PART ONE: UNCOMFORTABLE ASPECTS OF TODAY
1.1 THE DELICATE BALANCE OF OUR ECONOMY
To maintain their existence people need food and shelter. To maintain a happy existence people also need domestic goods and much else including opportunities for entertainment. Nearly everybody, in order to obtain these, needs an income of money. Also, for most people, happiness requires some friendship or companionship and some form of regular occupation.
There are three honest ways in which people get money (other than by inheritance):
[I] By engaging in business, meaning that they are employed in the commercial growing of foods, making and selling of goods or foodstuffs, selling services or entertainments, or other money-making activities, where their income comes from commercial profits.
[II] By engaging in public service, meaning that they are teachers, doctors, nurses, social workers, civil servants etc., where their income comes from the state.
[III] Or neither of the above, meaning that they are children, or old, or infirm, or caring for the infirm at home, otherwise not gainfully employed, or out-of-work. Their income comes from state benefits, other pensions, investments, or from being dependent on others.
Economic stability of the nation depends upon sufficient tax being collected to provide for the people in [II] and [III]. This means that there have to be sufficient markets for the goods and services of business that, in various ways, provide government with taxes.
But what happens when markets for certain manufactured goods become saturated? When households have refrigerators, washing machines, televisions, tables, sofas, beds, cars and houses that are in good working order and do not need replacing? There are two likely consequences:
(a) Business has to try to persuade people to discard the old and buy afresh – through advertising. Manufacturers may try to ensure that their products, seemingly excellent, have a limited life so that they will need to be replaced: ‘built-in obsolescence’ as it was once called.
(b) If business cannot sell its goods it cannot pay its workers and so has no option but to lay them off. These workers then obtain their (lower level) income from [III] rather than [I].
When business is less successful, less tax is collected from businesses (corporation tax) and from the nation’s workforce (income tax). But more unemployed workers require more to be paid in unemployment benefit and tax levels may need to increase. If this happens tax-payers become angry with the government and, at the next election, may vote them out of office.
When workers become unemployed, the benefits they receive from the state are much less than what they had earned. Hopefully this provides for their food and shelter but there will be little money for the “domestic goods and much else” of their erstwhile working life. So, they may become depressed, or angry and rebellious.
This demonstrates that the economy and the emotional health of the nation depend upon a delicate balance based on the success or failure of business. That has been the situation up to the recent past. But now that delicate balance seems threatened. What will happen if the parameters of economy change?
1.2 PROMISE OR PERIL: TOMORROW’S CAPITALISM
In a Guardian article[i] “The promise and peril of Industrial Revolution 4.0” Larry Elliott describes:
“a fresh wave of innovation in areas such as driverless cars, smart robotics, materials that are lighter and tougher, and a manufacturing process built around 3D printing.”
He notes that the Swiss Bank UBS expects as a result of these innovations that there will be:
“a polarisation of the labour force as low-skill jobs continue to be automated and this trend increasingly spreads to middle class jobs”
And he quotes Klaus Schwab, of the World Economic Forum, in his book “The Fourth Industrial Revolution” describing the consequences:
“The changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril. My concern, however, is that decision-makers are too often caught in traditional, linear [non-disruptive] thinking or too absorbed by immediate concerns to think strategically about the forces of disruption and innovation shaping our future”.
Elliott agrees with Schwab and concludes:
“Faced with the challenge of disruptive new technology, the current political framework is no longer fit for purpose and its shortcomings are likely to lead to a backlash that could turn very nasty.”
Larry Elliot is surely right that as lower-skill jobs are lost due to automation, unemployment will rise and to avoid consequent disaster we need a different political framework, one that accepts these changes, while ensuring that poverty is eliminated and the good things of life are available to all. But first consider global crises much greater than the rise of automation.
Nafeez Mosaddeq Ahmed in 2010 published “A User’s Guide to the Crisis of Civilisation” [ii] and predicted the “inevitable demise of neoliberal industrial capitalism if our civilisation is to survive” (p248) in these terms:
“Industrial capitalism [has] erupted on a global scale. In the last generation, the entire human species, along with virtually all other species and indeed the entire planet, have been thrown into a series of crises, which many believe threaten to converge in global catastrophe: global warming spiralling our of control; oil prices fluctuating wildly; food riots breaking out in the South; banks collapsing world-wide; the spectre of terror bombings in major cities; and the promise of ‘endless war’ to fight ‘violent extremists’ at home and abroad. …
The argument of this study is that these crises cannot be easily abstracted from the very structure and nature of the civilisation which has incubated them. The world is, therefore, in a period of momentous transition, fraught with unprecedented danger, yet simultaneously holding the prospect of unprecedented opportunity.” (p1)
Of these perils the effect of climate change is the most serious. Among similar warnings, a global economic model developed by a team at Anglia Ruskin University’s Global Sustainability Institute, suggests that global society will collapse in less than three decades due to catastrophic food shortages unless national policies change and new political frameworks emerge. Dr Aled Jones, Director of the Institute said in 2015 [iii]:
"We ran the model forward to the year 2040, along a business-as-usual trajectory based on ‘do-nothing’ trends — that is, without any feedback loops that would change the underlying trend.The results show that based on plausible climate trends, and a total failure to change course, the global food supply system would face catastrophic losses, and an unprecedented epidemic of food riots. In this scenario, global society essentially collapses as food production falls permanently short of consumption."
Major changes in the structure of our society will be needed if Nafeez Mosaddeq Ahmed, the Global Sustainability Institute, and others with similar messages, are correct. I believe their diagnosis is right although the time scale of collapse is uncertain. As Klaus Schwab says, our political leaders are not thinking “strategically about the forces of disruption and innovation shaping our future.” It is the journalist, Larry Elliott, who says that our political framework “is no longer fit for purpose”.
In any ‘new political framework’ the first priority must be to stop global warming. This means leaving fossil fuels in the ground and finding alternative sources of energy. This is one starting point for a new political framework. But there are others.
1.3 WHAT MAKES PEOPLE UNHAPPY?
The second starting point for considering a new political framework is not directly with government and its institutions, but with individuals and their happiness. What makes people tick? What gives them contentment? What makes them happy, or perhaps of greater moment, what makes people unhappy?
To start with the basics, people first need shelter and food. Second, they need something worthwhile to do: an occupation to which they can devote much of their time. Third, they seek comfort, entertainment and, in most cases, companionship and a loving family. To some extent the better the housing, the more varied and sufficient the food, the more agreeable the occupation, and so on, the more likely they are to be satisfied with their lives.[iv] Also, of course, contentment depends for most people on good health – physical and mental - but these lie outside a nation’s political framework, other than provision of health and care services.
Most of these aspects of the good life depend upon sufficient income, either earned through work or from state benefits. With rare exceptions, no money means no happiness.
A new political framework for the UK should tackle two major causes of family unhappiness: poverty and unemployment, which are ones that Government could, and should, tackle..
1.3.1 CAUSES OF UNHAPPINESS: POVERTY
The UK Department for Work and Pensions (DWP) annually publishes data on household weekly incomes. One household income measure is based on earnings, state support, pensions, and investment income among others, and after tax has been deducted but before any housing benefit is added. Figure 1 uses this data to show the number of people in the UK (adults and children) living in households in ten ranges of household income in 2014/15, based on a sample of about 20,000 households. [v]
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Figure 1 Ten levels of household income and numbers of people in UK living in these households in 2014/15
weekly household income people living in these households (millions)
£0-£240 6.03
£240-£310 7.04
£310-£360 6.12
£360-£410 6.07
£410-£470 6.09
£470-£540 6.44
£540-£630 6.83
£630-£740 6.11
£740-£950 6.46
£950- 6.24
TOTAL 63.43
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The median household income (as many above as below) was £473 per week. 60% of this is £284 per week and in the words of the DWP “those falling below this line are considered to have relative low income.” This is officialdom’s way of saying that they are in a state of poverty. In 2014/5 this was the case for 16% of the overall population (10 million people), and 19% of the child population. Comparable figures after housing costs for those in relative low income are 13.5 million with 3.9 million being children [i], which demonstrates how significant is the cost of shelter in the weekly budgets of those with low incomes.
The Joseph Rowntree Foundation has a more fundamental approach to defining poverty. Its Minimum Income Standard study [ii] asks members of the public what goods and services they think different households need to live to an adequate standard and then costs these. The 2014 study suggests that a couple with two children need to earn between them £781 per week, a lone parent with one child needs £521 per week and a single person of working age needs £329 per week. Figures are not readily available for the numbers of households with incomes below these sums but relating them to the data in Figure 1 indicates that by this standard the numbers ‘in poverty’ are larger than the Department of Work and Pensions reckons.
The 2016 Food Poverty report [iii] of Oxfam gives a dire insight into poverty in our country.
“Although the UK is the seventh richest country in the world, many people struggle to afford food.
· In 2012-13, the Trussell Trust foodbank network, an Oxfam partner, provided over 350,000 people in the UK with food parcels - more than double the year before.
· Oxfam and Church Action on Poverty estimate that over 500,000 people in the UK are now reliant on food parcels.
· Over 2 million people in the UK are estimated to be malnourished, and 3 million are at risk of becoming so.
· 36% of the UK population are just one heating bill or a broken washing machine away from hardship.
· 1 in 6 parents have gone without food themselves to afford to feed their families.”
With the expected increases in unemployment of the less-skilled due to automation it is clear that these sad measures of poverty in the UK are set to rise. How long before we can expect food riots by starving people?
At the other end of the spectrum, a report by Income Data Services in 2014 showed that the chief executive officers of the major companies in the UK were, on average, receiving remuneration 120 times greater than the average UK worker.[iv]
As a rule of thumb it is difficult to see how anyone can be so highly competent and hard working that they deserve to be paid even more than ten times that of the average worker.
What a disgrace that in one of the richest countries in the world there should be such poverty!
1.3.2 CAUSES OF UNHAPPINESS: UNEMPLOYMENT
The obvious function of work is to provide for the cost of living, but beyond that, for many people work tends to define their existence and gives them a sense of dignity and purpose. This is lost if they lose their job and need to rely on state benefits.
“Unemployment” is defined by government as those without a job who have been actively seeking work in the past four weeks. In the UK between 1992 and 2016 it fluctuated between 5% and 10%. In July 2016 it dropped to 4.9% - totalling 1.5 million people.[v]
“Long term unemployment” refers to workers who have been out of work for more than 27 weeks. Between 1992 and 2016 in the UK it averaged 2%, dropping to 1.3% in July 2016.[vi] Yes, a low figure: but it relates to the undoubted misery of almost 40,000 people and their families.
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THESE ARE THE FOLLOWING PARTS OF THIS ESSAY -
accessed throughout the navigation bar.
2. KEEP FOSSIL FUELS UNDERGROUND
3. UNIVERSAL CITIZEN’S INCOME AND PROGRESSIVE INCOME TAX
4. COMMUNITY ORGANISED UNPAID WORK AND PLAY
5. CULTURE CHANGE FROM WEALTHISM TO CONVIVIALITY
6. ENVOI: A CONVIVIAL REVOLUTION ?
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REFERENCES
[i] Larry Elliott, “The promise and peril of Industrial Revolution 4.0”, The Guardian 25 January 2016
[ii] A User’s Guide to the Crisis of Civilisation (2010) Nafeez Mosaddeq Ahmed, Pluto Press
[iii] The Independent 22 June 2015,
[iv] Sadly, for some people today, contentment also depends upon having similar, or slightly better, amenities than their neighbours, friends and acquaintances. If other folk seem to be better off, this may be a source of disquiet.
[v] http::www.gov.uk/government/uploads/system/uploads/attachment_data/file/532416/households-below-average-income-1994-1995-2014-2015.pdf (seen 11Nov16; regret no longer accessible 16Jan17)
[vi] idem
[vii] Minimum Income Standard 2014 Joseph Rowntree Foundation
[viii] Policy-practice.oxfam.org.uk/our-work/inequality/food-poverty. (seen 17Oct16)
[ix] Robert Colvile, “Yes, CEOs are ludicrously overpaid. And yes, its getting worse” Daily Telegraph (13Oct14)
[viii] https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment (seen 11Nov16)
[vi] http://www.tradingeconomics.com/united-kingdom/long-term-unemployment-rate (seen 11Nov16)