[Politics] Sir Keir Starmer’s route to Number 10

[Weststander]

I will repeat again - the working class encompasses anyone who works by hand or by brain for a wage - this by its nature, in a 21st century society, creates a situation where the working class comprise the vast majority of the population - go back 50 years and the proportions were different - go back 100 years and the working class comprised half the population and the middle-class almost 40% - go back 200 years and the working class was in a minority, and a major section of the population were peasantry. Globalisation over the past 50 years has had the impact of decimating the middle-class and dramatically increasing the percentage of the population in the working class.

You can disagree with this - but the facts speak for themselves - the current stats in the UK -

28.5million employees (86.65% of the workforce)
4.39million self-employed (13.35%)

Not all of the 'employees' are working class (but the percentage that aren't is quite small) - and many of these 'self-employed' are bogus self-employed because employers want to avoid their social insurance responsibilities, etc (many delivery drivers, construction workers etc.)

In the UK there’s a vast change going on, hastened by the lockdowns and furlough. Millions of young people by choice are either setting up to work on their own, or plan to, or at the very least are determined not to spend 45 years in a master and servant relationship. I see this all the time. They do not want to follow what their parents did of a 9 to 5 at the desk, lathe or production line.

If that comes off, it’s a big positive.

It’ll swell further still the numbers you quote.

There’s also a very long tradition in the UK of millions of building industry tradesmen, engineers who 100% want to be self employed. They do not want to be employed by house builders, plumbing companies, etc for many personal reasons.

The ‘gig economy’ etc is a modern thing, a separate part of the workforce. To add, many of them like it that way eg freedom on holidays, they work when they want to.

 

[Rdodge30]

I will repeat again - the working class encompasses anyone who works by hand or by brain for a wage - this by its nature, in a 21st century society, creates a situation where the working class comprise the vast majority of the population - go back 50 years and the proportions were different - go back 100 years and the working class comprised half the population and the middle-class almost 40% - go back 200 years and the working class was in a minority, and a major section of the population were peasantry. Globalisation over the past 50 years has had the impact of decimating the middle-class and dramatically increasing the percentage of the population in the working class.

You can disagree with this - but the facts speak for themselves - the current stats in the UK -

28.5million employees (86.65% of the workforce)
4.39million self-employed (13.35%)

Not all of the 'employees' are working class (but the percentage that aren't is quite small) - and many of these 'self-employed' are bogus self-employed because employers want to avoid their social insurance responsibilities, etc (many delivery drivers, construction workers etc.)

You do not need to ‘repeat again’ I understand the definition of class you have given.

The Tesco area manager on £56kpa + £11.5k in add ons is working class, as is the single parent Tesco shelf stacker doing 16 hours a week. Both working class.

My point is that it makes reference to class in political discussions such as this meaningless.

 

[Harry Wilson's tackle]

You do not need to ‘repeat again’ I understand the definition of class you have given.

The Tesco area manager on £56kpa + £11.5k in add ons is working class, as is the single parent Tesco shelf stacker doing 16 hours a week. Both working class.

My point is that it makes reference to class in political discussions such as this meaningless.

Nail on head.

It's a bit like asking me if I'm a proddy or a Catholic. As in, which estate I should stick to, which school, which job, which cemetery I must be buried in.

Well....I was Christened and baptised C of E, which means my parents thought I was a prod. Albeit they never mentioned it. Or ever thought about it. Because I am a Brighton boy. And there is no god so why would I listen to her priests if I ever met them, anyway?

Perhaps were I forced to live among Fenians I may feel a bit of a Prod by proxy. But that doesn't count. In any case, I have no connection with sectarianism in Ireland and Scotland, and all I know about it is from some reading.

So whatever I am I choose to be because I can. Those who can't have my sympathies.

 

[beorhthelm]

I will repeat again - the working class encompasses anyone who works by hand or by brain for a wage - this by its nature, in a 21st century society, creates a situation where the working class comprise the vast majority of the population - go back 50 years and the proportions were different - go back 100 years and the working class comprised half the population and the middle-class almost 40% - go back 200 years and the working class was in a minority, and a major section of the population were peasantry. Globalisation over the past 50 years has had the impact of decimating the middle-class and dramatically increasing the percentage of the population in the working class.

You can disagree with this - but the facts speak for themselves - the current stats in the UK -

28.5million employees (86.65% of the workforce)
4.39million self-employed (13.35%)

Not all of the 'employees' are working class (but the percentage that aren't is quite small) - and many of these 'self-employed' are bogus self-employed because employers want to avoid their social insurance responsibilities, etc (many delivery drivers, construction workers etc.)

you can repeat it, doesnt make it correct. i dont know why, with the obvious inconsistency in the definition. can you back those claims up - 50% of the population were not working for a wage in the 1960's? and working class was a minority 200 years ago, what on earth is that about?

 

[Jolly Red Giant]

In the UK there’s a vast change going on, hastened by the lockdowns and furlough. Millions of young people by choice are either setting up to work on their own, or plan to, or at the very least are determined not to spend 45 years in a master and servant relationship. I see this all the time. They do not want to follow what their parents did of a 9 to 5 at the desk, lathe or production line.

If that comes off, it’s a big positive.

It’ll swell further still the numbers you quote.

There’s also a very long tradition in the UK of millions of building industry tradesmen, engineers who 100% want to be self employed. They do not want to be employed by house builders, plumbing companies, etc for many personal reasons.

The ‘gig economy’ etc is a modern thing, a separate part of the workforce. To add, many of them like it that way eg freedom on holidays, they work when they want to.

The gig economy doesn't bring any of the freedoms you suggest - in fact it is an attempt to squeeze more work out of a workforce without companies having to pay for the normal social insurance etc that comes with hiring employees. It is another aspect of this bogus self-employment that is very prevalent in industries like construction and delivery services.

Also - support for socialism is much higher among the under 30s than it is in any other section of the population (over 70%). I am sure someone will argue here that this is because people normally become more conservative as they get older (not the case by the way) - but the reality is that there has been a major shift in public opinion towards socialist ideas - not just in the UK, but globally - in the past 10 years (and it is accelerating since the lockdown)

 

[Jolly Red Giant]

You do not need to ‘repeat again’ I understand the definition of class you have given.

The Tesco area manager on £56kpa + £11.5k in add ons is working class, as is the single parent Tesco shelf stacker doing 16 hours a week. Both working class.

My point is that it makes reference to class in political discussions such as this meaningless.

No - the Tesco area manager is not working class - the area manager has a different relationship to the forces of production than the shelf stacker. He/she has the power to hire and fire the shelf-stacker, the power to impact the income of the shelf-stacker, the power to change the working conditions of the shelf-stacker, etc and receives financial benefit directly from these decisions.

My point is that you do not understand the nature of social class - and you have just proven it with this post.

 

[Jolly Red Giant]

Nail on head.

It's a bit like asking me if I'm a proddy or a Catholic. As in, which estate I should stick to, which school, which job, which cemetery I must be buried in.

Well....I was Christened and baptised C of E, which means my parents thought I was a prod. Albeit they never mentioned it. Or ever thought about it. Because I am a Brighton boy. And there is no god so why would I listen to her priests if I ever met them, anyway?

Perhaps were I forced to live among Fenians I may feel a bit of a Prod by proxy. But that doesn't count. In any case, I have no connection with sectarianism in Ireland and Scotland, and all I know about it is from some reading.

So whatever I am I choose to be because I can. Those who can't have my sympathies.

Again - missing the point - It is not about what your individual views are.

Social class is not a matter of choice - it is a matter of economics and specifically the social relationship an individual has with the production forces in society. Indeed - it is not even about the individual - it is about a specific class of workers in combination with one another - e.g. from Rdodge's example - it is not being an individual shelf-stacker that makes that single parent working class - it is the social relationship with the productive forces in society that make all shelf stackers in Tesco part of the working class.

 

[Jolly Red Giant]

you can repeat it, doesnt make it correct. i dont know why, with the obvious inconsistency in the definition. can you back those claims up - 50% of the population were not working for a wage in the 1960's? and working class was a minority 200 years ago, what on earth is that about?

The argument here is that the working class do not comprise 90% (or close to it) of the population in Britain - it does and statistics prove it - what I was outlining is that social class is not fixed and the percentage of the population in working, middle and upper classes can and does change over time and is dependant on the nature of society. As capitalism has become more monopolised in the hands of fewer and fewer global conglomerates, the middle-class has been significantly squeezed, the working class has expanded as a result of sections of the middle-class being drive down the social order (and the upper class has narrowed slightly as the landed class have pretty much been eliminated from society).

 

[BenGarfield]

1. I accept that you do not need tax to fund government spending - and we don't need the wealthy's money to perform the function - we can create a democratically planned socialised economy that eliminates the need for taxation and eliminates the wealthy (and by the way - I know where you are trying to go with this argument).
2. QE does not keep interest rates and inflation low - in fact it has the opposite effect. The danger when QE was introduced was a deflationary depression in the global economy - something which capitalism has serious difficulties getting out of. And Draghi was doing exactly what his private sector backers wanted him to do. The gut does not and never has operated in the interests of the general economy, he operated in the interests of the finance houses. And I say this as someone who has met the guy and spend a couple of hours debating these issues with him.
2.5 QE generated inflation (as demonstrated by the current inflationary cost of living crisis) and that is its purpose. and inflation transfers economic wealth from the mass of the population to the richest 1%. You really have your understanding of the capitalist system backwards if you think that QE has/had a deflationary effect.

This is from the Bank of England -

Quantitative easing is a tool central banks can use to meet an inflation target. We are the UK’s central bank and our job is to get the rate of inflation to our 2% target. We do that by changing interest rates to influence what happens in the economy. When we need to reduce the rate of inflation, we raise interest rates. Higher interest rates mean borrowing costs more and saving gets a higher return. That leads to less spending in the economy, which brings down the rate of inflation. When we need to support the economy by boosting spending, we lower interest rates. That also causes inflation to go up. QE is one of two tools we can use to change interest rates. The other is Bank Rate, which historically has been our most important tool. We first began using QE in March 2009 in response to the Global Financial Crisis. At that time Bank Rate was already very low. In fact, it couldn’t be lowered any further at that point. So we needed another way to lower interest rates, encourage spending in the economy, and meet our inflation target. QE involves us buying bonds to push up their prices and bring down long-term interest rates. In turn, that increases how much people spend overall which puts upward pressure on the prices of goods and services.

And for clarification - the inflation rate in 2009 was negative 0.59%

Tax: Great, Im glad you agree with me that we dont need the wealthy`s tax to fund progressive programmes,. We dont have to wait for socialism to be achieved, however, before we start spending the money that only a sovereign currency issuing government can create. Even a socialist government will still need taxes, primarily to drive the need to use the currency, but also as a check against inflation, to ensure equity, and maybe for other reasons such as encouraging healthy lifestyles etc (e.g. tobacco/alcohol duties)

QE: QE has very little effect, if any, on inflation. The recent inflation increases are mainly caused by supply side issues as a result of the COVID situation and the war in Ukraine. Re the mechanisms as to the why QE doesnt seem to have achieved what you, Draghi and the Bank of England (at one time-see below) seemed to believe it did. I will defer to Professor Bill Mitchell, a Marxist, and one of the originators of Modern Monetary Theory commenting on a recent (2021) report issued by the Bank Of England on the effectiveness of QE.

"I read an August 2020 Bank of England Staff Working Paper (No.883) – Does quantitative easing boost bank lending to the real economy or cause other bank asset reallocation? The case of the UK – recently, which investigates whether the large bond-buying program of the Bank stimulates bank lending. They find that there was no stimulus to lending. Which would only be a surprise if one thought that mainstream monetary economics had anything useful to say. Modern Monetary Theory (MMT) economists were not at all surprised by this finding.The reality is that the lack of bank lending during the GFC had nothing to do with a liquidity shortfall within the banking sector. It had all to do with a lack of credit-worthy borrowers – which should tell you that bank reserves do not constrain bank lending. The fact that mainstream institutions such as the Bank of England are now publishing this sort of research, which undermines the mainstream theory is the interesting fact.

I also considered these questions in a series of blog posts 12 years ago – when people were starting to wonder what the impacts of the large central bank bond-buying programs would be.

They were scared that the so-called ‘money printing’ interventions from the various central banks early on in the GFC would be inflationary.

The reason they thought that is because they had either been taught that in economics programs at university or because they had been listening to politicians and their crony mainstream economists relentlessly pushing that message in the media.

QE does not increase the risk of inflation in an economy.

If it did then Japan should have been hyperinflating by now given the 20 years or so of very large government bond purchases by Bank of Japan.

The problem that the mainstream economists encounter here is that they start with a flawed view of the private banking system.

They believe that bank lending is constrained by the reserves they have in the vault and that quantitative easing solves this shortage by providing those reserves.

So banks are conceived as being ‘desks’ where officials wait for cash to come in in the the form of deposits, which they loan out, profiting from the difference between deposit and loan rates.

But this is a completely incorrect depiction of how banks operate.

Bank lending is not ‘reserve constrained’.

Banks extend loans to any credit worthy customer they can find and then worry about their reserve positions afterwards.

Remember the role of bank reserves is to facilitate the clearing system for transactions that have cross-bank implications.

The point is that building bank reserves will not increase the bank’s capacity to make loans.

Loans create deposits which generate reserves not the other way around.

The major institutional constraints on bank lending (other than a stream of credit worthy customers) are expressed in the capital adequacy requirements set by the Bank of International Settlements (BIS) which is the central bank to the central bankers.

They relate to asset quality and required capital that the banks must hold.

These requirements manifest in the lending rates that the banks charge customers

But despite what is taught in mainstream courses in monetary economics, bank lending is never constrained by a lack of reserves.

Which is why MMT economists never considered QE to be an appropriate vehicle for increasing bank lending in order to stimulate the economy.

Quantitative easing merely involves the central bank buying bonds (or other bank assets) in exchange for deposits made by the central bank in the commercial banking system – that is, crediting their reserve accounts.

Quantitative easing is really just an accounting adjustment in the various accounts to reflect the asset exchange. The commercial banks get a new deposit (central bank funds) and they reduce their holdings of the asset they sell.

It was always obvious that the reason the commercial banks were reluctant to originate loans during the GFC was because they were not convinced there were credit worthy customers on their doorstep.

Further, after years of lax assessment practices in relation to credit-worthiness, the banks tightened their rules once the GFC threatened their solvency.

The 2020 Bank of England report has reflected on this issue and constructed a unique dataset.

The empirical data is clear:

1. The Bank of England QE program began in March 2009, which followed the US Federal Reserve launching a program in November 2008.

Of course, the Bank of Japan launched its large-scale bond buying program in 2001. So we already knew what happened.

But the mainstream economists kept dismissing the Japanese case as ‘special’ due to cultural differences.

positions” and other regulatory matters intervened.

Their results are interesting:

1. “the additional liquidity did not incentivise QE-bank to increase lending, relative to the control group. There is no evidence suggesting that these results were driven by changes in relative demand for loans the two groups faced.”

2. They “no evidence that lower lending by QE banks after the two QE waves is caused by differences in the demand for loans between the treatment and control groups.”

3. “Relative to the control group, QE banks increased reserves and reduced lending to other banks after QE1. They also increased holdings of government securities, especially after QE2. This suggests that QE banks reallocated their resources from lending towards government securities with low risk weights.”

This is significant.

There was a lot going on at that time.

The Banks scrambled to increase the quality of their capital base – which is why they increased their holdings of government bonds which were considered lower risk than retail loans.

Banks also reduced their exposure to the European debt crisis by reallocating their assets to British bonds.

So there was asset reallocation going on but no increase in bank lending as a result of the rising reserve balances.

The overall conclusion of the paper is that “if the policy objective is to provide an additional boost to the economy through supporting bank lending in a time of stress and uncertainty, it might be valuable consider using alternative credit easing tools.”

Which really is a confession.

QE was never going to break the deadlock in the loans market that arose during the GFC as the deep uncertainty drove would be borrowers underground.

Households, fearing unemployment, did not want to take the risk.

Businesses, knowing that household spending was constrained, and with excess productive capital, had little incentive to borrow more even at lower rates.

Conclusion
Another piece of evidence that tells any aspiring student not to study mainstream monetary economics, unless you like fiction."

 

[Weststander]

The gig economy doesn't bring any of the freedoms you suggest - in fact it is an attempt to squeeze more work out of a workforce without companies having to pay for the normal social insurance etc that comes with hiring employees. It is another aspect of this bogus self-employment that is very prevalent in industries like construction and delivery services.

Also - support for socialism is much higher among the under 30s than it is in any other section of the population (over 70%). I am sure someone will argue here that this is because people normally become more conservative as they get older (not the case by the way) - but the reality is that there has been a major shift in public opinion towards socialist ideas - not just in the UK, but globally - in the past 10 years (and it is accelerating since the lockdown)

Your last para … before your reply, my long term theory on this for the UK is the lack of housing. From memory I think our population has risen by 9m since 1997. Charities report multi millions more homes are needed now. Millions of folk sofa surf, or live with parents well into their thirties. House prices and tents halving, wouldn’t create a single new unit. Almost everyone sitting cozily is an overt or secret nimby. Making a false argument that building huge blocks of mini apartments on city centre land will solve all.

The prospects on that front for folk in their 30’s and 20’s are grim, unless well off middle class mum and dad write a cheque for a £75k deposit.

A huge housebuilding programme of no-profit homes is required and not minute apartments.

 

[Jolly Red Giant]

Tax: Great, Im glad you agree with me that we dont need the wealthy`s tax to fund progressive programmes,. We dont have to wait for socialism to be achieved, however, before we start spending the money that only a sovereign currency issuing government can create. Even a socialist government will still need taxes, primarily to drive the need to use the currency, but also as a check against inflation, to ensure equity, and maybe for other reasons such as encouraging healthy lifestyles etc (e.g. tobacco/alcohol duties)

QE: QE has very little effect, if any, on inflation. The recent inflation increases are mainly caused by supply side issues as a result of the COVID situation and the war in Ukraine. Re the mechanisms as to the why QE doesnt seem to have achieved what you, Draghi and the Bank of England (at one time-see below) seemed to believe it did. I will defer to Professor Bill Mitchell, a Marxist, and one of the originators of Modern Monetary Theory commenting on a recent (2021) report issued by the Bank Of England on the effectiveness of QE.

1. You are incorrect on tax and socialism - a democratically planned socialised economy does not need taxes, has no need for a currency (at least in the capitalist sense), would not be impacted by inflation, does not need taxes for equity and the provision of healthy lifestyle choices etc would be done (a) through the elimination of product advertising and (b) through education, rather than through punitive measures.

2. QE did have an impact on the current inflation - COVID saw what was effectively a massive expansion of QE through furlough payments, business bailouts etc. But that is not the key point and neither is the effectiveness of QE - the key point is that the purpose of QE is to promote inflation. This is because a capitalist economy needs inflation to function and drive profits. Deflation is an utter disaster for capitalism and it is incredibly difficult for a capitalist economy to pull itself out of a deflationary depression.

 

[Jolly Red Giant]

Your last para … before your reply, my long term theory on this for the UK is the lack of housing. From memory I think our population has risen by 9m since 1997. Charities report multi millions more homes are needed now. Millions of folk sofa surf, or live with parents well into their thirties. House prices and tents halving, wouldn’t create a single new unit. Almost everyone sitting cozily is an overt or secret nimby. Making a false argument that building huge blocks of mini apartments on city centre land will solve all.

The prospects on that front for folk in thie 30’s and 20’s are grim, unless well off middle class mum and dad write a cheque for a £75k deposit.

A huge housebuilding programme of no-profit homes is required and not minute apartments.

Agree 100% - and Ireland is face with the same type of housing crisis - indeed it is possibly worse here.

 

[Weststander]

Agree 100% - and Ireland is face with the same type of housing crisis - indeed it is possibly worse here.

Whatever happened to all new ghost estates in the suburbs of your cities, built in mid/late 2010’s [bankers and criminal developers monumental financial fraud]?

 

[Jolly Red Giant]

Whatever happened to all new ghost estates in the suburbs of your cities, built in mid/late 2010’s [bankers and criminal developers monumental financial fraud]?

Most of them were flogged off to vulture funds at a pittance - the vulture funds rented them for five years (their normal strategy) and then started selling them off at huge profits - oh - and the deal when they were buying them for pennies - not tax on the rent or any future profits when sold.

Last year Irish local councils built the sum total of 647 homes (that's houses and apartments) - it is estimated that Ireland needs at least 33,000 (some estimates put it as high as 50K) new homes every year for the next ten years - the government keep missing but big numbers all their targets for house (both public and private). These days what is regarded as affordable new housing is Dublin (affordable homes are available to a family with a total household income of €66K) - the price €380,000.

 

[Weststander]

Most of them were flogged off to vulture funds at a pittance - the vulture funds rented them for five years (their normal strategy) and then started selling them off at huge profits - oh - and the deal when they were buying them for pennies - not tax on the rent or any future profits when sold.

Last year Irish local councils built the sum total of 647 homes (that's houses and apartments) - it is estimated that Ireland needs at least 33,000 (some estimates put it as high as 50K) new homes every year for the next ten years - the government keep missing but big numbers all their targets for house (both public and private). These days what is regarded as affordable new housing is Dublin (affordable homes are available to a family with a total household income of €66K) - the price €380,000.

Sounds familiar.

 

[Herr Tubthumper]

Your last para … before your reply, my long term theory on this for the UK is the lack of housing. From memory I think our population has risen by 9m since 1997. Charities report multi millions more homes are needed now. Millions of folk sofa surf, or live with parents well into their thirties. House prices and tents halving, wouldn’t create a single new unit. Almost everyone sitting cozily is an overt or secret nimby. Making a false argument that building huge blocks of mini apartments on city centre land will solve all.

The prospects on that front for folk in thie 30’s and 20’s are grim, unless well off middle class mum and dad write a cheque for a £75k deposit.

A huge housebuilding programme of no-profit homes is required and not minute apartments.

Something I have been looking at recently is what they call 'projects' here in Germany. In short a group of people organise themselves into a buyer community/co-operative, buy a piece of land and build whatever it is they want e.g. some houses, a block of apartments. In effect, the buyer community becomes a developer. The huge difference is they are not building for profit, and given the build cost is around a 1/3 of the regular price, they have good budgets and can build attractive looking quality and sizable dwellings. A friend is involved in one of these and their project is now finished and looks great and has lots of land, a childrens play area and a community hall. This seems like a good solution to the housing issue for the folk in their 20s and 30s in the UK.

 

[joydivisionovengloves]

Your last para … before your reply, my long term theory on this for the UK is the lack of housing. From memory I think our population has risen by 9m since 1997. Charities report multi millions more homes are needed now. Millions of folk sofa surf, or live with parents well into their thirties. House prices and tents halving, wouldn’t create a single new unit. Almost everyone sitting cozily is an overt or secret nimby. Making a false argument that building huge blocks of mini apartments on city centre land will solve all.

The prospects on that front for folk in thie 30’s and 20’s are grim, unless well off middle class mum and dad write a cheque for a £75k deposit.

A huge housebuilding programme of no-profit homes is required and not minute apartments.

100 % agree.

 

[The Antikythera Mechanism]

Something I have been looking at recently is what they call 'projects' here in Germany. In short a group of people organise themselves into a buyer community/co-operative, buy a piece of land and build whatever it is they want e.g. some houses, a block of apartments. In effect, the buyer community becomes a developer. The huge difference is they are not building for profit, and given the build cost is around a 1/3 of the regular price, they have good budgets and can build attractive looking quality and sizable dwellings. A friend is involved in one of these and their project is now finished and looks great and has lots of land, a childrens play area and a community hall. This seems like a good solution to the housing issue for the folk in their 20s and 30s in the UK.

Self build schemes were common back in the 70’s & 80’s but I haven’t seen one in the last 30 odd years. No idea why they seem to not happen anymore.

 

[Herr Tubthumper]

Self build schemes were common back in the 70’s & 80’s but I haven’t seen one in the last 30 odd years. No idea why they seem to not happen anymore.

I never knew this. It will be interestng to know the reason why.

 

[Weststander]

Something I have been looking at recently is what they call 'projects' here in Germany. In short a group of people organise themselves into a buyer community/co-operative, buy a piece of land and build whatever it is they want e.g. some houses, a block of apartments. In effect, the buyer community becomes a developer. The huge difference is they are not building for profit, and given the build cost is around a 1/3 of the regular price, they have good budgets and can build attractive looking quality and sizable dwellings. A friend is involved in one of these and their project is now finished and looks great and has lots of land, a childrens play area and a community hall. This seems like a good solution to the housing issue for the folk in their 20s and 30s in the UK.

Yet another Teutonic tick