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.
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.
@@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.
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.
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.
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.
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!
@@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.
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.
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.
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.
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.
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.
@@400VAL-p3vyou 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
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.
If productivity is a problem, there is only one sector that can address this. That's manufacturing. Service industries can't deliver significant productivity growth, as they are essentially labour based industries. Manufacturing can deliver productivity by growths of automation, scale, innovation. Oh, but we offshored most of this a while ago. Better get it back then. But I think the immediate problem right now is something else, we are now so highly taxed that ordinary people can't save up the money to start small businesses. And without a significant amount of your own money then you have to borrow at a high rate, and then you had better be really good at a) picking your new business sector and b) managing to run your business well so you can survive on a small margin and c) avoid making significant mistakes, because you won't have any financial buffer. So much business innovation and national growth happens as small businesses scale to medium sized businesses. So if you unwittingly place burdens on that business formation and growth phase, by making it really hard for people to save the money to start their business, and hard for people to keep their money during the growth phase ... well then, it's not hard to see that things won't end up well. And why are we so highly taxed ? Well there's a whole bucket load of things there. One I might highlight is that we have made many people ill in many diverse ways by allowing the processed food industries to dominate, and make a large number of us metabolically unwell. Live with that for a couple of decades and you will be operating sub-par in a number of ways without knowing it, and then we nationally spend a fortune on medical services that don't solve the problem, but consume bucket loads of tax, which have to be taken off those that could otherwise save up and start businesses....
Hey garry I discovered your content and it opened my mind to a slave collar around my neck I couldn't see but always felt. Yesterday I saw your book in the bookstore around 30 /40 euro I went in to get the cheapest notepad I could find to write down a to do list so I don't have a mental breakdown. I cycled 12km to town cause I cant afford to keep my car on the road and don't have a job because I live in the back arse of a dead village. The funny thing is I can't afford a simple book. If you feel generous please send me out one and I'll give a 5 star review. 30 living with parents no job because I can't afford to keep my car on the road STRUGGLING TO SEE HOPE!!! Ps thanks for opening my eyes to the lies.
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
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.
Slow productivity growth is caused by high housing prices making people live in areas with fewer job opportunities and settle for jobs they are overskilled for.
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.
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 😃
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.
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
@@moebius90 This is very very true but infinite growth in any system is not possible and sadly we are at the end of the road It’s being propped up until Ai can support the new cbdc system. Thats why theft is through the roof with governments as they will let the system fall once the new digital currency is working for them. All government debt will be reset but private debt will be a wealth grab on assets
The last time Britain wanted to achieve unlimited growth they ended up colonizing half the world. Now imagine if every country in the world wanted to achieve that ambitious goal. It's just not possible. I wish governments would do what they're supposed to do and ensure they protect the economy from the rich as well.
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
Also, consider that economic and natural ecosystems share several fundamental principles, such as cycles, balance, and diversity, but they differ in their time perspectives, with the economy tending to be short-term oriented while natural principles are long-term.
I love the videos, it's like coming out of a pea soup for into a clear day. The way I see financial growth is quite simplistic. Growth ultimately relies on the availability of natural resources. Resources on Earth are finite so ultimately growth can only continue for so long. As such, is it not a folly to keep chasing it in the long term? There has to be another way. As a species we've been blessed with a high level of intelligence and a resource in planet Earth that if treated responsibly could sustain our species for a long time. Think crocodiles etc... I'm afraid humans have allowed greed to waste this potential. Keep the videos coming though, they're great.
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.
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.
The Limits To Growth was first published in 1972, and predicted the problems of unrestricted growth for mankind. Since then we have moved to a global economy - effectively now a closed system - in which business is all part of the of one big market, i.e. there are no new markets to conquer; and restricted opportunities to grow markets. And in a closed system if one part is getting richer , the other part must get poorer. It is that simple.
I literally wrote my dissertation on economics about how GDP/ earnings per capita all those markers were going to be outdated. I wrote it because of China not self-inflicted economic policies.
“Lifestyles of the rich and the famous They're always complainin' Always complainin' If money is such a problem Well they got mansions Think we should rob them”
I remember someone saying that if you replace "economic growth" with "rich people's yachts", it all starts to make a lot more sense. I never understood why so many use it as a measure of things improving when it's so clearly not that case. I'd say it's worse, because they take any chance to make out they're doing well. Growth of a few percent and oh look how amazing. So we're supposed to be grateful and praise them while living standards fall further for normal people. As for calling us lacking in productivity, if they genuinely believe it they're idiots. But I'm sure some just push that narrative as they know there's enough people who will lap it up and blame normal people. It's always either faux motivational work harder bullshit or blaming normal people for being lazy. I imagine it's the usual distraction. That's all any of it has felt like since 2008. It's the poor, the lazy, benefits, immigrants, the EU, Muslims, the liberal elite, trans people, disabled people, now anyone signed off work unwell. It's all deliberate distraction to frame discussion, make people argue, make people blame. And of course, stop people actually focusing their attention on the increasingly rich.
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.
Hi Gary - I'd like you to look at this from a social contract point of view. It's not breaking... in my opinion it's broken. You are spot on - thank you for your work.
Very useful video to raise people conscience, and a good way to look at. If the productivity was at fault, we would be seeing GDP decrease. It's as if you were getting paid the same gross wage (and growing it at 2-3% rate each year), and the government were increasing taxes every year, so that you were ending up with less and less in your pocket. People would grow angry at government for raising taxes. This way it's exactly the same, but the culprit is 'inflation' (especially housing) and people are just not knowing how to direct their angst against...
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
This comes back to assets, there’s the expectation that once you’ve bought a house it’s price will increase. It often feels the whole economy is based around the ongoing increase in house prices. And that that is therefore where most of the UKs money goes in propping this up.
Good for you Gary. Your educational videos are a gift to humanity. You’re describing an old and persistent ideology= a set of ideas that serves and promotes interests of the rich and powerful. This is the core of capitalism…. “Tax the rich and feed the poor.”
I keep coming back to the Monopoly experiment. Life in the UK feels like a game of monopoly where, as an addition to the standard rules, one player is randomly selected to have three times the starting money of the other players and has an additional third dice they can roll if they want to to get them out of trouble. Then everyone plays, the lucky player powers ahead, buys everything up, and has everyone else paying them rent by the end. And then, just like the monopoly experiment, they put their success down to skill and good judgement, rather than unassailable, unearned advantage.
Productivity is what enables non inflationary public spending eg supply to meet demand. Public spending which targets increasing productive capacity is just not done so public services are underfunded instead of managing the econ with the assumption they will be properly funded. Financialisation is a problem, asset inflation is a problem and these allow wealth to be extracted up to the top. These are not "productive". Corporations and asset managers are allowed free reign to extract value from, break up and remove the means of our productive activity.
Hey Gary, I think it would be useful if you could do a video to explain or put into perspective the actual amounts of wealth and cash reserves that are being hoarded by the rich, ready and waiting to purchase assets and stocks etc. once interest rates start to drop. Is this something you can estimate or is cash savings data difficult to acquire? The book is beautifully written by the way. You are a game changer 👍
Thanks for another wonderful video! It would be great if you could explain what economic "growth" actually is. From a lay person's perspective it's hard to make sense of. I'm a small business owner. If my business keeps growing it will eventually have thousands of employees. That could only happy if my competitors businesses shrink right? I mean there is only so much demand. So if I grow someone else has to shrink or go out of business. Surely its the same with one national economy verses another? They can't all grow can they? On the surface the idea of growth seems to have a logical inconsistency at it's heart. Yet this can't be the case surely. Could you explain why one economy growing doesn't mean another economy must shrink? And why businesses need to grow to be healthy? Thanks for all your great work.
Individual productivity does not have a direct relationship to personal gain for anyone who is an employee. Centralization of company ownership (large conglomerates etc) rather than small business is quite likley to result in less individual productivity as there is no direct benefit for that productivity for almost everyone in society. But supermarkets are the cheapest way to buy from unilever. PS i mean there are lots of clear problems and not lots of clear solutions, even if productivity was the problem.
American indexes, such as the NASDAQ and S&P 500, are experiencing significant growth, while European indexes are growing at a much slower pace. The UK100, for example, has risen only 70% since 2011.
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.
I quit my job as a high school teacher to go into banking, and then quit banking to become a content creator “influencer”. Why? Because this career choice seems to be the only real chance left of true social mobility. People criticise the younger generation so much for their ambitions to become influencers or “TikTokers” but who can blame them, when working hard in a “real job” just isn’t enough for a decent life anymore.
The other problem with growth is that it's just not sustainable on a finite planet. For a large economy to grow by just 1% sucks up enormous amounts of resources. Big economies should be shrinking while smaller ones are supported in their development
Gary I wonder if you've read 'British Economic Performance 1945-1975' by B W E Alford? He essentially puts our economic woes, lack of growth, historically, to the British Public School system. Over educated 'gentlemen who lead' rather than workers who 'do' incompetantly crashing our great industries onto the rocks. I agree about inequality of course.
"Look how much better we all are better now then in the past", even that we can buy less, necessities become luxury, but companys are getting record high profits.
'Real income' stagnates in a world where fiat currencies are inflated by government money spending schemes. Say you doubled your income from 2014 to 2024 because you are more productive now and more experienced; considering you were being paid in equivalent grams of gold, your pay now would be the same. That is, if you were getting paid 20gm Gold at your pay in 2014, you still would be getting 20gm of Gold, even though your pay doubled. Isn't that screwed up. It also means that the value of your savings halved! 100k in 2014 would have fetched ya twice the gold that 100k today will. Let that sink in.
I'd love to hear Gary's take on Canada's federal budget released last week. I've been seeing a lot of media complaining about the increase in capital gains and how that would stifle investments, as well as how Canadians "can't afford" all the proposed government spending
Living standards aren't falling all across the world. They are falling only in the Western World. They are rising rapidly in the rest of the world. We are living through a great rebalancing. A billion or more Chinese and Indians lifted out of abject poverty in only a couple of decades. Globalisation means jobs move to wherever labour is cheapest, transport costs are way lower than the differential in wages. That's not the only problem the UK but it;'s why the manufacturing jobs all disappeared, and now even service jobs (think call centres for example).
Productivity is the engine behind economic growth and is simply a measure of the output achieved per unit of input. It’s not a measure of human effort. When they say productivity is not increasing they are not disparaging the hard work or work ethics of ordinary brits.
Its true about having no money to grow where i work the owners recently did a big expansion where they set up a new factory right next to our supplier things grew quite rapidly but all their plans for for the second part of the expansion have stopped becsuse the cost of raw materials is 5 times higher and with wages going up and up every year they cant make as much money so we are now massivly short staffed our wages are the lowest thry can legally be and we cant run the factory properly anymore despite having too work weekends and working longer hours than ever productivity of the individuals had increased massively but on thr whole its plummeted due too lack of staff its nuts i think my job is in real trouble
Degrowth next? Really needs mainstream economists to speak more about it not just on the fringe of academic economics and political ecology. A lot of the arguments against degrowth are valid(it cannot be done by individual nations, because of economic competition against it) but living standards do not fall in developing nations when there is stagnant or longterm reduction of gdp (Japan is the case study example, where they have reduced material throughput, but are objectively and subjectively better off in living standards). The reason its relevant is the only model to meet the 2C carbon budget that is deemed realistic (without CCS technology that doesnt exist yet) is by reducing material and thus economic throughput. Its called LED (Low Energy Demand) The reason its an important idea if unrealistic on the face of it, is that in some parts its already happening, with the shift by some to solve global inequality (rather than wealth inequality).
He is right. Problem for me is: What do i make out of it. These video makes me to want to work less, hate my bosses which are basically in the same situation only one position higher or make my own company without the skillset to do so or to demonstrate. But nothing will help my personal situation it actually would hurt me. Thats what makes it so difficult
The issue is that we have very little power as individuals to change the situation. We need to talk about these issues and solutions to them to bring any sort of change through policy.
It is true that there is inequality growth, but still it is not necessarily the main problem. The financial system is in a debt spiral, where the system needs to create more currency to pay the interests of this big debt, creating big inflation in the process so the purchasing power of all the currencies are falling, and so also falling the living standards of the poor and middle class. This inflationary process also is distorting the economy, making very difficult for the companies to forecast prices, etc. This process is like pressing the breaks in a car, meanwhile the politicians are telling you to press the accelerator. I think they know what is going on, the only solution is to change the monetary system and return to a system where the currencies were backed by something like gold, but of course these change will have big consequences.
Inequality is eternally rising because the cost of labour is eternally falling. Cost of labour is falling, in large part, because workers tolerate it. Workers tolerate it because their labour is being devalued surreptitiously (we get payrises evert year, right? What should my salary be tracking to maintain its wealth acquisition power? Inflation right?). The central issue is the opacity of the fiat system. If everyone were paid in BTC, it would be harder to drive down labour costs without workers becoming angry. Inequality would fall, or at least cease rising. Love you Gary mate, but this is the only solution.
Right now, more then ever, I see people online saying "it's your fault, be more responsible. Move to a cheaper area, get a better job at a company, no excuses." Meanwhile, my 70+ y/o boomer dad talks about how he quit his job when he did, snatching his pensions and retirement benefits because companies weren't paying him enough...THEY PAY LESS NOW and payed MORE decades ago. He tells me you're better off running your own company or business.
100%, there should be more acceptance of established and profitable business. So often it seems unprofitable companies who are growing are valued more than established profitable companies who aren't growing. Growth is literally worthless if you aren't benefiting from that growth. More emphasis needs to be on quality, not productivity/growth
I agree. I would have no problem with businesses closing because they are no good, don't generate enough sales. But BUSY businesses can't make ends meet. The numbers just don't add up, no matter how hard people work.
We must cut migration and pay out our debt asap by cutting all benefits. At the same time as the labour market becomes tighter, the businesses will be forced to invest in automation which will increase productivity
How are you going to "grow the Economy"? Ah, yes... well you see, I would like the number to have been lower before, but now it will be higher; therefore, growth occurred. The number was stated and the new statement is that that number is larger now. I said that there would be growth, and it did grow, meaning I lived up to my promise and I would like to continue on as the government, and if you choose me again, "Growth!"
My favourite examples are East Asia: Japan, South Korea, Taiwan, Hong Kong. All of them have declining populations. In order to sustain the same standard of living for fewer people, less economic output is required. Why does it matter if Japan's economy is "stagnating"? I've lived in Japan for more than 5 years. Yes, there are problems, of course. But our "problems" seem like blessings compared to y'all folk with GROWING economies! I'll keep my "stagnation", thank you... Life is better here than UK, USA or Canada.
Hi Gary, thanks for your videos. Regarding the idea of infinite growth, where companies and corporations are expected to dish out more returns every fiscal year. Do you have thoughts on how we could shift towards more sustainable investment schemes? It is clear that from an economical aspect taxation of the rich is necessary, but I'm curious about how that would affect their investment strategies? If certain markets have been supported by super rich investors, will taxation make investors more conservative and potentially collapse those markets? Thank you for your time
Assets held not by the very rich will be held by ordinary families, who can spend more as a result, and this itself would drive higher investment. Depending on how you implement it you could end up bringing asset prices down, but it's worth considering that cheaper assets (like housing and stocks) relative to wages is probably a very good thing.
Ask yourself who is telling you to do more for less. We finally got payrises this year in the form of a one time payment (basically a tax dodge for the company). My boss begrudgingly gave it to us and made us aware that he is struggling financially too. Then he got in his Maserati and drove to the airport as he was spending the weekend in his 6 bed Spanish villa.
Mark Carney would have been thinking about lack of investment and automation w.r.t. productivity, not just individuals time & motion. We need to think about the impact of lack of investment in the built environment and public health in general to understand productivity in the broader sense. In any case continuous growth is unsustainable in terms of natural resources. As Thomas Piketty says, inequality leads to instability and disaster. Guess where we're heading. We need a completely new way of governance?
Wealth acruing to wealth is simple market distortion - that politicians maintain with big-state economics. 'Inequality' if we even need to worry about it - is a symptom of political interference - learn about classical/austrian economics and 'real' money if you want to understand. If you vote for established political parties you are voting for the freedom of tiny special interest groups - vote for your own instead; it's called democracy where the only inequality that matters is that imposed by the state.
I was wondering if you could discuss or invite someone to discuss the impact of technology and automation, how it has replaced human labor and added to the evaporation of the middle class. For one thing because those with capital can invest in manufacturing with fewer and fewer workers and therefore less distribution of wealth. Another factor being globalization, where manufacturing has moved to countries with cheaper labor; though I've heard that automation is a larger factor in why these jobs have diminished so much in the US and the UK (for many decades now). If technology replaces the need for human labor it seems one part of the solution could be that people work less, as recently proposed by Bernie Sanders among others, so good paying work is distributed to more people, along with other benefits to workers' general well-being, like having more time to pursue other work, grow food, etc. Of course this could be at a higher pay rate (or as in the Bernie plan easier to reach overtime); if no pay raise workers could benefit from increased public services via taxing the rich. Would love to see some of these things discussed here. Keep up the good work!
Wealthy people getting wealthier and a productivity problem aren't contradictory. Both can be true at the same time. Also, productivity doesn't mean working harder, in fact it normally coincides with work getting easier. A builder with power tools is far more productive than a builder without. That's the only way you get significant productivity growth. Through technology, mechanisation, automation and improved methods of working. The problem with talking about GDP growth is that it isn't taking the population growth into account. The economy is growing but only because the population is growing, which means, per person, there is no improvement. The only way to grow the economy in a way that benefits individuals is through productivity growth. There literally is no other way. It's a mathematical truth.
It's not that growth solves all problems, it's that growth solves inequality in capitalistic society. Inequality is simply a statistical lack of opportunity for the ones that aren't already winners. I think the best example of this is the education / job market split. How come the population is so much more educated, but on average people are not much richer? If everyone got multiples more capacity to produce then people should be richer, yet that is not the case. Even if you have the capacity you still need the demand to supply that capacity to. That is the problem - there is not enough demand for the educated worker and it is no longer easy to create that demand either. The world has many problems that could be solved, but the capitalistic system is not capable of organizing the people to solve those problems anymore. I don't think it ever was particularly good at it, there simply was a long period where the steps to solving a problem were clear enough for many people to chip in. I very rarely hear of a company that was started in 2010s having great growth in anything besides tech. Most classic job crearing businesses were started in the last century. There is practically no new entrants to those markets and serious competition for those that are already established. Regular people get richer when there is demand for them, but in this century that has only been going down for most sectors. There will always be rich people, but having them store away all the capital in their own pockets is a disaster.
The main problem is austerity in the public sector where middle class is hit the hardest. But don't tax the rich...or they do but they have accountants working through all the little cracks and holes of the tax system. Take our beloved brand: Heineken. The CEO saves an annual of €30,000,000.- making smart use of tiny loopholes in taxing regulation. But they did close down several hospitals which of many were some special care children's hospitals. Go figure.
I do believe that the problem is productivity. We are not producing enough of the things that people actually need. Like housing and energy. And the fundamentals to these industries are being manipulated and monopolised by capitalists that will do what ever it takes to maintain an upwards trend. By it’s nature will increase a gap from those with nothing to those with something. So rising inequality is baked into capitalism.
Slight correction: The standard of living for the middle class is collapsing IN THE G7 ECONOMIES. The fastest growing economies right now are in central Asia (former USSR) and Africa. (Admittedly, many of them benefitted from the global reshuffling after Ukraine) ASEAN and South Asia in general are handedly outperforming EU and USA with rapidly rising middle classes. Asia's share in the "global middle class" is up from around 10% in the 2010s to hovering just below *FIFTY PERCENT* today.
this is so depressing. it just feels like there's zero reason to keep on living. I don't have neither rich parents or the smarts. I'm just a small fry in a big sea. I will never have an any effect on anything. being aware of how shitty world is not going to make my life any easier either. if these are unchangeable, what's the point of struggling.
My question is have the corporations won the game of capitalism? If so what kind of society do we get then? I think they have but only by making up the rules of the game. Ever since the threat of a person going to prison was swapped for fining or sanctioning an incorporated company these captains of capitalism have royally took the piss. Think about why we have so many regulations. It's to enable us to fine them purely because their whole purpose is to extract as much capitol out of everything. Knowing nobody is going to prison only makes the fines/sanctions a profit/loss equation for them so as soon as they find a way around the regulation they go back to taking the piss. Because profit. If we changed just this one thing making people accountable to people again we might just have a chance to claw back into the game.
Thank you for the videos, great point about the stock markets high etc, I'm a bit OCD, would it be possible to put the cap on the fairy liquid bottle please.
If you watched this video and liked how he explains things and want to understand more and also get to know about his life then read his book. I read it to my friend but also listened to it on audible with Gary narrating, which was brilliant. Buy the book, listen to the audio. It’s really well written, and it has laugh out loud moments in it too. (Though I am left wondering if his stomach issue ever got better. Did it Gary?)
Is it fair to say that there is a disconnect between macroeconomics and microeconomics? Economy growth is a macro metric and that's all economists worry about. Whereas wealth disparity is a microeconomic issue?
What we really need to grow is the awareness of what’s happening right under our noses and tax the super rich properly! They’re not going to offer up that option themselves now are they! Keep pressing on Gary, legend mate ✊🏻 P.S Currently enjoying your audio book on my morning runs 👊🏻 Love the fact you narrated it yourself man.
I may be economically illiterate, but if we had huge growth, say 10% per year, without fixing the tax system, would most of that growth just go to the already stupendously rich?
Of course productivity per unit of labour falls when all you do is throw copious sums of labour at an economy and tell it to grow. Worst part is that these ppl are fully aware of the non linear relationships between the variables and outcomes. They just rely on the average pleb not knowing about it, and it works for them. What you get is a bunch of demand driven nominal growth that hops up prices in excess of the declining marginal return on each unit of labour added. For the average wage earner, this just means worse services, higher prices, and lower wages. Ps: Carney may be the PM of Canada in the near future. Makes sense to have a Carney accompanying the circus.
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
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?
When companies are taken over they often reduce mileage allowance , expense allowances and holidays for new starters .
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.
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.
@@oldskoolmusicnostalgia “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.
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.
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.
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.
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.
@@400VAL-p3vyou 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
@@400VAL-p3v
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.
If productivity is a problem, there is only one sector that can address this. That's manufacturing. Service industries can't deliver significant productivity growth, as they are essentially labour based industries. Manufacturing can deliver productivity by growths of automation, scale, innovation. Oh, but we offshored most of this a while ago. Better get it back then. But I think the immediate problem right now is something else, we are now so highly taxed that ordinary people can't save up the money to start small businesses. And without a significant amount of your own money then you have to borrow at a high rate, and then you had better be really good at a) picking your new business sector and b) managing to run your business well so you can survive on a small margin and c) avoid making significant mistakes, because you won't have any financial buffer. So much business innovation and national growth happens as small businesses scale to medium sized businesses. So if you unwittingly place burdens on that business formation and growth phase, by making it really hard for people to save the money to start their business, and hard for people to keep their money during the growth phase ... well then, it's not hard to see that things won't end up well. And why are we so highly taxed ? Well there's a whole bucket load of things there. One I might highlight is that we have made many people ill in many diverse ways by allowing the processed food industries to dominate, and make a large number of us metabolically unwell. Live with that for a couple of decades and you will be operating sub-par in a number of ways without knowing it, and then we nationally spend a fortune on medical services that don't solve the problem, but consume bucket loads of tax, which have to be taken off those that could otherwise save up and start businesses....
Keep it going Gary, our important voices are getting muted or psyched out. But you are completely right about who's ruling us 👍
Hey garry I discovered your content and it opened my mind to a slave collar around my neck I couldn't see but always felt. Yesterday I saw your book in the bookstore around 30 /40 euro I went in to get the cheapest notepad I could find to write down a to do list so I don't have a mental breakdown. I cycled 12km to town cause I cant afford to keep my car on the road and don't have a job because I live in the back arse of a dead village. The funny thing is I can't afford a simple book. If you feel generous please send me out one and I'll give a 5 star review.
30 living with parents no job because I can't afford to keep my car on the road STRUGGLING TO SEE HOPE!!!
Ps thanks for opening my eyes to the lies.
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.
Slow productivity growth is caused by high housing prices making people live in areas with fewer job opportunities and settle for jobs they are overskilled for.
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 always say there are two things you can be absolutely certain. Human stupidity and greed.
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 😃
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.
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.
@@moebius90 This is very very true but infinite growth in any system is not possible and sadly we are at the end of the road
It’s being propped up until Ai can support the new cbdc system.
Thats why theft is through the roof with governments as they will let the system fall once the new digital currency is working for them.
All government debt will be reset but private debt will be a wealth grab on assets
The last time Britain wanted to achieve unlimited growth they ended up colonizing half the world. Now imagine if every country in the world wanted to achieve that ambitious goal. It's just not possible. I wish governments would do what they're supposed to do and ensure they protect the economy from the rich as well.
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
You made clear and explicit what many of us sense with our intuition. Thank you. 🙏
Also, consider that economic and natural ecosystems share several fundamental principles, such as cycles, balance, and diversity, but they differ in their time perspectives, with the economy tending to be short-term oriented while natural principles are long-term.
I love the videos, it's like coming out of a pea soup for into a clear day.
The way I see financial growth is quite simplistic. Growth ultimately relies on the availability of natural resources. Resources on Earth are finite so ultimately growth can only continue for so long. As such, is it not a folly to keep chasing it in the long term?
There has to be another way. As a species we've been blessed with a high level of intelligence and a resource in planet Earth that if treated responsibly could sustain our species for a long time. Think crocodiles etc...
I'm afraid humans have allowed greed to waste this potential.
Keep the videos coming though, they're great.
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.
The Limits To Growth was first published in 1972, and predicted the problems of unrestricted growth for mankind. Since then we have moved to a global economy - effectively now a closed system - in which business is all part of the of one big market, i.e. there are no new markets to conquer; and restricted opportunities to grow markets. And in a closed system if one part is getting richer , the other part must get poorer. It is that simple.
I literally wrote my dissertation on economics about how GDP/ earnings per capita all those markers were going to be outdated. I wrote it because of China not self-inflicted economic policies.
Your channel has proven to be such a great education for me, Gary. Thank you for waking me up!
“Lifestyles of the rich and the famous
They're always complainin'
Always complainin'
If money is such a problem
Well they got mansions
Think we should rob them”
I remember someone saying that if you replace "economic growth" with "rich people's yachts", it all starts to make a lot more sense.
I never understood why so many use it as a measure of things improving when it's so clearly not that case. I'd say it's worse, because they take any chance to make out they're doing well. Growth of a few percent and oh look how amazing. So we're supposed to be grateful and praise them while living standards fall further for normal people.
As for calling us lacking in productivity, if they genuinely believe it they're idiots. But I'm sure some just push that narrative as they know there's enough people who will lap it up and blame normal people. It's always either faux motivational work harder bullshit or blaming normal people for being lazy.
I imagine it's the usual distraction. That's all any of it has felt like since 2008. It's the poor, the lazy, benefits, immigrants, the EU, Muslims, the liberal elite, trans people, disabled people, now anyone signed off work unwell. It's all deliberate distraction to frame discussion, make people argue, make people blame. And of course, stop people actually focusing their attention on the increasingly rich.
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.
Hi Gary - I'd like you to look at this from a social contract point of view. It's not breaking... in my opinion it's broken.
You are spot on - thank you for your work.
Very useful video to raise people conscience, and a good way to look at.
If the productivity was at fault, we would be seeing GDP decrease.
It's as if you were getting paid the same gross wage (and growing it at 2-3% rate each year), and the government were increasing taxes every year, so that you were ending up with less and less in your pocket. People would grow angry at government for raising taxes. This way it's exactly the same, but the culprit is 'inflation' (especially housing) and people are just not knowing how to direct their angst against...
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
Just a couple of words to promote this video
This comes back to assets, there’s the expectation that once you’ve bought a house it’s price will increase. It often feels the whole economy is based around the ongoing increase in house prices. And that that is therefore where most of the UKs money goes in propping this up.
Good for you Gary. Your educational videos are a gift to humanity.
You’re describing an old and persistent ideology= a set of ideas that serves and promotes interests of the rich and powerful.
This is the core of capitalism….
“Tax the rich and feed the poor.”
I keep coming back to the Monopoly experiment. Life in the UK feels like a game of monopoly where, as an addition to the standard rules, one player is randomly selected to have three times the starting money of the other players and has an additional third dice they can roll if they want to to get them out of trouble. Then everyone plays, the lucky player powers ahead, buys everything up, and has everyone else paying them rent by the end. And then, just like the monopoly experiment, they put their success down to skill and good judgement, rather than unassailable, unearned advantage.
Productivity is what enables non inflationary public spending eg supply to meet demand. Public spending which targets increasing productive capacity is just not done so public services are underfunded instead of managing the econ with the assumption they will be properly funded. Financialisation is a problem, asset inflation is a problem and these allow wealth to be extracted up to the top. These are not "productive". Corporations and asset managers are allowed free reign to extract value from, break up and remove the means of our productive activity.
Hey Gary, I think it would be useful if you could do a video to explain or put into perspective the actual amounts of wealth and cash reserves that are being hoarded by the rich, ready and waiting to purchase assets and stocks etc. once interest rates start to drop. Is this something you can estimate or is cash savings data difficult to acquire?
The book is beautifully written by the way. You are a game changer 👍
Thanks for another wonderful video! It would be great if you could explain what economic "growth" actually is. From a lay person's perspective it's hard to make sense of. I'm a small business owner. If my business keeps growing it will eventually have thousands of employees. That could only happy if my competitors businesses shrink right? I mean there is only so much demand. So if I grow someone else has to shrink or go out of business. Surely its the same with one national economy verses another? They can't all grow can they? On the surface the idea of growth seems to have a logical inconsistency at it's heart. Yet this can't be the case surely. Could you explain why one economy growing doesn't mean another economy must shrink? And why businesses need to grow to be healthy? Thanks for all your great work.
Individual productivity does not have a direct relationship to personal gain for anyone who is an employee.
Centralization of company ownership (large conglomerates etc) rather than small business is quite likley to result in less individual productivity as there is no direct benefit for that productivity for almost everyone in society.
But supermarkets are the cheapest way to buy from unilever.
PS i mean there are lots of clear problems and not lots of clear solutions, even if productivity was the problem.
American indexes, such as the NASDAQ and S&P 500, are experiencing significant growth, while European indexes are growing at a much slower pace. The UK100, for example, has risen only 70% since 2011.
The problem is inflation caused by governments printing money and not creating mechanisms to keep the existing money moving during the pandemic.
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.
I quit my job as a high school teacher to go into banking, and then quit banking to become a content creator “influencer”. Why? Because this career choice seems to be the only real chance left of true social mobility.
People criticise the younger generation so much for their ambitions to become influencers or “TikTokers” but who can blame them, when working hard in a “real job” just isn’t enough for a decent life anymore.
Quantitative easing was a great catalyst for wealth growth.
The other problem with growth is that it's just not sustainable on a finite planet. For a large economy to grow by just 1% sucks up enormous amounts of resources. Big economies should be shrinking while smaller ones are supported in their development
Gary I wonder if you've read 'British Economic Performance 1945-1975' by B W E Alford? He essentially puts our economic woes, lack of growth, historically, to the British Public School system. Over educated 'gentlemen who lead' rather than workers who 'do' incompetantly crashing our great industries onto the rocks. I agree about inequality of course.
"Look how much better we all are better now then in the past", even that we can buy less, necessities become luxury, but companys are getting record high profits.
Keep exposing their hypocrisy Gary! 👏
'Real income' stagnates in a world where fiat currencies are inflated by government money spending schemes. Say you doubled your income from 2014 to 2024 because you are more productive now and more experienced; considering you were being paid in equivalent grams of gold, your pay now would be the same. That is, if you were getting paid 20gm Gold at your pay in 2014, you still would be getting 20gm of Gold, even though your pay doubled. Isn't that screwed up. It also means that the value of your savings halved! 100k in 2014 would have fetched ya twice the gold that 100k today will. Let that sink in.
I'd love to hear Gary's take on Canada's federal budget released last week. I've been seeing a lot of media complaining about the increase in capital gains and how that would stifle investments, as well as how Canadians "can't afford" all the proposed government spending
Living standards aren't falling all across the world. They are falling only in the Western World. They are rising rapidly in the rest of the world. We are living through a great rebalancing.
A billion or more Chinese and Indians lifted out of abject poverty in only a couple of decades. Globalisation means jobs move to wherever labour is cheapest, transport costs are way lower than the differential in wages. That's not the only problem the UK but it;'s why the manufacturing jobs all disappeared, and now even service jobs (think call centres for example).
Productivity is the engine behind economic growth and is simply a measure of the output achieved per unit of input. It’s not a measure of human effort. When they say productivity is not increasing they are not disparaging the hard work or work ethics of ordinary brits.
Its true about having no money to grow where i work the owners recently did a big expansion where they set up a new factory right next to our supplier things grew quite rapidly but all their plans for for the second part of the expansion have stopped becsuse the cost of raw materials is 5 times higher and with wages going up and up every year they cant make as much money so we are now massivly short staffed our wages are the lowest thry can legally be and we cant run the factory properly anymore despite having too work weekends and working longer hours than ever productivity of the individuals had increased massively but on thr whole its plummeted due too lack of staff its nuts i think my job is in real trouble
Degrowth next? Really needs mainstream economists to speak more about it not just on the fringe of academic economics and political ecology.
A lot of the arguments against degrowth are valid(it cannot be done by individual nations, because of economic competition against it) but living standards do not fall in developing nations when there is stagnant or longterm reduction of gdp (Japan is the case study example, where they have reduced material throughput, but are objectively and subjectively better off in living standards).
The reason its relevant is the only model to meet the 2C carbon budget that is deemed realistic (without CCS technology that doesnt exist yet) is by reducing material and thus economic throughput. Its called LED (Low Energy Demand)
The reason its an important idea if unrealistic on the face of it, is that in some parts its already happening, with the shift by some to solve global inequality (rather than wealth inequality).
He is right. Problem for me is: What do i make out of it. These video makes me to want to work less, hate my bosses which are basically in the same situation only one position higher or make my own company without the skillset to do so or to demonstrate. But nothing will help my personal situation it actually would hurt me. Thats what makes it so difficult
The issue is that we have very little power as individuals to change the situation. We need to talk about these issues and solutions to them to bring any sort of change through policy.
The problem in the US, and i would suspect in the UK is government spending that exceeds government income.
It is true that there is inequality growth, but still it is not necessarily the main problem. The financial system is in a debt spiral, where the system needs to create more currency to pay the interests of this big debt, creating big inflation in the process so the purchasing power of all the currencies are falling, and so also falling the living standards of the poor and middle class. This inflationary process also is distorting the economy, making very difficult for the companies to forecast prices, etc. This process is like pressing the breaks in a car, meanwhile the politicians are telling you to press the accelerator. I think they know what is going on, the only solution is to change the monetary system and return to a system where the currencies were backed by something like gold, but of course these change will have big consequences.
I live in Italy and living standards are definitely falling.
Inequality is eternally rising because the cost of labour is eternally falling. Cost of labour is falling, in large part, because workers tolerate it. Workers tolerate it because their labour is being devalued surreptitiously (we get payrises evert year, right? What should my salary be tracking to maintain its wealth acquisition power? Inflation right?). The central issue is the opacity of the fiat system.
If everyone were paid in BTC, it would be harder to drive down labour costs without workers becoming angry. Inequality would fall, or at least cease rising.
Love you Gary mate, but this is the only solution.
Right now, more then ever, I see people online saying "it's your fault, be more responsible. Move to a cheaper area, get a better job at a company, no excuses." Meanwhile, my 70+ y/o boomer dad talks about how he quit his job when he did, snatching his pensions and retirement benefits because companies weren't paying him enough...THEY PAY LESS NOW and payed MORE decades ago. He tells me you're better off running your own company or business.
Carney is WEF -is a big part of the problem. As long as lobbying and corporations funding government inequality will grow.
100%, there should be more acceptance of established and profitable business. So often it seems unprofitable companies who are growing are valued more than established profitable companies who aren't growing. Growth is literally worthless if you aren't benefiting from that growth. More emphasis needs to be on quality, not productivity/growth
I agree. I would have no problem with businesses closing because they are no good, don't generate enough sales.
But BUSY businesses can't make ends meet. The numbers just don't add up, no matter how hard people work.
We must cut migration and pay out our debt asap by cutting all benefits. At the same time as the labour market becomes tighter, the businesses will be forced to invest in automation which will increase productivity
How are you going to "grow the Economy"? Ah, yes... well you see, I would like the number to have been lower before, but now it will be higher; therefore, growth occurred. The number was stated and the new statement is that that number is larger now. I said that there would be growth, and it did grow, meaning I lived up to my promise and I would like to continue on as the government, and if you choose me again, "Growth!"
In a nutshell. Economists rarely talk about Inequality, which is increasing and becoming more of a problem. Very simple.
My favourite examples are East Asia: Japan, South Korea, Taiwan, Hong Kong.
All of them have declining populations.
In order to sustain the same standard of living for fewer people, less economic output is required.
Why does it matter if Japan's economy is "stagnating"?
I've lived in Japan for more than 5 years.
Yes, there are problems, of course.
But our "problems" seem like blessings compared to y'all folk with GROWING economies!
I'll keep my "stagnation", thank you...
Life is better here than UK, USA or Canada.
Hi Gary, thanks for your videos.
Regarding the idea of infinite growth, where companies and corporations are expected to dish out more returns every fiscal year.
Do you have thoughts on how we could shift towards more sustainable investment schemes?
It is clear that from an economical aspect taxation of the rich is necessary, but I'm curious about how that would affect their investment strategies? If certain markets have been supported by super rich investors, will taxation make investors more conservative and potentially collapse those markets?
Thank you for your time
Assets held not by the very rich will be held by ordinary families, who can spend more as a result, and this itself would drive higher investment.
Depending on how you implement it you could end up bringing asset prices down, but it's worth considering that cheaper assets (like housing and stocks) relative to wages is probably a very good thing.
Ask yourself who is telling you to do more for less.
We finally got payrises this year in the form of a one time payment (basically a tax dodge for the company). My boss begrudgingly gave it to us and made us aware that he is struggling financially too.
Then he got in his Maserati and drove to the airport as he was spending the weekend in his 6 bed Spanish villa.
Excellent message.
Mark Carney would have been thinking about lack of investment and automation w.r.t. productivity, not just individuals time & motion. We need to think about the impact of lack of investment in the built environment and public health in general to understand productivity in the broader sense. In any case continuous growth is unsustainable in terms of natural resources. As Thomas Piketty says, inequality leads to instability and disaster. Guess where we're heading. We need a completely new way of governance?
Isn't the growth based on debt? Shouldn't value be growing not the supply of money? I'd be interested to hear your views on Bitcoin.
Finally someone see the big picture. I can't believe most everyone don't see it this way
Wealth acruing to wealth is simple market distortion - that politicians maintain with big-state economics. 'Inequality' if we even need to worry about it - is a symptom of political interference - learn about classical/austrian economics and 'real' money if you want to understand. If you vote for established political parties you are voting for the freedom of tiny special interest groups - vote for your own instead; it's called democracy where the only inequality that matters is that imposed by the state.
Ordinary people borrow money from commercial banks. Rich people get free money from Central Banks.
I’m convinced that secret to a better economy is written on the dark side of that red, polka-dot mug
I was wondering if you could discuss or invite someone to discuss the impact of technology and automation, how it has replaced human labor and added to the evaporation of the middle class. For one thing because those with capital can invest in manufacturing with fewer and fewer workers and therefore less distribution of wealth. Another factor being globalization, where manufacturing has moved to countries with cheaper labor; though I've heard that automation is a larger factor in why these jobs have diminished so much in the US and the UK (for many decades now). If technology replaces the need for human labor it seems one part of the solution could be that people work less, as recently proposed by Bernie Sanders among others, so good paying work is distributed to more people, along with other benefits to workers' general well-being, like having more time to pursue other work, grow food, etc. Of course this could be at a higher pay rate (or as in the Bernie plan easier to reach overtime); if no pay raise workers could benefit from increased public services via taxing the rich. Would love to see some of these things discussed here. Keep up the good work!
Wealthy people getting wealthier and a productivity problem aren't contradictory. Both can be true at the same time. Also, productivity doesn't mean working harder, in fact it normally coincides with work getting easier. A builder with power tools is far more productive than a builder without. That's the only way you get significant productivity growth. Through technology, mechanisation, automation and improved methods of working.
The problem with talking about GDP growth is that it isn't taking the population growth into account. The economy is growing but only because the population is growing, which means, per person, there is no improvement.
The only way to grow the economy in a way that benefits individuals is through productivity growth. There literally is no other way. It's a mathematical truth.
It's not that growth solves all problems, it's that growth solves inequality in capitalistic society. Inequality is simply a statistical lack of opportunity for the ones that aren't already winners. I think the best example of this is the education / job market split. How come the population is so much more educated, but on average people are not much richer? If everyone got multiples more capacity to produce then people should be richer, yet that is not the case. Even if you have the capacity you still need the demand to supply that capacity to. That is the problem - there is not enough demand for the educated worker and it is no longer easy to create that demand either. The world has many problems that could be solved, but the capitalistic system is not capable of organizing the people to solve those problems anymore. I don't think it ever was particularly good at it, there simply was a long period where the steps to solving a problem were clear enough for many people to chip in. I very rarely hear of a company that was started in 2010s having great growth in anything besides tech. Most classic job crearing businesses were started in the last century. There is practically no new entrants to those markets and serious competition for those that are already established. Regular people get richer when there is demand for them, but in this century that has only been going down for most sectors. There will always be rich people, but having them store away all the capital in their own pockets is a disaster.
The main problem is austerity in the public sector where middle class is hit the hardest. But don't tax the rich...or they do but they have accountants working through all the little cracks and holes of the tax system. Take our beloved brand: Heineken. The CEO saves an annual of €30,000,000.- making smart use of tiny loopholes in taxing regulation. But they did close down several hospitals which of many were some special care children's hospitals. Go figure.
With no growth in the economy how does the economy cope with population growth?
They need to hear your expertise in economics ASAP
I do believe that the problem is productivity. We are not producing enough of the things that people actually need. Like housing and energy. And the fundamentals to these industries are being manipulated and monopolised by capitalists that will do what ever it takes to maintain an upwards trend. By it’s nature will increase a gap from those with nothing to those with something. So rising inequality is baked into capitalism.
Slight correction:
The standard of living for the middle class is collapsing IN THE G7 ECONOMIES.
The fastest growing economies right now are in central Asia (former USSR) and Africa.
(Admittedly, many of them benefitted from the global reshuffling after Ukraine)
ASEAN and South Asia in general are handedly outperforming EU and USA with rapidly rising middle classes.
Asia's share in the "global middle class" is up from around 10% in the 2010s to hovering just below *FIFTY PERCENT* today.
this is so depressing. it just feels like there's zero reason to keep on living. I don't have neither rich parents or the smarts. I'm just a small fry in a big sea. I will never have an any effect on anything. being aware of how shitty world is not going to make my life any easier either. if these are unchangeable, what's the point of struggling.
My question is have the corporations won the game of capitalism? If so what kind of society do we get then?
I think they have but only by making up the rules of the game.
Ever since the threat of a person going to prison was swapped for fining or sanctioning an incorporated company these captains of capitalism have royally took the piss.
Think about why we have so many regulations. It's to enable us to fine them purely because their whole purpose is to extract as much capitol out of everything. Knowing nobody is going to prison only makes the fines/sanctions a profit/loss equation for them so as soon as they find a way around the regulation they go back to taking the piss. Because profit.
If we changed just this one thing making people accountable to people again we might just have a chance to claw back into the game.
Thank you for the videos, great point about the stock markets high etc, I'm a bit OCD, would it be possible to put the cap on the fairy liquid bottle please.
love his vids the more and more i watch em
I've always said that we put too much emphasis on growth and more often than not, I get shot down for saying it.
If you watched this video and liked how he explains things and want to understand more and also get to know about his life then read his book. I read it to my friend but also listened to it on audible with Gary narrating, which was brilliant. Buy the book, listen to the audio. It’s really well written, and it has laugh out loud moments in it too. (Though I am left wondering if his stomach issue ever got better. Did it Gary?)
Surely the point of growth is to inflate the debt away. Its the only way they can see out of the situation we are in?
Money printing = speculation = rich get richer
Productivity can decrease completely unrelated to people speculating on assets do to cheap money
Is it fair to say that there is a disconnect between macroeconomics and microeconomics? Economy growth is a macro metric and that's all economists worry about. Whereas wealth disparity is a microeconomic issue?
What's the difference from the average working person to the crooks at the top....this needs sorted now...this is one major problem
You need to get on Question Time Gary.
Practically everyone that comes across you agrees with you.
What we really need to grow is the awareness of what’s happening right under our noses and tax the super rich properly! They’re not going to offer up that option themselves now are they!
Keep pressing on Gary, legend mate ✊🏻
P.S Currently enjoying your audio book on my morning runs 👊🏻 Love the fact you narrated it yourself man.
And also you can't say that the country doesn't have finance it has finance
I may be economically illiterate, but if we had huge growth, say 10% per year, without fixing the tax system, would most of that growth just go to the already stupendously rich?
Everyone would see a 10% increase in wealth on average.
Of course productivity per unit of labour falls when all you do is throw copious sums of labour at an economy and tell it to grow. Worst part is that these ppl are fully aware of the non linear relationships between the variables and outcomes. They just rely on the average pleb not knowing about it, and it works for them. What you get is a bunch of demand driven nominal growth that hops up prices in excess of the declining marginal return on each unit of labour added. For the average wage earner, this just means worse services, higher prices, and lower wages.
Ps: Carney may be the PM of Canada in the near future. Makes sense to have a Carney accompanying the circus.
And yet we still argue about which flavour of tory we elect.