trashing the planet so that we not only have a chance of survival but also can have the things (like the NHS) that we value, or are we to just live in a literal throwaway society where everything of worth is going to end up abandoned and destroyed?