Thursday, March 19, 2020
Our lives are worth more.
There is a plan to save something very important during this pandemic we are experiencing. Lives will be lost in order to save this thing; my life possibly, hence my keen interest. Governments who love fiscal tightness will deliberately enter deficits largely by borrowing from the private sector so that this thing survives. The right and the left are united in calling for this thing to be rescued in some way. But I don’t know if the economy is worth saving.
Our governments tend to be elected or thrown out almost entirely on how they manage the economy and why wouldn’t they? When the economy is strong, indicators of this are full (or fullish) employment, which is people making money and investor and consumer confidence, which is people’s hope they will make more money in the future. When you hear the ka-ching of money landing in your opened hands from the fountain of the economy and when you look up and see so much more money potentially on its way to you it feels good. Good enough to want to re-elect a government despite their open corruption. That lovely money is pizza and fixing your car and getting your sore tooth looked at and it’s a Charles and Di wedding anniversary set of Celine Dion reads the Koran. It’s choice. It’s control. It’s power in the marketplace in your hands.
Then the real magic of a strong economy happens. You take that power and give it to your dentist. They now have the power to hire a secretary who has the power to pop over to yours and pay you to walk their dog. That’s power back in your hands again. You’re not losing anything. You and everyone else is just getting more done from that kitchen refit to that tattoo they always wanted. The tattooist and the carpenter and you all benefit.
But economies don’t match the dream. In addition to increased income and spending another indication of a strong economy is inflation which is the reduction in actual value of any of that money that’s landing in your hands. That undoes the relationship between the ka-ching and the market power. Also not every body even gets to stand under the money waterfall. Some people stand under other people and catch what (if anything) spills out from their hands. Those dregs they get will, due to inflation, be worth less in real terms. Anybody who gets the same amount of golden coins as they received before the economy blooms is actually facing a reduction in marketplace power. They can’t go to the dentist anymore. The dentist has to sack the secretary. Your dog walking business goes nowhere.
Lastly that circular effect of economic spending doesn’t always even happen when wealth increases. When you spend money you could be just pouring your money into some corporate conglomerate who sells tech products made for the cheapest labour costs in the world and pays no tax and whose overseas warehouse just sacked every employee but the unpaid intern who oils the robots. When this happens economic growth can’t achieve momentum. The extra pizzazz of a charged up economy is siphoned off into the same deep pockets who can’t seem to find a need for a twelfth bum wiper and so that economic power doesn’t return to you. But the recruitment officer does thank you for your enthusiastic application.
Somewhere buried inside a strong economy is a “general lift in living standards” but its not a given that you in particular will be part of the generally benefiting at all or that even more than a few will. It’s still considered, illogically, by governments, as a general improvement in living standards if Mr. Burns buys an island while his whole workforce can’t afford their rents anymore. This is because by the power of averages its as if everybody got a coconut from the islands palm trees. Utilitarians however would largely agree that concentrated wealth is worth less than distributed wealth in terms of pleasure “points”. The value of a meal to a hungry person is more than the value of a better cut of steak to a well fed person and certainly worth more than the second steak the tycoon can’t even finish. The rich person may whinge louder than seems possible from an adult, when they lose their luxuries, but as we used to say over beers in my student lefty days you’ve got to learn to filter out the wealthys tantrums as a non-concern because they’re bullshit.
For some time our relatively strong economy has been a horror for many of its participants. Rampant wage theft; No real wage growth despite corporate profits growing; Entrenched long term unemployment; Scandalous harassment of people on unemployment benefits, and disability and parenting payments; Robots (and I like Astroboy, he’s one of the good ones) are taking our jobs. In a number of countries student debt is growing astronomically. Good Old Boy Joe Biden was one of those who voted to prevent US tertiary students who couldn’t pay their loans ever declaring bankruptcy locking them in permanent financial servitude. In Australia we have a housing crisis that means people can’t afford home ownership while rents keep them in anxious poverty. On the other hand global yacht sales including super yachts have experienced steady growth above 4% so it’s not all doom and gloom.
I am a teacher in a secondary school. I will work with kids because I value their education and I value them as people and because I am a part of preserving human knowledge across generations. I will work with kids for additional hours (call me up these pending holidays if necessary) to free up medical staff who need to work on fighting this virus. I will do this even though schools are impossible places to strictly impose infection controls, although we could do better than we are currently, especially if we have less kids attending and threw some more money to hire more people to our overworked cleaners. But I am not risking my safety, the safety of my kids and your kids in my classes, in order to save the economy from going under. We are seeing endless energy from this government for squeezing the tits of the poor, and zero energy cracking down on wage theft. Hospitality workers lost penalty rates recently. High income tax cuts have not been cancelled to save the surplus but the underfunding of the NDIS and public schools is supposedly acceptable to get us to one. Nobody I know has got a super yacht.
I say lets dump this economy. Let’s do something different. Something better. Something where everyone gets paid sick leave, where wage theft is taken seriously, where we have an anti-corruption commission with actual teeth, where nobody is homeless because housing is a right, not a way to make money. And if a teacher, a nurse or the staff at the supermarket checkout dies from this virus we can give them their own Viking funeral in one of those yachts.