?

Log in

No account? Create an account
Next Wednesday's strike - The Ex-Communicator

> Recent Entries
> Archive
> Friends
> Profile

November 25th, 2011


Previous Entry Share Next Entry
10:50 am - Next Wednesday's strike
I keep telling myself that I won't post any more economic/politics rants, but I just can't give them up. Someone argued passionately yesterday that the public sector is not a drain on the economy, but a net economic benefit. Who said it? Francis Maude and Danny Alexander (Tory and Lib Dem respectively). They said yesterday that next Wednesday's strike will cost the economy half a billion pounds. That's one day where the strikers receive no pay, and do no work. So - clearly - striking workers alone are injecting half a billion pounds more a day into the economy than they cost in wages. So how can the same politicians argue that the public sector is the cause of our current economic crisis, if it is producing a net benefit of a billion pounds every two days (in reality far more)? If it is bringing in money at that rate, how can reducing it raise money? I honestly don't know how much longer the Coalition can sustain this deep contradiction at the heart of their strategy.

The right wing commentators on the Guardian and BBC sites are stymied by the same contradiction. They want to say that the public sector workers are a drain and should all be sacked, and simultaneously, that they are essential and should be forced to work.

(22 comments | Leave a comment)

Comments:


[User Picture]
From:steepholm
Date:November 25th, 2011 11:14 am (UTC)
(Link)
I think that's an excellent point. The only riders I'd add are:

a) there was an implication that the reason it will cost that much is because of the disruption to private sector workers, who won't be able to use schools as childcare facilities ("We Keep Them Off the Street And Out of the Unemployment Statistics" being the raison d'etre of the DES, as you know) and will be forced to take a day off from work, where the real wealth of the economy is created.

b) it's not just the Tories and the LibDems. Labour - which still condemns the strike, last I heard (not that I do hear much from Mr Miliband) - also has a track record of describing public sector jobs as not real jobs at all.
[User Picture]
From:communicator
Date:November 25th, 2011 02:58 pm (UTC)
(Link)
I agree it's because the public sector enables private enterprise, but in a way that's the point. Public services help private business by allowing workers to be there, ready and healthy and free to work. The two sectors help each other. It surprises me that private businesses don't realise that.
[User Picture]
From:steepholm
Date:November 25th, 2011 04:48 pm (UTC)
(Link)
No dissent here - I'm just talking about the way it was presented by ministers, who implied that the cost lay in the withdrawal of creche facilities, rather than in any value the public sector might be adding to the economy directly.
[User Picture]
From:communicator
Date:November 25th, 2011 04:51 pm (UTC)
(Link)
I know, sorry, I was talking to imaginary interlocutors (as Kryten might say 'Rant mode off')
[User Picture]
From:fjm
Date:November 25th, 2011 11:23 am (UTC)
(Link)
And this morning they have decided to spend a billion paying young people to do jobs that might still exist if they hadn't cut a billion from social spending.
[User Picture]
From:communicator
Date:November 25th, 2011 03:01 pm (UTC)
(Link)
Yes; a billion which will be redirected from working tax credit - ie from the income of low-paid workers. And making young people work for nothing stacking shelves at Tesco. If those shelves need stacking, and I assume they do, then Tesco should pay someone to do it.
[User Picture]
From:del_c
Date:November 25th, 2011 04:24 pm (UTC)
(Link)
The billion used to go to public workers' wages giving them (and their private counterparts too!) the annoying ability to say no to bad job offers, and now goes to bribe employers to make bad job offers the workers can't say no to instead. Win for employers!

[on the "and the private workers too" point, I mean that when private workers complain that public workers "get a better deal", do they realise that better deal is what keeps their private sector wages higher than they otherwise would be?]
[User Picture]
From:communicator
Date:November 25th, 2011 04:49 pm (UTC)
(Link)
It makes me laugh when Tories comment in the Guardian 'I hate Unions - I'm not Unionised and I haven't got a pension and my pay is rubbish' to which the obvious reply is, get Unionised then. Fight to put statutory protection in place for all, not drag everyone down to your level.

I speak as someone not in a Union (LOL, should take my own advice).
[User Picture]
From:chickenfeet2003
Date:November 25th, 2011 11:48 am (UTC)
(Link)
Surely the unstated right wing argument is that the public sector doesn't make a profit for private companies and should be privatised so it can do so.
[User Picture]
From:communicator
Date:November 25th, 2011 03:02 pm (UTC)
(Link)
That's true: for example privatising hospitals. But they also want to blame the public sector for the deficit. If it was caused by all these wasteful wages then every day without paying the wages should be quids in.
[User Picture]
From:chickenfeet2003
Date:November 25th, 2011 03:10 pm (UTC)
(Link)
I take your point though it seems to me that the Schwerpunkt of the attack is being aimed at transfer payments which could be taken to include public sector pensions.
[User Picture]
From:sjkasabi
Date:November 25th, 2011 11:52 am (UTC)
(Link)
Please don't stop your rants. They are my favourite source for UK current affairs.
From:emmzzi
Date:November 25th, 2011 01:20 pm (UTC)
(Link)
this!
[User Picture]
From:communicator
Date:November 25th, 2011 02:59 pm (UTC)
(Link)
Oh, thank you. Every time I post I tell myself off later :-)
[User Picture]
From:tehomet
Date:November 25th, 2011 12:25 pm (UTC)
(Link)
What sjkasabi said.
[User Picture]
From:communicator
Date:November 25th, 2011 04:52 pm (UTC)
(Link)
Thank you. My main consolation is it took three or four years for the Poll Tax to go from policy to destroying Thatcher. Still plenty of time.
[User Picture]
From:tehomet
Date:November 25th, 2011 07:38 pm (UTC)
(Link)
That is quite a consoling thought. :)
From:huskyscotsman
Date:November 26th, 2011 09:27 am (UTC)
(Link)
I had the same thought while watching Question Time, where the Tory MEP on the panel offhandedly referred to the private sector as "the real economy", and said we "cannot keep taxing the productive bit of the economy to sustain the unproductive bit". Sadly nobody called him on it, and he even got a smattering of applause.

The cost to the "real economy" apparently being the lack of a state childminding service, as steepholm noted.
[User Picture]
From:iainjcoleman
Date:December 1st, 2011 01:31 pm (UTC)
(Link)
Sorry for resurrecting an old thread, but I caught an interesting piece on PM yesterday that illuminated this point. Eddie Mair was talking to BBC economics correspondent Jonty Bloom about exactly these figures. Bloom made two key points:

1. The £500 million is a reasonable ballpark figure for the economic impact of the strikes. (He presented a back-of-the-envelope calculation to that effect.)

2. That £500 million does not represent money lost, it represents value lost. The Treasury will not lose £500 million as a result of the strikes - indeed, the Treasury will make a substantial saving. The impact falls on the people who are unable to use public services due to the strike - operations not carried out, bins not emptied, streets not cleaned and so on. The total value of those lost services comes to around £500 million.

Of course, that's just a first-order analysis. Some public expenditure is really an investment, in that it generates more money for the Treasury than the Treasury spends on it. Scientific research, for example. But most public expenditure is indeed just expenditure - stuff we spend money on, not activities that generate extra money. Cleaning dog shit off the streets is not a profit-making activity, and will never generate more revenue than it costs. It is, of course, well worth doing - no one wants to live in turd-strewn streets - but it is something we spend money on because we want the results, it is not a generator of economic activity. Most public sector activity falls into this latter category, and is indeed ultimately paid for by tax revenue drawn from the private sector. One of Gordon Brown's characteristic pieces of rhetorical sleight-of-hand was calling all public spending "investment" when really most of it isn't.
[User Picture]
From:communicator
Date:December 1st, 2011 02:55 pm (UTC)
(Link)
I disagree with you very profoundly, and I think this Lib Dem attitude which you express, that pubic services in this country are a 'nice to have', exemplified by cleaning up dog mess, is pulling us down into an entirely preventable economic disaster. Most public expenditure is not merely expenditure, it is part of a great complex society on which we all depend.

For example, supposing hospitals were to be privatised, or railways to be renationalised. Would one suddenly generate value which it had not before and vice versa? Business depends on an array of functions, from transport to housing to health, which literally enable it to be. The Lib Dems are wildly mistaken if they think the web of good which supports our society can be removed, and the private sector alone sustain it.

A year and a half ago when we were first having these discussions this was all theoretical. I was saying 'the economy will tank, government spending will increase, unemployment will rocket'. And Lib Dems, including you, said these things would not happen. They have happened, and they are going to get worse. The economic theory is bad, catastrophically bad.

(edited to remove some of my typos)

Edited at 2011-12-01 03:20 pm (UTC)
[User Picture]
From:iainjcoleman
Date:December 1st, 2011 03:39 pm (UTC)
(Link)
I disagree with you very profoundly, and I think this Lib Dem attitude which you express, that pubic services in this country are a 'nice to have', exemplified by cleaning up dog mess, is pulling is down into an entirely preventable economic disaster. Most public expenditure is not merely expenditure, it is part of a great complex society on which we all depend.

You are profoundly mischaracterising my point in a way that I find not just politically muddled, but actually very personally insulting.

No one who had the slightest clue about Liberal Democrat priorities, policies or actions in government would ever characterise them as "public services are nice to have". I picked the cleaning up dog shit example for a good reason. It's an example of the kind of public service that Liberal Democrats campaign to improve, and put extra funding into when they are in power.

I, personally, was Executive Councillor for Environmental Services at Cambridge City Council from 2004-2006. In that time I spent a great deal of time, effort and energy on improving services such as bin collection, recycling, public toilets and, yes, cleaning the streets. In this I was supported by all my Liberal Democrat colleagues on the council, all of whom were elected on city-wide campaigns promoting these services as our top political priority. We achieved a considerable degree of success in making these improvements - many of which were, by the way, opposed and voted against by the Labour party - and I am pleased to say that my successors in that role have carried on this work, and Cambridge remains a clean, beautiful and environmentally progressive city.

And it's not just about one council, either. In Edinburgh, where I am not a councillor, the Lib Dem led administration has similarly prioritised this area of public service, with results that have made a clear and visible difference to the quality of the environment in Edinburgh, and which I am sure will form the cornerstone of the Lib Dem election campaign next May.

I really am very, very cross with you dismissing my work in this way, work I'm very proud of. It is utterly ignorant and prejudiced. We've been friends a long time. I hope you'll apologise.

My point was a narrow economic one, in response to your post about the economics of public spending. None of the services I promoted, none of the services I increased public spending on, were ones that made a profit for the council. Some of them attracted income that partially offset their costs (recycling sales, entry fees for public toilets, and so on), but ultimately they were all things we spent money on. We spent money on them, because we valued them: and we spent more money on them than the previous Labour administration, and more than the Labour opposition proposed spending, because we valued them more.

I don't expect you to agree with the Lib Dems, but I do wish your comments about the Lib Dems were rooted in reality.

For example, supposing hospitals were to be privatised, or railways to be renationalised. Would one suddenly generate value which it had not before and vice versa? Business depends on an array of functions, from transport to housing to health, which literally enable it to be. The Lib Dems are wildly mistaken if they think the web of good which supports our society can be removed, and the private sector alone sustain it.

I'll leave aside the last point, which is only held by the Lib Dems inside your head, and address the main economic point. If hospitals were to be run as profit centres, whether through privatisation or not, then they would do very different things. Much more cosmetic surgery for the rich and vain, and no palliative care for the impoverished. This would make the UK a much worse place to live, and so it should not be done. A nationalised railway could indeed be a profit centre. Whether railways are publicly or privately owned should be a pragmatic decision based on which option provides the best service, whether it is most effectively funded by public or private investment, and so on.

In a mixed economy such as ours, both public and private sectors need one another.
[User Picture]
From:communicator
Date:December 1st, 2011 06:53 pm (UTC)
(Link)
Actually I am going to delete that previous remark so that only you can read it - just in case anyone else reads this any time.

In the public comment I will just say this seems inappropriate to me.

> Go to Top
LiveJournal.com