Topic: The UK Economy - Is it the 1970's again?

[Nobby Reserve]

They will try to blame Labour for encouraging wage strikes that have fuelled inflation. give it 6 months and the argument will be we could have had Inflation down except for the Unions.

In response, Labour/TUC should run ads showing the 39% pay rises that senior executives have given themselves, and ask "Who's really to blame for inflation?"

[Dr. Beaker]

inflation was out of control, the Heath government tried to impose below inflation increases to public sector pay, the miners and the railway workers voted to go on strike which meant the coal fired power stations couldn't get coal so the government imposed a three day week to try to limit demand.

They then called an election in February 1974 and lost their majority.

It's uncanny the similarities with today

And all this spawned Thatcher and the pathological determination to destroy the miners.

[Jiminy Cricket]

I disagree. Technological improvement is essentially 'growth'.
Same area of field, bring in machinery to plough and harvest and you reduce the cost of the crops. That's essentially growth.  Bring in pesticides and GM crops , yet more growth. 
I'm not going down the 'never say never' route, but I believe never ending growth is achievable.


--edit-- it needs a huge mindshift.  For now growth is seen as a person having more stuff.  I think we need to learn to accept we have more than enough stuff already
--edit edit-- obviously, some people have WAaaay too much stuff, and many not enough yet.

Maybe I'm being simpleminded, but doesn't consumption = growth = depletion of natural resources? The key, I think, is to find a way in which confidence is retained even in a static or (dare I say it) shrinking economy. Business confidence is enhanced by the potential of expanding markets. Conversely, it is decreased shrinking markets. This leads to fewer jobs. And fewer jobs leads lack of confidence all round. Shrinking markets have the exact opposite effect to expanding markets to general confidence. It requires a huge paradigm shift to break this. I am not sure humans are capable of it. Though, UBI might help.

Again, I'm no economist, so what do I know.

[Red-Soldier]

I disagree. Technological improvement is essentially 'growth'.
Same area of field, bring in machinery to plough and harvest and you reduce the cost of the crops. That's essentially growth.  Bring in pesticides and GM crops , yet more growth. 
I'm not going down the 'never say never' route, but I believe never ending growth is achievable.


--edit-- it needs a huge mindshift.  For now growth is seen as a person having more stuff.  I think we need to learn to accept we have more than enough stuff already
--edit edit-- obviously, some people have WAaaay too much stuff, and many not enough yet.

The world is finite, with finite resources.  Continuous growth is impossible and unsustainable.

I'm amazed that people still believe what you wrote above, considering the situation we find ourselves in currently.

[Red-Soldier]

Maybe I'm being simpleminded, but doesn't consumption = growth = depletion of natural resources? The key, I think, is to find a way in which confidence is retained even in a static (or dare I say it) shrinking economy. Business confidence is enhanced by the potential of expanding markets. This leads to fewer jobs. And fewer jobs leads lack of confidence all round. Shrinking markets have the exact opposite effect to expanding markets to general confidence. It requires a huge paradigm shift to break this. I am not sure humans are capable of this. Though, UBI might help with that.

Again, I'm no economist, so what do I know.

Here you go:

What is degrowth?

Degrowth is an idea that critiques the global capitalist system which pursues growth at all costs, causing human exploitation and environmental destruction. The degrowth movement of activists and researchers advocates for societies that prioritize social and ecological well-being instead of corporate profits, over-production and excess consumption. This requires radical redistribution, reduction in the material size of the global economy, and a shift in common values towards care, solidarity and autonomy. Degrowth means transforming societies to ensure environmental justice and a good life for all within planetary boundaries.
Essential for degrowth is:

    Striving for a self-determined life in dignity for all. This includes deceleration, time welfare and conviviality.
    An economy and a society that sustains the natural basis of life.
    A reduction of production and consumption in the global North and liberation from the one-sided Western paradigm of development. This could allow for a self-determined path of social organization in the global South.
    An extension of democratic decision-making to allow for real political participation.
    Social changes and an orientation towards sufficiency instead of purely technological changes and improvements in efficiency in order to solve ecological problems. We believe that it has historically been proven that decoupling economic growth from resource use is not possible.
    The creation of open, connected and localized economies.


This definition of degrowth is based on the definition of Research and Degrowth, which the organizational team of the degrowth conference in Leipzig adapted and which was further edited by the editorial team of the web portal. We distance ourselves from forms of growth critique which do not aim for the good life for all. We object to all right-wing, racist and sexist forms of growth critique.
Why the word "degrowth"?

English speakers sometimes find the word ‘degrowth’ problematic and it can lead to misunderstandings. Reading just the word, it has a negative, and for some, a non-ecological connotation. But the origin of the term is anything but that. It is to be found in Latin languages, where “la décroissance” in French or “la decrescita” in Italian refer to a river going back to its normal flow after a disastrous flood. The English word “degrowth” became prominent after the first international degrowth conference in Paris in 2008. It has since then been established in academic writing as well as in the media and is used by social movements and practitioners. An advantage of using a term which does not roll off the tongue easily in English is that it creates disruption. Disruption in a world where the critique of economic growth is a radical position.

The editorial team of the degrowth web portal decided to use the English term “degrowth” to name the page. As a German translation we use “Postwachstum” in texts. The words “Wachstumsrücknahme” and “Entwachstum” we use synonymously.

https://degrowth.info/degrowth

[Elmo!]

Essentially everything boils down to the sun, and the energy we get from it - which is a fixed amount. This is essentially a theoretical maximum on productivity as all the renewable resources are limited by this factor.

You can improve the efficiency and total amount we can extract from that with technological advances but there is still a hard limit.

Until we get to the point we can exploit resources from other planets that is.

[west_london_red]

Essentially everything boils down to the sun, and the energy we get from it - which is a fixed amount. This is essentially a theoretical maximum on productivity as all the renewable resources are limited by this factor.

You can improve the efficiency and total amount we can extract from that with technological advances but there is still a hard limit.

Until we get to the point we can exploit resources from other planets that is.

It’s not just about energy and the Sun. There is a finite amount of iron, gold, lithium etc that we can extract from the earth. Recycling obviously helps massively and I wouldn’t underestimate human ingenuity either but at some point we’ll start running out of other stuff even if renewables can supply us with abundant energy.

[Red-Soldier]

Strange how nobody has mentioned air, freshwater and food, as finite, essential resources. 

Both, air and freshwater are taken for granted by most, and polluted with impunity.

[west_london_red]

Strange how nobody has mentioned air, freshwater and food, as finite, essential resources. 

Both, air and freshwater are taken for granted by most, and polluted with impunity.

Oh god, your going to turn this into another tree hugging thread aren’t you!

[Elmo!]

It’s not just about energy and the Sun. There is a finite amount of iron, gold, lithium etc that we can extract from the earth. Recycling obviously helps massively and I wouldn’t underestimate human ingenuity either but at some point we’ll start running out of other stuff even if renewables can supply us with abundant energy.

I know, those are more even limited, but the point was that even "renewables" have an upper limit to which they can be exploited.

[Nobby Reserve]

It’s not just about energy and the Sun. There is a finite amount of iron, gold, lithium etc that we can extract from the earth. Recycling obviously helps massively and I wouldn’t underestimate human ingenuity either but at some point we’ll start running out of other stuff even if renewables can supply us with abundant energy.

That depletion is only going to accellerate as more and countries 'industrialise' and their citizens begin buying gadgetry, cars and shiny consumer tat.

Being born/living in the developed world, we're lucky to have these luxuries. But the world cannot support even half the world's population having a standard of living akin to ours.

Of course, we have no moral right to deny others from enjoying what we do. But them doing so will fuck it up for everyone - them and us. Not least because the vast majority of the developing world is in areas that are uch more susceptible to the impacts of climate change.

[oldfordie]

In response, Labour/TUC should run ads showing the 39% pay rises that senior executives have given themselves, and ask "Who's really to blame for inflation?"

I would argue the distinction between fuelling inflation and the cause of inflation. just stating the obvious,  higher prices are the cause of inflation so company's making big profits should also shoulder responsibility, we know the answer to that argument already, it will stifle investment, this is not about future investment, it's  a luxury we can't afford right now, this is about finding short term solutions to the problems we face right now.
Wage rises do fuel inflation but they are not the cause of inflation. get prices down and the wage demands will drop.
The idea of the government having to balance the books to get us through this period is also the wrong way to look at it, nobody suggested this during the Covid pandemic, everyone knew Furlough etc would bring more debt so any criticism on Labour plans bringing debt should be mocked, what other options do we have.

[Red-Soldier]

Oh god, your going to turn this into another tree hugging thread aren’t you!

 

It always come down to the environment really.

If humans don't operate within the safe limits of Earth's planetary boundaries, then bad things will happen.

We are currently breaching three; Climate Change, Biodiversity Loss, and Pollution.

Live within the consraints of the Earth and the whole of society will benefit (as opposed to a select few).

[lobsterboy]

Strange how nobody has mentioned air, freshwater and food, as finite, essential resources. 

Both, air and freshwater are taken for granted by most, and polluted with impunity.

Too true.

[PaulF]

The world is finite, with finite resources.  Continuous growth is impossible and unsustainable.

I'm amazed that people still believe what you wrote above, considering the situation we find ourselves in currently.

Fair point. But I think we will find a way to generate electricity in the next century that will be low cost enough that it won't hamper economic growth for the next thousand years.  Totally agree with your view on other environmental issues. My point was more pointed at JCs thoughts that we can't keep economic growth forever and that there must be a hard limit once we have 'perfected' the extraction of natural resources.  I'm saying I fundamentally think we will get more and more out of each kg of resource , enabling growth to continue.   Again I totally get that im only viewing that from an economic perspective and we need to change that way of looking at things.   The big elephant in the room is population growth. One child per couple would be a great start.......

[-Willo-]

The world is finite, with finite resources.  Continuous growth is impossible and unsustainable.

I'm amazed that people still believe what you wrote above, considering the situation we find ourselves in currently.

We are just so fucked aren't we.

You have companies nowadays open about wanting to keep growing too, least they used to pretend to care, now they openly admit they make decision x y z because of profits.

We have become so caught up in capitalism its beyond belief, every company has to beat last years profits or its a catastrophy.

You have billion dollar companies making hundreds of millions a year, and the second one year doesn't beat the last you'll see lay offs.

What is wrong with the human brain honestly, we are fucked.

[Andy @ Allerton!]

Apologies if there's already a thread like this
https://www.ft.com/content/778e65e1-6ec5-4fd7-98d5-9d701eb29567

Inflation due to hit 18.6%, highest since '76.
Energy bill cap due to rise to nearly £6k
Fuel £1.70 a litre
Wages stagnating and not keeping up with inflation

A huge challenge/problem for which ever political persuasion you take
What does the govt do?

Hey. Brexit won. Get over it.

Not like everyone didn't fucking warn the inbred bellends that voted for it.

The good news is that this is going to get much, much, much worse and those that voted for it are going to get the pointy end up their hoops.

But 'They knew what they were voting for' innit.

[hide5seek]

Apologies if there's already a thread like this
https://www.ft.com/content/778e65e1-6ec5-4fd7-98d5-9d701eb29567

Inflation due to hit 18.6%, highest since '76.
Energy bill cap due to rise to nearly £6k
Fuel £1.70 a litre
Wages stagnating and not keeping up with inflation

A huge challenge/problem for which ever political persuasion you take
What does the govt do?

This government?
They give tax breaks that that doesn't help the poorest but does give the rich more money.
They take away our rights by banning striking/demonstrations and leaving the ECHR.

[hide5seek]

3 day week and power cuts at any random times of the day. 

Some enterprising person needs to start mass producing candles and restoring some parafin lamps.

I'd best make sure we've got plenty of batteries for our head torches too if we can't rely on rechargeables 😁

FFS what a state we're in 🤷

Paraffin lamps, were going to need a bigger fire service,

[PaulF]

Paraffin lamps, were going to need a bigger fire service,

We need that anyhow!

We all know bojo sees himself as the Amity island mayor.

[-Willo-]

Hey. Brexit won. Get over it.

Not like everyone didn't fucking warn the inbred bellends that voted for it.

The good news is that this is going to get much, much, much worse and those that voted for it are going to get the pointy end up their hoops.

But 'They knew what they were voting for' innit.

How can it be all down to Brexit when countries within the EU are suffering the same?

[Jiminy Cricket]

Fair point. But I think we will find a way to generate electricity in the next century that will be low cost enough that it won't hamper economic growth for the next thousand years.  Totally agree with your view on other environmental issues. My point was more pointed at JCs thoughts that we can't keep economic growth forever and that there must be a hard limit once we have 'perfected' the extraction of natural resources.  I'm saying I fundamentally think we will get more and more out of each kg of resource , enabling growth to continue.   Again I totally get that im only viewing that from an economic perspective and we need to change that way of looking at things.   The big elephant in the room is population growth. One child per couple would be a great start.......

And, are we going to manufacture gold, cobalt, lithium, silver, and other scarce elements/minerals? And what of biodiversity, land to grow crops, and fresh water* (in a world where available land is shrinking and the population growing). Electricity generation is potentially the least problematic of dwindling resources.

* Yeah, enough electricity and fresh water generation should not be a problem. Though, I don't know if we would run into other resource bottlenecks. Everything else is pretty-much limited to what we have or is relatively discoverable and easily mined (without causing too many negative effects upon the environment).

[PaulF]

I can't answer that JC, but I think we will find alternatives when it's not cost effective to extract finite resources. There will be a stall in growth while we do but I think generally we can go on . I still the the key problem is over population. Even. If we stopped population growth now I'd like to think we are capable of using what we have in better and better ways. Maybe not endlessly, which I suppose is your key point .

[thaddeus]

How can it be all down to Brexit when countries within the EU are suffering the same?

It's clearly not all down to Brexit.

The EU - except arguably France - is suffering greater contagion from the Russian invasion than the UK.  Inflation in the east of the EU bloc far outstrips that in the west as those economies are predictably more entwined with Ukraine and Russia.

Even without the Russian invasion and the fuel prices rising though the UK would be experiencing higher than usual inflation now (due to staff shortages from restricting FoM and increased overheads of importing goods from our biggest market - the EU).  It's very hard to know how much of our current inflation those Brexit impacts make up but however much it is I'm sure we'd all like to not have it right now!

There's an arguably tenuous argument that no Brexit means no Russian invasion.  Who knows how much foreign affairs effort was wasted on Brexit when the attention should really have been on what was happening with Russia?  I'm not convinced of that myself as it more feels like this was Putin's last chance to boost his legacy, although we do know Russian interference played a role in Brexit and also electing Trump (another massively destabilising event).

[redbyrdz]

This government?
They give tax breaks that that doesn't help the poorest but does give the rich more money.
They take away our rights by banning striking/demonstrations and leaving the ECHR.

That's what the majority of this country voted for.

[FiSh77]

How can it be all down to Brexit when countries within the EU are suffering the same?

Do you think any of the c*nts running the country would be where they are now if it wasn't for Brexit?

While a lot of the problems are nothing to with Brexit you'd think a responsible government would be doing it's best to limit the damage

[RF]

This is worth a look. Could probably have posted it in the strike thread instead, but it also goes on about corporate britain.

https://www.youtube.com/watch?v=YWyCsImj0Cc

[thaddeus]

I can't answer that JC, but I think we will find alternatives when it's not cost effective to extract finite resources. There will be a stall in growth while we do but I think generally we can go on . I still the the key problem is over population. Even. If we stopped population growth now I'd like to think we are capable of using what we have in better and better ways. Maybe not endlessly, which I suppose is your key point .

There are many ways to achieve infinite growth that don't involve consumption of additional finite resources.  In the post-industrialisation West much growth seems to come from extending production cycles to include additional steps.

At its simplest the production cycle for food is person A grows food then person B buys food directly and eats it.  We now have food production cycles that include building and maintaining machinery, producing pesticides and fertilisers, transportation to factories, transportation from factories to distribution centres, transportation from distribution centres to shops, staff at each of those steps, management/HR, IT support, advertisers, researchers, analysts, website developers etc.  I'm sure I've missed some and I'm also sure people will find new ways to include themselves in that cycle in the future.

It only feels like a few years ago that ordering a takeaway meant going to the takeaway or ringing the takeaway.  Who knew we needed to spend £1.5bn a year for Just Eat - amongst many others - to position themselves as middle people in that process?  GDP growth - yay!

When I went to India there was a person whose job was to take the ticket from a car leaving a multi-storey car park and put it in the machine.  The machine being about one foot away from the window of the car.  I'm sure we can dream up plenty more jobs like that.  Dig a hole and refill it, endlessly.

[PaulF]

To my mind, that makes parking your car more expensive, this lowering productivity. 
Although. I suppose on paper GDP is the total value of goods and services generated by an economy, your ticket person is now providing a paid for service and has money to purchase other goods and services, so madly GDP is up.
No that's not right. I guess it depends where the money that's spent to pay to have the ticket inserted on the machine would have gone otherwise.
My view is that somewhere down the line, Bluetooth deals with it and lowers the total cost of providing parking. Thereby making parking cheaper so the value of service goes up.
(Obviously fallacies in my line of reasoning excepted)

[reddebs]

I'm not sure we'll have much of anything, business wise, left if this trend of high energy costs continues.

More and more working people will have less and less disposable income to spend on consumables, entertainment and holidays and the price of everything will continue to rise making them unaffordable to even more people.

Just thinking about my own line of work, the margins, if you are salon based are so tight that many will close as the prices they'll need to charge to cover the increases will price out many of their clients.

Britain in winter will become a wasteland of businesses closing up for a few months, schools unable to open and folks will be huddled together in one room trying to keep warm.

Anyone else reckon we'll have one of those once in a decade severe winters just to compound the shit that already coming our way.

[PaulF]

Interesting reddebs. Would you say you are high end salon? People always get their hair done. They may go to lower end salons or have longer lasting work. Sure some salons will go to the wall, but the industry won't die.
Like you say, how are public buildings going to cope? Schools, hospitals, libraries, job centres.

[reddebs]

Interesting reddebs. Would you say you are high end salon? People always get their hair done. They may go to lower end salons or have longer lasting work. Sure some salons will go to the wall, but the industry won't die.
Like you say, how are public buildings going to cope? Schools, hospitals, libraries, job centres.

I'm not salon based now but to answer your question it'll hit all salons but the costs increase will hit the cheaper end hardest as their clients won't or can't budget for such big price increases.

Those used to a higher end salon wouldn't even consider going to them.
They'll either increase the time between visits or possibly go to a less experienced stylist in the same salon

My costs have gone up hugely since we moved as I go back to Yorkshire to work.  A 3hr drive and hotels whilst I'm working has added an extra £50 per day to my outgoings, plus my product costs have increased too.

I'm doing more clients per day which means less hotel stays so I've not needed to pass those extra costs on yet otherwise it would be an additional £10-£15 per bill for my clients to pay.  That's a lot when its every 5 or 6 weeks.

As for everyone needs their hair doing, history shows that trends in hairdressing follow the economy.  When it's booming trends are expensive and high maintenance and   when there's a recession it's cheap and low maintenance.

[Max_powers]

Dig a hole and refill it, endlessly.

You can do that but who is going to pay for that? Whoever it may be, they are making a bad investment. There are many companies out there (Food delivery apps being one such example) that don't add value but survive on burning investor money.

It can work in short term but it's not sustainable long term. There are plenty of examples of countries that have enjoyed high GDP growth and economic prosperity due to high investment in non-productive things for a while and then crashed and burned.

Food production chain is maybe a bad example. Having great logistics and distribution systems is beneficial for society.

[PaulF]

I'm not salon based now but to answer your question it'll hit all salons but the costs increase will hit the cheaper end hardest as their clients won't or can't budget for such big price increases.

Those used to a higher end salon wouldn't even consider going to them.
They'll either increase the time between visits or possibly go to a less experienced stylist in the same salon

My costs have gone up hugely since we moved as I go back to Yorkshire to work.  A 3hr drive and hotels whilst I'm working has added an extra £50 per day to my outgoings, plus my product costs have increased too.

I'm doing more clients per day which means less hotel stays so I've not needed to pass those extra costs on yet otherwise it would be an additional £10-£15 per bill for my clients to pay.  That's a lot when its every 5 or 6 weeks.

As for everyone needs their hair doing, history shows that trends in hairdressing follow the economy.  When it's booming trends are expensive and high maintenance and   when there's a recession it's cheap and low maintenance.

Thanks. Good insight. Going to be a tough few years for most of us.

[reddebs]

Thanks. Good insight. Going to be a tough few years for most of us.

I'm not sure people have realised how tough it's actually going to get nor how far up the food chain it'll go.

There'll be plenty of folks out there thinking they'll be above it until they're not.

This isn't going to be like any other recession, this is something that's never been experienced by anyone, anywhere in the world.

[stewil007]

I'm not sure people have realised how tough it's actually going to get nor how far up the food chain it'll go.

There'll be plenty of folks out there thinking they'll be above it until they're not.

This isn't going to be like any other recession, this is something that's never been experienced by anyone, anywhere in the world.

I think this is so true, its only really going to hit home when the cold weather comes in and the shorter days and decisions have to made about putting the heating on or not.

We are looking at changing our ways now to hopefully get into some kind of routine for when the energy prices change - shorter showers, turning off appliances instead of on standby, using towels more before putting them in the wash - that sort of thing.

[reddebs]

I think this is so true, its only really going to hit home when the cold weather comes in and the shorter days and decisions have to made about putting the heating on or not.

We are looking at changing our ways now to hopefully get into some kind of routine for when the energy prices change - shorter showers, turning off appliances instead of on standby, using towels more before putting them in the wash - that sort of thing.

Hopefully everyone will be doing this but I'm talking more about no power, no fuel, no food, shops unable to store perishables, businesses unable to run plant or machinery.

The country can't and won't continue to run as we've previously known it.

[Millie]

Hopefully everyone will be doing this but I'm talking more about no power, no fuel, no food, shops unable to store perishables, businesses unable to run plant or machinery.

The country can't and won't continue to run as we've previously known it.

Do you have a source for this?  Or are you just speculating?

[jonnypb]

Thanks. Good insight. Going to be a tough few years for most of us.

It's going to be extremely difficult.  I'm dreading the price rise in energy bills next year when my fixed rate deal ends.  Mortgage is also up early next year.  Salary rose by less than 3% this year and I barely have any disposable income at the end of each month.  Trying to plan ahead and seriously considering changing my mortgage term.  I think it'll have about 14 years left next year, but with interest rates rising, but more importantly the energy bills soaring, I'm considering raising it to 25 years to bring the mortgage payments right down to try to offset some of the other increased costs.  This isn't ideal, but would hope in 2 or 3 years I could then bring the mortgage term back down to between 12-14 years once we've hopefully got light at the end of the tunnel in this cost of living crisis.  Worrying times 

[lobsterboy]

Think they want civil unrest now so they can usher in draconian emergency powers to complete the move to a fascist state.