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August 04, 2023

Comments

Richard

Sorry to hear about the cycle incident. Hope you are well.

GCarty80

How much of the decline in UK productivity after 2007 was down to the increasing exhaustion of North Sea oil and gas fields?

Jan Wiklund

One can add to the list of non-productivity all the computerization that is done mostly to control people and document that they are actually working. Teachers, for example, who use half their days to teach and the other half to fill in forms to prove that they teach.

But this is probably only the tip of the iceberg, see https://hbr.org/2017/08/what-we-learned-about-bureaucracy-from-7000-hbr-readers

Green

For blissex all government spending is financed by seigniorage (creating money) and borrowing doesn't happen until end of the day. 90% with blissex and 10% with 'buffoon wing of MMT':

https://www.taxresearch.org.uk/Blog/2023/04/20/government-spend-precedes-tax-in-the-real-world-but-not-for-the-reasons-some-supporters-of-modern-monetary-theory-suggest/#comment-929480

"I believe the mainstream theory government finances spending by tax, borrow or print is wrong. In the UK all government spending works by creating money and there are unlimited intraday overdrafts at the central bank borrowing happens at the end of the day. Money can’t leak abroad it is a swap/exchange, not a conversion. If there is no saving or pay back bank loans in the spending chain you will get all government spend back as tax. Similarly, if people spend from savings or take out bank loans and spend no saving or pay back bank loans get all that money back as tax too. Government spend at Tesco get some back as VAT (taxes as ‘cashback’), Tesco pays its employees another chunk taken by government in income tax and so forth.

https://publications.parliament.uk/pa/cm200102/cmselect/cmpubacc/349/349ap02.htm

Point 20 says:

“ensure that its position is balanced at the end of each day”

Also at diagram in bottom surplus/shortfall in consolidated fund."

Some Guy

It seems like your proposed causes for the stagnation suffer from the same flaw as blaming over 50 participation, it is not as though they suddenly appeared in 2008.

What seems more likely is that the stagnation is a function of high energy prices, combined with UK being an energy importer, combined with stupid auesterity measures.

ltr

I only hope you are well and will take extra care when riding again.

This essay is brilliant...

rsm

As an over-50 who cannot imagine returning to the toxic workplace where social game-playing is rewarded more than efficiency, why shouldn't I take advantage of defined-risk options spread trades to try to hedge inflation?

What if I told you I can do a credit call spread (sell a long call, buy another at a higher strike) that shorts the British Pound (based on the sentiment in this blog) and get paid $33, then monitor it to get out before the premium received evaporates in case FXG increases? Would you tell me I should aspire to work in a factory instead, because you need your neckties or whatever?

Scurra

Another thing about over-50s 'leaving' the workforce that is connected with management and that I think is probably underrated is that it's also psychologically difficult to have a manager who is noticeably younger than you. Unless they are clearly competent and willing to listen (yeah, right), there's likely to be a significant tension and if someone was already inclined to think about getting out, this would be a good, if not explicitly stated, reason.
I imagine that this trend has accelerated over the past couple of decades because the MBA takeover is effectively complete now, making it almost impossible to find other work that isn't being solely ruled by the spreadsheet.

DrAlfOldman

Your observation about flat-lining UK productivity is indeed spot-on. I put the 'why' question to Google Bard, experimental AI tool. It supports your argument well. However, in age of AI, surely Marxism is like a dinosaur? See https://g.co/bard/share/be90681e470f

Blissex

From an employer's point of view there is a labour shortage as long as wages are higher than the cost of bare survival, and they can argue that since the global wage is around £1/hour there is such a dire labour shortage in the UK that employers are exploited by greedy workers with £10/hour wages.

In political practice "struggling to recruit" is something that employers *always* complain about as an euphemism for "wages are too high" and it means simply "more immigration".

As to "bullshit jobs" and other forms of underemployment they are just to keep the servant classes busy for public order reasons, too many servants on too short work weeks (JM Keynes thought by 2030 there could be a 2 working days per week) could create confusion of give them strange ideas.

NB the number of days worked per week *on average* is a more subtle topic than it seems, because one must look at the *lifetime* average (including length of education and of retirement), and include that of women.

rsm

At the risk of being seen as advancing a strange idea due to my nonviolent noncooperation with labor markets, what if public policy encouraged employers to invest in financial markets so payroll couldn't be used as an excuse to complain anymore, because the expense pales in comparison to financial capital productivity? Would my productivity increase if I made money on options spreads without working for an institution? Why isn't finance the way out of our problems, if only regulators would stop placing barriers in the way of little guys like me (3 cents regulatory fee per options contract) trying to take advantage of the financial free lunches that the big boys enjoy (the big guys are exempt from the fee)?

ltr

Your observation about flat-lining UK productivity is indeed spot-on.... However, in age of AI, surely Marxism is like a dinosaur?

[ Look to the years of limited investment in the UK and the investment emphasis in China. Then look to the Chinese success in new energy vehicles. What has worked for NEVs is socialized or directed investment in China. The UK needs an investment mix, but that was lost after 2007. ]

Blissex

«Look to the years of limited investment in the UK»

That is one of the usual myth pushed by the corporate media: there has been massive investment in the UK, for decades, in financial and real estate assets, that has made owners of finance and property businesses and assets very productive (in income per hour terms).

The UK government simply has had different priorities from the PRC government (even if the PRC government will eventually adopt those priorities as the classes from which it is expressed have increasingly acquired significant portfolios of finance and property assets).

Blissex

«there has been massive investment in the UK, for decades»

">https://thenextrecession.wordpress.com/2018/09/06/a-plan-for-a-new-economy/>
«Back in 2012, the UK firefighters union (FBU) commissioned a report on the banks, that I wrote jointly with Mick Brooks. We found that less than 5% of lending by UK banks went towards productive investment by companies. The rest went on real estate (mortgages) or lending to other financial institutions for speculation.»

">https://discussion.theguardian.com/comment-permalink/134833266>

https://discussion.theguardian.com/comment-permalink/134833266
«No British politician in his right mind is going to let property prices fall. It would kill the government. But, far more importantly, most of our MPs own two, three or more homes. The wise thing to do is do as I did and follow suit. If two homes are good enough for our esteemed political leaders then, I figured, it’s also good enough for me.»

ltr

«Look to the years of limited investment in the UK»

That is one of the usual myth pushed by the corporate media: there has been massive investment in the UK, for decades, in financial and real estate assets, that has made owners of finance and property businesses and assets very productive (in income per hour terms)....

[ I am, of course, correct that investment in the UK as defined by the IMF has lagged significantly for years. The lag in investment in turn has meant little growth in productivity for years:

https://www.imf.org/en/Publications/WEO/weo-database/2022/October/weo-report?c=924,112,111,&s=NID_NGDP,NGSD_NGDP,&sy=2007&ey=2022&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1

October 15, 2022

Total Investment & Gross National Savings as a Percent of GDP for China, United Kingdom and United States, 2007-2022

The UK can maintain property prices and build manufacturing industry as well. Look to Singapore. ]

ltr

The wise thing to do is do as I did and follow suit. If two homes are good enough for our esteemed political leaders then, I figured, it’s also good enough for me.

[ Yes, I understand completely and agree but a healthy UK economy needs more than a property and finance base. Also, there is an education base that allows for all sorts of research and development work. The potential is all there; what is needed is industrial policy. ]

rsm

With comments like the above, is it any wonder that shorting the pound seems like the kind of bet that would increase my productivity enough to buy two houses (if that was what I even wanted)?

Simon

This is a serious (and possibly silly) question from someone who is not a trained economist: is the decline in productivity growth linked in some way to the ubiquity of distracting personal devices in the workplace (or even the browser on their desktop)?

Are knowledge workers less able to concentrate and come up with useful ideas because they’re constantly interacting with the black mirror?

Are work-related apps, some of them more to do with monitoring the employee than making him or her more productive, another factor?

Correlation does not mean cause but it is interesting that the productivity issues started happening in the wake of the iPhone being released.

And sorry to hear about the bike accident. I bet the driver was looking at his phone.

Blissex

«it is interesting that the productivity issues started happening in the wake of the iPhone being released.»

There is not much evidence that certain types of computerization have helped productivity, and many have simple replaced the phone and printed catalogues with messaging and web pages.An improvement bust modest.

But the vast majority of the (physical) productivity increases of the past 200 years have been given by the enormous contribution of coal first and oil later, in two modes: extensive adoption (more people use them) and intensive adoption (the machinery that feeds on coal and oil becomes more efficient).

https://royalsocietypublishing.org/doi/pdf/10.1098/rsta.2011.056
https://voxeu.org/article/industrial-revolution-energy-revolution
https://oll.libertyfund.org/titles/jevons-the-coal-question

Unfortunately in the "first world" most of both extensive and intensive adoption of oil was over in the 1970s-1980s, so we currently rely on the much smaller improvements from further division of labour and from improved technology, which are subject to diminishing returns.

Note: think of cars as horses feeding on mineral oil, airplanes as giant birds also feeding on oil, chemical plants as forests feeding on mineral wood. ...

Kester Pembroke

its a huge mistake for the left wing to oppose immigration controls UK post Brexit (and all rich countries) should implement Net Zero Immigration instead of stealing skilled staff from poor countries. It is, very simply, completely immoral for a liberal person to take a trained doctor from a developing nation where they have endemic malaria and rickets without supplying an equivalent replacement doctor in return. Money is not sufficient. Second problem is the result then is the same as training in firms. They stop doing it. Why invest if you’re just going to get poached. Then everyone is screwed! It’s a fundamental issue, that cannot be rectified by paying money. It should be a EXACT like for like swap, or we’re depriving ‘overseas’ of a doctor. The swap is of value as each doctor learns the issues in the other area – making them both more rounded overall. How is stealing doctors different from stealing their oil?

Blissex

«completely immoral for a liberal person to take a trained doctor from a developing nation where they have endemic malaria and rickets without supplying an equivalent replacement doctor in return»

What about the individual right of the doctors to escape a life of low income and frustrating work in a backward country to instead enjoy a comfortable middle class lifestyle in a developed country working in much better (if not for long yet in the NHS) environments?

If poor countries train doctors etc. at state expense and don't require those doctors to pay back the cost of their education if they emigrate, that's their choice (their governments probably expect remittances to flow back, and don't care much about what happens to the health of their overabundant servant classes).

As to the UK, the Conservative, New Labour, LibDem policies are cleverly and consistently shaped to do what is best for their core constituencies of«completely immoral for a liberal person to take a trained doctor from a developing nation where they have endemic malaria and rickets without supplying an equivalent replacement doctor in return»

What about the individual right of the doctors to escape a life of low income and frustrating work in a backward country to instead enjoy a comfortable middle class lifestyle in a developed country working in much better (if not for long yet in the NHS) environments?

If poor countries train doctors etc. at state expense and don't require those doctors to pay back the cost of their education if they emigrate, that's their choice (their governments probably expect remittances to flow back, and don't care much about what happens to the health of their overabundant servant classes).

Note: one of the problem with "social-democratic" policies is that they are either outright donations, and then things like an education paid for by the state are irrevocable gifts, or they are considered investments by the state in individuals, and then individuals have to accept to be accountable to the state for those investments.

As to the UK, the Conservative, New Labour, LibDem policies are cleverly and consistently shaped to do what is best for their core constituencies of ("deserving winners") middle and upper class people deriving most or a large chunk of their income from finance and property assets. middle and upper class people deriving most or a large chunk of their income from finance and property assets, and for them importing cheap doctors from abroad is a double win and screw-everybody-else.

ltr

If poor countries train doctors etc. at state expense and don't require those doctors to pay back the cost of their education if they emigrate, that's their choice (their governments probably expect remittances to flow back, and don't care much about what happens to the health of their overabundant servant classes).

[ Forgive me, but this is a creepy argument. Belittling other people is always unfortunate. ]

Kester Pembroke

Blissex,

Scenario 1: We steal a doctor from Tanzania.

Scenario 2: We train enough doctors in UK and swap doctor in UK for one in Tanzania.

I'm not curtailing people's oppurtunities. I just say if we take a docotor we leave one too. There could be LOTS of swaps.

I Don't understand. Net migration is higher than before Brexit.

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