Responding to Mayism

Ed Miliband never got to Number Ten, but his words did. Theresa May’s talk of fighting “burning injustice” could have come from him. As Phil says, hers was “very much the kind of speech you'd expect Ed Miliband to have made if history turned out somewhat differently.” This poses the question: what should we make of this?

It might, of course, be that her words will prove as false as Thatcher’s when she entered Number 10 in 1979: “where there is discord, may we bring harmony.” This seems to be the view of Chuka Umunna. This, though, raises the question: why is she telling these particular lies?

Another possibility is that, even if she’s sincere, she won’t be able to walk the talk. Her talk of worker-directors, for example, won’t sit well with the Britannia Unchained crew who have called for fewer workers’ rights. With a slim majority, this matters.

However, I prefer the advice of Adam Barnett: let’s take her at her word. If she is sincere, her government will test whether moderate reforms really can improve the efficiency and justice of capitalism. Here, I have several doubts.

 - Her aim of “setting people free to go as far as their talents will take them” runs into the many massive obstacles to true equality of opportunity: the tight link between good state schools and expensive housing; private education and tuition; the cultural capital and connections that richer kids often enjoy; and, perhaps, genetics. As James Bloodworth has said:

Genuine equality of opportunity would require a genuine radicalism – radicalism of a kind that British politicians are unwilling to countenance. (The Myth of Meritocracy, p127)

 - Her desire to improve productivity runs into the fact that it is in fact very difficult for national policies to raise trend growth. She also faces some nasty headwinds. World trade growth has slowed, perhaps permanently – which is bad for both growth and productivity. And firms are still loath to invest – whether because of falling profit rates, a fear of future competition or a lack of monetizable projects.

 - The desire “to create more well-paid jobs” runs into the fact that job polarization and the degradation of erstwhile “middle class” jobs means that good jobs are scarce. These problems might be exacerbated not just by future technical change, but by the fact that Brexit jeopardizes good jobs in finance and manufacturing.

 - Her desire to reduce exploitation “by unscrupulous bosses” insufficiently recognizes the fact that this requires a massive increase in the bargaining power of the worst-off – something that can only be achieved by some mix of welfare reform (a citizens income), much fuller employment, stronger trades unions and a job guarantee.

Herein lies an opportunity for the left. We should ask of her Adam’s question: “yes, and?” We can point out the contrast between her fine ideals and the (probable) weakness of the policies used to achieve them. We should say that achieving her aims requires bolder measures.

Revolutions often happen when people’s expectations increase by more than objective reality. Ms May might – just might – have opened up such a gap.

My point here is that there is a coherent space to the left of May. There’s also – like it or not – space to the right, in the form of free market thinking. What’s not so clear is where this leaves the centre-left. Perhaps there are good reasons why Mr Umunna seems to be in denial about Ms May’s intentions.

Comments

[BCFG]

Nothing has changed if you listen carefully, it is still we will help you... if you work very hard!

Given that the middle classes regard working hard as those few years spent at uni at the tax payers expense I still expect to see aspiration politics and divide and rule between those that work hard and those that don't.

Someone should challenge this Tory blathering about hard work. Hard work is not the solution, better work, quality work is the message. If you work your ass off you are probably just being inefficient and need to upskill. Certainly those in office jobs who work very hard probably need to brush up on the Excel skills, and are probably adding less value because they are taking ages just crunching numbers. Quality work, improving performance requires that you get off the Hamster wheel and think about what you are doing. Hard work is the antithesis of this.

The avoidance of hard work is the motor of history, all the great inventions lighten the work load.

Hard work should be a dirty word. Any politician spouting off about hard work should be held in contempt.

[Phil]

Yes. The cries of "OMG she's eaten the Left's lunch while Corbyn was piddling around with Cuba Solidarity!" are at best a half-truth; the answer to that is "no, mate, she's eaten *your* lunch, while you were piddling around trying to depose your own leader".

[Roy Lonergan]

Two things:

1. Perhaps she's setting a longer-term agenda for her 2020 government which will probably have a healthier majority and fewer problems with the bastards?

2. Do you recommend the Bloodworth book? Looks interesting.

Roy

[Mark]

You write that, 'Her desire to reduce exploitation “by unscrupulous bosses” insufficiently recognizes the fact that this requires a massive increase in the bargaining power of the worst-off – something that can only be achieved by some mix of welfare reform (a citizens income), much fuller employment, stronger trades unions and a job guarantee'.

Of these, the relationship between the supply of labour and demand for it is the most important. The difficult message for the metropolitan left, and I'd argue the reason why Brexit won with the support of many people who traditionally don't vote, is that large-scale immigration tips this balance in favour of employers.

The big unanswered question of the EU referendum campaign still lingers: if we can't have single market participation (and passporting for our financial services businesses) and the right to restrict freedom of movement of labour, which will the government choose? May's comments suggest the latter.

[Peter K.]

About global growth, that remains to be seen.

With better demand management (fiscal, monetary, trade) policies once could possibly reverse the process where long, shallow recoveries reduce potential GDP growth. Instead of hysteresis, once gets reverse-hysteresis with the economy pulling in long-unused resources and growth return to historical levels.

I doubt the Conservatives will engage in enough fiscal action to do this. I doubt Carney will do enough to avoid Brexit recession.

Even Labour went for austerity lite, no?

[Endrew]

@Peter K.

Demand management! What utter bollocks! We have no idea why or even if there is a "demand deficit" but let's just manage it by falsifying signals and hope for the best! Never mind diagnosis - let's get straight to the cure!

[Endrew]

@Chris - Why do you believe that a PM boss could effect such dramatic positive change when you are so sceptical of the abilities of bosses even at individual company level?

[Endrew]

@Mark - absolutely. Labour did great relative to capital in Europe after the Black Death. How a union supporting Marxist can be so pro-immigration has always escaped me.

[theOnlySanePersonOnPlanetEarth]

"How a union supporting Marxist can be so pro-immigration has always escaped me"

Maybe you should read some Marx and find out

[Igor Belanov]

'Labour did great relative to capital in Europe after the Black Death.'

Quick, close all the hospitals and we'll all be driving solid gold Rolls Royces!

[gastro george]

"We have no idea why or even if there is a "demand deficit" ..."

I suppose that all those factories with idle capacity and all of the under- or unemployed don't give you a clue.

[Socialism in One Bedroom]

"Labour did great relative to capital in Europe after the Black Death"

Whisper this but capitalism did not really develop until the 16th century. Endrew is either a comedian or an ignoramus. Given his other comments I would go for comedian.

[Endrew]

'SiOB - There was a wage labour economy and there was capital, so your objection to me referring to such things is nonsense, regardless of when you consider when the -ism "really developed". This is well described in academic literature, not something I just pulled out of my arse.

Furthermore, it is *interesting* - so perhaps you would better enjoy engaging with the subject rather than attempting facile knock-downs next time.

[Endrew]

@gastro george - No they do not give me a clue. What that tells me is that there is LESS demand for those particular outputs than there is current capacity.

Whether that means there SHOULD be more demand for those particular things is an entirely different question. Those things might be undesirable in the long run. Does an idle Furbie factory mean we SHOULD try to stimulate Furbie consumption? Does it mean we should spend resources upon Furbie production rather than on something we have not built a factory for?

[Endrew]

In addition, those things might be superficially desirable, or desirable in a perfect world, but currently an unwise use of constrained resources.

Simplistic assumptions about capacity, growth, employment and consumption as if they were just a mass of fungible stuff, which has "natural" yet unexplained "long term" values, are just that.

In actual fact it matters exactly WHAT people are producing and consuming ESPECIALLY in the long term.

Keyne's half-serious suggestion of burying printed money in bottles would generate nothing but environmental degradation, the waste of fuel and metal, and the waste of a generation mistrained and misemployed in bottle-mining.

The alchemy between arbitrary stimulated economic activity and constructive economic development has not yet been elucidated and is highly speculative. The cost of real resource expenditure is not.

[gastro george]

@Endrew - your argument is circular and self-fulfilling - that there can be no deficiency in demand because the demand is not (currently) there, in the form of current purchasing decisions.

But that argument is both trite and futile. For example, would you say that there is no demand for pothole-filling because pothole-filling is not being done?

[Endrew]

@tPSPoE - Maybe I should read some Marx. I may skip the bits about class struggle and the inevitability of a classless private propertyless society! He obviously had no idea how power works. Or capital and labour, for that matter - I'll skip the labour theory of value and the falling rate of profit too (though I'm assured those are a minor details).

[AndrewD]

With regard to capitalism after the Black Death, there was a paper by the historian Christopher Dyer, entitled (I think) " Capitalism in the 15th century", I do not have access to a copy at the moment but it was reprinted in a book of papers by Dyer whose title escapes me. If I can I will try to find it in my Local Library (Leicester Central). Dyer's conclusions where, from memory-no,there wasn't capitalism in the 15th century or before either.
Any historians reading who can correct me if I am wrong?

[AndrewD]

Found it, The Dyer piece is "Were there any Capitalists in 15th century England" in "Everyday life in Medieval England" (which is a collection of essay's and papers.)

[Endrew]

It is irrelevant whether there was capitalism in the 15th century. There was capital and there was a wage labour. So I can entirely correctly point out that labour did well relative to capital (i.e. the aristocracy and richer merchants) after worker numbers were radically reduced by the Black Death. Wages rose. Very simple.

[Endrew]

@gastro george - "@Endrew - your argument is circular and self-fulfilling - that there can be no deficiency in demand. But that argument is both trite and futile."

Circular, self-fulfilling, trite AND futile! My my!

I said no such thing. Keep up everyone. we would all do better if people stopped assuming I am a complete moron. Try the principle of charitable interpretation - it's fun!

[Socialism in One Bedroom]

"It is irrelevant whether there was capitalism in the 15th century. There was capital and there was a wage labour."

Not to the extent that you can make the claim that Labour was doing great relative to capital, this is a very particular measure of a fully developed capitalist economy.

It is a bit of an idiotic statement when you break it down, isn't it? I mean Labour was doing great, not exactly scientific is it. I am still sure you are a comedian and a not a complete moron, many great comics have employed idiocy as a tool. It can be seen in virtually every comment you make, which is quite a remarkable feat on your part.

[Dave Timoney]

The claim that the Black Death led to higher wages is largely a myth, arising from the confusion of real and nominal prices in a period of oscillating inflation and deflation. Real wages did go up in the late 14th century, but this was 30 years after the Black Death, around 1380.

What the Black Death did do was fracture the feudal system, which led to greater geographic and social mobility (the Statute of Labourers of 1351 was about preventing farm workers moving as much as capping wages), a spur to labour-saving technology, and a greater focus on marginal value (e.g. poorer quality land was temporarily abandoned as demand fell).

Ceteris paribus, a consistent decline in the population means a fall in both demand and labour supply, so the net effect would be neutral. Where there is evidence of increased wages in the 1350s is in specialised occupations that were disproportionately hit (i.e. particular jobs in particular areas - and mainly urban rather than rural).

Talking about pulling things from one's arse ...
https://ideas.repec.org/p/tor/tecipa/munro-04-04.html

[Endrew]

@fAtE - thank you for an interesting and substantive comment.

I hardly think it surprising that a cataclysmic event like the black death did not immediately raise the real wealth of the wage labourer, especially given the violence of that time.

Although I acknowledge that drawing firm conclusions about broad econosocial trends over 6 centuries ago is problematic, I would still argue that the massive labour reduction relative to things like farmland would have increased demand for that labour for many decades to come. This would be reflected in favourable political change as well as wages. I don't think your article disputes that, and indeed you agree with the general point about labour supply, if only within the scope of specialised labour.

If this view is shown to be ahistorical nonsense the then I will have learned something, but it will take a little more to convince me that the power of labour relative to capital does not significantly depend on supply of that labour in the general case. Nor that one of the main mechanisms by which unions exert power is by the control of that supply.

[Blissex]

«The claim that the Black Death led to higher wages is largely a myth, arising from the confusion of real and nominal prices in a period of oscillating inflation and deflation.»

That's extremely controversial to say the least. Consider this very nice paper:

http://www.najecon.org/naj/cache/625018000000000238.pdf

where they use documentary evidence of wages and bread prices, so it is all beyond inflation and deflation. That graph shows a *dramatic* spike around 1350 that goes back to trend around 1550, where real wages (for both farm laborers and skilled craftsmen) in 1400-1500 reached levels considerably higher than they were in 1850.

We don't have just the documentary evidence of nominal wage and bread prices, there is also ample record from the same times of property and business owners complaining about how difficult it was to find servants and workers and how uppity they were, and decrees setting *maximum* legal wages.

The spike in figure 8 above is so large that it needs a really big cause. Did anything happen in or around 1350-1400 in England (and other countries) that can explain a tripling of real wages in a century, and a subsequent fall of almost the same magnitude from 1500 to 1600?