Why Growth Is Stupid
2024 ж. 9 Мам.
156 511 Рет қаралды
"They are a class of very wealthy people - who are getting richer very rapidly - turning round to you and saying "You guys are just not productive enough.""
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Performed by Gary Stevenson
@garyseconomics
I’m retired,my experience during my working life was continuously doing more for less,so it’s not productivity,it’s not even inequality anymore,it’s corporate theft.
It has a name: exploitation.
I remember this pattern of more for less emerging from the early 90s onwards, perhaps earlier too, but that was a bit before my time
inflation is taxation without representation
You're on to something there. See my comment for more.
So as you gained more experience, and given better equipment to get more done with LESS effort you were paid less? Lol... Are you guys paid to say this nonsense?
The old contract about being "productive" has been broken. Kids don't believe that working hard = a house, a car, a summer holiday, a decent life and they are right. They live in a world where billionaires and grifters are the "smart" people to be emulated. Again, they are right. Those are the people getting paid. Not people who do a 9 to 5.
That’s because working hard isn’t productive.
@@YL-fb9kb I'd reframe this. Working hard is, in principle, literally the logical epitome of productivity. It's just a sad fact that in our current society, most working positions are simply not meritocratic, or based intrinsically on output or effort.
@@YL-fb9kb no, it is productive. Working hard is the only thing that produces anything of value. And all the benefits of that productivity is taken by the unproductive billionaires and conmen, leaving the people who created that wealth in poverty. Back in the 50s when productivity went up so did the wages of those who did the work, and the wealth of the rich also increased. So working hard had a value to those who did the work, and also produced value for those who owned the workplaces. Since the 80s that link has been steadily broken. The owners decided they didn't want to share the productivity the workers created with the workers and wanted to keep all of it. Now when productivity goes up working people's wages stay the same and the rich get richer. When productivity doesn't increase, the wages of working people go down and the rich get richer.
Buy-to-let mortgages were introduced in 1996. House prices then roughly tripled in the next 10 years in part due to BTL. You are right that the social contract has been broken. Young people work hard to pay the rent on their overpriced flats which their landlords own while being unable to save enough for a deposit. Welcome to rentier Britain.
Can we stop using 9-5 please… that died years ago. It’s 8-6 and you’ll be lucky to get a 30 minute lunch.
Thankyou Gary! I've been saying this for YEARS...we've always been told "you need to do more (work faster/harder/longer/later) then we can give you a decent pay rise". The pay rise part of that never really happens. The money goes to shareholders or company assets. And perhaps that's why people don't want to work in this country. We're fed up with being rinsed. "more productivity leads to growth that pays for public services and pensions"....BULLSHIT. We're one of the richest countries on the face of the earth with a poor population, awful public services & one of the crappiest state pensions in the developed world. We need a transfer of wealth back to the people not more productivity.
Lol that's NOT how productivity has increased. It's increased through investment in capital goods. Better machinery, better software that allows a worker to get more done with LESS effort. But of course it's hard to invest when a massive govt steals all your money in taxes and gives it to illegals and themselves. Know what I mean?
all the gains flow to the US. The UK has been bought out by the US companies, you get a corporate treatment as the they over there do and you get a pay as they do too.
The money does go to the owners. That is why workers need to live below their means and invest in stocks and mutual funds for years. That may not be fair, but it is obviously the way the game is set.
And remember, making a bit more money doesn't help. Often you pay so much more in taxes (at least in the USA), you end with less money than making less and not having as much tax or potentially also getting social welfare a bit like Medicaid for free by making a bit less. Dr. Phil has a new show on youtube, and he showed that a household in America that worked 30% of full time, but got TONS of welfare as a result was only making $1k less per year than a person that worked 80% of full time for the same wages that did not get as much welfare. Then, a person working 100% full time that made more money only made around $11k more a year than the other two brackets as they paid taxes more and had zero welfare type benefits. There is a big blob they are making of underclass then themselves with these redistribution rackets and huge taxes on the middle class.
@@jercasgav They do it so they can increase the size of government and their own power. People who are dependent on the government can never be free.
In 1990 when you wanted to register for something you had to telephone or get the form yourself. Fill out the form with a pen. Put that form in an envelope and go to the post office. Buy a stamp and post the letter. Someone would then drive that letter (with others) for perhaps hundreds of miles. Then it would arrive, and go into the in-tray of the person processing. They would open the letter and process it, then they would write you a letter back. Now it's all on a computer / email in the blink of an eye. But productivity is the problem.
productivity is not the problem, wealth distribution is.
spot on! we have workers with a lot more knowledge than before, machines that do most work and yet the problem is productivity while a CEO makes 300times more money than average worker on one of biggest supermarket chains of my country...
Imagine telling an nhs working couple with a kid, doing overtime, that has seen their disposable / real terms income erode over the last 10-15 years struggling to live comfortably - that they aren't productive enough?!!
well that was what the gov was saying over the last few years. Work harder, do more hours, get a 2nd job.
@@seancswash yes for sure. It's just that in the broader context of what's being discussed, it sounds mad
@@seancswashthe gov is saying work fewer hours at a higher paying job. That’s what productivity is.
@@YL-fb9kb sounds like laziness 😂
But both Tories & Labour politicians have actually said that already.
Same argument made in Australia saying our problem is we need to raise productivity, without real analysis of what is really happening, just vaguely implying that the plebs are slacking
You just need to look at your employers. actions. My dad worked for Holden in the late 60's, early 70's. They put on Christmas parties for their employees kids, and gave them all presents. Can you name any firm now that would even consider such a thing for their employees? Except the top boss's that is. Giving them monstrous bonuses whilst the workers are told to tighten their belts.
Why should be not be less productive. We effectively earnless for more work.
In a sense they are correct about increasing productivity. that is wealth creation. But then they go and tax the bejeezus out of the productive sector to support the unproductive state sector and wonder why wealth creating private enterprise cannot increase its productivity. By the way Carney is an absolute crony corporatist central banking (and that is rhyming slang) Goldman Sachs shill.
We are decadent. The average person has no work ethic. You can reject that all your want it's just a fact. I worked for a Korean firm (the obvious one). Their work ethic is off the charts. After the Korean war, country was split in two and in tatters. In 70 years it's an economic powerhouse. They just want it far more than we do. in time they will get it and start slacking off themselves. Problem with UK atm is we are in decline AND we have entitled view the world will just deliver the standard of living we expect to our doorstep. We have to change and quickly.
I don´t think it is implying that "the plebs are slacking". I believe the comment "we need to raise productivity" is aimed at politicians and businessmen. Productivity can be increased by improving the quality of the jobs (e.g., moving away from exporting grains to exporting computer chips). Unfortunately, this requires investment (usually coming from the private sector) and that requires the right incentives such as tax, labour and/or environmental laws.
When you work on something that only has the capacity to make you 5 dollars, it does not matter how much harder you work - the most you will make is 5 dollars.❤
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
I like this bloke he talks my language. I'm 63 and still working. I work in FE education. In comparison with what teachers did back in the late 80's and early 90's the work we do is off the chart. We do so much and we're so effective with so little resources and support staff. Pay has just collapsed at the same time and I'm sure this has happened across most sectors.
exactly the same in Portugal. In the 90s teachers were respected and paid way abive average. Now they are drowning in burocracy, lost all the authority, respect and salaries and career progression is a joke.
“growth for the sake of growth is the ideology of the cancer cell.”
Nothing in the World grows forever, unless it’s cancer cells.
Then what’s better? Equality for the sake of equality?
@@jimbojimbo6873 A focus on balance instead of growth.
@@jimbojimbo6873 Jup. Listen to Robert Reich and Jason Hickel in addition to Gary's videos. We have been told equality is bad, because it limits growth. But in a situation where growth is literally killing the biosphere that's not a bug, that's a feature :-)
@@jimbojimbo6873 Equal chances for everyone for a start. Any other problems using a brain?
Striving for infinite growth in a finite system is what cancers do, it is impossible without killing the host..
Very, very well said. On so many levels.
what makes you think the system is finite? The universe is virtually infinite
What in fact Covid did. It took over its host till the host died or became disabled.
@@fbdjwjflachow insightful
@@fbdjwjflac that argument is like saying why do people die of dehydration on life boats when there surrounded by water.
We are genuinely experiencing ECONOMIC FACISM ie the pursuit of GROWTH, PRODUCTIVITY must be the guiding principle of our society NO MATTER WHAT THE CONSEQUENCES ARE.
It benefits them when we work harder because they make more money. We are going backward towards the old ways with super rich people owning everything and common folks, renting, exploiting and working for the rich landlords (17th century style landlords) hold all the power and keep getting richer.
It's refresing to hear an economist saying the exact things me and my best mate have been saying to each other and anyone else who will listen for the last 15 years. Keep up the good work.
@@freddiepatterson1045 he read economics and maths at LSE and economics at Oxford. He's an economist. His wikipedia entry is Gary Stevenson (Economist) What makes you thimk he isn't an economist?
Britain swapped a manufacturing economy for a financial services one. It benifted the few not the many
Exactly right.
You guys could have been Norway but chose poverty instead 🤦♂️
@@northernswedenstories1028 well the rich chose Norway and strong armed the rest of us into poverty
And massive number of imigrants for cheap labour to serve peoples almond mocha lattes and avocado toast
They shipped out manufacturing to china to increase their bottom line and now they’re saying it’s the plebs fault. 🤷♂️
"It's the inequality, stupid". - I'll make up some t-shirts.
Yes! I’d buy one. It’s a great slogan for a “graffiti” campaign too 🤔🤫
If it is within my budget, I will buy one.
White, and good quality cotton, then I'm in! 😁
I'll buy a couple mate ! 💯👍🏻
subtext: "bitcoin fixes this"
One of the best videos of this already bright youtube channel. It would have been nice to hear about the quality of work and about how growth is often inversely proportional to it, still, the main point is loud and clear. Once again, thank you Gary!
I've been saying this for years, that our economy will eventually eat itself. The business owners want more business but want to pay poverty wages - who do they think is spending? Similarly shareholders are milking privatised public services and suddenly none of the infrastructure they rely on to operate works any more. It's so short-sighted I can't imagine any of them didn't see it coming, but they just didn't care because they were raking it in. And here we are, with a country bled dry, we already had a government in 2015 claiming austerity was to reduce the national debt and they tripled it. You just cannot trust anyone any more to make this better.
We will all become entrepreneurs and invoice one another... I guess. One of my friends who is a business owner appears convinced this is a perfectly logical modus operandi.
@@pritapp788 “imitating the parasites made me feel slightly less blood drained, so parasitism is good actually” - Your friend, probably.
Best example is the "just in time" operations philosophy. No more huge warehouse and everything is in moving trucks. The roads are the warehouse now and instead of being the business paying for warehousing, the government and the population is paying for it with the roads and maintenance.
It's all there in volume 1 of Capital. We've known this for a long time.
@@BabTheBabs I've never considered that, it seems obvious now that you've said it.
I’ve long thought the obsession with GDP growth is over baked. One of the best analogies I heard was that if me and my neighbour mow each other’s lawns, it adds nothing to GDP. But if both of us pay the other £10 to mow our respective lawns, it adds £20 to GDP without any meaningful difference. Same with the productivity obsession- the easiest way to improve productivity is to replace most of your workforce with robots, but that clearly has a massive problem with social impacts. The reality is that economic and social cannot be divorced from each other as some think.
I like the lawn mower analogy. I often think about how things like donating blood or volunteering do nothing for GDP, yet the production and sale of weaponry does.
It's also known that many negative things can have a positive impact on GDP. For example, bad roads cause more vehicle damage, which in turn stimulates the repairing and buying of cars. And the thing with robots is that they don't consume, so that is 'bad' for the economy. Basically, I feel that there are a lot of economic dogma's that just don't make sense anymore in today's world. But economists are very dogmatic, almost like priests.
With the lawn mowing example, you can easily assume you and your neighbour working for a lawn mowing business where the owner takes a 1% cut. In fact from a certain perspective the whole business of growth seems to be about selling off everything that was free to private owners. Starting from environmental resources although from the way they are being exploited there won't be any environment left to divide anymore leading to the collapse of everything. Look what happened to the internet when it was free and open in the beginning and now dominated by a few giants by the network effect and people selling off their own freedom to them ("data"). Even human attention, the last bit of it getting divided and given to them. There's one genuine reason for one human to provide a service to another which that the second would provide a rarer skill back to the first which can mean innovation, advances in medicine again. But I also think humans simply wanted to enslave each other from earlier on so trying to "make money" is seen as a hedge against losing one's freedom to a person who can command your labour because they have access to a large amount of capital.
@@rolyarsYes, and mix that with right wing dogma and this is why the UK is in such a mess.
@@Zemmmmmmmm yup. GDP growth doesn’t increase happiness per se.
Reliance on growth is one of the defining characteristics of a ponzi scheme. And we all know what happens to ponzi schemes when they run out of new mugs.
All the people at the bottom of the scheme get ill and die ?
was going to leave the exact comment. Reliance on *percentage* growth is the hallmark of a ponzi scheme. If things start to collapse without growth, then it's really hard to argue it's not a Ponzi scheme. Furthermore, the idea that senior people get to enjoy the fruits of their (past) labour, while young people need to earn their keep first (with some vague idea of better compensation in the future), then this becomes a textbook description of a Ponzi scheme. The idea that immigration as a way to fuel GDP growth is also textbook Ponzi. Only difference is that this is legal, at a national scale!
Fiat currency is a ponzi
@@MikeStillUK crypto is a ponzi aswell. would change exactly nothing
@@MikeStillUKnot really because its not a investment, it just a medium of exchange, its absolute value is kind of irrelevant as long as it can reflect the relative value of objects in relation to each other. Eg if a days wage is £100 and a cup of coffee is £1 today, does it really mater if next year a days wage is £1000 and a cup of coffee is £10. No one should be holding large amounts of fiat because thats not what its really for.
My advice to everyone is this : if you want to grow big this year especially in your finances. Be willing to make investments. Saving is great but investing puts you on a pedestal where you wouldnt have to worry about savings as you do now. Thanks to larysa Caba, my portolio is doing really great and im proud of the decisions i made last year.
I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have,making it difficult to find ourselves back to our feet. My biggest advice is to always seek the services of a professional just like I did when I ventured into it for the first time. Big thanks to Larysa Caba. I now make huge profits by weekly through her services while still learning to stand on my own.
I think she trades for everyone I meet. I met her twice at a meeting in Germany and after her lectures from Ella I had to personally ask her to be my financial advisor. she is definitely good.
I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have,making it difficult to find ourselves back to our feet. My biggest advice is to always seek the services of a professional just like I did when I ventured into it for the first time. Big thanks to Larysa Caba. I now make huge profits by weekly through her services while still learning to stand on my own.
I just looked up her name online. she is licensed with credible certificates and has an amazing track record. Thank you for the message.
I definitely will like to know more
Recently found the channel, great content! Super refreshing to hear someone who is educated and experienced in matters, who know what they are talking about, delivering Economics in layman's terms devoid of bias. Everyone in the UK and Europe should be following you. Bravo, keep it coming!
😂🤣😂🤣
If my landlord jacks up the rent, does that mean the landlord has become more productive?
Yes! Definitely. The landlord can take the rent increase.and invest it in productive assets. You may or may not be aware of how GDP is calculated - they include investment in real estate in the GDP calculation. P.S I'm a landlord.
A landlord can increase the rent due to high interest rates. Do high interest rates contribute to an increased GDP?
@@Keeree75 GDP figures are normally adjusted for inflation to get the real GDP growth as opposed to the nominal GDP growth. And off course, inflation is related to interest rate levels.
Well, a good landlord needs to put the money back to maintain the building, so I think that's productive. It is very expensive to maintain a building.
@@MuzorewaRatshikuniI asked chatgpt: Productivity refers to the efficiency with which resources are utilized to produce goods and services. A landlord raising rent may simply reflect changes in market conditions or the landlord's desire to increase profits, rather than increased productivity. ........ So it seem like it is 'debatable' rather than 'definitely'
Every time I hear Rachel Reeves go on and on about growth as the solution to everything, it just makes it clearer and clearer to me that Westminster won't be any help in improving the fortunes of UK citizens.
Westminster can't help with anything. Not just your specific issue with Rachel reeves
bosses will only start thinking about growth when their remuneration packages are max a couple of times higher than their average worker's ones. As things stand, they do not care what the outcome of their efforts is, they will still get paid 70x as much and no tax will be able to take it away from them in a reasonable amount.
You make so much sense, you articulate the point perfectly and this current subject is the main reason why I left my job in finance. Keep up the great work your voice will grow louder and louder 👍
Great video. You really hit on an important truth here. Britain's low productivity can, however, be explained by low net fixed capital formation ( now 3%, was 8% in 70s). This can in turn be explained by govt providing endless low risk shelters for those with capital to invest. E.g. housing markets, tax efficient investments or finance. The part of the economy run by the middle/working class is therefore starved of investment so the population find themselves in a state of what Adam Smith called "Static Capital". He predicted this would lead to living standards falling to a bare minimum, which is what we see happening. To create growth and raise living standards you need to pressure people with capital ,to invest in the real economy.
Cue Rishi Sunak on Thursday or Friday making a conference speech about more stringent changes to welfare to the sick & disabled making it even harder for them to claim it, accusing them of being workshy malingerers whilst his govt has drastically cut local and NHS mental health services. Unless I'm mistaken, didn't govts use public money to bail out banks after the financial crisis they created in 2008? Did the public cause the economy to crash in 2022 or Liz Truss's budget announcement? So why is it the public are made to pay for their crimes instead of being compensated? The govt just keeps doing this: taking more away from us to pay the corporations bail-outs subsidies and tax breaks, I've heard it called "Privatising the profits and socialising the losses": it's just not on.
Socialism for the rich, competitive individualism for everyone else.
We, the people, can talk about this situation for another 5 years. Unless we take action to change things, they will keep bleeding us dry.
Anything that affects the wealthy's money they start bleating that we mortals are ripping them off. All the while it's them that are ripping us off.
They did use taxpayer money and then implemented austerity on the public services to repay it whilst increasing government debt and the tory government was full of bankers that were part of the banking crisis, they just rinse and repeat
Because the public voted them in. That's why you have to fix families and education asap. Because people don't know who to vote for and think this politicians will help us.
Productivity has been growing since the twenties but wages have not. If productivity meant anything to workers, we would be on a 3 day working week by now… Who benefits from productivity?
the shareholder class
Productivity growth -pay growth from 1948 - 1979 was 118.4% to 107.5 % 1979 -2021 was 62.5 % pay only 15.9 % . The growth only seems to have helped the rich so Carney must have no idea about economics same as career MP's .
Wages have grown massively since the 1920's. What on earth are you talking about?
@@peepiepo No the currency has been debased since the 1920s.
Probably those who have paid off accept's & use the leverage to acquire more, they need the growth to fuel continuous acquisition.
Thank you Gary! Growth worries me - we need money doing useful things like investing in research into making greener energy (not more tax-subsidised solar panels on farmland that should be feeding us), and improving conditions for ordinary people. I’m reading Thomas Piketty, who has spent years crunching data to come to similar conclusions on inequality to what you, Gary, figured out faster looking at your trading screens. Next on my list, your book on order from library, then doughnut economics - trying to live within the earth’s limits. Tax the wealthiest and put that money to doing positive, needful things. Keep these videos coming, thank you again.
The more unequal society becomes the less productive it will be, as people working 9-5 simply do not see the returns anymore - the social contract being ‘you work hard and you can live a good life’ is completely broken. Short sighted pooling of wealth by the ultra rich - so short sighted.
Indeed! They harm themselves too in the long term by harming us right now.
Start a political party Gary - talk sense in high places.
What do you think this channel is. This is politics. The party system is designed to swallow people like Gary and chew them into a fine dust
I genuinely wouldn't vote for him .. but I think his take is interesting
@@camelotenglishtuition6394His take isn't interesting it's correct. He's 100% correct. The growth in indexes is inequality driven. However, the solution is a caucus where politicians of all parties join him.
They don’t do sense but luv a concoction 🤭 At least the bk benchers
I prefer Gary being in a position to call out bad economics in any party that pushes them. Picking a side in politics limits your credibility when criticising policy Let's keep Gary where he can hammer all sides if they have poor policies!
I stay in the West of Scotland but we were down in London last week staying at my son's flat in Battersea as he was away on holiday. We went to see "Enemy of the People" at The Duke of York with Matt Smith. The play is about corruption in local politics (could easily transfer to national) and moral choices that had to be made by a number of the characters. It was good and at the end of the play there was some audience participation with roving microphones for people to give their thoughts on the state of our economy/society/politics. I feel very strongly about the grim state we are in and took the opportunity to recommend that people should read/listen to your book and also listen to your podcasts. However, as much as I admire your conviction to fight the gross inequality in our country and the need to tax both the very rich and, in my view, many large corporations, I do think there has to be a strategy to get real political change and power if that's to happen. I'm sure you'll have listened to interviews with Owen Jones after he left the Labour Party having been a life long supporter. Although, understandably, it was Gaza that tipped Owen over the edge I also think that he feels very strongly that the likely new Labour government that we will get later this year aren't going to do anything about taxing the very rich and therefore are part of the problem and not part the solution. The elephant in the room for both, you, Owen Jones and most thoughtful people in our country is that it's effectively a two party system with little to choose between them. Surely we need a strategy to get some political power and effect change and I think the only viable way to do that is to start a very strong movement/protests that builds enormous pressure on Labour to introduce PR at the next election (one after this year) assuming they get into power this time. It needs a big campaign although as they said they were going to do PR before and bottled out when they got into power. I'd appreciate hearing your and others thoughts on this.
Take a look at Teesside and compare the fictional play you watched... It becomes a little less fictional...
I won't be voting for any of the main parties, I include Green in that, and never Reform, they're shills. I am hoping we have an independent come the election. I think we need many different voices and opinions in parliament. If I were in David Kurten's constituency I'd vote for him, If I were in George Galloway's I'd vote for him, then there is Andrew Feinstein in St Holborn and Pancras, Starmer's seat, I'd vote for Andrew Bridgen in Leicestershire, Corbyn in Islington, Craig Murray in Blackburn, all are different, from the left and right spectrum, but they are all challenging the narrative that's been spouted from the establishment line, the establishment don't like them, and that's a clear sign to vote for them. I'm hoping more independents or the Workers Party or Heritage party take a number of seats, that's the best we can hope for, though I have heard people say we can't vote our way out of this, that said one of the ploys of the elite is to pour cold water on any way forward the proletariat may find.
I couldn’t agree with you more. To me it seems clear that the ONLY way forward, is to abolish the First Past The Post voting system and oust special interest groups such as BP oil, Labour/Conservative friends of Israel and GWR, who have such sway over, and give massive financial to, our politicians. How to go about this, however, in real, concrete practical terms, I’m not sure.
Spot on. From Glasgow myself, moved to Germany for a one year contract in 09, still here! Now a citizen. When it comes to voting the choice is almost too much! Proportional representation is my normal now, logical and fair, I cannot fathom how a country of 65-70 million people is asked to choose between A or B. The country I left behind always seems so divided when I return, and underinvested. Really underinvested to the point I'm angry with the lack of progress.
@@verdebritanica Hi I was involved for around four years in my Community Council to help get lots needing done in our local village. It involved dealing a lot with the large Local Authority. I learned very quickly that it's definitely not fictional. I think the main problem is when people get some power the old saying generally applies "power corrupts ......" . Our experience was that many of those in power thought they knew better than the local people in the village that were living it.
Absolutely so glad that this channel exists and Gary Richardson has embarked on this project!
"It's easy for the powerful to dispossess the powerless" - I'm with you Gary, I'll get in touch.
We need as a group to bring down neoliberal politics. People need to be educated on how the economy is not synonymous with exports and big global business. We need to press for tougher laws that makes politics more honest and independent from big business financing.
Ah yes, the imaginary politicians that are inmune to the incentives the system creates for them are going to fix it with “laws” 🙄
or just let people build houses so supply can catch up with demand; www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf
The concept of growth and the metric GDP only really started as a thing in the 1950s but western countries talk as if Growth has been around for 500 years as if its some immovable constant law of Gravity.When and how will we break out of this GDP growth doom Loop?
Very soon. One to three generations. The question is if we choose a soft landing by redistribution and cooperation or elect to crash hard by doing business as usual.
@@user-om2se8mc3xyou have water companies, energy companies, rail companies growing their wealth in enormous amounts. Do they reinvest back? No. You cannot only rely on “market forces” and hope for the better, meritocracy just doesn’t work without forcing some redistribution and Gary explains it very well
@@user-om2se8mc3x Vanity projects and the mass transfer of wealth from ordinary people to the ultra rich is not "better".
The economies grow, but the people and planet earth are dying.
GDP was created in the 1950s in order for governments to track the performance of the economy more closely. It is deliberately misleading to say that prior to that governments were not trying to achieve economic growth. Also, growth is the surest way to raise living standards across society. It is the reason why were are significantly better off today than pervious generations.
When I was enrolled in economics at the university a decade ago, I was shocked to learn that everything was based on fixed models such as the one saying if we increase interest rates, inflation and jobs will fall. I'm surely not as smart as you but I couldn't stop thinking "life and society is much more complicated than this, you can't tell me that simple model is 100% fact". I dropped after a year. Still have a lot of interest on the subject but only when I think from the common people's point of view, which is how you talk. Thanks for all these videos. They don't give me hope for the future, but at least, now I know I'm not crazy in how I see the world moving forward right now.
Keep it going Gary, our important voices are getting muted or psyched out. But you are completely right about who's ruling us 👍
I think one of the problems is that some of the older generations (certainly my parents anyway) actually believe in 'trickle down economics'. There's only one thing tricking down - and it sure ain't wealth! Trying to convince my ol folks of this is like nailing water to a tree 🤦♂️ Great videos and book (about halfway thru now) Gary! Keep up the good work mate👍
Absolutely that! The "Boomer generation" seriously benefited from 'trickle down' consumer economics due to sheer demographic numbers. They are a unique generation in that their living standards improved due to improved public health, rapid technological advancement, the Post WWII Marshall plan, social change & massive economic investment. This affected all Westernised nations but Britain in particular as we had to let go of the Empire and move manufacturing to the East. The Boomers and their parents were tricked by the New Right to forget about cautious government intervention and the clever, Social Market economy of the postwar era. In fact the Reaganites & neo-Thatcherites blamed governments for the de-industrialization, high inflation and unemployment whereas it was a much more complex constellation of big issues including - the OPEC crisis, the rise of China, the collapse of Bretton Woods, the Population explosion with increased longevity, Huge Military expenditures of the Cold War, the massive cost of Space exploration, irresponsible politicians deliberately running up debts with tax cuts prior to elections, and Corporate greed. 🤨 Now some of these things led to economic benefits from newly developed technologies e.g. Satellites, Cheap consumer goods, Globalization, Telecommunication, Teflon etc. However, the costs to society at large were huge! The trade offs in terms of - family breakdown, generational unemployment, fracturing communities and lack of social cohesion have never really been healed. Due to the relatively small size of the 'Silent generation' (and their parents), Boomers have not really had to foot the massive bills of social security, healthcare & pensions. However, now that this postwar generation are elderly, 'we' are paying for the massive expenditures and debts racked up over the last 45 years i.e. starting when some of us were infants or before most of us were even born... The problem is that due to contraception and collapsed birth rates there are not enough younger people in work to pay for the older generations most of whom do not work but consume. 🤔 Lord Willets explained some of this in an extraordinary book 15 years ago. I am not sure if Gary has read it. Due to the size of the Boomer cohort they took the high inflation, falling birth rates (after them!,) and rapid technological advances in their stride whilst loading debt on future generations. The next generations cannot even afford to have a future generation! It is simply too costly to reproduce hence falling birth rates almost everywhere bar Central Africa.
Trickle down economics only works because the boomers cannot take their wealth with them. Your parents probably didn't have that much in savings and wealth until their own parents passed away. The problem comes for young people whose parents are also penniless they are basically screwed when it comes to buying their own property unless they live at home with mum paying rent and work full time from 18 to 30 and save 80% of their income.
@@Weakeyedominant Spot on! Funny thing is that they are both accountants but seem to be financially illiterate (or purposefully blind imho). They seem incapable of joining the dots and instead believe whatever cock and bull story du jour that the politicians feed them. It'll be them wanting the welfare state to provide medical services in the next few years, but they insist on voting against funding it 🤦♂️
talking about is not enough, not having children is. Or if you already have children, taken them away from this country and let the millionaires exploit someone else ...
If you Google U.K. productivity graph you will see a dramatic change happened around 2008. Britain’s economy hasn’t recovered from the banking crisis.
This is around the time oil production started peaking.
27 million souls here in Australia How hard is this to get right Our government has got its short and curlies Grasped by the private sector Ooops
An economist (sic) Are ina delusional safe place
We also had 14 years of pointless austerity that has left us with more debt than when we started.
@@squeakyproductionsDebt is not bad per se. It’s about what you use it for and get from it.
The issue is not just productivity in the abstract but the *rate* of profit. That explains the collapse in investment in productive manufacturing - and the increase in investment in "assets" and renting, gold, housing, govt contracts, resource extraction etc. Capitalists invest when and where the rate of profit is high, but under capitalism that rate of profit has an underlying tendency to fall over time, although with peaks and troughs along the way. Michael Roberts has done some excellent work on this .
I’m astonished that no one (that I’ve noticed anyway) is discussing the effects of manufacturing and freight costs on every single product we purchase, from cat food to office equipment and building supplies. Since the start of the pandemic & then the invasion of Ukraine, those have skyrocketed. Insurance rates have also gone up due to covering losses to forest fires & catastrophic flooding (both of which also affect the supply chain, depending on where they occur). I work in distribution (office equipment). The entire supply chain was affected when the factories shut down. When they reopened, the demand for delayed items was so high we had to pay something like 4 times what we used to pay just to reserve a spot on the boat. (Our little pallet kept getting bumped back onto the dock by companies with deeper pockets.) Air and ground delivery costs rise with fuel prices. All those costs are passed on to the end user customers. I have to explain this to my customers daily when they ask why their new order costs them so much more than their last order of the same equipment. And I know why it costs me three times more to feed my cats than it did five years ago. I’m no economist. I don’t know how this affects the Rich-Are-Getting-Richer big picture. (The rich have to pay freight costs too.) I DO know it is definitely part of why the paycheques of people like me don’t stretch as far anymore & it is definitely making people in my situation (older, divorced/single/, renting) immensely more vulnerable.
Brilliant. I will email, once again, my MP who just spouts the narratives of the government. He simply thinks I'm troublesome and sending him emails has become a bit annoying for him. I'll still do it though.
I do that too Teresa 😂
Really, once you´re a first world country, GDP growth isn´t the most important thing anymore. When you´re a poor country it is, because it can literally mean not having flushing toilets in ordinary people´s houses, but when you´re a rich country like the UK, France or Germany, the rate of growth only makes so much of an impact on people´s standard of living. Really, the big isue in the UK is wealth distribution and it´s totally skewed.Raising taxes on the rich and taking monopolies into public ownership would do a lot more for ordinary people than the difference between a 2 or 3% growth rate.
I disagree. Its a mistake to see these as two separate things - more equal countries have more long-term GDP growth potential. Less equal countries have less long-term GDP growth potential ... unfortunately many fall into the trap of attempting to constantly spur growth by the short-term fix of deregulation. In reality, raising taxes on the rich and taking monopolies into public ownership would also improve long-term growth prospects, and ordinary people would benefit both from the additional public expenditure (from the higher taxes) and the general benefits of growth.
@@ednash8453 oh I am not saying it´s either or, I´m sorry if I gave that impression, I think nationalised companies can play a huge role in long term growth, they have in quite a few countries (France, Germany, Norway etc). I think they have in the USA too, i.e the Tenessee valley project, I mean the US army is arguably the most productive nationalised industry in history! What I meant to say was that just hitting x gdp growth figure is pointless and providing more social services etc is what we should be doing.
Denationalising had amazing benefits. But now is the time to recognise we nationalised too much. Natural monopiles, industries where you cant easily create competition should be re-nationalised. Water, requires an infrastructure. Stupidly inefficient to have two infrastructures, only one makes sense. Hence we have regional water monopiles. Same with railways. You can't create competition in these markets.
With regards tax..... the tax on income from wealth is a joke, both in terms of rates and the ease of avoidance. So we end up with a ridiculous system where 95% of people pay 5% of tax. BUT it's not the richest 5% who pay.... it's working people on good salaries. If you are on PAYE you are destroyed. 40% tax, rising to 45%, £100-£125k lose personal allowance - marginal rate of tax 60%, above £150k lose pension allowance, NI........ 20% VAT, 80% of petrol is tax, council tax etc etc...... if you add it all up people that are not super rich are paying somewhere between 60-75% tax - that is insane. The people at the top don't contribute. Most of the population are net takers. And so the whole thing is balancing precariously on the backs of a tiny number of middle class professionals. Tax system is broken.
@@paullegend6798 yes, it´s true that you can´t really have competition when it comes to railways and water, I would argue the same for energy production. I don´t think privatisation did have amazing benefits though, indeed, there are countries with 25-30% of their economy partially state owned, i.e Singapore and Norway that are doing well. The tax system is broken in my view, one big problem is that rich people often have income that wouldn´t be taxed under income taxes.
As the education system fails, the economy will follow. UK does not have sufficient graduate careers for those who go to universities. Empirical studies show that Govt investment leads to more R&D & better living standards. US in the 1950s was the most affluent period in history, then came space exploration. 1970s was the catalyst for decline in the UK & industrial output began to fall, eg, ripple effect, global competition. Manufacturing only represents 8% of the UK economy. Lack of investment in infrastructures, eg, schools, hospitals, roads, train stations, ultimately leads to acute skill shortages & higher wages & lower productivity because projects take longer to complete. Govt cost cutting has an impact on productivity & sustainability. Private equity & Govt contracts means more national supply chains rather than regional & local supply chains, resulting in longer waiting times & in some cases, lower quality. Universal Credit only provides 70% of essentials, which means less spending power &, lower demand. UK benefit system including pensions & disability is the worst in Europe. Business rents & rates are the highest in Europe which is why many shops are vacant. This also means consumers either go online or travel to better shopping areas. Costs are 3x higher than Europe & this will have an impact on businesses & employment opportunities. EU countries invest in free childcare for its working population. UK doesn't. Low pay in many deprived areas means only one parent works. UK is one of the worst run economies. Growth by GDP includes profiteering, excessive pay/bonuses(not performance related), failed contracts & projects, fraud, corruption, & unnecessary waste. Executive spending(tax relief) runs into £billions every year, eg, hospitality, private jets, gifts. London is the global capital for fraud & corruption.
Hi Gary - I love your channel and what you stand for. I also loved the book - well done! The fundamental part of what you do that I thnk is missing is understand HOW we make the change you call for (and that I agree with). I think it would be very helpful for you (and maybe in collaboration with your supporters) to think about that question - how do we elicit change? Is it protesting on the streets Is it at the ballot box? Is it by writing letters to our MP's If I am honest, all of the above feel a little useless and wont get us anywhere (along with lots of other people doing the same for other causes) Im very interested what you think and what others think is a way to address this obviously growing inequality. Answers on a postcard please.....
here here Gary. Smart kind man you are. Keep talking.
*hear hear
Gary, you are a prodigy. Keep pushing kid.
@@anthonydunphy8181 to where...? 😟😳😰
Hopefully,an end to wealth inequality.
Like a lantern for moths.
If in theory we used a deflationary currency and everything got cheaper every year, real growth would likely skyrocket as the middle class grew for the first time since 1971
No it would encourage the rich to hoard more and more assets and would kill the working classes.
Exactly. As happened in the 19th century. But inflation benefits debtors. And governments are the biggest debtors. And warfare is very expensive.... We are run by satanic lunatics.
Like bitcoin?
@@mrwillis5339 right
The problem with deflation is that people stop buying since everything will be cheaper tomorrow. So inventory backs up which causes downward pressure on prices. Then companies start going under, which I suspect this audience would consider a positive outcome 😂
Clear and concise as always Your words amplify the call for change which must come to our unequal and antiquated so called democracy
Part of the problem is we monetise necessities. I don’t mean air and water, I mean societal necessities, like buses, healthcare, prisons and schools. If they cost X for the state to run, then they cost Y + P (profit) for a company to run. Granted Y might be lower than X, but it’s not guaranteed. If it is lower, it’s because some previously essential part of the service is cut. State gets a worse service, stock market gets P. The difference is what we the people have lost.
In your example it maybe that Y is less than X but also possible that Y + P is more than X
@@keithparker1346 absolutely. But that’s why I said might be. 👍
I think part of the problem is social mobility and the class system, particularly in the UK. I've met a number of people who had very expensive, very good educations. It means that they, initially, come across as being very intelligent. But as you spend more time with them and debate issues, it's all a vaneer, a gloss. Boris Johnson is a famous example of this. He can speak Latin and Greek and quote (partially) from ancient texts. So, he appears to be intelligent. But he's not. Most of them have no particular talent but, due to rich parents, have had a leg up and, through contacts, obtained positions of power. It's like Gary said in his book, most of the traders now are rich kids dropped into the role by their rich parents. And many of them are two short planks. These are the people running our economy, running our country, making the big decisions. But they don't understand any of it because they're not bright enough to.
if you have rich parents, you do not need to understand complex numbers, or the exponential function ...
The Jolly Heretic channel calls these people you are describing, "midwits". They think they are smart, they have some level of useless book smarts, but they are not truly intelligent as they cannot apply things to real life for beans.
Very much enjoyed your book. Brilliant points here too - thank you!!
Hi Gary, love your videos. I think this issue about growth is more smoke and mirrors from the ruling class. For me the main issue is about how people understand/react to "standard of living". What i mean is this; we are a country living in debt. People in my parents generation started off their adult lives scrimping and saving because credit wasn't something you automatically turn to (picture an old grey episode of Coronation street from the sixties). Then Thatcher/Reagan opened the floodgates and deregulated the banks encouraging them to lend more and to pass out credit cards like confetti. People these days think we have a much higher standrd of living now than the 50/60's. We don't. WE ARE IN DEBT. You owe the bank for your house mortgage, your car finance, your credit card is maxxed out and the biggest one, perhaps, is the Student Loan; a "forever" debt! Added to this is the government debt which is now over £2 trillion. So, who is this debt owed to. The Ruling Class. So, for me, any talk about growth/interest rates/inflation is just bollocks, a distraction, dead cat(ism) The Ruling class is robbing us blind as usual aided and abetted by compliant politicians and media tycoons.
Absolutely
There’s no such thing as the middle class, Gary. There’s the working class and the capitalist/owner class. That’s it.
The middle class still exists, just now it means people who own a property (but not more than 1) and are able to keep themselves at a level with some disposable income, or who have enough income to support a family by the old middle class standards on dual income, or enough income to self sustain by themselves with no property at a middle class level personal rented house (size depends on area), disposable income. These people are so far below the owner class and so far above the working class they must be defined separately. But there is very little middle class and working class overlap now, the lower middle class is now almost all working class. Also, the upper middle class are now owner class if they used their money on long term wealth, or middle class if they own very little other than depreciating goods but still make above average incomes vs the current middle class
It blurs in many places. This has been recognised for a long time. And why class politics doesn't break through.
There is also no longer the kind of job progression that used to enabled a new middle class to form from their own effort within big companies or government. Management structures are more flat due to cost savings. Those starting low don't have as many middle ranking jobs to which they can apply and gain experience and expertise for further progression.
@@francescachristy8761yes there is no new middle class people being created, unless they inherit property from family. If you calculate the life times earning of young professional it shows its impossible to earn enough to be elevated to middle class, except for the few that will reach the very top of there profession.
There are people that have the power to do what they wish with little or no consequence, then there's a layer of middle men that protect that power, then there's everybody else.
For a in depth argument why eternal growth is a fundamental problem please read "Less is more" by Jason Hickel. Local growth for a limited time is natural, but that is not the fundament of our current economy. The growthism is the reason we currently are in a climate crises, an inequality crisis, a biodiversity crisis and a mental health crisis.
One of my favourite books, currently reading for the second time.
It’s not growth, it’s value. But that’s too abstract a concept for political economy and the interface with the public so ‘growth’ is promoted instead. Positive economic development is fundamentally not a phenomenon like something physically ‘growing’, and it’s unbelievable that this cottage industry has been created around this misunderstanding.
@@brianboyle2681 So what are these immaterial values going to be spent on? Other immaterial values? Nice theory. But if you are poor and get some immaterial raise, wouldn't you want to trade it for real goods and real food? That is exactly what we see time and again: growth is tightly coupled to physical growth in the real world. You may see tidy models saying otherwise, but the data is against that pretty picture. Please read the book. It is very well argued and documented. And paradoxically hopeful.
@@brianboyle2681 I just saw your previous comment on this channel asking Gary to do a PhD to develop his ideas. I'd say that the book "Less is more" is as close as you can get to that unwritten thesis. The inequality angle is there, but so are a lot of other stuff challenging convention wisdom. Q: If the theory is good, why is the world currently broken?
Thanks for the recommendation, just ordered it.
Thank you for this video as for once I don't feel crazy! I studied economics at university and I always struggled to see those Economist "facts" about productivity and growth when explaining UK wage stagnation as on their own they never seemed to explain the full story about wage growth or at least I was never convinced. I also do see the idea of a wage price spiral which works very well in theory, but it's a weak argument to assume that people will be spending a lot more on consumption when many people struggle to even pay their bills and live paycheck to paycheck.
This ”just grow = stupidity” analysis is 100% correct. Glad someone is saying it
it is not entirely true, you need to grow, but also you need to know when to diverge ...
Thank you!! Finally, seeing this in a thumbnail gives me hope.
You made clear and explicit what many of us sense with our intuition. Thank you. 🙏
I'm glad so many people are seeing this.
Hiya Gary, Another good video and some great points made. A few ideas would be: -Increase the tax of major companies by a small amount -Ensure fair and flexible tax for SME’s - Reduce tax or even cut it on overtime pay to incentivise workers while not impacting businesses bottom line. This extra money would help grow the economy and help people feel better as they would have money to spend. - Generate a large first time buyers project where houses are built and owned by the government, with low rent. These properties cannot be purchased and there is a limited time that you can stay in them. The purpose is to allow you to build a line of credit and save money to purchase a house. In addition, houses are also build by the government which can then be purchased at a low rate by only the people who come through the house savings system. These properties cannot be purchased by banks or businesses. We need to tax the very rich just like you say but help SME’s and workers, motivate people and give people an opportunity to build a life and a home. Hope to hear your thoughts. Thanks, Dan
I work in the public sector and haven’t had a pay rise (accounting for inflation) since I qualified, 12 years ago. Dead economy
Are you frightened of the private sector ?
@@jjefferyworboys8138 ridiculous comment. Why would I be frightened of the private sector? In social care, I prefer not to be part of the problem so I avoid the private sector
You, Gary, are part of the anti-growth coalition. Grow the pie 😀. But seriously, keep up the good work and messaging about growing inequality
Insightful. Clear. Thank you, Gary.
It is very hard to see project which can be used in real life like AMS89K 🥳🥳🥳
Farming, fishing, quarrying at all time low. Manufacturing down again. Construction quantity down. Bonds up.
Surely with all these new immigrants quarrying, fishing, farming and construction should be up ? But the government is suppressing these aren’t they ? 🤷♂️ seems the government is the problem ?
@@tropics8407 the UK has been bought out by the US money, and their business practices have been introduced.
All the productivity has moved to China.
6:59 one of the key indicators for me is what happens when the commuting vehicle breaks - in the '80s i would just go buy another one giving time for the original one to be fixed properly, now you're walking to work unless you can get a lift & the expense of fixing your vehicle means you're missing meals for quite a while.
conclusion? On ye bike?
Thanks Gary keep them coming please!
A brilliant argument you put here,Gary.
You need to be on Joe Rogan!! Get this message out there!
Joe Rogan is an internet witchdoctor, and king of the doomscrolling gullible zombie nation idiot class of right wing populism
Your channel has proven to be such a great education for me, Gary. Thank you for waking me up!
Totally agree on productivity and inequality. But I wish you would highlight the problems of infinite growth on a finite planet. Linking the need for economic reform because of unjust inequality and the need to reform because of the fundamental unsustainability of ongoing growth would make the message much more powerful, and we need to link these conversations.
I worked in the financial sector for a FTSE top 100 company and it was hammered into us that we had to grow every year or the share price would fall.. If it was looking like we were going to miss our growth target fior the financial year we were told (Off the record of course) that we were OK to lend to people who normally we would be censured for lending to. Of course at the beginning of the next Financial year we would be saddled with a mountain of bad debt from said loans for which we would be blamed for.. I also worked for one of the biggest names in the Insurance Industry and saw people lose their jobs for miss selling pensions and investments. Sacked by the very people who had encouraged them to do it. Our Branch manager got early retirement on full pension whilst the sales staff got to sign on The system stinks and it's never those at the top of the pile who get the blame.
Another great video. At my work this very week the message from the Executive team was that we need to do more with less. As we have looked for efficiencies for a number of years now, I made the comment “maybe we can ask staff to work 12 hours a day (but with no change in pay)”. This was obviously a belligerent comment, but there was a genuine pause of consideration! If the message is for higher productivity with no plan of how to achieve this, can “stupid” please leave the call.
Problem is people don't just work and sleep. When at home there are lots of tasks to complete. Some people could off load all those tasks onto there wife. But that just means the problem has been shifted to someone else.
Short, but sweet Gary 👍 You did allude to it, but I think there's another layer to the message of our supposed lack of productivity. Yes, with lower standards of living, lower disposable income, we can't as individuals just go out and lift our local economies by spending our way out of it. So, what's the other solution the wealthy want to plant in our minds? It's simply that we don't physically work hard enough. We don't produce as much as we should, for the level of pay we receive. We need to work longer, harder, for relatively less pay, and things would be so much better. It's easy to see how that makes little sense to the working population. But, it doesn't stop them planting that seed. Or hiding behind that excuse. If wealth inequality is addressed, citizens would have the disposable income to boost their local and national economy. However, that relies on the mega rich sharing what they have, which brings us back to the real problem. We can't allow them to fool us into thinking it's our fault, and we just need work harder, for less. PS. Always look forward to your weekly updates 👍🙂
Growth is the defunct group think dogma of our times. You are 100% correct.
Love your channel Gary, thanks for all that you do. Do you ever have guests on? I would love to hear a conversation between you and Peter Turchin.
Canada had a sensible government in the late 90s. It didn’t deregulate banking. As a result, it’s economy wasn’t as devastated as others in 2008. Mark Carey’s good fortune as governor of the Bank of Canada in 2008 is that he got the credit for decisions that had nothing to do with him, made a decade earlier.
a lot of the regulations Canada had on finance, food standards etc are being chipped away. I was shocked to see the backlash when Canadian farmers had to meet EU regulations on food, they used to have the same standards but more and more have gone down the route of American 'deregulation'
In New Zealand we had a Conservative Prime Minister who took the credit for steering the economy through the GFC. Truth is the previous Labour GOVT had made great trade deals and left a big surplus. The Conservative PM who took the credit was making himself fabulously wealthy trading for Meryl Lynch while the Labour Party were making these deals. Meryl Lynch was one of the first companies to collapse, causing the GFC but many people in my country (mainly baby boomers) think John Key, the Conservative PM is a genius and saviour of our country. And they've voted them back in!
In Northamptonshire the shoe industry moved to India,In Bedford the Texas Instruments semiconductor production moved to Italy I think. Again in Bedford the Britannia Iron and Steel works have gone. I don't know much about the rest of the country. How can people produce when there's no jobs. All along the countryside there are huge logistics centres which are not full of people producing but a few people who are moving other countries goods. I am not very clever about financial matters but do look at this and ask questions. Thank you for your videos Gary. I find them interesting.
The same way Gary describes the money trickling up to the very wealthy thus the money leaving the working and middle class, when we buy service and goods from abroad, the money is also leaving the country. So perhaps our trade deficit is exacerbating the problem because the money stops circulation in the UK and leaves the system never to return.
@@neilwillimott6988if wages are forced to keep pace with increasing asset price inflation I believe the problem would largely correct itself. Also the issue with growing asset prices is it gives the rich the power to buy the government corrupting democracy. It’s a self perpetuating cycle down
You can't have strong currency and manufacturing economy. Decide what you want. If you want a job, it is better to move to Vietnam these days. The UK is for those who already have money and assets they can rent out to those who foolishly came over to this country to look for a job.
"You want higher wages, or more affordable products? Only if it makes more money for me, which it doesn't, so instead just make more money for me."
Been sayin that for ages , growth is fine in business I guess , but that's just not life , politics is bout life , not fuckin makin money , you articulate it much better my bro , go on Gazman . ✊🏽 . Keep going .
Just a couple of words to promote this video
Great subject. Interesting points. So much to say about this. Including about the environmental impacts of economic growth, which are right now in the process of destroying the economy long term. A great place to start in this giant issue is Doughnut Economics by Kate Raworth. You guys should do a colab 😃
It's refreshing to see someone who understands the system so well finally speak up about its flawed nature because anyone who's not a professor gets laughed at for pointing out these exact flaws and "not understanding the intricacies of global finance". Well done Mate!!!!!
Thank you, Gary... I know you've said this before so it could feel wasteful, but please keep saying it! You understand how society drives economics and that seems like a lost art... They need to wake up and see how things don't just come out of nowhere to make everything work.
in the USA & UK at least, the shareholder class has been gifted all the profits we've earned from our continual increases in productivity since the mid to late 70's. in other words; our pay increases over that period have been diverted away from us into the pockets of the rich...and the rate of that diversion is only speeding up.
So buy shares with your wages.
@@carlwide6594 amusing
There is no inconsistency between exploding asset prices and slowdown in productivity. Increasing asset prices reflect increasing rents extracted by the very wealthy, which is perfectly consistent with slowdowns in productivity growth. Take housing. In the UK we've not built any housing so house prices have increased massively. Homeowners have extracted larger and larger rents over time. At the same time, excessive housing costs slow down productivity growth by limiting the geographic movement of workers. Fewer and fewer people can afford to move to London limiting its growth. Since there are gains from agglomeration there are lost productivity gains from high house prices. Similarly, take UK's railway, water, electricity systems. All are designed for the extraction of rents by their owners, whilst underinvesting in the service they provide UK consumers. This limits our productivity whilst enriching very few. High asset prices and rents are exactly what I'd expect in an unproductive economy. You are of course correct inequality is an underlying concern which is partly driving a slowdown in productivity.
Increasing asset prices are a sign someone was willing to pay that price before. A small group of people gets their money very early, spends it ... and the rest must pay the same after. Add immigration to the mix to prop up demand and you have what the UK housing market is.
I totally agree with Gary's view on this, thanks as always for breaking things down so clearly. My own take on the question of productivity comes from my perspective as a manual worker in the construction sector: I see a lot of work done by people without good training - this means that the work is often poor quality and very inefficient (that usually mean slow and expensive for whoever is paying for it). If we want greater productivity (and better quality housing) then training for manual work must be taken as seriously by governments as academeic subjects like economics 😉
Spot on gary, here in Aus they are constantly talking about things like 'lax retail spending' or 'wow people are doing great, look at the all time high spending'. What they don't understand is that the majority of people are living paycheck to paycheck. Spending is not much of a choice they spend everything they have every week. Give them a payrise and see them spend more, put interest rates up and they will spend less, inflation goes up they will spend more on food and watch recreational spending collapse. The only other way for them to spend is with debt and that's not a viable long term solution. Also young people have no motivation to work hard because it doesn't make a meaningful difference for most of them, we are taxed significantly more for what we earn than what we own. Also the bracketed tax system is a ruse because there are so many tax loopholes for high earners to use that they end up paying less than people on lower wages and put what would normally be taxed directly into wealth creation tax free. The system is rigged beyond belief.
Gary, I think it would be very useful (essential, perhaps) to start a series (or commission it) on "The Core Principles of Economics" / "Economics Explained" aimed at the common people, so that the man in the street can get a grasp of what's going on. And the problem over the years will shift; so understanding the whole picture, not just one issue - inequality is today's issue - but next year? All the best! :)
Try Richard Murphy- Money for Nothing and my Tweets for Free. www.taxresearch.org.uk/Blog/wp-content/uploads/2021/04/Money-for-nothing-and-my-Tweets-for-free.pdf
Don't forget about the chairman of NatWest saying that it's not that hard currently to get on the property ladder whilst being paid a base salary of £750k.... In their own little worlds
AI could replace these jobs in the future lol
Gary's point about wealth concentration being a core issue resonates deeply. 🌍 It highlights that economic discussions should perhaps shift from productivity to equitable wealth distribution to address the real impact on living standards.
Great video as always Gary thanks! I have my theories about all this, but in order for things to change, at least with our current style of politics, then people need to get involved and informed. At the moment I see far too much apathy - in which case nothing will fundamentally change. I lived in the US for a while and that experience really opened my eyes to politics and much of what happens there is exported to the UK. Don’t get me started :)
Gary, thank you for another excellent video. We are out here having these discussions with people and promoting your work. One objection to the wealth inequality hypothesis I have thrown at me a lot comes in the forms of reports that show wealth inequality is not that bad. These come from charities looking into this kind of thing and appear to be ok except: some include gini coefficients based on income inequality, they tend to not include the latest figures including the pandemic etc. I’m not sure what wealth is captured and if it includes off shore and hidden assets or who the figures cover. Would it be possible to make a video on this as establishing that growing wealth inequality is real is fundamental.
Wealth inequality and income inequality are not the same thing. I do not therefore think it is correct to use gini co-efficients based on income inequality as a measure of wealth inequality. To get a measure of wealth inequality is not that complicated. Well, perhaps I'm oversimplifying, but nonetheless, just look at say property ownership ( records available at Deeds Offices), look at private and public company owndership, also look at debt ownership (who owns the public and private debt etc). Then you can chart theae figures over a time period to see the trend.
I don't know if I'm being daft, but infinite growth in a closed system doesn't seem possible.
One of the most important aspects of the definition of economic growth is ‘value’, which is an abstraction and allows ‘growth’ to transcend the ‘closed loop’ you mention. There’s another interesting aspect to growth - on the subject of productivity - or ‘intensive growth’ - in an unequal society, opportunities for value increase from increased productivity are diminished because unequal societies lose the ability to optimise for worker input.
With advancing technology you can increase growth. Being infinite is another whole different unreachable parameter
The pie can grow in size, but the distribution matters
You’re absolutely correct! The uk and the western world have out grown the current system,hence austerity. Since 2009 we have deliberately strangled growth and exported our services and products. This is because our current financial system has out grown its self.Growth over 2% average speeds up our demise
@@mraksuperk it’s credit outgrowing productivity the lag creates the problems.
Thank you Gary! Keep on fighting the good fight.
We love you Gary ❤ This episode reminds of Oscar Wilde's quote ' The critic has to educate the public'.
I keep thinking a couple of things. For someone who's explicitly in the Piketty / non-Marxist camp, Gary has an uncanny ability to say things that jibe with Marx; particularly about the need of investment capital to grow. I suspect if we got a couple of drinks in him, he'd be talking about the tendency of the rate of profit to fall, but I've been wrong before. I say we try it and see what happens. The other thing is that I'd like to see Richard Wolff talk to Gary. Wolff has made a full court press of popularizing left economics from a Marxist perspective without getting too technical for a general audience. I think that between those two, a genuinely substantive discussion could happen without locking out everybody who doesn't have an economics degree. And finally, greetings here from the US. Things are going to shit here, too. One big difference between us is that we're way the hell too big for anyone to have any kind of a coherent thought. It's one big room of 350 million people, nobody can hear anything above the roar of the crowd, nobody's listening anyway, and half of these idiots are armed to the teeth. Either you guys are gonna figure some of this stuff out or we're all screwed.
I don't think Gary chimes with Richard Wolf. More with Michael Hudson and Steve Keen
It is because capitalism, communism and socialism are all 3 terrible ideas. The fact that we have been dividing groups, and nations into these categories is one of the atrocities of modern propaganda. None of them is a solution to anything. And being loyal to any of them misapplies economics in certain areas which leads to pockets of wealth and power where corruption festers. The only answer is a mixed economy with a government that is actually benevolently representative of the citizens, all citizens. So from a nation that is "capitalism" loyal, a lot of paths to improvement are departing from capitalism. But the reality is that democracy is important for citizen prosperity and wealth equality no matter what you are labeling your economy.
@@5353Jumper Socialism is democracy. That some groups seek to separate the two creates contradiction. And misery. But socialism when applied is just an extension of democracy into the economy.
@farhadchaudhry you are correct that a core principal of Socialism is Democracy. I know it sounds like "no true Scotsman," but this is why so many of the world's failed "Socialist" dictatorship countries were not actually socialist. But what many fail to see is if a country is pretending to be capitalist or communist, democracy is also crucial in order to improve citizen prosperity. So socialism, capitalism, communism are all irrelevant. The focus of citizens should be on achieving the Democracy first THEN we can start working on changing the economy, ownership, and distribution of wealth and income.
@@5353Jumper I think that's putting the cart before the horse. Because democratic capitalism is as much of a contradiction as a socialist dictatorship. So it's not irrelevant. For example, right now, it's because of these neoliberal capitalist fundamentalists that we have the demolition of local government, banning of the right to protest, de-mutualisation, privatisation of public spaces. All which while pursuing capitalist outcomes, harm democracy. If we reverse that and demand more democracy, it means undoing that. And also inequality, because inequality harms democracy.
Hi Gary, I agree with most of what you say in this video. The only bit that worries me is that your work seems to have a blind spot on the link between economics/growth and biophysical limits/planetary boundaries. Without this it is acontextual. If you could put your work in this context it would be perfect :)
As somebody both living in North America and Europe I may say that in my humble opinion a big issue is even the misperception we usually have of certain words and related meanings. I.e. many people call themselves “middle class”, without considering that nowadays in many realities it’s a very (to say the least) vague term: it includes people scoring some of the lowest possible income around with some pretty conspicuous wages. One of the metric I keep listening over and over is anywhere between 40k and 150k, but some have even more extreme values going anywhere between 25-30k up to 250k. So, with governments and media using such terms with such a high level of certainty make feel many people as all sailing into the same boat, without even keeping into account that a million dollar house owner by modern definition may fall into the same category of a renter barely capable of making a living. This deception and misperception generates confusion, with a perceived gap that is indeed feudal: poor/lords, without anything in the middle, and without considering the enormous differences of prices and ta actions in different areas/regions/countries. I may dare say as an unemployed for some pretty long time that I could honestly see more pungent and clear the gap between me and my neighbour scoring 200k a year with a so called “middle class” job, that seeing any wish to comparing my situation with a multi millionaire of sort. All of that meaning that when I see news and media keeps stating how “family/people’ standard of living” is decreasing I may dare say, which ones? Mine and many millions of others for sure, but I can equally see how many other jobs, even many supposedly being “low level/low wage” kind of employment are raising, and not few individuals were capable of increasing their “standard of living” of a more than conspicuous and visible amount (without arguing on what they are going to spend nor what they may consider a decent standard of living). It looks like to me as it’s becoming a problem of semantics and a generic spread ignorance, nurtured with great commitment by propaganda, since it generate fertile soil for any sort of negative feeling of sort (that notoriously being the best environment to allow rumours and specific narrative to grow and develop solid roots). Big words, big claims, everybody apparently put into the same boat, but at the same time everybody treated “slightly” differently: not an expert of economy but being a mediocre scholar of history, that’s a great way to keep alive a continuous sense of unease, discontent, and social injustice: everybody with the same problems, but somebody capable of coping with them better than others. Instead of focusing on growth, productivity and metric that are outdated and obsolete for the time we are living in, it would be maybe more beneficial to start using words with a certain degree of logic and common sense, noticing more how the reciprocal indifference drive to unconscious exploitation while granting at the same time for such system to exist and thrive. Just my two bits worth on the matter. First time on the channel, interesting videos, bravo :)
Hi Gary, Best regards from Chile, I could talk a lot about inequality but you made your point so clear and it connects so well to my experiance of a neo-liberal society here that the only thing I would like to do is to say that if you think about sailing to Chile you are very welcome.
I came to this country 20 years ago, the amount of disposable income you had left even on minimum wage was mind-blowing. It's not like that anymore even on median wage.
The money is broken