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.
Same argument made in Australia saying our problem is we need to raise productivity, without real analysis of what is really happening, just vaguely implying that the plebs are slacking
You just need to look at your employers. actions. My dad worked for Holden in the late 60's, early 70's. They put on Christmas parties for their employees kids, and gave them all presents. Can you name any firm now that would even consider such a thing for their employees? Except the top boss's that is. Giving them monstrous bonuses whilst the workers are told to tighten their belts.
In a sense they are correct about increasing productivity. that is wealth creation. But then they go and tax the bejeezus out of the productive sector to support the unproductive state sector and wonder why wealth creating private enterprise cannot increase its productivity. By the way Carney is an absolute crony corporatist central banking (and that is rhyming slang) Goldman Sachs shill.
We are decadent. The average person has no work ethic. You can reject that all your want it's just a fact. I worked for a Korean firm (the obvious one). Their work ethic is off the charts. After the Korean war, country was split in two and in tatters. In 70 years it's an economic powerhouse. They just want it far more than we do. in time they will get it and start slacking off themselves. Problem with UK atm is we are in decline AND we have entitled view the world will just deliver the standard of living we expect to our doorstep. We have to change and quickly.
I don´t think it is implying that "the plebs are slacking". I believe the comment "we need to raise productivity" is aimed at politicians and businessmen. Productivity can be increased by improving the quality of the jobs (e.g., moving away from exporting grains to exporting computer chips). Unfortunately, this requires investment (usually coming from the private sector) and that requires the right incentives such as tax, labour and/or environmental laws.
In 1990 when you wanted to register for something you had to telephone or get the form yourself. Fill out the form with a pen. Put that form in an envelope and go to the post office. Buy a stamp and post the letter. Someone would then drive that letter (with others) for perhaps hundreds of miles. Then it would arrive, and go into the in-tray of the person processing. They would open the letter and process it, then they would write you a letter back. Now it's all on a computer / email in the blink of an eye. But productivity is the problem.
spot on! we have workers with a lot more knowledge than before, machines that do most work and yet the problem is productivity while a CEO makes 300times more money than average worker on one of biggest supermarket chains of my country...
Yes, over-productivity is a problem. In your example, how many jobs were necessary in the economy to do that simple thing? It fed many people. Now, how many people get fed by sending an email? Now, technology is technology, and once the genie is out of the bottle, you cannot put it back in... You may not even want to put it back in... but there are consequences to that. There are consequences to making processes cheaper, more automated and reliant on fewer people overseeing them or participating in them. It strips jobs and money out of the economy, and from circulating among average workers, and sucks that surplus up into profits for shareholders, and the owners of assets in general. We've been fed this line of efficiency and productivity since 'supply side economics' replaced the Keynesian consensus, but they never expounded on the consequences to all that.
Haha I love your comment. It highlights the issue so clearly. Things are done almost instantly when digital, yet they want it faster, more efficient, more productivity!!! Like, how much do you want when we're already going at light speed?
I like this bloke he talks my language. I'm 63 and still working. I work in FE education. In comparison with what teachers did back in the late 80's and early 90's the work we do is off the chart. We do so much and we're so effective with so little resources and support staff. Pay has just collapsed at the same time and I'm sure this has happened across most sectors.
exactly the same in Portugal. In the 90s teachers were respected and paid way abive average. Now they are drowning in burocracy, lost all the authority, respect and salaries and career progression is a joke.
Massive wage stagnation in FE. I was in it for 11 years and was lucky and took my chance to move into HE, and it has helped, but I'm still far from to pay for a lifestyle on my salary alone, that my dad was able to fund, on one salary in the 80s + 90s.
Instead of making things more efficient and requiring less hours worked this technology is being used to increase the amount of work that each person has to do. The amount of stress has gone through the roof but not the pay.
Imagine telling an nhs working couple with a kid, doing overtime, that has seen their disposable / real terms income erode over the last 10-15 years struggling to live comfortably - that they aren't productive enough?!!
Hi Gary, as a graduate student in economics I’m learning much more on inequality in your channel than in any class attended in 5 years! Thanks for taking the time to explain this so anyone can understand
@jimbojimbo6873 Jup. Listen to Robert Reich and Jason Hickel in addition to Gary's videos. We have been told equality is bad, because it limits growth. But in a situation where growth is literally killing the biosphere that's not a bug, that's a feature :-)
I get where your coming from, but cancer cells don't strive. Humans do. All the cancer cell has is damaged DNA, which has lost the chemical controls that govern the growth of a particular set of cells. The Cancer is the result of DNA failure. Our economic destruction is a malaise of a different kind. It's self-deceit and delusion of a kind that only sociopaths can square in their own minds. Capitalism is a human system, and so can never be perfect. But how it is practised is a conscious choice. As a species we need to choose differently, or suffer the consequences. Human beings are flawed creatures, who don't always remember their limitations and dependencies. We all suffer from shortsighted Ness in one way or another. Our evolution created brains that whose efficiencies create blind spots. And some people can only learn from failure. This why we need to step back and really look hard at the world we are creating. We're not masters of the universe. We're hairless apes that got lucky, and our luck is running out.
I’ve long thought the obsession with GDP growth is over baked. One of the best analogies I heard was that if me and my neighbour mow each other’s lawns, it adds nothing to GDP. But if both of us pay the other £10 to mow our respective lawns, it adds £20 to GDP without any meaningful difference. Same with the productivity obsession- the easiest way to improve productivity is to replace most of your workforce with robots, but that clearly has a massive problem with social impacts. The reality is that economic and social cannot be divorced from each other as some think.
I like the lawn mower analogy. I often think about how things like donating blood or volunteering do nothing for GDP, yet the production and sale of weaponry does.
It's also known that many negative things can have a positive impact on GDP. For example, bad roads cause more vehicle damage, which in turn stimulates the repairing and buying of cars. And the thing with robots is that they don't consume, so that is 'bad' for the economy. Basically, I feel that there are a lot of economic dogma's that just don't make sense anymore in today's world. But economists are very dogmatic, almost like priests.
With the lawn mowing example, you can easily assume you and your neighbour working for a lawn mowing business where the owner takes a 1% cut. In fact from a certain perspective the whole business of growth seems to be about selling off everything that was free to private owners. Starting from environmental resources although from the way they are being exploited there won't be any environment left to divide anymore leading to the collapse of everything. Look what happened to the internet when it was free and open in the beginning and now dominated by a few giants by the network effect and people selling off their own freedom to them ("data"). Even human attention, the last bit of it getting divided and given to them. There's one genuine reason for one human to provide a service to another which that the second would provide a rarer skill back to the first which can mean innovation, advances in medicine again. But I also think humans simply wanted to enslave each other from earlier on so trying to "make money" is seen as a hedge against losing one's freedom to a person who can command your labour because they have access to a large amount of capital.
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.
The more unequal society becomes the less productive it will be, as people working 9-5 simply do not see the returns anymore - the social contract being ‘you work hard and you can live a good life’ is completely broken. Short sighted pooling of wealth by the ultra rich - so short sighted.
The problem is what seems shortsighted will likely last far beyond their lifetime thanks in large part to globalisation and mass economic migration. Whilst the West might bemoan ever reduced living standards there are still millions living in far worse conditions happy to sign up.
That's it in such basic terms. 'The more unequal society becomes, the less productive it will be.' What motivation could the majority of people have to sustain a system that prevents the possibility of their financial security while turboboosting wealth/asset hoarding for a few?
Thankyou Gary! I've been saying this for YEARS...we've always been told "you need to do more (work faster/harder/longer/later) then we can give you a decent pay rise". The pay rise part of that never really happens. The money goes to shareholders or company assets. And perhaps that's why people don't want to work in this country. We're fed up with being rinsed. "more productivity leads to growth that pays for public services and pensions"....BULLSHIT. We're one of the richest countries on the face of the earth with a poor population, awful public services & one of the crappiest state pensions in the developed world. We need a transfer of wealth back to the people not more productivity.
Lol that's NOT how productivity has increased. It's increased through investment in capital goods. Better machinery, better software that allows a worker to get more done with LESS effort. But of course it's hard to invest when a massive govt steals all your money in taxes and gives it to illegals and themselves. Know what I mean?
all the gains flow to the US. The UK has been bought out by the US companies, you get a corporate treatment as the they over there do and you get a pay as they do too.
The money does go to the owners. That is why workers need to live below their means and invest in stocks and mutual funds for years. That may not be fair, but it is obviously the way the game is set.
And remember, making a bit more money doesn't help. Often you pay so much more in taxes (at least in the USA), you end with less money than making less and not having as much tax or potentially also getting social welfare a bit like Medicaid for free by making a bit less. Dr. Phil has a new show on youtube, and he showed that a household in America that worked 30% of full time, but got TONS of welfare as a result was only making $1k less per year than a person that worked 80% of full time for the same wages that did not get as much welfare. Then, a person working 100% full time that made more money only made around $11k more a year than the other two brackets as they paid taxes more and had zero welfare type benefits. There is a big blob they are making of underclass then themselves with these redistribution rackets and huge taxes on the middle class.
Yes! Definitely. The landlord can take the rent increase.and invest it in productive assets. You may or may not be aware of how GDP is calculated - they include investment in real estate in the GDP calculation. P.S I'm a landlord.
@@Keeree75 GDP figures are normally adjusted for inflation to get the real GDP growth as opposed to the nominal GDP growth. And off course, inflation is related to interest rate levels.
@@MuzorewaRatshikuniI asked chatgpt: Productivity refers to the efficiency with which resources are utilized to produce goods and services. A landlord raising rent may simply reflect changes in market conditions or the landlord's desire to increase profits, rather than increased productivity. ........ So it seem like it is 'debatable' rather than 'definitely'
I stay in the West of Scotland but we were down in London last week staying at my son's flat in Battersea as he was away on holiday. We went to see "Enemy of the People" at The Duke of York with Matt Smith. The play is about corruption in local politics (could easily transfer to national) and moral choices that had to be made by a number of the characters. It was good and at the end of the play there was some audience participation with roving microphones for people to give their thoughts on the state of our economy/society/politics. I feel very strongly about the grim state we are in and took the opportunity to recommend that people should read/listen to your book and also listen to your podcasts. However, as much as I admire your conviction to fight the gross inequality in our country and the need to tax both the very rich and, in my view, many large corporations, I do think there has to be a strategy to get real political change and power if that's to happen. I'm sure you'll have listened to interviews with Owen Jones after he left the Labour Party having been a life long supporter. Although, understandably, it was Gaza that tipped Owen over the edge I also think that he feels very strongly that the likely new Labour government that we will get later this year aren't going to do anything about taxing the very rich and therefore are part of the problem and not part the solution. The elephant in the room for both, you, Owen Jones and most thoughtful people in our country is that it's effectively a two party system with little to choose between them. Surely we need a strategy to get some political power and effect change and I think the only viable way to do that is to start a very strong movement/protests that builds enormous pressure on Labour to introduce PR at the next election (one after this year) assuming they get into power this time. It needs a big campaign although as they said they were going to do PR before and bottled out when they got into power. I'd appreciate hearing your and others thoughts on this.
I won't be voting for any of the main parties, I include Green in that, and never Reform, they're shills. I am hoping we have an independent come the election. I think we need many different voices and opinions in parliament. If I were in David Kurten's constituency I'd vote for him, If I were in George Galloway's I'd vote for him, then there is Andrew Feinstein in St Holborn and Pancras, Starmer's seat, I'd vote for Andrew Bridgen in Leicestershire, Corbyn in Islington, Craig Murray in Blackburn, all are different, from the left and right spectrum, but they are all challenging the narrative that's been spouted from the establishment line, the establishment don't like them, and that's a clear sign to vote for them. I'm hoping more independents or the Workers Party or Heritage party take a number of seats, that's the best we can hope for, though I have heard people say we can't vote our way out of this, that said one of the ploys of the elite is to pour cold water on any way forward the proletariat may find.
I couldn’t agree with you more. To me it seems clear that the ONLY way forward, is to abolish the First Past The Post voting system and oust special interest groups such as BP oil, Labour/Conservative friends of Israel and GWR, who have such sway over, and give massive financial to, our politicians. How to go about this, however, in real, concrete practical terms, I’m not sure.
Spot on. From Glasgow myself, moved to Germany for a one year contract in 09, still here! Now a citizen. When it comes to voting the choice is almost too much! Proportional representation is my normal now, logical and fair, I cannot fathom how a country of 65-70 million people is asked to choose between A or B. The country I left behind always seems so divided when I return, and underinvested. Really underinvested to the point I'm angry with the lack of progress.
@@verdebritanica Hi I was involved for around four years in my Community Council to help get lots needing done in our local village. It involved dealing a lot with the large Local Authority. I learned very quickly that it's definitely not fictional. I think the main problem is when people get some power the old saying generally applies "power corrupts ......" . Our experience was that many of those in power thought they knew better than the local people in the village that were living it.
After WWII wealth was shared a little more equitably. People expected their children to do better. Regan & Thatcher introduced trickle-down economics (disaster economics) now rule. The result we are returning to Georgian times. Extreme wealth and extreme poverty. The return of the workhouse to resolve social care issues cannot be far off.
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.
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.
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.
Productivity has been growing since the twenties but wages have not. If productivity meant anything to workers, we would be on a 3 day working week by now… Who benefits from productivity?
Productivity growth -pay growth from 1948 - 1979 was 118.4% to 107.5 % 1979 -2021 was 62.5 % pay only 15.9 % . The growth only seems to have helped the rich so Carney must have no idea about economics same as career MP's .
When I was enrolled in economics at the university a decade ago, I was shocked to learn that everything was based on fixed models such as the one saying if we increase interest rates, inflation and jobs will fall. I'm surely not as smart as you but I couldn't stop thinking "life and society is much more complicated than this, you can't tell me that simple model is 100% fact". I dropped after a year. Still have a lot of interest on the subject but only when I think from the common people's point of view, which is how you talk. Thanks for all these videos. They don't give me hope for the future, but at least, now I know I'm not crazy in how I see the world moving forward right now.
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.
I think one of the problems is that some of the older generations (certainly my parents anyway) actually believe in 'trickle down economics'. There's only one thing tricking down - and it sure ain't wealth! Trying to convince my ol folks of this is like nailing water to a tree 🤦♂️ Great videos and book (about halfway thru now) Gary! Keep up the good work mate👍
Absolutely that! The "Boomer generation" seriously benefited from 'trickle down' consumer economics due to sheer demographic numbers. They are a unique generation in that their living standards improved due to improved public health, rapid technological advancement, the Post WWII Marshall plan, social change & massive economic investment. This affected all Westernised nations but Britain in particular as we had to let go of the Empire and move manufacturing to the East. The Boomers and their parents were tricked by the New Right to forget about cautious government intervention and the clever, Social Market economy of the postwar era. In fact the Reaganites & neo-Thatcherites blamed governments for the de-industrialization, high inflation and unemployment whereas it was a much more complex constellation of big issues including - the OPEC crisis, the rise of China, the collapse of Bretton Woods, the Population explosion with increased longevity, Huge Military expenditures of the Cold War, the massive cost of Space exploration, irresponsible politicians deliberately running up debts with tax cuts prior to elections, and Corporate greed. 🤨 Now some of these things led to economic benefits from newly developed technologies e.g. Satellites, Cheap consumer goods, Globalization, Telecommunication, Teflon etc. However, the costs to society at large were huge! The trade offs in terms of - family breakdown, generational unemployment, fracturing communities and lack of social cohesion have never really been healed. Due to the relatively small size of the 'Silent generation' (and their parents), Boomers have not really had to foot the massive bills of social security, healthcare & pensions. However, now that this postwar generation are elderly, 'we' are paying for the massive expenditures and debts racked up over the last 45 years i.e. starting when some of us were infants or before most of us were even born... The problem is that due to contraception and collapsed birth rates there are not enough younger people in work to pay for the older generations most of whom do not work but consume. 🤔 Lord Willets explained some of this in an extraordinary book 15 years ago. I am not sure if Gary has read it. Due to the size of the Boomer cohort they took the high inflation, falling birth rates (after them!,) and rapid technological advances in their stride whilst loading debt on future generations. The next generations cannot even afford to have a future generation! It is simply too costly to reproduce hence falling birth rates almost everywhere bar Central Africa.
Trickle down economics only works because the boomers cannot take their wealth with them. Your parents probably didn't have that much in savings and wealth until their own parents passed away. The problem comes for young people whose parents are also penniless they are basically screwed when it comes to buying their own property unless they live at home with mum paying rent and work full time from 18 to 30 and save 80% of their income.
@@Weakeyedominant Spot on! Funny thing is that they are both accountants but seem to be financially illiterate (or purposefully blind imho). They seem incapable of joining the dots and instead believe whatever cock and bull story du jour that the politicians feed them. It'll be them wanting the welfare state to provide medical services in the next few years, but they insist on voting against funding it 🤦♂️
talking about is not enough, not having children is. Or if you already have children, taken them away from this country and let the millionaires exploit someone else ...
One of the best videos of this already bright youtube channel. It would have been nice to hear about the quality of work and about how growth is often inversely proportional to it, still, the main point is loud and clear. Once again, thank you Gary!
"You go to the doctor with cancer, and the doctor says grow your way out of it" is great satire - really like your tone on these videos and in your message because it is asinine that more people are not making noise about a glaring problem while misinformation spreads like wildfire because people have such easy access to information. Please continue your type of work and sharing this knowledge!
We need as a group to bring down neoliberal politics. People need to be educated on how the economy is not synonymous with exports and big global business. We need to press for tougher laws that makes politics more honest and independent from big business financing.
6:59 one of the key indicators for me is what happens when the commuting vehicle breaks - in the '80s i would just go buy another one giving time for the original one to be fixed properly, now you're walking to work unless you can get a lift & the expense of fixing your vehicle means you're missing meals for quite a while.
It's refresing to hear an economist saying the exact things me and my best mate have been saying to each other and anyone else who will listen for the last 15 years. Keep up the good work.
@@freddiepatterson1045 he read economics and maths at LSE and economics at Oxford. He's an economist. His wikipedia entry is Gary Stevenson (Economist) What makes you thimk he isn't an economist?
I think part of the problem is social mobility and the class system, particularly in the UK. I've met a number of people who had very expensive, very good educations. It means that they, initially, come across as being very intelligent. But as you spend more time with them and debate issues, it's all a vaneer, a gloss. Boris Johnson is a famous example of this. He can speak Latin and Greek and quote (partially) from ancient texts. So, he appears to be intelligent. But he's not. Most of them have no particular talent but, due to rich parents, have had a leg up and, through contacts, obtained positions of power. It's like Gary said in his book, most of the traders now are rich kids dropped into the role by their rich parents. And many of them are two short planks. These are the people running our economy, running our country, making the big decisions. But they don't understand any of it because they're not bright enough to.
The Jolly Heretic channel calls these people you are describing, "midwits". They think they are smart, they have some level of useless book smarts, but they are not truly intelligent as they cannot apply things to real life for beans.
I prefer Gary being in a position to call out bad economics in any party that pushes them. Picking a side in politics limits your credibility when criticising policy Let's keep Gary where he can hammer all sides if they have poor policies!
We are genuinely experiencing ECONOMIC FACISM ie the pursuit of GROWTH, PRODUCTIVITY must be the guiding principle of our society NO MATTER WHAT THE CONSEQUENCES ARE.
It benefits them when we work harder because they make more money. We are going backward towards the old ways with super rich people owning everything and common folks, renting, exploiting and working for the rich landlords (17th century style landlords) hold all the power and keep getting richer.
If in theory we used a deflationary currency and everything got cheaper every year, real growth would likely skyrocket as the middle class grew for the first time since 1971
Exactly. As happened in the 19th century. But inflation benefits debtors. And governments are the biggest debtors. And warfare is very expensive.... We are run by satanic lunatics.
The problem with deflation is that people stop buying since everything will be cheaper tomorrow. So inventory backs up which causes downward pressure on prices. Then companies start going under, which I suspect this audience would consider a positive outcome 😂
Brilliant. I will email, once again, my MP who just spouts the narratives of the government. He simply thinks I'm troublesome and sending him emails has become a bit annoying for him. I'll still do it though.
Thank you Gary! Growth worries me - we need money doing useful things like investing in research into making greener energy (not more tax-subsidised solar panels on farmland that should be feeding us), and improving conditions for ordinary people. I’m reading Thomas Piketty, who has spent years crunching data to come to similar conclusions on inequality to what you, Gary, figured out faster looking at your trading screens. Next on my list, your book on order from library, then doughnut economics - trying to live within the earth’s limits. Tax the wealthiest and put that money to doing positive, needful things. Keep these videos coming, thank you again.
Another great video. At my work this very week the message from the Executive team was that we need to do more with less. As we have looked for efficiencies for a number of years now, I made the comment “maybe we can ask staff to work 12 hours a day (but with no change in pay)”. This was obviously a belligerent comment, but there was a genuine pause of consideration! If the message is for higher productivity with no plan of how to achieve this, can “stupid” please leave the call.
Problem is people don't just work and sleep. When at home there are lots of tasks to complete. Some people could off load all those tasks onto there wife. But that just means the problem has been shifted to someone else.
When you work on something that only has the capacity to make you 5 dollars, it does not matter how much harder you work - the most you will make is 5 dollars.❤
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much
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.
In Northamptonshire the shoe industry moved to India,In Bedford the Texas Instruments semiconductor production moved to Italy I think. Again in Bedford the Britannia Iron and Steel works have gone. I don't know much about the rest of the country. How can people produce when there's no jobs. All along the countryside there are huge logistics centres which are not full of people producing but a few people who are moving other countries goods. I am not very clever about financial matters but do look at this and ask questions. Thank you for your videos Gary. I find them interesting.
The same way Gary describes the money trickling up to the very wealthy thus the money leaving the working and middle class, when we buy service and goods from abroad, the money is also leaving the country. So perhaps our trade deficit is exacerbating the problem because the money stops circulation in the UK and leaves the system never to return.
@@neilwillimott6988if wages are forced to keep pace with increasing asset price inflation I believe the problem would largely correct itself. Also the issue with growing asset prices is it gives the rich the power to buy the government corrupting democracy. It’s a self perpetuating cycle down
You can't have strong currency and manufacturing economy. Decide what you want. If you want a job, it is better to move to Vietnam these days. The UK is for those who already have money and assets they can rent out to those who foolishly came over to this country to look for a job.
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 am a business student and have had several economic courses throughout uni. For the last couple of years I have been wondering how come that so many people seem to get poorer and are for example not able to afford buying a home, yet things such as houses and stocks are not going down in price. I tried to connect it to what I had learned in school and it just did not make sense to me - I was truly wondering what was going on. Glad that I found your channel. With your explanations the whole situation makes so much more sense. Finally I am getting answers.
Canada had a sensible government in the late 90s. It didn’t deregulate banking. As a result, it’s economy wasn’t as devastated as others in 2008. Mark Carey’s good fortune as governor of the Bank of Canada in 2008 is that he got the credit for decisions that had nothing to do with him, made a decade earlier.
a lot of the regulations Canada had on finance, food standards etc are being chipped away. I was shocked to see the backlash when Canadian farmers had to meet EU regulations on food, they used to have the same standards but more and more have gone down the route of American 'deregulation'
In New Zealand we had a Conservative Prime Minister who took the credit for steering the economy through the GFC. Truth is the previous Labour GOVT had made great trade deals and left a big surplus. The Conservative PM who took the credit was making himself fabulously wealthy trading for Meryl Lynch while the Labour Party were making these deals. Meryl Lynch was one of the first companies to collapse, causing the GFC but many people in my country (mainly baby boomers) think John Key, the Conservative PM is a genius and saviour of our country. And they've voted them back in!
Hi Gary, love your videos. I think this issue about growth is more smoke and mirrors from the ruling class. For me the main issue is about how people understand/react to "standard of living". What i mean is this; we are a country living in debt. People in my parents generation started off their adult lives scrimping and saving because credit wasn't something you automatically turn to (picture an old grey episode of Coronation street from the sixties). Then Thatcher/Reagan opened the floodgates and deregulated the banks encouraging them to lend more and to pass out credit cards like confetti. People these days think we have a much higher standrd of living now than the 50/60's. We don't. WE ARE IN DEBT. You owe the bank for your house mortgage, your car finance, your credit card is maxxed out and the biggest one, perhaps, is the Student Loan; a "forever" debt! Added to this is the government debt which is now over £2 trillion. So, who is this debt owed to. The Ruling Class. So, for me, any talk about growth/interest rates/inflation is just bollocks, a distraction, dead cat(ism) The Ruling class is robbing us blind as usual aided and abetted by compliant politicians and media tycoons.
Short, but sweet Gary 👍 You did allude to it, but I think there's another layer to the message of our supposed lack of productivity. Yes, with lower standards of living, lower disposable income, we can't as individuals just go out and lift our local economies by spending our way out of it. So, what's the other solution the wealthy want to plant in our minds? It's simply that we don't physically work hard enough. We don't produce as much as we should, for the level of pay we receive. We need to work longer, harder, for relatively less pay, and things would be so much better. It's easy to see how that makes little sense to the working population. But, it doesn't stop them planting that seed. Or hiding behind that excuse. If wealth inequality is addressed, citizens would have the disposable income to boost their local and national economy. However, that relies on the mega rich sharing what they have, which brings us back to the real problem. We can't allow them to fool us into thinking it's our fault, and we just need work harder, for less. PS. Always look forward to your weekly updates 👍🙂
You make so much sense, you articulate the point perfectly and this current subject is the main reason why I left my job in finance. Keep up the great work your voice will grow louder and louder 👍
I'm halfway through Yanis Varoufakis' book, in which he explains his term Technofeudalism and how it isn't really capitalism creating wealth but the architecture of the internet and it's platforms that are generating tremendous and conventrated wealth by taking their " rents". It's put a lot in perspective for me.
Surely with all these new immigrants quarrying, fishing, farming and construction should be up ? But the government is suppressing these aren’t they ? 🤷♂️ seems the government is the problem ?
in the USA & UK at least, the shareholder class has been gifted all the profits we've earned from our continual increases in productivity since the mid to late 70's. in other words; our pay increases over that period have been diverted away from us into the pockets of the rich...and the rate of that diversion is only speeding up.
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.
Once again you have made such a valid point by asking the question what does growth actually mean and to which economic class the asset economy or the working economy classes. The phrase is a smokescreen for their actions which is the transfer of wealth evident in the explosion of wealth inequality. They consider us who are real human beings like some Homo Economicus a creature they created from their own bias. There are very few of you left Gary the youth need you.
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 😃
For a in depth argument why eternal growth is a fundamental problem please read "Less is more" by Jason Hickel. Local growth for a limited time is natural, but that is not the fundament of our current economy. The growthism is the reason we currently are in a climate crises, an inequality crisis, a biodiversity crisis and a mental health crisis.
It’s not growth, it’s value. But that’s too abstract a concept for political economy and the interface with the public so ‘growth’ is promoted instead. Positive economic development is fundamentally not a phenomenon like something physically ‘growing’, and it’s unbelievable that this cottage industry has been created around this misunderstanding.
@@brianboyle2681 So what are these immaterial values going to be spent on? Other immaterial values? Nice theory. But if you are poor and get some immaterial raise, wouldn't you want to trade it for real goods and real food? That is exactly what we see time and again: growth is tightly coupled to physical growth in the real world. You may see tidy models saying otherwise, but the data is against that pretty picture. Please read the book. It is very well argued and documented. And paradoxically hopeful.
@@brianboyle2681 I just saw your previous comment on this channel asking Gary to do a PhD to develop his ideas. I'd say that the book "Less is more" is as close as you can get to that unwritten thesis. The inequality angle is there, but so are a lot of other stuff challenging convention wisdom. Q: If the theory is good, why is the world currently broken?
I’m astonished that no one (that I’ve noticed anyway) is discussing the effects of manufacturing and freight costs on every single product we purchase, from cat food to office equipment and building supplies. Since the start of the pandemic & then the invasion of Ukraine, those have skyrocketed. Insurance rates have also gone up due to covering losses to forest fires & catastrophic flooding (both of which also affect the supply chain, depending on where they occur). I work in distribution (office equipment). The entire supply chain was affected when the factories shut down. When they reopened, the demand for delayed items was so high we had to pay something like 4 times what we used to pay just to reserve a spot on the boat. (Our little pallet kept getting bumped back onto the dock by companies with deeper pockets.) Air and ground delivery costs rise with fuel prices. All those costs are passed on to the end user customers. I have to explain this to my customers daily when they ask why their new order costs them so much more than their last order of the same equipment. And I know why it costs me three times more to feed my cats than it did five years ago. I’m no economist. I don’t know how this affects the Rich-Are-Getting-Richer big picture. (The rich have to pay freight costs too.) I DO know it is definitely part of why the paycheques of people like me don’t stretch as far anymore & it is definitely making people in my situation (older, divorced/single/, renting) immensely more vulnerable.
It's refreshing to see someone who understands the system so well finally speak up about its flawed nature because anyone who's not a professor gets laughed at for pointing out these exact flaws and "not understanding the intricacies of global finance". Well done Mate!!!!!
Hi, I'm from a similar background to Gary but currently a commodities trader so see things a bit differently. Mark Carney isnt wrong when he says UK has a productivity problem - its just true. The UK is rapidly falling behind the other major economies of the world and esp younger economies like Poland. I also agree with Gary that growing inequality is a huge part of the global problem, but also something we need to think about is resource contraints. Growth is happening in the luxury sector because we have no resource contraints in producing those things. Food and energy are different - the reason the European gas price went from 7 eur/mwh to 365 eur/mwh is because there simply isn't enough gas in existence to satify demand, which is a similar story across other commodities.
Poland is not a young economy. We had a good infustracture including houses for people, railway, good education system and good public services including childcare and health service. We joined the EU which stimulated investment in development of important infrastructure and previous goverment (PIS) overseen the biggest transfer of wealth towards ordinary people by implementing minimum wage, intoducing child benefit (which is higher per child than in the UK), lowering Vat, increasing pensions. All this made economic growth possible as people improved their purchasing power so the could spend on things which haven't been accessible to them before. This is why Poland is doing better in terms of growth and this is exactly what Gary is talking about and is called redistribution of wealth.
@@gavinlangley8411 not really - the world is not a static place although people assume it is. For example, the UK doesn't have access to cheap oil and gas from the north sea anymore as reserves have declined which used to be a massive boost to the economy. We are using up our finite resources so it makes sense that, all things being equal, our standard of living will drop. that said inequality is a monumental problem globally that we need to deal with also driving lack of investment in the things ordinary people need.
As the education system fails, the economy will follow. UK does not have sufficient graduate careers for those who go to universities. Empirical studies show that Govt investment leads to more R&D & better living standards. US in the 1950s was the most affluent period in history, then came space exploration. 1970s was the catalyst for decline in the UK & industrial output began to fall, eg, ripple effect, global competition. Manufacturing only represents 8% of the UK economy. Lack of investment in infrastructures, eg, schools, hospitals, roads, train stations, ultimately leads to acute skill shortages & higher wages & lower productivity because projects take longer to complete. Govt cost cutting has an impact on productivity & sustainability. Private equity & Govt contracts means more national supply chains rather than regional & local supply chains, resulting in longer waiting times & in some cases, lower quality. Universal Credit only provides 70% of essentials, which means less spending power &, lower demand. UK benefit system including pensions & disability is the worst in Europe. Business rents & rates are the highest in Europe which is why many shops are vacant. This also means consumers either go online or travel to better shopping areas. Costs are 3x higher than Europe & this will have an impact on businesses & employment opportunities. EU countries invest in free childcare for its working population. UK doesn't. Low pay in many deprived areas means only one parent works. UK is one of the worst run economies. Growth by GDP includes profiteering, excessive pay/bonuses(not performance related), failed contracts & projects, fraud, corruption, & unnecessary waste. Executive spending(tax relief) runs into £billions every year, eg, hospitality, private jets, gifts. London is the global capital for fraud & corruption.
Hi Gary. One of the main issues about poor productivity is that MPs and those in powerful positions put it in terms of people not working hard enough, implying people are lazy. A lot of the UK’s productivity “problems” are due to underinvestment in technologies and companies instead preferring cheap labour.
the point is that there is a ceiling how precise people can be, even when given the latest tools. Precision is a limiting factor for majority of us. Try to be precise 8 hours an hour for a year or two. Certain burnout. The truth for the war and for most of today's work is that these are not environments for people any more, they are for robots and people should not be pushed into them by political wing of business like the Tory party.
Love your channel. Not only does the pursuit of growth not translate into benefits for the general population, it is bounded by clear environmental boundaries. I would love it you did an episode on a degrowth economy. I think it's a great concept which aims to solve both the issue you have raised and environmental concerns simultaneously.
Don't forget about the chairman of NatWest saying that it's not that hard currently to get on the property ladder whilst being paid a base salary of £750k.... In their own little worlds
There is no inconsistency between exploding asset prices and slowdown in productivity. Increasing asset prices reflect increasing rents extracted by the very wealthy, which is perfectly consistent with slowdowns in productivity growth. Take housing. In the UK we've not built any housing so house prices have increased massively. Homeowners have extracted larger and larger rents over time. At the same time, excessive housing costs slow down productivity growth by limiting the geographic movement of workers. Fewer and fewer people can afford to move to London limiting its growth. Since there are gains from agglomeration there are lost productivity gains from high house prices. Similarly, take UK's railway, water, electricity systems. All are designed for the extraction of rents by their owners, whilst underinvesting in the service they provide UK consumers. This limits our productivity whilst enriching very few. High asset prices and rents are exactly what I'd expect in an unproductive economy. You are of course correct inequality is an underlying concern which is partly driving a slowdown in productivity.
Increasing asset prices are a sign someone was willing to pay that price before. A small group of people gets their money very early, spends it ... and the rest must pay the same after. Add immigration to the mix to prop up demand and you have what the UK housing market is.
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 worked in the financial sector for a FTSE top 100 company and it was hammered into us that we had to grow every year or the share price would fall.. If it was looking like we were going to miss our growth target fior the financial year we were told (Off the record of course) that we were OK to lend to people who normally we would be censured for lending to. Of course at the beginning of the next Financial year we would be saddled with a mountain of bad debt from said loans for which we would be blamed for.. I also worked for one of the biggest names in the Insurance Industry and saw people lose their jobs for miss selling pensions and investments. Sacked by the very people who had encouraged them to do it. Our Branch manager got early retirement on full pension whilst the sales staff got to sign on The system stinks and it's never those at the top of the pile who get the blame.
@@jjefferyworboys8138 ridiculous comment. Why would I be frightened of the private sector? In social care, I prefer not to be part of the problem so I avoid the private sector
No, it doesn't have to be that way, it is all based on the laws we use as a framework to build and guide corps. Because (at least in the USA), after the drama from the gilded age in the early 1900s into the 30s policies were implemented that made it so corps could not be crazy and do whatever they wanted. Things like the Glass-Steagal act for example, and the gilded age monopolies broken up with anti trust laws is another example. The laws NEED to be fair and provide adequate framework for the society. What happened was that from the 1960s on over the decades the structure that held things together with fair rules was seriously whittled away, and these old rules were legit repealed (like Glass-Steagal), or they were ignored by govt as the corps were allowed to pay off the politicians to get what they wanted. Add to this changing values in the society. Before companies were usually smaller, people lived in communities where they knew each other and felt more accountable. There was this idea pre-1960s/70s that the owner was beholden to the community and their workers and shareholders equally, NOT just the shareholders. But laws were passed that the corporation was DUTY bound to increase profits of shareholders as priority number one above ALL else. So a lot of the legal framework being destroyed by lobbying govt by the rich, and also the values and sense of community people did have values wise being changed by the boomer culture revolution and the rise in globalism all contributed in a giant turd sandwich over decades.
Totally agree with your sentiments Gary, for years it has been so obvious to me that market indicators go up and up and so generally 'employment' seems somewhat stable and yet inequality is getting pitifully worse. The people that push the mantra 'Growth is the key to everything good' are the ones that are rich and getting richer still through growth. They love growth because growth makes them increasingly rich. So there is a list of factors at play that are rigging the system of growth for the few. What are those factors favouring growth AND equality, can we list them and put together as blueprint that could work to diminish inequality while keeping growth stable/strong? A 'manifesto’ if you will, that all can latch onto and push for? By the way I do like that phrase mentioned at the end .. "It's the inequality, stupid!". This will be the stock phrase that can be used to explain the unsustainable death spiral that we are all, and I mean all, heading down.
This is my favourite video so far. It's the tone towards the end. It's tinged with an exasperation I find very familiar having been talking about these issues for a few years myself. It's hard for me sometimes to keep a level head hearing the same stupid arguments again and again. I don't know if I'm reading stuff into this, but by the end of the video I was feeling it. It's inequality stupid.
Part of the problem is we monetise necessities. I don’t mean air and water, I mean societal necessities, like buses, healthcare, prisons and schools. If they cost X for the state to run, then they cost Y + P (profit) for a company to run. Granted Y might be lower than X, but it’s not guaranteed. If it is lower, it’s because some previously essential part of the service is cut. State gets a worse service, stock market gets P. The difference is what we the people have lost.
Hi Gary, I agree with most of what you say in this video. The only bit that worries me is that your work seems to have a blind spot on the link between economics/growth and biophysical limits/planetary boundaries. Without this it is acontextual. If you could put your work in this context it would be perfect :)
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
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
Gary, thank you for another excellent video. We are out here having these discussions with people and promoting your work. One objection to the wealth inequality hypothesis I have thrown at me a lot comes in the forms of reports that show wealth inequality is not that bad. These come from charities looking into this kind of thing and appear to be ok except: some include gini coefficients based on income inequality, they tend to not include the latest figures including the pandemic etc. I’m not sure what wealth is captured and if it includes off shore and hidden assets or who the figures cover. Would it be possible to make a video on this as establishing that growing wealth inequality is real is fundamental.
Wealth inequality and income inequality are not the same thing. I do not therefore think it is correct to use gini co-efficients based on income inequality as a measure of wealth inequality. To get a measure of wealth inequality is not that complicated. Well, perhaps I'm oversimplifying, but nonetheless, just look at say property ownership ( records available at Deeds Offices), look at private and public company owndership, also look at debt ownership (who owns the public and private debt etc). Then you can chart theae figures over a time period to see the trend.
“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”
Measuring growth productivity nominal income wealth in fiat is the problem. Fiat inflation leads to loss for those of us In the group that doesn't have assets
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
Gary you are spot on. If the excess returns from increased productivity go straight to the rich, and aren’t reflected in wages, then quality of life won’t improve. This compounds the issue of productivity because workers who are poorer, sicker and less secure are a drag on growth. Low productivity is therefore the symptom and not the disease. This can and will go on for a long time, unless and until the people demand redistribution of wealth from the top to the bottom. Austerity and tax breaks for the wealthy will only make things worse. Either we eventually devolve back into feudalism or the people wake up and demand redistribution.
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.
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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.
Same argument made in Australia saying our problem is we need to raise productivity, without real analysis of what is really happening, just vaguely implying that the plebs are slacking
You just need to look at your employers. actions. My dad worked for Holden in the late 60's, early 70's. They put on Christmas parties for their employees kids, and gave them all presents. Can you name any firm now that would even consider such a thing for their employees? Except the top boss's that is. Giving them monstrous bonuses whilst the workers are told to tighten their belts.
Why should be not be less productive. We effectively earnless for more work.
In a sense they are correct about increasing productivity. that is wealth creation. But then they go and tax the bejeezus out of the productive sector to support the unproductive state sector and wonder why wealth creating private enterprise cannot increase its productivity. By the way Carney is an absolute crony corporatist central banking (and that is rhyming slang) Goldman Sachs shill.
We are decadent. The average person has no work ethic. You can reject that all your want it's just a fact. I worked for a Korean firm (the obvious one). Their work ethic is off the charts. After the Korean war, country was split in two and in tatters. In 70 years it's an economic powerhouse. They just want it far more than we do. in time they will get it and start slacking off themselves.
Problem with UK atm is we are in decline AND we have entitled view the world will just deliver the standard of living we expect to our doorstep. We have to change and quickly.
I don´t think it is implying that "the plebs are slacking". I believe the comment "we need to raise productivity" is aimed at politicians and businessmen. Productivity can be increased by improving the quality of the jobs (e.g., moving away from exporting grains to exporting computer chips). Unfortunately, this requires investment (usually coming from the private sector) and that requires the right incentives such as tax, labour and/or environmental laws.
In 1990 when you wanted to register for something you had to telephone or get the form yourself. Fill out the form with a pen. Put that form in an envelope and go to the post office. Buy a stamp and post the letter. Someone would then drive that letter (with others) for perhaps hundreds of miles. Then it would arrive, and go into the in-tray of the person processing. They would open the letter and process it, then they would write you a letter back.
Now it's all on a computer / email in the blink of an eye.
But productivity is the problem.
productivity is not the problem, wealth distribution is.
spot on! we have workers with a lot more knowledge than before, machines that do most work and yet the problem is productivity while a CEO makes 300times more money than average worker on one of biggest supermarket chains of my country...
Yes, over-productivity is a problem. In your example, how many jobs were necessary in the economy to do that simple thing? It fed many people. Now, how many people get fed by sending an email? Now, technology is technology, and once the genie is out of the bottle, you cannot put it back in... You may not even want to put it back in... but there are consequences to that. There are consequences to making processes cheaper, more automated and reliant on fewer people overseeing them or participating in them. It strips jobs and money out of the economy, and from circulating among average workers, and sucks that surplus up into profits for shareholders, and the owners of assets in general.
We've been fed this line of efficiency and productivity since 'supply side economics' replaced the Keynesian consensus, but they never expounded on the consequences to all that.
Haha I love your comment. It highlights the issue so clearly. Things are done almost instantly when digital, yet they want it faster, more efficient, more productivity!!! Like, how much do you want when we're already going at light speed?
I like this bloke he talks my language. I'm 63 and still working. I work in FE education. In comparison with what teachers did back in the late 80's and early 90's the work we do is off the chart. We do so much and we're so effective with so little resources and support staff. Pay has just collapsed at the same time and I'm sure this has happened across most sectors.
exactly the same in Portugal. In the 90s teachers were respected and paid way abive average. Now they are drowning in burocracy, lost all the authority, respect and salaries and career progression is a joke.
Massive wage stagnation in FE. I was in it for 11 years and was lucky and took my chance to move into HE, and it has helped, but I'm still far from to pay for a lifestyle on my salary alone, that my dad was able to fund, on one salary in the 80s + 90s.
Instead of making things more efficient and requiring less hours worked this technology is being used to increase the amount of work that each person has to do. The amount of stress has gone through the roof but not the pay.
Striving for infinite growth in a finite system is what cancers do, it is impossible without killing the host..
Very, very well said. On so many levels.
what makes you think the system is finite? The universe is virtually infinite
What in fact Covid did. It took over its host till the host died or became disabled.
@@fbdjwjflachow insightful
@@fbdjwjflac that argument is like saying why do people die of dehydration on life boats when there surrounded by water.
Imagine telling an nhs working couple with a kid, doing overtime, that has seen their disposable / real terms income erode over the last 10-15 years struggling to live comfortably - that they aren't productive enough?!!
well that was what the gov was saying over the last few years. Work harder, do more hours, get a 2nd job.
@@seancswash yes for sure. It's just that in the broader context of what's being discussed, it sounds mad
@@seancswashthe gov is saying work fewer hours at a higher paying job. That’s what productivity is.
@@YL-fb9kb sounds like laziness 😂
But both Tories & Labour politicians have actually said that already.
Britain swapped a manufacturing economy for a financial services one. It benifted the few not the many
Exactly right.
You guys could have been Norway but chose poverty instead 🤦♂️
@@northernswedenstories1028 well the rich chose Norway and strong armed the rest of us into poverty
And massive number of imigrants for cheap labour to serve peoples almond mocha lattes and avocado toast
They shipped out manufacturing to china to increase their bottom line and now they’re saying it’s the plebs fault. 🤷♂️
Hi Gary, as a graduate student in economics I’m learning much more on inequality in your channel than in any class attended in 5 years! Thanks for taking the time to explain this so anyone can understand
That is alarming. But yeah all my econ professors were self-professed libertarians and were much more focused on growth than anything else
@@bguasch demand and supply economics here too in a way though .. everyone stretching for two shillings job and then they squeeze all
Come on Gary, get the Party started. I'm in!!!
“growth for the sake of growth is the ideology of the cancer cell.”
Nothing in the World grows forever, unless it’s cancer cells.
@jimbojimbo6873 A focus on balance instead of growth.
@jimbojimbo6873
Jup.
Listen to Robert Reich and Jason Hickel in addition to Gary's videos.
We have been told equality is bad, because it limits growth.
But in a situation where growth is literally killing the biosphere that's not a bug, that's a feature :-)
@jimbojimbo6873 Equal chances for everyone for a start. Any other problems using a brain?
I get where your coming from, but cancer cells don't strive. Humans do. All the cancer cell has is damaged DNA, which has lost the chemical controls that govern the growth of a particular set of cells. The Cancer is the result of DNA failure. Our economic destruction is a malaise of a different kind. It's self-deceit and delusion of a kind that only sociopaths can square in their own minds. Capitalism is a human system, and so can never be perfect. But how it is practised is a conscious choice. As a species we need to choose differently, or suffer the consequences. Human beings are flawed creatures, who don't always remember their limitations and dependencies. We all suffer from shortsighted Ness in one way or another. Our evolution created brains that whose efficiencies create blind spots. And some people can only learn from failure. This why we need to step back and really look hard at the world we are creating. We're not masters of the universe. We're hairless apes that got lucky, and our luck is running out.
I’ve long thought the obsession with GDP growth is over baked. One of the best analogies I heard was that if me and my neighbour mow each other’s lawns, it adds nothing to GDP. But if both of us pay the other £10 to mow our respective lawns, it adds £20 to GDP without any meaningful difference. Same with the productivity obsession- the easiest way to improve productivity is to replace most of your workforce with robots, but that clearly has a massive problem with social impacts. The reality is that economic and social cannot be divorced from each other as some think.
I like the lawn mower analogy. I often think about how things like donating blood or volunteering do nothing for GDP, yet the production and sale of weaponry does.
It's also known that many negative things can have a positive impact on GDP. For example, bad roads cause more vehicle damage, which in turn stimulates the repairing and buying of cars. And the thing with robots is that they don't consume, so that is 'bad' for the economy. Basically, I feel that there are a lot of economic dogma's that just don't make sense anymore in today's world. But economists are very dogmatic, almost like priests.
With the lawn mowing example, you can easily assume you and your neighbour working for a lawn mowing business where the owner takes a 1% cut. In fact from a certain perspective the whole business of growth seems to be about selling off everything that was free to private owners. Starting from environmental resources although from the way they are being exploited there won't be any environment left to divide anymore leading to the collapse of everything. Look what happened to the internet when it was free and open in the beginning and now dominated by a few giants by the network effect and people selling off their own freedom to them ("data"). Even human attention, the last bit of it getting divided and given to them.
There's one genuine reason for one human to provide a service to another which that the second would provide a rarer skill back to the first which can mean innovation, advances in medicine again. But I also think humans simply wanted to enslave each other from earlier on so trying to "make money" is seen as a hedge against losing one's freedom to a person who can command your labour because they have access to a large amount of capital.
@@rolyarsYes, and mix that with right wing dogma and this is why the UK is in such a mess.
@@Zemmmmmmmm yup. GDP growth doesn’t increase happiness per se.
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.
The more unequal society becomes the less productive it will be, as people working 9-5 simply do not see the returns anymore - the social contract being ‘you work hard and you can live a good life’ is completely broken.
Short sighted pooling of wealth by the ultra rich - so short sighted.
Indeed! They harm themselves too in the long term by harming us right now.
The problem is what seems shortsighted will likely last far beyond their lifetime thanks in large part to globalisation and mass economic migration. Whilst the West might bemoan ever reduced living standards there are still millions living in far worse conditions happy to sign up.
That's it in such basic terms. 'The more unequal society becomes, the less productive it will be.' What motivation could the majority of people have to sustain a system that prevents the possibility of their financial security while turboboosting wealth/asset hoarding for a few?
You summed the issue up perfectly. It blows my mind how we are lied to and manipulated into voting against our own well-being and survival.
Thankyou Gary! I've been saying this for YEARS...we've always been told "you need to do more (work faster/harder/longer/later) then we can give you a decent pay rise". The pay rise part of that never really happens. The money goes to shareholders or company assets. And perhaps that's why people don't want to work in this country. We're fed up with being rinsed.
"more productivity leads to growth that pays for public services and pensions"....BULLSHIT. We're one of the richest countries on the face of the earth with a poor population, awful public services & one of the crappiest state pensions in the developed world. We need a transfer of wealth back to the people not more productivity.
Lol that's NOT how productivity has increased. It's increased through investment in capital goods. Better machinery, better software that allows a worker to get more done with LESS effort.
But of course it's hard to invest when a massive govt steals all your money in taxes and gives it to illegals and themselves. Know what I mean?
all the gains flow to the US. The UK has been bought out by the US companies, you get a corporate treatment as the they over there do and you get a pay as they do too.
The money does go to the owners. That is why workers need to live below their means and invest in stocks and mutual funds for years. That may not be fair, but it is obviously the way the game is set.
And remember, making a bit more money doesn't help. Often you pay so much more in taxes (at least in the USA), you end with less money than making less and not having as much tax or potentially also getting social welfare a bit like Medicaid for free by making a bit less. Dr. Phil has a new show on youtube, and he showed that a household in America that worked 30% of full time, but got TONS of welfare as a result was only making $1k less per year than a person that worked 80% of full time for the same wages that did not get as much welfare. Then, a person working 100% full time that made more money only made around $11k more a year than the other two brackets as they paid taxes more and had zero welfare type benefits. There is a big blob they are making of underclass then themselves with these redistribution rackets and huge taxes on the middle class.
@@jercasgav They do it so they can increase the size of government and their own power. People who are dependent on the government can never be free.
If my landlord jacks up the rent, does that mean the landlord has become more productive?
Yes! Definitely.
The landlord can take the rent increase.and invest it in productive assets. You may or may not be aware of how GDP is calculated - they include investment in real estate in the GDP calculation.
P.S
I'm a landlord.
A landlord can increase the rent due to high interest rates. Do high interest rates contribute to an increased GDP?
@@Keeree75
GDP figures are normally adjusted for inflation to get the real GDP growth as opposed to the nominal GDP growth. And off course, inflation is related to interest rate levels.
Well, a good landlord needs to put the money back to maintain the building, so I think that's productive. It is very expensive to maintain a building.
@@MuzorewaRatshikuniI asked chatgpt: Productivity refers to the efficiency with which resources are utilized to produce goods and services. A landlord raising rent may simply reflect changes in market conditions or the landlord's desire to increase profits, rather than increased productivity. ........
So it seem like it is 'debatable' rather than 'definitely'
I stay in the West of Scotland but we were down in London last week staying at my son's flat in Battersea as he was away on holiday.
We went to see "Enemy of the People" at The Duke of York with Matt Smith. The play is about corruption in local politics (could easily transfer to national) and moral choices that had to be made by a number of the characters. It was good and at the end of the play there was some audience participation with roving microphones for people to give their thoughts on the state of our economy/society/politics.
I feel very strongly about the grim state we are in and took the opportunity to recommend that people should read/listen to your book and also listen to your podcasts.
However, as much as I admire your conviction to fight the gross inequality in our country and the need to tax both the very rich and, in my view, many large corporations, I do think there has to be a strategy to get real political change and power if that's to happen.
I'm sure you'll have listened to interviews with Owen Jones after he left the Labour Party having been a life long supporter.
Although, understandably, it was Gaza that tipped Owen over the edge I also think that he feels very strongly that the likely new Labour government that we will get later this year aren't going to do anything about taxing the very rich and therefore are part of the problem and not part the solution.
The elephant in the room for both, you, Owen Jones and most thoughtful people in our country is that it's effectively a two party system with little to choose between them.
Surely we need a strategy to get some political power and effect change and I think the only viable way to do that is to start a very strong movement/protests that builds enormous pressure on Labour to introduce PR at the next election (one after this year) assuming they get into power this time.
It needs a big campaign although as they said they were going to do PR before and bottled out when they got into power.
I'd appreciate hearing your and others thoughts on this.
I won't be voting for any of the main parties, I include Green in that, and never Reform, they're shills. I am hoping we have an independent come the election. I think we need many different voices and opinions in parliament. If I were in David Kurten's constituency I'd vote for him, If I were in George Galloway's I'd vote for him, then there is Andrew Feinstein in St Holborn and Pancras, Starmer's seat, I'd vote for Andrew Bridgen in Leicestershire, Corbyn in Islington, Craig Murray in Blackburn, all are different, from the left and right spectrum, but they are all challenging the narrative that's been spouted from the establishment line, the establishment don't like them, and that's a clear sign to vote for them. I'm hoping more independents or the Workers Party or Heritage party take a number of seats, that's the best we can hope for, though I have heard people say we can't vote our way out of this, that said one of the ploys of the elite is to pour cold water on any way forward the proletariat may find.
I couldn’t agree with you more. To me it seems clear that the ONLY way forward, is to abolish the First Past The Post voting system and oust special interest groups such as BP oil, Labour/Conservative friends of Israel and GWR, who have such sway over, and give massive financial to, our politicians.
How to go about this, however, in real, concrete practical terms, I’m not sure.
Spot on. From Glasgow myself, moved to Germany for a one year contract in 09, still here! Now a citizen. When it comes to voting the choice is almost too much! Proportional representation is my normal now, logical and fair, I cannot fathom how a country of 65-70 million people is asked to choose between A or B. The country I left behind always seems so divided when I return, and underinvested. Really underinvested to the point I'm angry with the lack of progress.
@@verdebritanica
Hi
I was involved for around four years in my Community Council to help get lots needing done in our local village. It involved dealing a lot with the large Local Authority. I learned very quickly that it's definitely not fictional.
I think the main problem is when people get some power the old saying generally applies "power corrupts ......" .
Our experience was that many of those in power thought they knew better than the local people in the village that were living it.
After WWII wealth was shared a little more equitably. People expected their children to do better.
Regan & Thatcher introduced trickle-down economics (disaster economics) now rule.
The result we are returning to Georgian times. Extreme wealth and extreme poverty. The return of the workhouse to resolve social care issues cannot be far off.
Exactly right, the problem in not lack of Growth the problem is Growing inequality.. Well said..
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.
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.
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.
Productivity has been growing since the twenties but wages have not. If productivity meant anything to workers, we would be on a 3 day working week by now… Who benefits from productivity?
the shareholder class
Productivity growth -pay growth from 1948 - 1979 was 118.4% to 107.5 % 1979 -2021 was 62.5 % pay only 15.9 % . The growth only seems to have helped the rich so Carney must have no idea about economics same as career MP's .
Wages have grown massively since the 1920's. What on earth are you talking about?
@@peepiepo No the currency has been debased since the 1920s.
Probably those who have paid off accept's & use the leverage to acquire more, they need the growth to fuel continuous acquisition.
I'm glad so many people are seeing this.
When I was enrolled in economics at the university a decade ago, I was shocked to learn that everything was based on fixed models such as the one saying if we increase interest rates, inflation and jobs will fall. I'm surely not as smart as you but I couldn't stop thinking "life and society is much more complicated than this, you can't tell me that simple model is 100% fact". I dropped after a year. Still have a lot of interest on the subject but only when I think from the common people's point of view, which is how you talk. Thanks for all these videos. They don't give me hope for the future, but at least, now I know I'm not crazy in how I see the world moving forward right now.
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
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.
@@400VAL-p3v Well, we are going to grow ourselves and every other species on the planet to extinction if we don't change our values....
If you Google U.K. productivity graph you will see a dramatic change happened around 2008. Britain’s economy hasn’t recovered from the banking crisis.
This is around the time oil production started peaking.
27 million souls here in Australia
How hard is this to get right
Our government has got its short and curlies
Grasped by the private sector
Ooops
An economist (sic)
Are ina delusional safe place
We also had 14 years of pointless austerity that has left us with more debt than when we started.
@@squeakyproductionsDebt is not bad per se. It’s about what you use it for and get from it.
I think one of the problems is that some of the older generations (certainly my parents anyway) actually believe in 'trickle down economics'. There's only one thing tricking down - and it sure ain't wealth! Trying to convince my ol folks of this is like nailing water to a tree 🤦♂️
Great videos and book (about halfway thru now) Gary! Keep up the good work mate👍
Absolutely that! The "Boomer generation" seriously benefited from 'trickle down' consumer economics due to sheer demographic numbers. They are a unique generation in that their living standards improved due to improved public health, rapid technological advancement, the Post WWII Marshall plan, social change & massive economic investment. This affected all Westernised nations but Britain in particular as we had to let go of the Empire and move manufacturing to the East.
The Boomers and their parents were tricked by the New Right to forget about cautious government intervention and the clever, Social Market economy of the postwar era. In fact the Reaganites & neo-Thatcherites blamed governments for the de-industrialization, high inflation and unemployment whereas it was a much more complex constellation of big issues including - the OPEC crisis, the rise of China, the collapse of Bretton Woods, the Population explosion with increased longevity, Huge Military expenditures of the Cold War, the massive cost of Space exploration, irresponsible politicians deliberately running up debts with tax cuts prior to elections, and Corporate greed. 🤨
Now some of these things led to economic benefits from newly developed technologies e.g. Satellites, Cheap consumer goods, Globalization, Telecommunication, Teflon etc. However, the costs to society at large were huge! The trade offs in terms of - family breakdown, generational unemployment, fracturing communities and lack of social cohesion have never really been healed.
Due to the relatively small size of the 'Silent generation' (and their parents), Boomers have not really had to foot the massive bills of social security, healthcare & pensions. However, now that this postwar generation are elderly, 'we' are paying for the massive expenditures and debts racked up over the last 45 years i.e. starting when some of us were infants or before most of us were even born... The problem is that due to contraception and collapsed birth rates there are not enough younger people in work to pay for the older generations most of whom do not work but consume. 🤔
Lord Willets explained some of this in an extraordinary book 15 years ago. I am not sure if Gary has read it. Due to the size of the Boomer cohort they took the high inflation, falling birth rates (after them!,) and rapid technological advances in their stride whilst loading debt on future generations. The next generations cannot even afford to have a future generation! It is simply too costly to reproduce hence falling birth rates almost everywhere bar Central Africa.
Trickle down economics only works because the boomers cannot take their wealth with them. Your parents probably didn't have that much in savings and wealth until their own parents passed away. The problem comes for young people whose parents are also penniless they are basically screwed when it comes to buying their own property unless they live at home with mum paying rent and work full time from 18 to 30 and save 80% of their income.
@@Weakeyedominant Spot on! Funny thing is that they are both accountants but seem to be financially illiterate (or purposefully blind imho). They seem incapable of joining the dots and instead believe whatever cock and bull story du jour that the politicians feed them. It'll be them wanting the welfare state to provide medical services in the next few years, but they insist on voting against funding it 🤦♂️
talking about is not enough, not having children is. Or if you already have children, taken them away from this country and let the millionaires exploit someone else ...
One of the best videos of this already bright youtube channel. It would have been nice to hear about the quality of work and about how growth is often inversely proportional to it, still, the main point is loud and clear. Once again, thank you Gary!
"You go to the doctor with cancer, and the doctor says grow your way out of it" is great satire - really like your tone on these videos and in your message because it is asinine that more people are not making noise about a glaring problem while misinformation spreads like wildfire because people have such easy access to information. Please continue your type of work and sharing this knowledge!
We need as a group to bring down neoliberal politics. People need to be educated on how the economy is not synonymous with exports and big global business. We need to press for tougher laws that makes politics more honest and independent from big business financing.
Ah yes, the imaginary politicians that are inmune to the incentives the system creates for them are going to fix it with “laws” 🙄
or just let people build houses so supply can catch up with demand;
www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf
here here Gary. Smart kind man you are. Keep talking.
*hear hear
Gary, you are a prodigy.
Keep pushing kid.
@@anthonydunphy8181 to where...? 😟😳😰
Hopefully,an end to wealth inequality.
Like a lantern for moths.
6:59 one of the key indicators for me is what happens when the commuting vehicle breaks - in the '80s i would just go buy another one giving time for the original one to be fixed properly, now you're walking to work unless you can get a lift & the expense of fixing your vehicle means you're missing meals for quite a while.
conclusion? On ye bike?
It's refresing to hear an economist saying the exact things me and my best mate have been saying to each other and anyone else who will listen for the last 15 years.
Keep up the good work.
@@freddiepatterson1045 he read economics and maths at LSE and economics at Oxford. He's an economist. His wikipedia entry is Gary Stevenson (Economist)
What makes you thimk he isn't an economist?
This ”just grow = stupidity” analysis is 100% correct. Glad someone is saying it
it is not entirely true, you need to grow, but also you need to know when to diverge ...
I think part of the problem is social mobility and the class system, particularly in the UK. I've met a number of people who had very expensive, very good educations. It means that they, initially, come across as being very intelligent. But as you spend more time with them and debate issues, it's all a vaneer, a gloss. Boris Johnson is a famous example of this. He can speak Latin and Greek and quote (partially) from ancient texts. So, he appears to be intelligent. But he's not. Most of them have no particular talent but, due to rich parents, have had a leg up and, through contacts, obtained positions of power. It's like Gary said in his book, most of the traders now are rich kids dropped into the role by their rich parents. And many of them are two short planks. These are the people running our economy, running our country, making the big decisions. But they don't understand any of it because they're not bright enough to.
if you have rich parents, you do not need to understand complex numbers, or the exponential function ...
The Jolly Heretic channel calls these people you are describing, "midwits". They think they are smart, they have some level of useless book smarts, but they are not truly intelligent as they cannot apply things to real life for beans.
Start a political party Gary - talk sense in high places.
What do you think this channel is. This is politics. The party system is designed to swallow people like Gary and chew them into a fine dust
I genuinely wouldn't vote for him .. but I think his take is interesting
They don’t do sense but luv a concoction 🤭
At least the bk benchers
I prefer Gary being in a position to call out bad economics in any party that pushes them. Picking a side in politics limits your credibility when criticising policy
Let's keep Gary where he can hammer all sides if they have poor policies!
complaining instead of sense
We are genuinely experiencing ECONOMIC FACISM ie the pursuit of GROWTH, PRODUCTIVITY must be the guiding principle of our society NO MATTER WHAT THE CONSEQUENCES ARE.
It benefits them when we work harder because they make more money. We are going backward towards the old ways with super rich people owning everything and common folks, renting, exploiting and working for the rich landlords (17th century style landlords) hold all the power and keep getting richer.
"It's easy for the powerful to dispossess the powerless" - I'm with you Gary, I'll get in touch.
Thank you Gary! Keep on fighting the good fight.
Thank you!! Finally, seeing this in a thumbnail gives me hope.
If in theory we used a deflationary currency and everything got cheaper every year, real growth would likely skyrocket as the middle class grew for the first time since 1971
No it would encourage the rich to hoard more and more assets and would kill the working classes.
Exactly. As happened in the 19th century.
But inflation benefits debtors. And governments are the biggest debtors. And warfare is very expensive.... We are run by satanic lunatics.
Like bitcoin?
@@mrwillis5339 right
The problem with deflation is that people stop buying since everything will be cheaper tomorrow. So inventory backs up which causes downward pressure on prices. Then companies start going under, which I suspect this audience would consider a positive outcome 😂
Brilliant. I will email, once again, my MP who just spouts the narratives of the government. He simply thinks I'm troublesome and sending him emails has become a bit annoying for him. I'll still do it though.
I do that too Teresa 😂
Keep it going Gary, our important voices are getting muted or psyched out. But you are completely right about who's ruling us 👍
Thank you Gary! Growth worries me - we need money doing useful things like investing in research into making greener energy (not more tax-subsidised solar panels on farmland that should be feeding us), and improving conditions for ordinary people. I’m reading Thomas Piketty, who has spent years crunching data to come to similar conclusions on inequality to what you, Gary, figured out faster looking at your trading screens. Next on my list, your book on order from library, then doughnut economics - trying to live within the earth’s limits. Tax the wealthiest and put that money to doing positive, needful things. Keep these videos coming, thank you again.
You made clear and explicit what many of us sense with our intuition. Thank you. 🙏
Your channel has proven to be such a great education for me, Gary. Thank you for waking me up!
Another great video. At my work this very week the message from the Executive team was that we need to do more with less. As we have looked for efficiencies for a number of years now, I made the comment “maybe we can ask staff to work 12 hours a day (but with no change in pay)”. This was obviously a belligerent comment, but there was a genuine pause of consideration! If the message is for higher productivity with no plan of how to achieve this, can “stupid” please leave the call.
Problem is people don't just work and sleep. When at home there are lots of tasks to complete. Some people could off load all those tasks onto there wife. But that just means the problem has been shifted to someone else.
Absolutely so glad that this channel exists and Gary Richardson has embarked on this project!
When you work on something that only has the capacity to make you 5 dollars, it does not matter how much harder you work - the most you will make is 5 dollars.❤
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much
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.
In Northamptonshire the shoe industry moved to India,In Bedford the Texas Instruments semiconductor production moved to Italy I think. Again in Bedford the Britannia Iron and Steel works have gone. I don't know much about the rest of the country. How can people produce when there's no jobs. All along the countryside there are huge logistics centres which are not full of people producing but a few people who are moving other countries goods. I am not very clever about financial matters but do look at this and ask questions.
Thank you for your videos Gary. I find them interesting.
The same way Gary describes the money trickling up to the very wealthy thus the money leaving the working and middle class, when we buy service and goods from abroad, the money is also leaving the country. So perhaps our trade deficit is exacerbating the problem because the money stops circulation in the UK and leaves the system never to return.
@@neilwillimott6988if wages are forced to keep pace with increasing asset price inflation I believe the problem would largely correct itself.
Also the issue with growing asset prices is it gives the rich the power to buy the government corrupting democracy.
It’s a self perpetuating cycle down
You can't have strong currency and manufacturing economy. Decide what you want. If you want a job, it is better to move to Vietnam these days. The UK is for those who already have money and assets they can rent out to those who foolishly came over to this country to look for a job.
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 am a business student and have had several economic courses throughout uni. For the last couple of years I have been wondering how come that so many people seem to get poorer and are for example not able to afford buying a home, yet things such as houses and stocks are not going down in price. I tried to connect it to what I had learned in school and it just did not make sense to me - I was truly wondering what was going on. Glad that I found your channel. With your explanations the whole situation makes so much more sense. Finally I am getting answers.
Politicians have confused inflation for growth for far too long.
Canada had a sensible government in the late 90s. It didn’t deregulate banking. As a result, it’s economy wasn’t as devastated as others in 2008. Mark Carey’s good fortune as governor of the Bank of Canada in 2008 is that he got the credit for decisions that had nothing to do with him, made a decade earlier.
a lot of the regulations Canada had on finance, food standards etc are being chipped away. I was shocked to see the backlash when Canadian farmers had to meet EU regulations on food, they used to have the same standards but more and more have gone down the route of American 'deregulation'
In New Zealand we had a Conservative Prime Minister who took the credit for steering the economy through the GFC. Truth is the previous Labour GOVT had made great trade deals and left a big surplus. The Conservative PM who took the credit was making himself fabulously wealthy trading for Meryl Lynch while the Labour Party were making these deals. Meryl Lynch was one of the first companies to collapse, causing the GFC but many people in my country (mainly baby boomers) think John Key, the Conservative PM is a genius and saviour of our country. And they've voted them back in!
Hi Gary, love your videos. I think this issue about growth is more smoke and mirrors from the ruling class. For me the main issue is about how people understand/react to "standard of living". What i mean is this; we are a country living in debt. People in my parents generation started off their adult lives scrimping and saving because credit wasn't something you automatically turn to (picture an old grey episode of Coronation street from the sixties). Then Thatcher/Reagan opened the floodgates and deregulated the banks encouraging them to lend more and to pass out credit cards like confetti. People these days think we have a much higher standrd of living now than the 50/60's. We don't. WE ARE IN DEBT. You owe the bank for your house mortgage, your car finance, your credit card is maxxed out and the biggest one, perhaps, is the Student Loan; a "forever" debt! Added to this is the government debt which is now over £2 trillion. So, who is this debt owed to. The Ruling Class. So, for me, any talk about growth/interest rates/inflation is just bollocks, a distraction, dead cat(ism) The Ruling class is robbing us blind as usual aided and abetted by compliant politicians and media tycoons.
Absolutely
Short, but sweet Gary 👍
You did allude to it, but I think there's another layer to the message of our supposed lack of productivity.
Yes, with lower standards of living, lower disposable income, we can't as individuals just go out and lift our local economies by spending our way out of it. So, what's the other solution the wealthy want to plant in our minds? It's simply that we don't physically work hard enough. We don't produce as much as we should, for the level of pay we receive. We need to work longer, harder, for relatively less pay, and things would be so much better.
It's easy to see how that makes little sense to the working population. But, it doesn't stop them planting that seed. Or hiding behind that excuse.
If wealth inequality is addressed, citizens would have the disposable income to boost their local and national economy. However, that relies on the mega rich sharing what they have, which brings us back to the real problem.
We can't allow them to fool us into thinking it's our fault, and we just need work harder, for less.
PS. Always look forward to your weekly updates 👍🙂
You make so much sense, you articulate the point perfectly and this current subject is the main reason why I left my job in finance. Keep up the great work your voice will grow louder and louder 👍
I'm halfway through Yanis Varoufakis' book, in which he explains his term Technofeudalism and how it isn't really capitalism creating wealth but the architecture of the internet and it's platforms that are generating tremendous and conventrated wealth by taking their " rents". It's put a lot in perspective for me.
Farming, fishing, quarrying at all time low.
Manufacturing down again.
Construction quantity down.
Bonds up.
Surely with all these new immigrants quarrying, fishing, farming and construction should be up ? But the government is suppressing these aren’t they ? 🤷♂️ seems the government is the problem ?
@@tropics8407 the UK has been bought out by the US money, and their business practices have been introduced.
All the productivity has moved to China.
in the USA & UK at least, the shareholder class has been gifted all the profits we've earned from our continual increases in productivity since the mid to late 70's. in other words; our pay increases over that period have been diverted away from us into the pockets of the rich...and the rate of that diversion is only speeding up.
So buy shares with your wages.
@@carlwide6594 amusing
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.
I love your way of delivering this message. Awesome stuff 👏👏👏
Once again you have made such a valid point by asking the question what does growth actually mean and to which economic class the asset economy or the working economy classes. The phrase is a smokescreen for their actions which is the transfer of wealth evident in the explosion of wealth inequality. They consider us who are real human beings like some Homo Economicus a creature they created from their own bias.
There are very few of you left Gary the youth need you.
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 😃
For a in depth argument why eternal growth is a fundamental problem please read "Less is more" by Jason Hickel.
Local growth for a limited time is natural, but that is not the fundament of our current economy.
The growthism is the reason we currently are in a climate crises, an inequality crisis, a biodiversity crisis and a mental health crisis.
One of my favourite books, currently reading for the second time.
It’s not growth, it’s value. But that’s too abstract a concept for political economy and the interface with the public so ‘growth’ is promoted instead. Positive economic development is fundamentally not a phenomenon like something physically ‘growing’, and it’s unbelievable that this cottage industry has been created around this misunderstanding.
@@brianboyle2681
So what are these immaterial values going to be spent on?
Other immaterial values?
Nice theory.
But if you are poor and get some immaterial raise, wouldn't you want to trade it for real goods and real food?
That is exactly what we see time and again: growth is tightly coupled to physical growth in the real world.
You may see tidy models saying otherwise, but the data is against that pretty picture.
Please read the book. It is very well argued and documented.
And paradoxically hopeful.
@@brianboyle2681
I just saw your previous comment on this channel asking Gary to do a PhD to develop his ideas.
I'd say that the book "Less is more" is as close as you can get to that unwritten thesis.
The inequality angle is there, but so are a lot of other stuff challenging convention wisdom.
Q: If the theory is good, why is the world currently broken?
Thanks for the recommendation, just ordered it.
I’m astonished that no one (that I’ve noticed anyway) is discussing the effects of manufacturing and freight costs on every single product we purchase, from cat food to office equipment and building supplies. Since the start of the pandemic & then the invasion of Ukraine, those have skyrocketed. Insurance rates have also gone up due to covering losses to forest fires & catastrophic flooding (both of which also affect the supply chain, depending on where they occur). I work in distribution (office equipment). The entire supply chain was affected when the factories shut down. When they reopened, the demand for delayed items was so high we had to pay something like 4 times what we used to pay just to reserve a spot on the boat. (Our little pallet kept getting bumped back onto the dock by companies with deeper pockets.) Air and ground delivery costs rise with fuel prices. All those costs are passed on to the end user customers. I have to explain this to my customers daily when they ask why their new order costs them so much more than their last order of the same equipment. And I know why it costs me three times more to feed my cats than it did five years ago.
I’m no economist. I don’t know how this affects the Rich-Are-Getting-Richer big picture. (The rich have to pay freight costs too.) I DO know it is definitely part of why the paycheques of people like me don’t stretch as far anymore & it is definitely making people in my situation (older, divorced/single/, renting) immensely more vulnerable.
Insightful. Clear. Thank you, Gary.
It's refreshing to see someone who understands the system so well finally speak up about its flawed nature because anyone who's not a professor gets laughed at for pointing out these exact flaws and "not understanding the intricacies of global finance". Well done Mate!!!!!
Hi, I'm from a similar background to Gary but currently a commodities trader so see things a bit differently. Mark Carney isnt wrong when he says UK has a productivity problem - its just true. The UK is rapidly falling behind the other major economies of the world and esp younger economies like Poland. I also agree with Gary that growing inequality is a huge part of the global problem, but also something we need to think about is resource contraints. Growth is happening in the luxury sector because we have no resource contraints in producing those things. Food and energy are different - the reason the European gas price went from 7 eur/mwh to 365 eur/mwh is because there simply isn't enough gas in existence to satify demand, which is a similar story across other commodities.
Blowing up n0rd stream reduced the supply of gas. Interestingly the price of gas peaked a month before the explosions. Cui bono? Not the Ru$$ians!
Imposed resource constraints?
Poland is not a young economy. We had a good infustracture including houses for people, railway, good education system and good public services including childcare and health service. We joined the EU which stimulated investment in development of important infrastructure and previous goverment (PIS) overseen the biggest transfer of wealth towards ordinary people by implementing minimum wage, intoducing child benefit (which is higher per child than in the UK), lowering Vat, increasing pensions. All this made economic growth possible as people improved their purchasing power so the could spend on things which haven't been accessible to them before. This is why Poland is doing better in terms of growth and this is exactly what Gary is talking about and is called redistribution of wealth.
Or it could be the destruction of cheap energy from Russia.
@@gavinlangley8411 not really - the world is not a static place although people assume it is. For example, the UK doesn't have access to cheap oil and gas from the north sea anymore as reserves have declined which used to be a massive boost to the economy. We are using up our finite resources so it makes sense that, all things being equal, our standard of living will drop. that said inequality is a monumental problem globally that we need to deal with also driving lack of investment in the things ordinary people need.
As the education system fails, the economy will follow. UK does not have sufficient graduate careers for those who go to universities. Empirical studies show that Govt investment leads to more R&D & better living standards. US in the 1950s was the most affluent period in history, then came space exploration. 1970s was the catalyst for decline in the UK & industrial output began to fall, eg, ripple effect, global competition. Manufacturing only represents 8% of the UK economy. Lack of investment in infrastructures, eg, schools, hospitals, roads, train stations, ultimately leads to acute skill shortages & higher wages & lower productivity because projects take longer to complete. Govt cost cutting has an impact on productivity & sustainability. Private equity & Govt contracts means more national supply chains rather than regional & local supply chains, resulting in longer waiting times & in some cases, lower quality. Universal Credit only provides 70% of essentials, which means less spending power &, lower demand. UK benefit system including pensions & disability is the worst in Europe. Business rents & rates are the highest in Europe which is why many shops are vacant. This also means consumers either go online or travel to better shopping areas. Costs are 3x higher than Europe & this will have an impact on businesses & employment opportunities. EU countries invest in free childcare for its working population. UK doesn't. Low pay in many deprived areas means only one parent works. UK is one of the worst run economies. Growth by GDP includes profiteering, excessive pay/bonuses(not performance related), failed contracts & projects, fraud, corruption, & unnecessary waste. Executive spending(tax relief) runs into £billions every year, eg, hospitality, private jets, gifts. London is the global capital for fraud & corruption.
You need to be on Joe Rogan!! Get this message out there!
Joe Rogan is an internet witchdoctor, and king of the doomscrolling gullible zombie nation idiot class of right wing populism
Hi Gary. One of the main issues about poor productivity is that MPs and those in powerful positions put it in terms of people not working hard enough, implying people are lazy. A lot of the UK’s productivity “problems” are due to underinvestment in technologies and companies instead preferring cheap labour.
the point is that there is a ceiling how precise people can be, even when given the latest tools. Precision is a limiting factor for majority of us. Try to be precise 8 hours an hour for a year or two. Certain burnout. The truth for the war and for most of today's work is that these are not environments for people any more, they are for robots and people should not be pushed into them by political wing of business like the Tory party.
Love your channel. Not only does the pursuit of growth not translate into benefits for the general population, it is bounded by clear environmental boundaries. I would love it you did an episode on a degrowth economy. I think it's a great concept which aims to solve both the issue you have raised and environmental concerns simultaneously.
Don't forget about the chairman of NatWest saying that it's not that hard currently to get on the property ladder whilst being paid a base salary of £750k.... In their own little worlds
AI could replace these jobs in the future lol
There is no inconsistency between exploding asset prices and slowdown in productivity. Increasing asset prices reflect increasing rents extracted by the very wealthy, which is perfectly consistent with slowdowns in productivity growth. Take housing. In the UK we've not built any housing so house prices have increased massively. Homeowners have extracted larger and larger rents over time. At the same time, excessive housing costs slow down productivity growth by limiting the geographic movement of workers. Fewer and fewer people can afford to move to London limiting its growth. Since there are gains from agglomeration there are lost productivity gains from high house prices.
Similarly, take UK's railway, water, electricity systems. All are designed for the extraction of rents by their owners, whilst underinvesting in the service they provide UK consumers. This limits our productivity whilst enriching very few.
High asset prices and rents are exactly what I'd expect in an unproductive economy. You are of course correct inequality is an underlying concern which is partly driving a slowdown in productivity.
Increasing asset prices are a sign someone was willing to pay that price before. A small group of people gets their money very early, spends it ... and the rest must pay the same after. Add immigration to the mix to prop up demand and you have what the UK housing market is.
Just a couple of words to promote this video
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 worked in the financial sector for a FTSE top 100 company and it was hammered into us that we had to grow every year or the share price would fall.. If it was looking like we were going to miss our growth target fior the financial year we were told (Off the record of course) that we were OK to lend to people who normally we would be censured for lending to. Of course at the beginning of the next Financial year we would be saddled with a mountain of bad debt from said loans for which we would be blamed for..
I also worked for one of the biggest names in the Insurance Industry and saw people lose their jobs for miss selling pensions and investments. Sacked by the very people who had encouraged them to do it. Our Branch manager got early retirement on full pension whilst the sales staff got to sign on
The system stinks and it's never those at the top of the pile who get the blame.
I work in the public sector and haven’t had a pay rise (accounting for inflation) since I qualified, 12 years ago. Dead economy
Are you frightened of the private sector ?
@@jjefferyworboys8138 ridiculous comment. Why would I be frightened of the private sector? In social care, I prefer not to be part of the problem so I avoid the private sector
You, Gary, are part of the anti-growth coalition. Grow the pie 😀. But seriously, keep up the good work and messaging about growing inequality
Is it an inherent problem of publically traded companies where the pressure from owners to grow eternally trumps everything?
No, it doesn't have to be that way, it is all based on the laws we use as a framework to build and guide corps. Because (at least in the USA), after the drama from the gilded age in the early 1900s into the 30s policies were implemented that made it so corps could not be crazy and do whatever they wanted. Things like the Glass-Steagal act for example, and the gilded age monopolies broken up with anti trust laws is another example. The laws NEED to be fair and provide adequate framework for the society. What happened was that from the 1960s on over the decades the structure that held things together with fair rules was seriously whittled away, and these old rules were legit repealed (like Glass-Steagal), or they were ignored by govt as the corps were allowed to pay off the politicians to get what they wanted.
Add to this changing values in the society. Before companies were usually smaller, people lived in communities where they knew each other and felt more accountable. There was this idea pre-1960s/70s that the owner was beholden to the community and their workers and shareholders equally, NOT just the shareholders. But laws were passed that the corporation was DUTY bound to increase profits of shareholders as priority number one above ALL else.
So a lot of the legal framework being destroyed by lobbying govt by the rich, and also the values and sense of community people did have values wise being changed by the boomer culture revolution and the rise in globalism all contributed in a giant turd sandwich over decades.
Totally agree with your sentiments Gary, for years it has been so obvious to me that market indicators go up and up and so generally 'employment' seems somewhat stable and yet inequality is getting pitifully worse. The people that push the mantra 'Growth is the key to everything good' are the ones that are rich and getting richer still through growth. They love growth because growth makes them increasingly rich. So there is a list of factors at play that are rigging the system of growth for the few. What are those factors favouring growth AND equality, can we list them and put together as blueprint that could work to diminish inequality while keeping growth stable/strong? A 'manifesto’ if you will, that all can latch onto and push for? By the way I do like that phrase mentioned at the end .. "It's the inequality, stupid!". This will be the stock phrase that can be used to explain the unsustainable death spiral that we are all, and I mean all, heading down.
This is my favourite video so far. It's the tone towards the end. It's tinged with an exasperation I find very familiar having been talking about these issues for a few years myself. It's hard for me sometimes to keep a level head hearing the same stupid arguments again and again. I don't know if I'm reading stuff into this, but by the end of the video I was feeling it. It's inequality stupid.
Part of the problem is we monetise necessities. I don’t mean air and water, I mean societal necessities, like buses, healthcare, prisons and schools. If they cost X for the state to run, then they cost Y + P (profit) for a company to run. Granted Y might be lower than X, but it’s not guaranteed. If it is lower, it’s because some previously essential part of the service is cut. State gets a worse service, stock market gets P. The difference is what we the people have lost.
In your example it maybe that Y is less than X but also possible that Y + P is more than X
@@keithparker1346 absolutely. But that’s why I said might be. 👍
Hi Gary, I agree with most of what you say in this video. The only bit that worries me is that your work seems to have a blind spot on the link between economics/growth and biophysical limits/planetary boundaries. Without this it is acontextual.
If you could put your work in this context it would be perfect :)
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
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
A brilliant argument you put here,Gary.
Gary, thank you for another excellent video. We are out here having these discussions with people and promoting your work.
One objection to the wealth inequality hypothesis I have thrown at me a lot comes in the forms of reports that show wealth inequality is not that bad. These come from charities looking into this kind of thing and appear to be ok except: some include gini coefficients based on income inequality, they tend to not include the latest figures including the pandemic etc. I’m not sure what wealth is captured and if it includes off shore and hidden assets or who the figures cover.
Would it be possible to make a video on this as establishing that growing wealth inequality is real is fundamental.
Wealth inequality and income inequality are not the same thing. I do not therefore think it is correct to use gini co-efficients based on income inequality as a measure of wealth inequality.
To get a measure of wealth inequality is not that complicated. Well, perhaps I'm oversimplifying, but nonetheless, just look at say property ownership ( records available at Deeds Offices), look at private and public company owndership, also look at debt ownership (who owns the public and private debt etc). Then you can chart theae figures over a time period to see the trend.
“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”
It's just one banger after another with this guy 🔥
Thanks Gary for your common sense and keeping on sharing.
It’s a brilliant argument. The more productivity goes up the more money they make.
Measuring growth productivity nominal income wealth in fiat is the problem. Fiat inflation leads to loss for those of us In the group that doesn't have assets
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
Any chance of an update of your thoughts on bitcoin in April 2024?
Gary you are spot on. If the excess returns from increased productivity go straight to the rich, and aren’t reflected in wages, then quality of life won’t improve. This compounds the issue of productivity because workers who are poorer, sicker and less secure are a drag on growth. Low productivity is therefore the symptom and not the disease. This can and will go on for a long time, unless and until the people demand redistribution of wealth from the top to the bottom. Austerity and tax breaks for the wealthy will only make things worse. Either we eventually devolve back into feudalism or the people wake up and demand redistribution.
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.