After a decade of miserable growth, the shock of Brexit, the miserable mismanagement of the pandemic and the ongoing shambles of Tory misrule, the future of the UK economy is in question. If one can still speak of a British growth model - David Edgerton might question this assumption - that model is broken.
In Marx’s view, the greatest driver of increases in productivity is the relative strength of labour vis-a-vis capital. When workers have some leverage in the labour market, capitalists are compelled to innovate to raise productivity in order to get more bang for their buck. They’re also incentivised by the fact that investing in technical innovation in the production process can give them greater control over that process, curbing worker autonomy. The quite deliberate destruction of worker solidarity and trade union power in Britain over the last 40 years probably has more to do with stagnating productivity and declining wages than the undoubted mediocrity (and, indeed, mendacity) of the managerial class.
Marx's take is just obviously untrue from the historical record, so I'm not sure why you bring it up. Even then, he is assuming a competitive market with several non-coordinated employers, which we have never seen coexist alongside strong unionization. The far more common circumstance in a heavily unionized industry is the stagnant, anti-consumer hell of the 1960s/70s car industries in the US and UK.
Governments that encourage unionization also typically reduce corporate profit through taxation, so between that and increased unionized labor costs, there is very rarely an incentive to increase capital investment in the sector. Managers have very little reason to do anything with extra cash besides increasing their own salaries and acquiring competitors. Any profit increase will just cause the unions or the government to start demanding a bigger share, anyway.
Quite contrary to your statement the historical record bears Marx out - just look at capitalism’s golden age in the 50’s and 60’s. Your argument can not be backed up. I guess you do not understand the nexus between productivity, labor cost and innovation. Besides Marx did not have to assume a competitive market with non-coordinated employers - his account is based on competition in any kind of market environment regardless of the degree of unionization - provided there is no governmental market regulation which would substantially hinder capital accumulation. The british economy based on the rotten neoliberal principles you are obviously promoting is a striking example of the crises ridden capitalism Marx was talking about.
"Golden Age" based on what? The 50s and 60s had some positive feature's in the USA because the rest of the world's industrial capacity had been bombed to ash, but in the UK the 50s was miserable.
The British economy's problem is stagnation, not crisis. You've constructed an entire alternative set of facts and subjective narrative about golden ages to back what you wish to be true, aesthetically, so there's very little point in further discussion.
No, it was anti consumer. Mr Ford and the execs at Leyland and GM were still swimming in money. It was our working class grandads who had to buy overpriced, broken down rust buckets for decades.
Your latter point is just a unsupported aphorism. I can do it too: "You can have freedom or you can have socialism, but you cannot have them both."
Just so you know - freedom from capitalist alienation and thus freedom for all of humanity can only be provided by socialism. I suggest you do some serious reading before regurgitating narrow minded populist mainstream stereotypes
The matter is settled for US for instance, which was a long time ago declared a plutocracy masquerading as a democracy just because of the circus of elections. And with the stripping of good earth's resources, we are going to run out of basic things due to capitalism. And freedom is a nice shout out, but I prefer to have democracy, real one.
The point of democracy is to protect freedom. I don't really have any uses for it, otherwise. A system with a single tyrant is at least more streamlined than one with 300 million.
The UK’s manufacturing sector has shrunk from 30% of GDP in the 1970s to 9% today. One disappointing feature of the Resolution report is their fatalistic acceptance that the UK should remain essentially a services-only economy, and that trying to revive UK manufacturing is mostly futile. But everything I’ve read suggests that it’s much harder to achieve high productivity growth in services than in manufacturing.
There’s no reason in principle (or reality!) why productivity increases should be more difficult to attain in service industries than in manufacturing. It’s just that workers in the service industries are largely unorganised and thus very weak. Thatcherism focused on destroying the UK’s manufacturing sector (in which workers were relatively well organised and unions had some clout) and promoting services for precisely that reason, backing that up with a (still ongoing) programme of anti-union legislation. If workers in the service sector got organised and wielded some power, you’d soon see productivity as well as wages increasing. But of course, such a “class-struggle” understanding of how productivity operates in a capitalist economy is beyond the ken of most bourgeois economists. Although Tooze is a liberal, I’d have thought he’d have more on the ball and be canny enough at least to consider the Marxist account of what drives capitalist productivity.
In the USA, manufacturing has recorded fairly healthy productivity rises, while services haven’t so much. It’s very easy to calculate the productivity gains from introducing industrial robots in a factory; more widgets made per hour. To some extent you can robotise the preparing of a customer’s coffee in a Starbucks outlet, leading to more cups of coffee delivered per hour. But what does it even mean to talk about productivity gains in a hairdressing salon or a nail bar? The one-minute, robot-delivered haircut isn’t yet a thing; maybe because many customers like to linger and talk to the staff. It’s part of the experience.
The reason workers in the service industry are more unorganized is their low skills and pay, which is owned to the ever growing reserve army of unemployed people. Marx was well aware of the weight the reserve army has in a capitalist system - it is a key staple of capitalism. Besides higher productivity usually goes hand in hand with technological innovation and automation, which comes with reduced surplus value if not compensated by productivity which exceeds the loss in surplus value, something which is more difficult to achieve in the service sector than in manufacturing for a variety of reasons. On that score I can highly recommend ‚Jason E. Smith - Smart Machines and Dervice Work‘
Jesus Christ. It's like watching a crack addict standing in the smoking ruins of their home shouting "MORE! MORE OF EVERYTHING THAT CRACK EXPERTS RECOMMEND! SPECIFICALLY, MORE CRACK!"
To what extent are these productivity measures meaningful when something so manifestly socially unproductive as "Finance" scores so highly? I suspect part of the problem is that the wrong things are getting measured, leading to a map that does not remotely match the territory.
I work as network*tech in financial extranet 20+ years.
Finance isn’t productive , it’s consumptive.
Moreover as all the world should know, since 2008-09 “Finance” is the central bank pump, pumping out digital Fiat.
This boosts GDP...
...and GENUG.
Finance by the way is handing the day to day job to the same people who Dell outsourced the call center to, and I don’t mean China. Yes... THEM. Ask Rishi.
Ask him anything.
The answer will be... revealing.
*I deliver 1/0s ok? My communication works.
Not rob you.
When we took the job, it wasn’t obvious that we were Satan’s Electricians. Sorry.
I mostly agree. We clearly need to allow the building of more housing but we also need to start taxing land more heavily, otherwise the landowners will continue to capture a large share of productivity growth.
As per usual with the "UK", this is focused on England. Which is probably what will end up happening. Northern Ireland is getting closer and closer to unification with Eire. Scotland seems to share far more values with the EU than with England. Why does England covet it? There are only 5mm Scotsmen against 60mm English. The English subsidize both Scotland and Northern Ireland. For what? The long term trend of the British Empire has been de-empirization. Moving from the UK to England seems like a logical progression.
In addition to labor market reform the UK needs land reform--break up great estates by converting leases into freehold, and shift to building "as of right" where land use standards are met. Invest specifically in transportation that enlarges the labor-shed in urban areas outside London and so create deeper regional labor markets. Accelerate the energy transition.
Sir - the best answers are found in your part countryman
Ernst Junger “The Worker.”
-what is needed is being done here; 🇺🇸 economically at least:
1. At risk of nuclear war and open intention of war with China by 2025 we 🇺🇸 are reshoring in a Tidal wave, and no it’s not all CHIPS act( although it helps).
2. You need Leadership, shared sacrifice, not management.
Managerialism is not leadership, and Economics is not morality.
Nor science. We need it too.
3. 🇬🇧 needs GB 🇬🇧 owned,and British workers staffed factories etc. If you have to have 100% tariffs, so be it. If you have to go without new clothes for a time, do. I was a kid in the 70s and wore hand me downs. It can get worse. It will without real choices.
4. Why anyone would expect neocolonial neoliberals like Rishi to not loot the hotel formerly known as 🇬🇧 England, and absentee landlord ownership to understand or care for the place or people? Of course not.
Get a Brit up there, one with real teeth . Churchill smiled, he didn’t show his teeth.
5. They’re people, not spreadsheets.
6. If you want 🇬🇧 to go the way of Sri Lanka 🇱🇰, Ireland 🇮🇪 and the biggest Island ever USA 🇺🇸, certainly continue on Plan 2030: back to the 90s just harder!
7. Neoliberalism doesn’t work.
Except to summon Communism, National Socialism, at best Fascism, Islam or God knows what. 1200 BC ?
8. Again the best answers are found in your part countryman
Ernst Junger “The Worker.”
For the hour of the Worker/Soldier returns.
So find one. The land of Bevan Howard must have someone left.
What’s needed it seems is moar Neoliberalism!! The 90s are calling, they say MOAR!
More degrees, more service jobs (not servants at all, no !) and moar welfare.
Don’t make it British owned or manufacturing sector!
“Britain suffers from a lack of human capital, especially in middle and lower skilled occupations.”
The manufacturing sector is too small! Concentrate on services and welfare, unless you have an “advanced degree”. Because we need more elites, which means more servants, er service sector.
The rest can get on welfare and “disability” like America.
🇺🇸 meanwhile we’re 🇺🇸going alls balls in on manufacturing. It seems hard hats and angry grannies chasing Congress into Shelters has had an unexpected effect for 🇺🇸 our working class.
Productivity differs by sector. Finance has high output per person. Healthcare and government do not.
The data might be interesting if one were to compare similar industries/sectors across different regions (within the UK as well as outside).
British manufacturing has never been known as efficient, reliable or cutting edge. There are some exceptions - BAe, Rolls Royce (the jet engines, not the autos), some chemicals companies.
One could point out that Horatio wasn’t composing poetry at the Bridge, and that the first steel bridge (in England I believe) wasn’t built by graduate students nor the servant sector, er services sector.
But this stuff is hard,
We need more 90s
Christian Bale can get his own accent back and CGI will allow him to recreate his Psycho role as I don’t know “Albion Pyscho” with London instead of Manhattan?
(I’m against Financialization and neoliberalism, if it’s not obvious).
I look forward to reading the whole report. One symptom I observe (here in Scotland) is that supposedly "good" governance extends the problem of poor management into the next generation. Innovative new companies can only attract investment if they have boards stuffed with experienced non-execs. Many of these are drawn from that weak long tail of mismanagement in previous generations.
Centralisation of power in London is what caused Brexit. If none of the obvious problems in your town are getting fixed, because local politicans have literally no power, of course you'll vote for major change
I was beside myself looking at the "productivity" in the financial services... The ultimate parasite, very productive at eating its host...
In Marx’s view, the greatest driver of increases in productivity is the relative strength of labour vis-a-vis capital. When workers have some leverage in the labour market, capitalists are compelled to innovate to raise productivity in order to get more bang for their buck. They’re also incentivised by the fact that investing in technical innovation in the production process can give them greater control over that process, curbing worker autonomy. The quite deliberate destruction of worker solidarity and trade union power in Britain over the last 40 years probably has more to do with stagnating productivity and declining wages than the undoubted mediocrity (and, indeed, mendacity) of the managerial class.
Sure- that’s why US productivity is higher- they embraced organized labour and work rules all throughout the Reagan and Clinton years
Missing a /sarc tag, are we?
There’s more to life than economics.
Marx's take is just obviously untrue from the historical record, so I'm not sure why you bring it up. Even then, he is assuming a competitive market with several non-coordinated employers, which we have never seen coexist alongside strong unionization. The far more common circumstance in a heavily unionized industry is the stagnant, anti-consumer hell of the 1960s/70s car industries in the US and UK.
Governments that encourage unionization also typically reduce corporate profit through taxation, so between that and increased unionized labor costs, there is very rarely an incentive to increase capital investment in the sector. Managers have very little reason to do anything with extra cash besides increasing their own salaries and acquiring competitors. Any profit increase will just cause the unions or the government to start demanding a bigger share, anyway.
Quite contrary to your statement the historical record bears Marx out - just look at capitalism’s golden age in the 50’s and 60’s. Your argument can not be backed up. I guess you do not understand the nexus between productivity, labor cost and innovation. Besides Marx did not have to assume a competitive market with non-coordinated employers - his account is based on competition in any kind of market environment regardless of the degree of unionization - provided there is no governmental market regulation which would substantially hinder capital accumulation. The british economy based on the rotten neoliberal principles you are obviously promoting is a striking example of the crises ridden capitalism Marx was talking about.
"Golden Age" based on what? The 50s and 60s had some positive feature's in the USA because the rest of the world's industrial capacity had been bombed to ash, but in the UK the 50s was miserable.
The British economy's problem is stagnation, not crisis. You've constructed an entire alternative set of facts and subjective narrative about golden ages to back what you wish to be true, aesthetically, so there's very little point in further discussion.
In what way is long term stagnation in growth driven capitalism different from recession and crisis - You are embarassing yourself
What you have written down in this comment is an oxymoron that shows you don't know the meaning of the word 'stagnation.'
And a windfall like massive EV and battery subsidies is followed by strikes for higher wages to ensure the bounty is spread around
It was anti-capitalist profit hell, not anti-consumer hell.
You can have capitalism or you can have democracy, but you cannot have them both.
No, it was anti consumer. Mr Ford and the execs at Leyland and GM were still swimming in money. It was our working class grandads who had to buy overpriced, broken down rust buckets for decades.
Your latter point is just a unsupported aphorism. I can do it too: "You can have freedom or you can have socialism, but you cannot have them both."
Just so you know - freedom from capitalist alienation and thus freedom for all of humanity can only be provided by socialism. I suggest you do some serious reading before regurgitating narrow minded populist mainstream stereotypes
I suggest you read something besides pseudo-intellectual marxism. It's affecting your prose style for the worse.
The matter is settled for US for instance, which was a long time ago declared a plutocracy masquerading as a democracy just because of the circus of elections. And with the stripping of good earth's resources, we are going to run out of basic things due to capitalism. And freedom is a nice shout out, but I prefer to have democracy, real one.
The point of democracy is to protect freedom. I don't really have any uses for it, otherwise. A system with a single tyrant is at least more streamlined than one with 300 million.
The point of democracy is to assure that the will of the people in their majority is being implemented.
Why then this doesn't happen in the US?
https://news.gallup.com/poll/468401/majority-say-gov-ensure-healthcare.aspx
or what about guns?
https://news.gallup.com/poll/1645/guns.aspx
we could go on and on and on...
But Freeedooom!
Whoa! I don’t agree, but either capitalism or democracy is a fresh take.
What happens when democracy runs out of everything?
What happens when capitalism runs out of Demos (people)?
The UK’s manufacturing sector has shrunk from 30% of GDP in the 1970s to 9% today. One disappointing feature of the Resolution report is their fatalistic acceptance that the UK should remain essentially a services-only economy, and that trying to revive UK manufacturing is mostly futile. But everything I’ve read suggests that it’s much harder to achieve high productivity growth in services than in manufacturing.
There’s no reason in principle (or reality!) why productivity increases should be more difficult to attain in service industries than in manufacturing. It’s just that workers in the service industries are largely unorganised and thus very weak. Thatcherism focused on destroying the UK’s manufacturing sector (in which workers were relatively well organised and unions had some clout) and promoting services for precisely that reason, backing that up with a (still ongoing) programme of anti-union legislation. If workers in the service sector got organised and wielded some power, you’d soon see productivity as well as wages increasing. But of course, such a “class-struggle” understanding of how productivity operates in a capitalist economy is beyond the ken of most bourgeois economists. Although Tooze is a liberal, I’d have thought he’d have more on the ball and be canny enough at least to consider the Marxist account of what drives capitalist productivity.
In the USA, manufacturing has recorded fairly healthy productivity rises, while services haven’t so much. It’s very easy to calculate the productivity gains from introducing industrial robots in a factory; more widgets made per hour. To some extent you can robotise the preparing of a customer’s coffee in a Starbucks outlet, leading to more cups of coffee delivered per hour. But what does it even mean to talk about productivity gains in a hairdressing salon or a nail bar? The one-minute, robot-delivered haircut isn’t yet a thing; maybe because many customers like to linger and talk to the staff. It’s part of the experience.
The productivity growth of four string quartets has been abysmal for centuries!
The reason workers in the service industry are more unorganized is their low skills and pay, which is owned to the ever growing reserve army of unemployed people. Marx was well aware of the weight the reserve army has in a capitalist system - it is a key staple of capitalism. Besides higher productivity usually goes hand in hand with technological innovation and automation, which comes with reduced surplus value if not compensated by productivity which exceeds the loss in surplus value, something which is more difficult to achieve in the service sector than in manufacturing for a variety of reasons. On that score I can highly recommend ‚Jason E. Smith - Smart Machines and Dervice Work‘
the best answers are found in
Ernst Junger “The Worker.”
And there’s more to life than economics.
Jesus Christ. It's like watching a crack addict standing in the smoking ruins of their home shouting "MORE! MORE OF EVERYTHING THAT CRACK EXPERTS RECOMMEND! SPECIFICALLY, MORE CRACK!"
To what extent are these productivity measures meaningful when something so manifestly socially unproductive as "Finance" scores so highly? I suspect part of the problem is that the wrong things are getting measured, leading to a map that does not remotely match the territory.
I work as network*tech in financial extranet 20+ years.
Finance isn’t productive , it’s consumptive.
Moreover as all the world should know, since 2008-09 “Finance” is the central bank pump, pumping out digital Fiat.
This boosts GDP...
...and GENUG.
Finance by the way is handing the day to day job to the same people who Dell outsourced the call center to, and I don’t mean China. Yes... THEM. Ask Rishi.
Ask him anything.
The answer will be... revealing.
*I deliver 1/0s ok? My communication works.
Not rob you.
When we took the job, it wasn’t obvious that we were Satan’s Electricians. Sorry.
🇬🇧 need to beat servants, er service sector harder
It’s housing. The answer is deregulation. It is obvious.
I mostly agree. We clearly need to allow the building of more housing but we also need to start taxing land more heavily, otherwise the landowners will continue to capture a large share of productivity growth.
As per usual with the "UK", this is focused on England. Which is probably what will end up happening. Northern Ireland is getting closer and closer to unification with Eire. Scotland seems to share far more values with the EU than with England. Why does England covet it? There are only 5mm Scotsmen against 60mm English. The English subsidize both Scotland and Northern Ireland. For what? The long term trend of the British Empire has been de-empirization. Moving from the UK to England seems like a logical progression.
In addition to labor market reform the UK needs land reform--break up great estates by converting leases into freehold, and shift to building "as of right" where land use standards are met. Invest specifically in transportation that enlarges the labor-shed in urban areas outside London and so create deeper regional labor markets. Accelerate the energy transition.
Sir - the best answers are found in your part countryman
Ernst Junger “The Worker.”
-what is needed is being done here; 🇺🇸 economically at least:
1. At risk of nuclear war and open intention of war with China by 2025 we 🇺🇸 are reshoring in a Tidal wave, and no it’s not all CHIPS act( although it helps).
2. You need Leadership, shared sacrifice, not management.
Managerialism is not leadership, and Economics is not morality.
Nor science. We need it too.
3. 🇬🇧 needs GB 🇬🇧 owned,and British workers staffed factories etc. If you have to have 100% tariffs, so be it. If you have to go without new clothes for a time, do. I was a kid in the 70s and wore hand me downs. It can get worse. It will without real choices.
4. Why anyone would expect neocolonial neoliberals like Rishi to not loot the hotel formerly known as 🇬🇧 England, and absentee landlord ownership to understand or care for the place or people? Of course not.
Get a Brit up there, one with real teeth . Churchill smiled, he didn’t show his teeth.
5. They’re people, not spreadsheets.
6. If you want 🇬🇧 to go the way of Sri Lanka 🇱🇰, Ireland 🇮🇪 and the biggest Island ever USA 🇺🇸, certainly continue on Plan 2030: back to the 90s just harder!
7. Neoliberalism doesn’t work.
Except to summon Communism, National Socialism, at best Fascism, Islam or God knows what. 1200 BC ?
8. Again the best answers are found in your part countryman
Ernst Junger “The Worker.”
For the hour of the Worker/Soldier returns.
So find one. The land of Bevan Howard must have someone left.
Try an MMA fighter if all else fails.
Yes, I’m serious.
What’s needed it seems is moar Neoliberalism!! The 90s are calling, they say MOAR!
More degrees, more service jobs (not servants at all, no !) and moar welfare.
Don’t make it British owned or manufacturing sector!
“Britain suffers from a lack of human capital, especially in middle and lower skilled occupations.”
The manufacturing sector is too small! Concentrate on services and welfare, unless you have an “advanced degree”. Because we need more elites, which means more servants, er service sector.
The rest can get on welfare and “disability” like America.
🇺🇸 meanwhile we’re 🇺🇸going alls balls in on manufacturing. It seems hard hats and angry grannies chasing Congress into Shelters has had an unexpected effect for 🇺🇸 our working class.
================
Productivity differs by sector. Finance has high output per person. Healthcare and government do not.
The data might be interesting if one were to compare similar industries/sectors across different regions (within the UK as well as outside).
British manufacturing has never been known as efficient, reliable or cutting edge. There are some exceptions - BAe, Rolls Royce (the jet engines, not the autos), some chemicals companies.
Maths are hard
Sciencez r harder
Engineering hardest
Economics not so hard
Business easy
Humanities best.
Waiter, you’re not being productive enough...
One could point out that Horatio wasn’t composing poetry at the Bridge, and that the first steel bridge (in England I believe) wasn’t built by graduate students nor the servant sector, er services sector.
But this stuff is hard,
We need more 90s
Christian Bale can get his own accent back and CGI will allow him to recreate his Psycho role as I don’t know “Albion Pyscho” with London instead of Manhattan?
(I’m against Financialization and neoliberalism, if it’s not obvious).
I look forward to reading the whole report. One symptom I observe (here in Scotland) is that supposedly "good" governance extends the problem of poor management into the next generation. Innovative new companies can only attract investment if they have boards stuffed with experienced non-execs. Many of these are drawn from that weak long tail of mismanagement in previous generations.
Centralisation of power in London is what caused Brexit. If none of the obvious problems in your town are getting fixed, because local politicans have literally no power, of course you'll vote for major change
Neoliberalism is a long tortured road to Socialism via the Soviet Union Redux in the West...
...and gracious I'm not even a Socialist.
Yes of course something must be done for the workers and common people.
I wonder if it could be done without ruining them morally and ultimately physically and economically?
[I'm working class, we don't care for parasites high or low].