As my ageing mother said a couple of weeks ago, up until this you have not lived through any crisis. This is a woman who was not yet into double digits before the second world war ended.
You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.
Having switched off a fair part of the economy, it’s a fair chance to ask the question “If we started with a blank sheet of paper, I don’t know, say about May 1979, would we design to get to where we are now?”
if it was meself that was going to Letterfrack, faith, I wouldn’t start from here
apocryphal Irish joke
Let’s take a look at what we have got in the UK compared to what we had. Way back when a young Ermine entered university around that time, inflation was way up in the sky. By the time I graduated, the economy went titsup in a big way, and it took six months to find a job. I plied my trade in a small company making electronic gizmos. Britain was a different place then.
When we wanted castings for a piece of equipment, we were able to go a couple of miles down the road to meet up with the suppliers, they could point to the part of the design that would reduce the yield, tell us why and we got to change that. The people who wound the transformers for us were in walking distance.
In my next job, I travelled by train from SE London to Cannon Street Station. No city, other than perhaps Edinburgh presents a pretty face to the railway line, but I saw light engineering firms here and there from the railway line, amongst the council estates and blocks of flats. As the decades passed, billboards went up ‘you could be home by now’ as the factories were cleared to make way for estates of ‘executive’ homes. Funny how every bugger buying a new house wants to feel they are an executive, I’d imagine a real FTSE100 CEO wouldn’t be seen dead in one of those rabbit hutches.
I inherited this pump made in east London from my Dad, we still use it when making compost to get enough pressure from our water butts to run a sprayer.
As the entertaining wingnut David Starkey related, today’s Britain is buggered if it can make shaped bits of plastic in any quantity, for that is largely what PPE is. Sic transit gloria for the erstwhile workshop of the world. I’m sure Mr Carter would have something to say about that, once he’s stopped spinning in his grave on his sintered bearings, still serviceable after six decades or more.
Starkey is surprisingly dirigiste for a wingnut. Perhaps he hates globalisation and its inhabitants of nowhere even more than furriners. Maybe here is a way to make a success of Brexit, with hyper-localisation, though I thought we had given industrial policy up with Thatcher in favour of Ricardian advantage and the invisible hand of market forces. Too much of a good thing can be wonderful and all that.
Maybe there is a turning point here. We could draw in our horns and make more stuff, indeed balance the economy, though I don’t think that we will have employment enough for the horny-handed New Tories of the North. But hopefully we could make shaped plastic quicker… We used to have big companies that made the raw materials, with grand sounding names like Imperial Chemical Industries.
Britain decided to maximize the amount of money we could make, by specialising in finance, and tossed an awful lot of the population’s dreams and expectations1 by the wayside. Now although I blame the borked state of the housing market squarely on Mrs T and her cursed Right to Buy sale of votes, clearly the world didn’t stay static over the intervening 40 years, so you can’t blame other pathologies of modern Britain on her. But it did set the direction of travel, a focus on the numbers and Ricardian advantage. Despite the bad rap she has for manufacturing, causal inspection of the share of GDP as manufacturing chart lower down shows that it was the Rt Hon Tony Blair who was in the wheelhouse when manufacturing got run out of town.
Our finest minds went into finance, and there’s some pretty damning critiques of the desperate lack of balance in the British economy from some of these. There’s the short form from ZXSpectrum on Monevator
The UK made a sort of Faustian bargain: low unemployment for high underemployment and low skill base. Taxpayers subsidize many corporates and SMEs, through low taxation and incentives, to provide rubbish jobs on low pay. These jobs should have been offshored to EM markets years ago. It’s unsustainable for UK workers to be paid 3-5x an EM worker for something where they offer no advantage. It’s also results in terrible productivity and low capex.
I’m clearly going to have to pay more tax after this crisis. I’d much prefer to pay people UBI so that they could stare at the ceiling, than see my tax used to subsidize Richard Branson, Mike Ashley or Phillip Green. Machine learning and AI is going to make many middle class people unemployed.
and the long form with knobs on from Tullet Prebon’s Tim Morgan
In the West, a small minority prospers, principally the CEOs of companies whose profits have surged, and bankers who gain from the expansion of the lending sector. On the other hand, the majority suffers, both because of declining wages and because of rising indebtedness.[…]
Our Tim ain’t feeling any more chipper about things now, here’s what he has to say about the much-vaunted V-shaped coronavirus recession that the markets are telling you do go buy into RIGHT NOW ‘cuz everything is up in the sky and going up. There’s an updated version of Tim’s growl H/T FI Warrior which makes the same sort of Limits To Growth angle. For the moment let’s set the LtG angle aside2. After all, I was still in short trousers when the Club of Rome said we were doomed in thirty years, and I am now within spitting distance of The Firm’s normal retirement age, after two decades of extra play.
However, it is clear that since 1980 we in Britain have designed a world of work that is a seriously shit experience for a lot of people after 40 years of TINA. In particular we shifted the UK economy to services, and created an awful lot of crap low-paid bottom end jobs, and a lot of middle-class bullshit jobs. The poor on zero-hours contracts can point to what the problem is with their service jobs. They aren’t reliable, and they aren’t enough to pay the rent, never mind a good life.
Many in the middle-class find their bullshit jobs eat their souls, though they pay OK. One of the problems of bullshit jobs is that they are like Universal Credit for the middle class without the DWP torture, they still lower productivity. Bullshit jobs produce services/goods that nobody wants or needs.
We have maximised money, but not meaning, and muddle along with misery for the many
It’s all very well to clap for our carers, but we will learn what our values are if we collectively stick our hands in our pockets and pay the poor bastards a living wage, and perhaps bring back bursaries so they don’t carry student debt. In general this crisis is highlighting that an awful lot of people who keep the wheels running for us are paid the minimum wage if they are lucky, and don’t have a minimum guaranteed hours if they are unlucky.
And, when we get to stand back a little bit from it all, we discover that an awful lot of better paid middle-class jobs are a bizarre combination of make-work and perverse incentives. F’rinstance, several years ago, we took a look at how some funding organisation was setting up a community project. The first rule of funding is that you have to fund the consultants who happen to be funded by the funders somehow, that advise you on how to use the funding, then how to get next year’s funding, how to fill in the innumerable forms to get the right ticks in the boxes so the funders feel good about the funding.
Personally, I’d pull the plug on the lot, including the National Lottery and all its good causes. There’s a lot to be said for the Hippocratic oath when it comes to fiddling with the lives of the poor. First do no harm. Betting on the horses or greyhounds in the 1960s was more honest than ‘it could be you’ but pretty definitely won’t be. I have some recollection that there was regulation of that but it appeared that the Tote established by Churchill was sold off3 to Betfred in 2008. Ain’t privatisation such a great thing, eh? I’m sure Betfred maximises the amount of money not ripped off from the punters and feeds it back to the sports. Not.
On a more collective level we end up with the deeply borked twisted mess that the DWP has become. They start with a buggered up premise from the get go, which is that work is the way out of poverty. No. It used to be, when the economy had a wide range of jobs for a wide range of talents, and we needed hod-carriers as well doctors. That was forty years ago, guys.
That’s just not true any more, because: globalisation. There are many people in the UK whose skills aren’t up to adding enough value, because it is cheaper to go to somewhere where the cost of living is cheaper and hire that function there – or build a factory to make it there and import the product.
Now there are lovely jobs and lousy jobs, and whaddya know, there are a lot more lousy jobs than lovely jobs. This was spotted 17 years ago, it’s not new. You can’t make a lovely life out of lousy jobs.
That is why they don’t make pumps in London any more – they make money in London, and making pumps is just too low value-add compared with making money.
That isn’t to say we make nothing in Britain any more – the added value of manufacturing has been sort of retained, even as the share of GDP has dropped like a stone
So what, many might say. After all, my Dad was notably hard of hearing by my age due to working in a glass bottling plant, and he was stone deaf by the time he cashed in his chips.
People may wax lyrical about the mining community spirits but it was still a pretty ghastly tough job. There’s not that much great about a lot of manufacturing jobs, because wrangling Stuff tends to be physical, noisy and hard work. The younger ermine thought I would have to leave the electronics industry due to getting asthma. That first company was probably not COSHH-compliant. The problem turned out to be that we would wash circuit boards in boiling Arklone with the instruction never fall to the floor in that room, because the vapour is heavier than air. I never had trouble with asthma4 since leaving that first job after a year, though soldering was still part of the electronics industry, and fume extraction was not a thing until a few more years. As a design engineer and then research engineer I didn’t do enough soldering for that to be an issue.
Many manufacturing jobs were bad for you, but an awful lot of modern service jobs are shit in a different way. At least many of the problems in manufacturing were soluble with PPE and automation, whereas many service jobs seem to gravitate towards low-end minimum wage zero hour contracts that you can’t live or die on. The micromanagement and metrics of some middle-class jobs lead to chronic stress and the associated strokes/heart attacks.
In Britain Thatcher inaugurated the practice of buying votes by raising house prices. This was achieved by destroying social housing, giving bungs to people who were too poor to buy a house. Credit was expanded massively with banks going into the home lending market. In 1989 a young Ermine as a single man stupidly bought a house on 3.5 times earnings. Apparently you can still do that oop North, but according to the ONS your average English first time buyer earns5 52k, saves one year’s earnings and spunks 237k on the house.
Over a couple of generations, that means a higher level of housing precarity, though house owners feel good about higher nominal values, and they increase inequality by favouring their own children with the loot when they die. Those not so blessed with ancestral wealth also take a hit from BTL landlords hoovering up starter homes, because homeowners are of the view that bricks and mortar = money tree. Present company excepted, that is…
One thing I have always thought would be a good way to eliminate a lot of what’s gone wrong with employment practices is to terminate all agencies and middlemen. If somebody pays you to pay someone else to do something then you are skimming, and should be run out of town. We did it to wholesalers of Stuff, let’s repeat the exercise to wholesalers of people. The Firm used to employ its cleaners directly. They saved money by outsourcing that, goodbye paid holiday and sick pay. Agency is a fancy name for gangmaster. Oddly enough digitalisation has greatly disintermediated buying and selling stuff, but has greatly intermediated employment with agencies and job-search platforms.
What could we do better?
We will have less Stuff. Probably fewer Services. It’s not all bad – you might get to see your kids more. Here are some things I would like to happen. I’m sticking with the UK here, we seem to want the world to get a larger place what with Brexit etc and I am nowhere near clever enough to fix anything wider, but I could probably match the current shower in charge of the UK in basic competence. Ain’tcha glad I’m not in charge. huh?
1) Destroy the low-cost leisure airline industry. Burn it, and encase the memory that it ever happened in glass and concrete, and bury it so deep nobody will ever find it for five thousand years.
Easyjet will resume domestic flights in mid June. There is absolutely no need for domestic flights in the UK ever. Britain is not that big – we aren’t Australia or the United States. I want to see EasyJet, Ryanair, the lot of them destroyed and the ground that low-cost airlines grew in salted and burned. If you have grandchildren, you don’t need low-cost airlines. Because: their world when they are your age. Let’s quietly ignore the possibility that air travel got Europe into serious shit in March according to the ECDC. The original mistake wasn’t malicious – people weren’t to know then. However, after what happened, if you postulate air bridges – well, it pretty much sums up air travel all round. No externality is important enough to constrain the God Given right to cheap air travel. This is not about people starving like the Berlin Airlift, it’s about the right to fight for towels on a packed beach.
Zooming out, you will never electrify air travel. Sure, you might be able to do it technically in a couple of decades, but you have to plug the entire output of Sizewell B power station into a future electric 747 for an hour to achieve one long-haul flight. Even if you don’t give a shit about climate change or know for a fact it’s all a Deep State cabal, just how much nuclear waste to you want those grandchildren to have to deal with to keep up your flying habit? People used to have one annual family holiday to foreign parts. If we could make work less hateful, perhaps we might not need to run away from it so often. As for commuting by air…
I really hate the low cost airline industry. It fucks up our skies which is patently obvious now, it generates needless unholy rumble through most of the day and encroaching onto the nights, it ruins your kids’ future worlds, it facilitates stag party twattishness, it makes places like Barcelona nd Amsterdam crap. It’s just gone too far. If coronavirus can kill it that is all to the good IMO. Less is more. It’s a proxy for the pathologies inherent in late stage capitalism. It just doesn’t know when to bloody well stop. More is not always better.
2) A four day week isn’t a bad idea, along the lines of making work less hateful
3) Do something about crap jobs. Automate the ones that aren’t worth doing, pay the ones that are worth doing a living wage.
4) String up anybody who even thinks “work is the way out of poverty” – it hasn’t been for 40 years and it never will be. Talent that matches well paid work opportunities and luck are the route out of poverty, and neither are something you have overwhelming influence over. You can play a good hand well, but you can’t do anything with a weak hand, the opportunities just aren’t there. We have specialised too much.
5) Fix Universal Credit. Turn it into a universal basic income, or for all I care universal basic services. Or at least be honest and say we believe some people’s lives are worthless, we aren’t going to get involved, we don’t give a shit, and basically, kill ’em all. If we can pay Endemol to round up Iain Duncan Smith and have him live a month on UC that should be good for a laugh, too.
6) Destroy bullshit jobs. A Universal Income/Services would save the waste of human potential. And the trees. And reduce the pressure on the transport system.
6) Think about how we feel about poverty. If we collectively are chilled about it, there are enough dystopian way pointers on how to deal with it. If we aren’t, then finding some way of learning to live within our means will mean rationing of some things. Probably including air travel, and probably including other popular lifestyle choices.
7) Reinstate previous generations’ controls on ownership and share of media6. There was an awful lot wrong with the media in the UK before Mrs T gave it to Murdoch, but I would suggest that while the cure eliminated the disease, the pathology metastasized into something worse. There was at least plurality in the previous disease.
Ain’tcha really glad I’m not in charge? Before I take too much heat for the air travel, note many people would have more time in an Ermine world, you can get to your Alpine skiing second, third, fourth holiday by Eurostar. I’m only coming for your second and up air travel holidays. We’ve probably got enough world for the air travel of the 1990s. But not the amount in 2020 BCV.
How about that Limits to Growth stuff?
It is possible that this second global financial crisis of the new Millennium is the result of systemic overreach as described by the Club of Rome. Let’s not beat about the bush here- the prognosis for FIRE is dire in this case. If you aren’t there you’re not getting there, and if you are there you may not stay there, and yes, that’s me too. The problem is an overhang of debt accumulated, this covered up the fact that global production hasn’t kept up with global population, and some of the limiting inputs to production are becoming exhausted. These are claims on future resources that will not be honoured because they just aren’t possible.
That narrative makes a lot of sense, but there are other stories playing out. For starters old men have been saying the world is going titsup ever since Roman times and probably before.
an alternative – Spenglerian decline
Secondly there is a power shift in play – the ascendancy of China and the East in general, which is a longer example of the cycles of the Imperial decline of the West. These were the European empires of Victorian times, of which the best know example was of course the British Empire, but I would also say that the American Empire is also into decline, the Project for a New American Century looks like a Spenglerian dream gone wrong.
Trump and Brexit both express nostalgia for past exceptionalism, but this is not just a pathology of the Anglosphere, it’s writ across the Western world IMO.
Spengler’s – The Decline of the West was written a hundred years ago, and the narrative runs true to form, and it predates the Club of Rome by fifty years. Like Asimov in Foundation, Spengler did not predict a catastrophic fall, but a protracted decline. That’s pretty much what this looks like to me. Maybe the Chinese will fix air travel with small fusion nuclear reactors that won’t spew foul shit everywhere in the event of a crash. Maybe we will have five thousand years of darkness until the new Imperium rises. Hopefully humanity will have learned a thing or two across the interregnum.
We could make a better world, and for all I know this may be the impulse that makes us ask some tough questions about would we want to end up here if we started along the track that got us here. We could start with the question anybody contemplating FIRE asks themselves.
Is our current level and form of consumption the optimal way to live, or is there a better way to optimise our experience?
But I fear we will let the crisis go to waste. The desperate urge to get air travel going again is symbolic of the driving impulse for a snap back to how things were before. There’s all sorts of special interest pleading to get back to the status quo.
A lot of that is understandable – this has been a sudden stop for an awful lot of economic activity. But it isn’t unheard of for us to say ‘we want to see less of this sort of economic activity in future’, usually because it has undesirable outcomes, usually externalities, costs paid for by other people who often don’t get a say or a share of the economic advantages.
It won’t happen. The drive towards a snap back is strong, and the countervailing forces are weak and disorganised. Macchiavelli was right
“there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”
- The dreams include raising children, having jobs that you could plan a life on, being able to buy a house. The reason their dreams were tossed by the wayside is because they don’t have the aptitudes for high finance. That’s the problem with doing one thing overwhelmingly well, you tend to suck at other things. Specialisation is for insects ↩
- If you want to see how Limits to Growth is going now, take a look at the thirty years on update. It ain’t looking good. ↩
- Blair’s government should be charged with the original idea and doing all the groundwork for this, even though the next government actually pulled the trigger. New Labour was no friend of the statistically illiterate working classes, since t’was they who inaugurated the National Lottery to happen. ↩
- Curiously enough the OSHA doesn’t cite getting asthma as a side effect of CFCs, they reckon it causes you heart problems. You can get away with anything in your 20’s, eh 😉 OTOH the datasheet seems to say respiratory problems were possible. ↩
- I can’t work out if earns means individually or collectively, best not have kids in that house if collectively given what young children do for the household income, eh? ↩
- Goldsmith’s College have a longer form report on UK media shares/ownership ↩