There's been plenty of economic progress since 2008 - you're just not measuring it

The problem with economics, I find, is that too often it becomes trapped inside the limits of what it measures. If we haven't attached a specific monetary value to something then the economist's assumption all too often is that this something therefore has no value. Take childcare for example - government recognises that looking after young children has a cost but only when that looking after is done by an agency external to the family. We therefore provide subsidy to people using that external agency but not to the people who choose to provide the childcare themselves. I may be wrong but it does seem that the driver here - glossed over by debates about getting women back to work (as if looking after children isn't work) - is that the only measure that counts is GDP. And there's a double win by the parent returning to work by using a childcare agency - not only does her return raise GDP because she's in the part of society we measure but the purchase of childcare raises that GDP too. It's taking in eachothers washing on a grand scale but it make the figures look good. Better stills we can throw chaff about women's equality into the mix to make it look like a social good.

One theme popular right now with some economists is the argument that there has been no "progress" since 2008's great crash. Those economists point to per capita GDP proclaiming 'look no increase in productivity' because those figures seem to have stagnated. The problem here is that it's a one-eyed look at people's lives - measuring only the money income and not what that money income gets us. It's true that average incomes haven't risen but to say there has been no progress ("the final crisis of late capitalism") is hard to argue.

Until recently I was a director of a large social housing organisation and, in preparation for the shift to universal credit and the digital-by-default approach it uses, we looked at how ready our customers were for the change, the degree to which they were digitally-enabled. What we found was nearly 9 in 10 of the tenants had access to the Internet, most commonly using a smart-phone. Bear in mind that we are literally dealing with the poorest in society - three-quarters of our tenants relied on benefits. I realised why when I dropped my (expensive) phone in a car park and it smashed.

My temporary fix was to buy - yes buy - a phone for £20 and stick a sim card in it. And this wasn't the cheapest smart-phone. For £25 I had a phone allowing me access (albeit slightly slow) to the whole of the Internet's wonders. I'd venture to suggest that this wasn't possible in 2008 and those poor and vulnerable people in our flats and houses have had their lives made significantly better by being able to afford the benefits of Internet technology previously only available to the wealthy.

Take a walk round your house, look at the things that have changed - become cheaper and better in equal measures. Televisions, fridges, microwave ovens, dishwashers. Open the apps on your cheap smart phone and see the things you've got for free - music streaming, social media, football scores and updates, bus timetables, maps, radio. I've a super little bluetooth speaker, better sound quality than any transistor radio of my youth - cost me £9.99.

Pop down to the supermarket and walk round. Tens of thousands of lines, produce from across the world and at prices little higher than a decade ago. Add in cheaper taxis from Uber, cheap home delivery takeaway food, online retailing driving down costs and prices. Thousands of small changes each one providing a little more value to us as people often for a little less cost.

So when people say "there's no productivity growth" are they really telling the truth? Perhaps - hallelujah - the productivity growth is coming in people's private lives not in the dull Taylorist world of the workplace. The last ten years have seen massive advances in people's lives, what we get for our money means we're better off even if that money's still the same. Today's TV isn't the same as the telly of ten years ago (it's flat, smart and hung on the wall). Today's mobile phone isn't really a phone, it's a computer more powerful than the PCs and laptops of ten years ago.

All this is hard to measure (how to calculate the benefit I get from wasting so much time on Facebook and Twitter) so mostly we don't bother. And this lets people get away with spouting manifest nonsense like this from Delphine Strauss in the FT:

Absolute social mobility — people’s chances of living better than their parents — has worsened almost everywhere since the financial crisis.

Our children and grandchildren are likely to enjoy a vastly better life than us enjoying things we can only speculate about. For sure there's an outside chance of the Marxist wet dream coming about and capitalism completely collapsing but it's one of those sort of outside chances that brought Ford, Zaphod, Arthur and Tricia together - damned close to infinitely improbable. And so long as capitalism continues it will carry on creating, innovating, initiating - doing the thing it has done for three hundred years: making us all happier, healthier and wealthier. Long may it continue.

....

2017: Another year of human progress beckons. Let's celebrate!

Another year crawls coughing and spluttering from the ashes of its predecessor. Blinking in the watery light of a January morning, 2017, like many of its inhabitants, groans with the hangover from supervising the final death throes of the "Year of Horrors" that was 2016. Everywhere the perkier of those denizens, perhaps those most inured to hard drinking, started the annual task of churning out comments and predictions about the year ahead.

I've never been one for making predictions - I'm usually wrong - so instead I'll celebrate things we already have that are wonderful. We are, ignore all the doom and gloom, truly a blessed generation and we don't remind ourselves of this fact often enough. It's not just that there are fewer poor people in the world that ever in human history but that the things those no longer poor folk can have include stuff that were the stuff of science fiction just a decade or two ago.

I lost my phone in Lisbon during 2016 (on 23 June as it happens) and for various reasons had to get a cheap smart phone as a stop gap before my new and shiny Samsung was available. For less than £20 I had the sort of computing power that, as a student, had occupied a whole floor of a building in Hull. And with that bargain computing I could make phone calls, send letters, research the information I need for work plus things undreamed of back in the 1980s like social media and text messaging.

We've also found that the electricity these things need to run - much less as it happens that in times past - is now increasingly coming from renewal sources. And the fossil fuel sources we still use - fracked natural gas especially - are also far less contributory to climate change. If the EU would stop being dumb about importing cheaper solar panels from the Far East (more protectionist nonsense I'm afraid) maybe we'd move even faster towards a sustainable energy market without having to do so by making poorer people's fuel more expensive.

There was a time when brand ownership was what matters to food businesses because brands allowed a premium price to the consumer. Today - if the coffee business is anything to go by - the brand is no longer the thing, it's capacity and production efficiency that matters more. Food businesses are now delivering their margins more by reducing production costs rather than through the costly malarkey of brand marketing. This renews the wonderful thing that is cheap food, something brought to you by great farmers, fantastic manufacturers and brilliant supermarketers. It is a cause for celebration that we spend just 11% of our household incomes on food and drink (13% if you include booze and fags) and the trends - especially if Brexit opens up international food markets - will carry on downwards to the benefit of everyone.

Because we no longer spend all that cash on food, we've been able to buy stuff we otherwise wouldn't have had the money for - such as over 20% of our income on leisure, pleasure, recreation, culture, hotels and restaurants. Not only do we have more leisure time but we've also got the cash to enjoy that time better. And to top it all we're living longer and healthier lives than ever before - a trend that's set to continue. Whereas a previous generation retired at 60 or 65 and died ten or twelve years later, today's retirees can expect - even with a raised retirement age - to live passed 80 in an active independent life (and some can look to living a great deal longer).

For sure this longevity presents a challenge - not least to our creaking and badly run health service - but it shows why the cult of the young that dominated media and politics for so long is no longer such a deal. Those 55 year old baby boomers (like me) can look forward to an average of 30 years more life so don't tell us that we've nothing invested in that Brexit decision. And with reducing rates of dementia and heart disease joining rapidly rising cancer survival rates whose to say thirty years doesn't become 35 or even forty!

Meanwhile, society is getting better. Crime rates have shown a recent rise but the really bad ones like murder are as low as they've been since the '70s. Other supposed crises seem less so - child obesity rates at five and eleven are at the lowest they've been since 2000 and this might represent a switch in what was a seemingly intractable problem. Vaping has resulted in an acceleration in smoking's decline - would be even faster in public health folk would get with the programme and accept that the markets and a consumer product has achieved what they couldn't.

Elsewhere the frantic panic about 'hate crime' seems misplaced too. If our primary schools are any guide, the UK is a really tolerant and non-racist place - out of 4.5 million children aged five to eleven there were just 420 racist 'incidents' in 2014-15 which is about one incident for each 10,000 children. And this came after a long campaign to make schools report incidents rather than just using their own discipline and correction. In Bradford - as multi-ethnic a place as you get - the Council and police had to put on extra resources to encourage the reporting of 'hate crime' And in a couple of months they managed just eight reports of such crimes from a population of half-a-million. We really aren't a racist nation - nor indeed are we especially sexist, homophobic or disablist either - at least if reports of hate crime are anything to go by.

The world's not perfect and mankind isn't perfect but let's get ourselves some perspective in 2017. Not everything's going to go well - some people will suffer personal loss or tragedy, celebrities who played a big part in our lives will die and the wrong side might win an election. But on the fundamentals and the direction of travel for technology, leisure, health and security the world's getting better year by year. There's no reason not to think this will continue on 2017. So look up, smile and enjoy the bounty that human genius has brought you.

....

Why we need immigration...

This isn't a plea for no rules or no controls but a reminder that the "we're full, stop anyone coming here ever again" brigade want to cut their nose off to spite their face. Here's why:

Low-fertility societies don’t innovate because their incentives for consumption tilt overwhelmingly toward health care. They don’t invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don’t have enough workers to pay for the retirees. They cannot project power because they lack the money to pay for defense and the military-age manpower to serve in their armed forces.

You have got that haven't you? Although the article is about us not having babies, it applies as well to us not letting people come to live here. If we are to suceed - to grow, to prosper, to keep up with the international Joneses then we need immigrants. Or more babies. Or both.

....

Sir Terry Leahy is right about supermarkets...

****

About supermarkets:

Asked if seeing boarded-up shops made him sad, Leahy said: "It does, but it is part of progress. People are not made to shop in supermarkets, they choose to shop there.

"High streets– some of them are medieval and the way that we live our lives now is very different, so what you have to do is make sure the benefits do outweigh the costs, and I think that they do."

It pains me to agree with Sir Terry since I like those independent shops. But he's right - there is no doubt that, on balance, society has gained from the success of supermarkets like Sir Terry's beloved Tesco. Just as we no longer have to pound away washing clothes by hand, bash at carpets with a big stick or get on our knees to scrub the hearth, we no longer have to spend hours each week traipsing from small shop to small shop merely to get the things we need.

Instead we can read, we can sing, we can enjoy a bit of leisure - make the most of all the good things progress (and I mean real progress here, the fruits of capitalism, not the fake progress socialists offer) has brought us. Television, computers, games, foreign holidays, thousands of songs on one little pod.

Our lives are richer than they've ever been and the supermarket has played a big part in creating those riches. Rather than a limited selection at the shop on the corner, we've access to thousands of different products under one roof. We don't have to walk round in the rain, snow and sleet but can make our choices in the warmth and light of indoors - choosing vegetables and fruit throughout the year, flown in from Peru, Kenya and Sri Lanka. We can experiment with odd foreign grains, with twenty types of rice and a hundred different teas and coffees.

All this isn't just available to the elite. Everyone has this choice on the doorstep. And it enriches our lives in a hundred ways. Yes, Sir Terry, supermarkets are great!

....

...