Monthly Archives: November 2017

Rebuild the local economy: prioritise labour-intensive sectors, difficult to automate, impossible to relocate abroad

Colin Hines, convenor of the UK Green New Deal Group, comments on the Guardian’s recent editorial on productivity and robots which ‘repeated the cliché that automation does cost jobs, but more are created’.

He says that the problem with this is that the new jobs are frequently in different places from where they are lost and require very different skills, hence exacerbating the problems for the “left behind”.

Also unmentioned was that just as automation is starting to really bite, the world faces a strong possibility of another serious credit-induced economic downturn, from China to the UK and a perfect storm of domestic unemployment soaring and export markets falling, as happened after the 2008 economic slump.

The answer to these problems has to be a shift of emphasis to rebuilding the local economy by prioritising labour-intensive sectors that are difficult to automate and impossible to relocate abroad.

Two sectors are key:

  • face-to-face caring from medicine, education and elderly care
  • carbon-reducing national infrastructural renewal.

This should range from making the UK’s 30m buildings energy efficient, constructing new low-carbon dwellings and rebuilding local public transport links.

Funding could come from fairer taxes, local authority bonds in which all could invest, green ISAs and a massive new green infrastructure QE programme.

This approach should become central to all political parties, set out in their next election manifestos because “jobs in absolutely every constituency” is the crucial vote-winning mantra.

 

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Rupert Read reviewed Colin Hines’ ebook, Progressive Protectionism in RESURGENCE AND ECOLOGIST May/June 2017

Rupert Read, Chair of the Green House thinktank, described Colin Hines’ new book as a ‘feisty clarion call’ to greens and ‘the Left’ – and, we add, small ‘c’ conservatives.

It calls for a change of direction: away from acquiescence in the trade treaties which shaped the deregulated world that spawned the financial crisis — and toward protection of nature, workers, localities and national sovereignty, as the key locale where democracy might resist rootless international capital.

Progressive protectionism’ is completely unlike the ‘protectionism’ of the 1930s, that sought to protect one’s own economy while undermining others; this by contrast is an internationalist protectionism, aimed, “at reducing permanently the amount of international trade”, and making countries around the world more self-reliant/resilient. ‘

Read believes that too many ‘progressives’ have sleepwalked into tacitly pro-globalisation positions incompatible with protecting what we most care about.

And partly because of this, a new political power is rising that threatens to trash the future: The Brexit vote and (in particular) the election of Donald Trump have restored the word ‘protectionism’ to the popular political vocabulary.

Hines argues that we need to take back protectionism from the Right. He means that only policies of progressive protectionism can make real the idea of “taking back control”. Read thinks that’s right. If we embrace progressive protectionism, we’ve something better to offer the voting public than they have.

The chapter on ‘free movement’ will be the most controversial of all. Hines (Ed: rightly) points out that countries such as Romania and the Philippines are being stripped bare of their medical personnel, and argues that no decent internationalist can support this sucking out of ‘the brightest and the best’ from their home countries.

We can take control of the agenda, rationally and seek to minimise such movement; for example by helping to make conditions better in home countries, tackling dangerous climate change, stopping foreign wars of aggression, encouraging ‘Site Here to Sell Here’ policies everywhere, and bringing back capital controls which helped the world prosper safely from 1947 till 1971 (and which certain countries, such as Iceland, have already brought back).

Capital controls are crucial, because they stop the threat of relocation which multinationals have used to ‘discipline’ democracies for too many years now (Ed: and capital can then be reinvested in the communities from which that capital was accrued).

Hines argues that the Treaty of Rome needs transforming into a ‘Treaty of Home’ that will allow peoples to protect what they hold dear – and Read thinks politicians on the Continent need to read his book if they are to prevent further exits, starting possibly with France. Read ends:

“This book is a necessary read. Perfect it ain’t; it’s slightly repetitive, and there are problems of substance too: most Resurgence readers will (rightly) dislike how soft Hines is on economic-growthism, and will wish that he were readier to embrace the post-growth future that is demanded by the acceptance that we are already breaching the limits to growth.

“But if there is to be a future, then progressive protectionism will surely be part of it. This book is crucial thought-leadership for us, away from the political dead-end of globalisationist fantasy, and toward a localisation that can transform the debate – and then the world”.

Progressive Protectionism Park House Press, 2017; ISBN 978-0-9544751-2-3

Read’s review may be read here: https://britain2020.wordpress.com/papers-reviews-reports-well-worth-reading/rupert-reads-review-of-colin-hiness-ebook-progressive-protectionism/

Money Week editor: ‘horrible’ side effects of quantitative easing and record-low interest rates

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Merryn Somerset Webb, editor-in-chief of MoneyWeek, is the best-selling financial magazine in the UK recently wrote in the Financial Times:

It has been a good week for billionaires.

The UBS/PwC Billionaires Report 2017 claimed the combined wealth of the world’s 1,542 billionaires rose by almost a fifth last year to $6tn: more than double the UK’s gross domestic product.

It has not been a particularly good week for governments.

They have to deal with the fallout from rising wealth inequality, and that fallout is getting increasingly nasty.

This kind of report does not do much for central bankers, either.

The rise of the billionaires is as much about financial globalisation as it is easy money, but every time a report lands on their desks, central bankers must stop to think about the economic, social and political havoc their policies have caused over the past 10 years.

The desperate attempt to avoid deflation via quantitative easing and record-low interest rates has had horrible side effects . . .

  • The rich have become much richer;
  • corporate wealth has become more concentrated;
  • soaring house prices have created intergenerational strife;
  • low yields have made all but the super-rich paranoid that they will be entirely unable to finance their futures.
  • Most markets have ended up overvalued (overvalued stock has a price not justified by its earningsoutlook or price/earnings ratio) – later, this will really matter.

This, while pension fund deficits and a constant sense of crisis have discouraged capital investment — and have possibly held down wages in the UK.

 

 

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