Guardian headline, October 5, 2022
There is some growth that is natural. Children grow. That’s good news. So do cancers. That’s not good. Any discussion on growth has to say what growth is desired.
Richard Murphy, below
For a second time in three days I’m plugging a piece by the man I described, first time round, as the “Quaker, tax specialist and modern monetary theory advocate, Richard Murphy”.
Its theme is growth.
It’s long been clear to me and a good many others that environmental unsustainability is the most damning of all the ways in which capitalism’s drive for narrowly defined growth serves us ill. (Its attendant drive to war comes a very close second; in fact right now it has risen to first place.) But more recently it’s become equally clear to me – on the one hand through reading Michael Hudson, on the other through Europe’s costly underestimation of Russia’s economy – how unreliable a metric “growth”, specifically GDP growth, can be in purely economic terms.
This is especially so in economies as financialised, with the attendant hollowing out of industry, as the USA and UK. 1 (Though manufacturing powerhouse Germany, biggest loser in the US proxy war to curb Russia and stop Europe moving closer to Eurasia by blowing up Baltic gas pipelines, now stands at the brink of industrial contraction and plummeting living standards for most of its citizens.)
Meanwhile, taking as his point of departure the arrival of Britain’s second prime minister in a row of breath-taking immaturity, Professor Murphy explores the implications for Britain of the unquestioned acceptance, by Starmer no less than Truss, of “growth, growth and growth” as an unmitigatedly Good Thing.
Truss neither understands growth or the steps required to deliver it
Liz Truss put growth at the epicentre of her policy and political narratives yesterday. It is the dividing line around which she will seek to differentiate the world between those who are for her and those who are opposed, in her view, to what she stands for.
I suggest Truss has made a mistake. Let me leave aside the fact that in July this year Keir Starmer chose an identical focus on “growth, growth, growth” as his campaigning slogan, which makes Truss’s position look like a straightforward case of plagiarism.
Instead, let me suggest that both fail to understand what growth is, and that neither will deliver much of it, whatever they say.
There is some growth that is natural. Children grow. That’s good news. So, unfortunately, do cancers. That’s not good. Even where growth is a natural phenomenon it is not necessarily good. In that case any discussion on growth has to say what growth is desired.
Truss made no such distinction yesterday. Apart from frequent references to pies which, as many pointed out, do not grow once they are baked, she left us to work out for ourselves what she was referring to when talking about growth.
The assumption is that what she wants is growth in the size of the UK’s monetary economy, which is measured using something called Gross Domestic Product, or GDP.
Growth in GDP has been a post-war obsession, largely because no reliable measures of it were prepared before the Second World War. Somehow, like children who grow even if they are not measured, growth happened at that time without a tool to appraise it.
The trouble with GDP is that it is really not a very good measure. First of all it says that all that is paid for with money is good and everything else is not. So, if childcare is paid for its good. And if it is done at home, or by granny, it has no value.
Very obviously that is not true. But what it also demonstrates is that if we want growth the best thing to do is monetise many things that are not paid for now. Simply insisting that all domestic laundry and cleaning must be paid for would massively increase GDP.
But would that add to growth? It would not, of course: the same amount of work would be done (albeit, maybe by someone else)and no one would really be better off. We’d record growth and have added little or nothing to society as a result.
Then there is the problem that GDP assumes that everything paid for with money is of equal worth. So, the surgery that saves a person’s life has the same value as a gambling website. Is that true?
GDP also puts no value on misery. As I have often told students, if you really want to increase GDP just require that everyone divorce. That generates vast quantities of legal fees and costs in setting up new households but it does not add to the quality of life.
Robert Kennedy, the brother of President Kennedy, who was assassinated in 1968 when he too was running for president of the USA, summarised this well. He said of GDP:
“Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.
Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.
If this is true here at home, so it is true elsewhere in world.”
This hopeless measure of nothing of necessary value is what Truss says she is pursuing. It’s scary, to say the least.
Read Richard Murphy’s piece in full …
* * *
- Hyper-financialisation of Western economies is not confined to mortgages, rent, student debt, legalised tax avoidance, and insurance. The trade in debts as assets (like the ‘collateralised debt obligations’ which kicked off the 2008 crash) … the sums lent and borrowed to finance corporate raids and share buyback … short-selling, ‘put’ and ‘call’ speculation … these features of today’s casino capitalism create no new value – few of the sums changing hands finance industry – but do create profits from the renting out of money. As such they are part of the picture. When Obama told Wall Street fat cats he’d saved them from the “pitchforks”, via a QE program as economically dysfunctional as it was morally disgraceful, he meant every word. A UK energy sector privatised by Mrs Thatcher owes a similar debt of gratitude to the incoming prime minister, Liz Truss, for her equally dysfunctional and disgraceful response to soaring fuel bills. And since we’re speaking of extractive industries, we should keep in mind that most value in that quarter is created ‘downstream’ of oil wells, mines, quarries and fracking sites; all of them forms of real estate. ‘Upstream’, the profits pour in as unearned income from a monopolised natural resource which may be inherited (the British royal family and related oligarchies), looted (Russian gas barons, their fortunes made overnight amid IMF-prescribed disaster capitalism under Yeltsin) or the recycling of other unearned incomes (Bill Gates, on a ten year land buying spree, his initial pile made by renting out a computer operating system of contentious provenance). But my narrower point is that until the Ponzi schemes collapse and non-inflationary QE is no longer an option thanks to the demise of the dollar as the world’s reserve currency – a demise hastened by the global south duly noting, inter alia, Washington’s lawless asset seizures in Iraq and Syria, and its lawless freezing of Afghan, Russian and Venezuelan deposits in its own vaults or those of vassal states like the UK – the West’s 1% will continue not only to plunder the planet, but to grow ever richer on the debt-driven impoverishment of its own 99%.
The focus on Truss is understandable given she heads the Government. Yet despite the equivalent of mentioning Starmer/the LP in dispatches by observing they are equally committed to following the same paradigm with maybe a few tweaks that particular elephant in the room is, in general terms, ignored.
Murphy’s piece concludes with the disappointing statement: ” Has Truss set out to fail in that case? It looks like it. I leave that problem to her to sort out.” as though this were some academic debate rather than one of real life consequences with everyday impact on tens of millions of real people.
One below the line comment in Murphy’s piece echoes George Monbiot’s piece I posted the other day (which falls apart at the point in which even Monbiot, whilst lamely expressing the wish that Labour would offer an alternative, nevertheless has nothing left to hang his hat on other than the LP) – lamenting if only Robert Kennedy’s speech could be put in front of Starmer whilst at the same time recognising that avenue as a forlorn hope.
And therein lies the issue we were discussing on the previous thread. Defining the problem (A) represents only a part of the necessary process. As does recognising what needs to be (B). What is required is the means of getting from A to B.
Right now, despite the decades of evidence of having flogged that particular horse into a state of non-existence, the only alternative (still) offered up is the hope that the Labour Party can somehow be turned around as though that can and has to be the only vehicle and means of getting from A to B or that there is any time now available to achieve what has not been achieved in over a century given how dire the situation is generally across all fronts.
What is revealed here is an implicit, perhaps even unconscious, recognition of what in our different ways Terry Barrow and myself were observing.
When the only available answer is a ‘Loyal Opposition’ totally captured by the same establishment elite creating, maintaining and driving the unworkable failed paradigm (whose first eleven is the Tory Party) under a Trilateral Commission placeman leader and which is reduced to singing ‘God Save The King’ rather than the ‘Red Flag’ at its Conference that in itself provides sufficient evidence of at least a tacit recognition that sufficient means and will to generate the necessary change no longer exists internally.
Lets be brutally honest here. Outside of a small number of dwindling un-influential members of the populace how much exposure and traction exists within an information sphere dominated by the approach pioneered by Berney does the counter analysis of those such as Murphy, Hudson, Escobar, Cook, Johnson, Greenwald and a host of other heavyweights enjoy internally?
And even in the unlikely event of such analysis and ideas being more widely and openly available (like ‘trickle down’ economics has there ever been a recorded instance of ‘the Overton Window’ travelling in the opposite direction to shrink mode?) the question arises as to whether a sufficient critical mass of traction could be generated in a populace in which through several generations a sufficient proportion have been indoctrinated to the point of being openly hostile to the mere suggestion that TINA does not represent the only true way?
Normally, the key tipping point is given as the daily experience of a sufficient proportion of the populace deteriorating to the extent that such experience overrides the received and implanted dominant ideology. Yet no matter how bad matters become over time – like the frog which allows itself to be slowly boiled – there seems little evidence of the penny ever dropping.
For sure, there is always plenty of complaining taking place. Even organised demonstrations, rallies and marchers. The problem here is the assumption that by complaining loud enough someone ‘has’ to take notice?
An interesting position given the pile of past and present evidence that no one ever takes a blind bit of notice. The complaints even come from such a servile position that strikes are suspended just because someone entitled at the very top of the (now nearly a thousand years old) edifice which is responsible for the problem paradigm shuffles off their mortal coil.
On the available evidence and experience it does not seem unreasonable to observe that the present system with its dominant paradigm will likely need to be tested to destruction and systemic collapse before the penny drops for a sufficient proportion of the populace within the West generally to seriously consider and act accordingly the necessary change process of getting from A to B internally.
A working, successful and sustainable alternative, outside of the failed and doomed Western mode, would need to exist. Which is what is taking place geo-politically and economically across Makinder’s ‘Heartland’ is a necessary key external driver which cannot be allowed to fail or go under if civilisation and society as a working practical model is to survive.
A lot of important observations here, Dave. Let me take my time responding. In doing so I’ll be replicating a good deal of what you have written.
It is. That’s because the piece is confined in scope, as all writing must be. His focus is on Truss. From that perspective it suffices to lay down a marker that the problem is not confined to her, while continuing to hold her shambolic administration as exemplifying the wider predicament you and I are aware of. That Murphy, committed still to reforming the system from within, doesn’t go nearly far enough is a significant constraint on his considerable powers of insight. In this instance, however, I do not see it as a damning indictment.
A tad harsh. Whatever faults may be laid at Murphy’s door, a lack of compassion is not one of them. Nor is an ivory towers outlook. His writings as a whole make that clear.
Like you I do not believe that reform of the Labour Party – aimed at making it a serious instrument of challenge to class rule, which condemns us to all to a race to the bottom in every sphere of human existence – is possible. But I cannot dismiss all those who do. My view is that none of the primary strands of resistance in the West – social democracy, trade unionism, vanguard revolutionary sects like WSWS and SWP, direct action of XR and Occupy stamp – has what it takes. All have useful features (even Labour’s feeble attempts at mitigating the worst excesses) but none, for reasons both overlapping and unique to its approach, can effect change of the scale and timeliness our circumstances require.
I strive nevertheless to find common ground with those whose worldviews I may see as limited. Yes, it is necessary and right that I highlight what I see as shortcomings – indeed, if you look to the handful of posts I have dedicated to Richard Murphy over the past two or three years, this for instance, you’ll see I’ve done that. But to dismiss honest voices out of hand would be sectarian. Baby. Bathwater. Unlike George Monbiot, whose malign ignorance on Syria and I dare say Ukraine does real harm, Murphy has yet to do anything equivalent. I don’t say he wouldn’t, mind. That’s always a possibility given how easily manipulated is the humanist outlook – see my 2017 post on “universalism”.
Just that he hasn’t. That’s an important distinction. What’s more, even Monbiot pens fine pieces on the environment; pieces in which, to the extent that his employer’s firmly pro capitalist and imperialist-friendly stance allows it, he shows a growing willingness to tie ecocide to big money.
(BTW, re Murphy’s citing of Robert Kennedy, let’s not forget the context. He did so to fill out his central point: that not only is economic “growth” far from a be all and end all for humanity, but that even on its own terms – i.e. GDP/GNP – we need to discriminate as to what growth is useful to society at large, and what is not. One reason Europe is in such a mess right now is that it foolishly took Russia’s GDP as a reliable measure of her capacity to defy and even gain from the economic warfare waged on her by the West.)
Well of course! But aren’t we all in the same boat here? As it happens I was recently and rightly challenged by another commentator, bevin, for a sloppy way of phrasing which could be read as my suggesting all we need do is sit back and wait for China to rescue the West’s 99%. (See our exchanges below this post, beginning with bevin’s comment: “The natural political division in the UK right now …”)
At risk of missing ground significantly different to that covered above, I’ll fast forward …
Not a lot. But those who see the world as you and I do have spent decades getting used to the fact. The question – at once both collective and existentially individual – is: how are we to act in this rotten world, knowing that most of it regards us as ridiculous?
I’m inclined here to cite, as I so often do, the late great Leonard Cohen: “though your promise count for nothing, you must keep it nonetheless.” If all we can realistically do is bear witness, then that is what we must do.
We must heed where such pessimism and gloom, understandable though it is, may take us. We wouldn’t be the first leftist critics of bourgeois society to make a dialectical leap to the far right out of sheer frustration of the kind all of us are prone to in the dark wee hours.
The problem here is that if nobody engages in such activities, things will be even worse. Sometimes – as with the Assange demonstrations yesterday – it is vital that protest, however puny, be registered. But here I’m teaching gran to suck eggs. You Dave have done far more than anyone I know to register your protest, despite being painfully aware of just how unsatisfactory are the channels for doing so.
Again I’ll fast forward.
Got it. I need to mug up on Mackinder …
As individual points there can be no disagreement.
However, it seems reasonable to conclude that the overall context of what was written – the problematic issue of generating the necessary change internally – was clearly insufficiently explicit.
After much consideration, being a natural foot blister (irritant) certainly provides much (subjective) satisfaction. Yet, objectively, consideration has to be given to effectiveness, in terms of advancing the process of getting from A to B, of being reasonable by continuing to operate under the (Overton Window) of rules (unwritten as well as written) of those controlling the failed and failing paradigm.
ANC MP Andrew Feinstein and anti-apartheid journalist Pearlie Joubert at the ‘Free Assange human chain’ demonstration around the Houses of Parliament over the weekend give sufficient indication of recognising this:
….given the following exchange at 5 minutes 50 seconds into the video:
Feinstein: “The people who don’t seem to get it occupy the building behind us.”
Interviewer: “The Houses of Parliament?”
Feinstein: “Yes. And, you know, this is one of the only avenues left to us. And its understandable to me why a lot of people have started taking direct action against defence companies like Elbit Systems and others because there is a sense that our rulers are prepared to give, in that instance, a company that is making most of the worlds drones that are being used in the occupied Palestinian Territories that are being used still in Yemen, in Iraq and Afghanistan to just give them a free ride and just throw our tax pounds at them.
We can’t stand for it any longer. And I think this is part of a much bigger rising up of ordinary people.”
The point being that, as the Russian’s have explicitly recognised (along with the other 85% of the non-Western World – at least implicitly), whether they are labelled ‘Elites’. ‘Establishment’, ‘ Rulers’ or whatever, that those running the West are agreement incapable on anything. Be it military, economic, social, political, diplomatic, foreign or any other policy, domestic or otherwise, at any level with anyone and everyone. Including us, their own populations.
Andrei Raevsky over at The Saker goes even further:
“In the meantime, it is simply shocking for me to observe the collective orgasm felt by the leaders of the West each time some horror befalls Russia. Truth be told, the fact that they hate us does not surprise me. What surprises me much more is how unapologetically hate-filled and “in your face” these cries of joy are. And I wonder….
…..I will end with a question: is the above only true of the European ruling classes or is that true for most people who live in the EU?
What will the well-intentioned and noble Europeans do when the next bloodbath happens in Russia (because sooner or later it will, such is the nature of the terrorist threat)? Will they rejoice and wave their Ukie flags a little stronger or will they just not give a damn?
The answer is obvious, especially to Russians.”
And Raevsky has a reasonable point.
Back in May this year, five months ago, the Telegraph was reporting that OFGEN rules would make it unlikely that the gas price charged by energy companies for UK consumers would fall even if wholesale prices dropped. Almost six weeks ago, on 1st September, the Guardian was reporting a 22% drop in wholesale prices. Whilst the Office for National Statistics (ONS) provide figures that in the week to 2nd October wholesale gas prices fell by 17% equating to a 60% drop since mid August – only two months ago.
This is no secret. The corporate media are not hiding such facts. Nor is it a secret that UK energy prices remain way above those across Europe (despite the massive drop in wholesale gas prices) even though the UK is located and fixed geographically in the same market.
At the same time, the Government is committed to borrowing huge sums of money (on top of the already gigantic sums given in direct and indirect tax breaks and other subsidised financial support running to tens of billions of pounds) in another three card monte scam to divert even more money to energy companies to further inflate profits through public subsidy for these inflated and unnecessary prices – with consumers and tax payers picking up the bill in terms of future debt payments. Either directly or via further draconian cuts to what is left of public services.
An act reminiscent of the borrowing of somewhere in the region of 30%-40% of the Country’s GDP around the 1830’s to compensate slave owning families for the loss of their human slaves following the abolition of slavery. An interest incurring debt not paid off until 2015 (that’s not far off two hundred years, give or take).
Feinstein’s point from the Skwawkbox video about the misuse of taxpayers money with consequent intended impacts across the whole of society here and abroad may have used a specific example, however, it represents a general endemic issue.
And yet despite this – just with the energy/gas price issue alone – all one sees and hears in terms of any kind of effective response from the general populace is tumbleweed.
Moments like the present unfolding moment are almost as rare as rocking horse droppings. Point being that when they occur registering the occasional presence, whilst necessary, is not sufficient in terms of generating the necessary change internally. One example, from almost forty years now, would be the Greenham Common women’s camp.
A single human chain around Parliament on one day – after which everyone goes home – gets zero coverage and register’s nothing with the vast majority of the public in an information sphere controlled by Establishment elite media. Unsurprising really given that even two demonstrations of over a million people each almost twenty years ago which did get some coverage was ignored.
A permanent camp around Belmarsh, along the lines of the Greenham Common one along with other more direct and constant in your face action/activity (taking, rather than asking or demanding), as an example, would represent a more dynamic option in terms of moving along the process of internal change than the present static one of pleading to the non-existent better nature of those who (like their predecessors stretching back from William the Bastard through to the regimes of King John, Richard II/John O’Gaunt, Charles I, etc) are non-agreement capable on anything.
As a result, given the intended context, it seems reasonable to conclude that the point at issue is one of approach/strategy rather than anything fundemental
Thanks Dave. I hope to return to this vital dialogue soon. For now, busy on a new post on economic aspects of the Ukraine proxy war, I’ll confine myself to saying that a huge question in “getting from A to B” is that most critics of A – me included! – tend only to envisage B in terms of an absence of A‘s many negatives. We seem unable to attempt a picture of what B might look like – and more importantly perhaps, what it would feel like.
This is understandable. As Slavoj Žižek put it, it’s easier for us to envisage the end of the world than the end of capitalism. So fully immersed are we in bourgeois ideology that describing a world in which human relations are not value relations calls for a titanic imaginative endeavour. What is required is a phenomenon I don’t believe currently exists: writers whose scientific grasp of how capitalism works (as well as why it is so harmful) is matched by the imaginative power of the best sci-fi authors. I’m unaware of any such.
This, it seems to me, is a big part of the problem for such as you and me. We may argue with conviction and persuasiveness about the terrible path that capitalism is taking us down. But unless we offer truly credible – and holistic – alternatives, few will listen. Why would they? It’s just too arcane and abstract when most people’s lives are rooted in the concrete, in trying to get by in the here and now.
Anway, gotta split man! That Ukraine post won’t write itself. But I do hope to resume this fascinating conversation; here, or on our long overdue walk in the peak district we both know and love.