The howling immorality of zero hours contracts

We've all recently been subjected to yet another of those campaigns. Zero hours contracts, where someone is trained and ready to work but no hours of work are guaranteed, were just the immoral exploitation of labour by the plutocratic capitalists and their lackey running dogs. Apparently: although one of the journalists who made this claim was really very put out when we pointed out that she, as a freelance journalist for a number of publications, was on a number of zero hours contracts herself. And indeed are several of us when we write for various places, chat on the radio and all that. 

So, McDonald's probably the country's largest user of such contracts has been offering more secure ones:

Paul Pomroy, the boss of McDonald’s UK, said the company was revamping its employment policy after staff told him they were struggling to get loans, mortgages and mobile phone contracts because they are not guaranteed employment each week.

As a result, the company has started offering staff the option of moving to contracts guaranteeing a minimum of four hours a week, 16 hours or 30 hours.

Pomroy said a trial in St Helens, Merseyside, had been very successful and McDonald’s is now looking to roll it out across the country.

About 80% of workers in the trial elected to stay on zero hours...

We certainly wouldn't decry people being offered more choice. But it does rather look like the screaming chatterati were wrong on this one too, doesn't it? Far from zero hours contracts being something which the workers hate as exploitation they exist because the vast majority of the workers are entirely happy with them, prefer them, actively choose them. How rare it is for that howling about a fashionable issue to be wrong, eh? 

As we've said before, if zero hours contracts are just fine for us, if we actively choose them in our own working lives, then why aren't they just fine if other people wish to make the same choice? After all, it's not as if every newly minted and left wing (but we largely repeat ourselves) graduate wouldn't cut their left leg off for a chance to freelance for one of the national papers, is it? And if that is fine then why one earth should the hoi polloi be excluded from a choice that we're allowed to make?

George Monbiot says we're to blame for everything. Perhaps he's even right

George Monbiot's latest tome gets an airing in The Guardian. And we're specifically fingered as being some of the evil ones who imposed neoliberalism upon the world. From Mises and Hayek, through the Mont Pelerin Society, leads us directly to the Adam Smith Institute and the condition of the world today.

We think that's rather overdoing our contribution to be frank but we are willing to accept responsibility all the same. As a point or argumentation that is: assume that the charge is correct, we really have been plotting all these decades to make the world as it is today.

OK, so what is it that our pushing of neoliberalism has done? You could look at that chart above from Max Roser. This last generation of globally applied neoliberalism, all that free trade, globalisation, that application of the Washington Consensus (that list of stupid things that governments should not do), what has been the effect? The greatest decline in absolute poverty in the history of our entire species. That decline has been so great that global inequality has been falling.

Or if you prefer it in words, from 2013:

The number of people living on less than $1.25 per day has decreased dramatically in the past three decades, from half the citizens in the developing world in 1981 to 21 percent in 2010, despite a 59 percent increase in the developing world population. However, a new analysis of extreme poverty released today by the World Bank shows that there are still 1.2 billion people living in extreme poverty, and despite recent impressive progress, Sub-Saharan Africa still accounts for more than one-third of the world’s extreme poor.

Or 2015

The number of people living in extreme poverty around the world is likely to fall to under 10 percent of the global population in 2015, according to World Bank projections released today, giving fresh evidence that a quarter-century-long sustained reduction in poverty is moving the world closer to the historic goal of ending poverty by 2030.

The distribution of the economic growth that has been happening. Yes, certainly, the global 1% have been doing well (that global 1% is just about everyone a bit over median income in the rich countries. Over about £30,000 a year in the UK and you're the 1%) but look at Branko Milanovic's chart to see what has been really happening elsewhere:

The top 1% of the global income distribution has seen its real income (adjusted for inflation) rise by more than 60% over those two decades.

What is far less known is that an even greater increase in incomes was realized by those parts of the global income distribution that now lie around the median. They achieved an 80% real increase in incomes.

It is there — between the 50th and 60th percentile of global income distribution, which in 2008 included people with annual after-tax per capita incomes between 1,200 and 1,800 international dollars — that we find some 200 million Chinese and 90 million Indians, as well as about 30 million each in Indonesia, Brazil, Egypt and Mexico. These 400 million people are among the biggest gainers in the global income distribution.

The real surprise is that those in the bottom third of the global income distribution have also made significant gains, with real incomes rising between more than 40% and almost 70%. (The only exception is the poorest 5% of the population, whose real incomes have remained about the same.)

Monbiot namechecks Milton Friedman, of course. And there's an interesting comment that has been made about Friedman. Which is that he wasn't right wing at all (his railing against the monopoly of the AMA should be enough for people to see that) but was a very left wing extreme utilitarian. The goal is to make the poor richer. What is to be done is what works in making that happen. We rather share that goal and outlook.

So, back to Monbiot's accusation. We're, in part at least, responsible for the state of the modern world, for the way things have gone these recent decades. What has happened is that the greatest curse upon humanity, that absolute , peasant, poverty has been alleviated as never before and looks as if it's well on the way to extinction.

We're really very happy indeed to be blamed for that. We'll celebrate, in fact we do celebrate, that it has happened and might even suffer from that warm smug glow of knowing that a plan has worked. 

At which point a question or four for George himself. What's wrong with wanting the global poor to be richer? What's wrong with advocating policies that promote that goal? And what on Earth is wrong with the application of policies which have, largely, achieved that goal?

Just what is it we are supposed to be ashamed of?

This is NOT a Conservative government

If you thought the nation elected a Conservative government in May 2015, you would be wrong.  A Conservative government would have simplified and reduced taxes, as Nigel Lawson did in every budget.  Instead George Osborne has copied Gordon Brown, packing his budget with trivial interferences with no overall goal or vision, and making more tax changes per budget than Gordon Brown did.

David Cameron's EU policy copies Harold Wilson's.  The Labour PM negotiated a few token 'concessions,' hailed it as a 'major change' in the relationship, and campaigned for a referendum yes vote.  He, too, spoke of an economic relationship, lulling the nation into remaining in an increasingly political union.

Because Conservatives support the spontaneity of society, a Conservative government should preserve that spontaneity, allowing people to decide how to live and to interact, producing a different outcome to one dreamed up in the mind of a central planner.  This government, however, wants to make society conform to a preconceived idea of how it thinks people should live.  The sugar tax is the latest in a long line of similar interferences.  We now have 'plain packaging' for cigarettes, and recommended levels for alcohol and dairy products low enough to be a laughing stock. Yet this is what the government's paid officials try to foist on us as an acceptable lifestyle.

We have a 'living wage' that secures more equality among low-paid workers at a cost of perhaps 60,000 jobs and higher prices in industries such as catering and entertainment.  It is not Conservative to compel employers to pay their employees more than the economic worth of their labour.  It is a Labour outlook to regard business and industry as there to provide jobs and wages.  A Conservative attitude sees their role as one of providing goods and services for consumers, with jobs and wages coming as a welcome consequence of that role.

If this government does have any goals at all, they seem to be political rather than economic or social.  It aims at a day-to-day management that directs society in ways that win today's headlines without heeding long-term consequences.  They seek to justify their mandate each day, rather than over the lifetime of a Parliament.  This, too, was originally a Labour policy and is what Peter Mandelson turned New Labour into.  It is not Conservative.

Conservatives are supposed to protect people's ability to live according to their values and aspirations, not to expose them to every pressure group wanting to ride its hobby horse roughshod over how they might choose to live.

This government wants to micromanage our lives, telling us how much energy to use, how much garbage to discard, and not even trusting us to dispose of plastic bags responsibly.  It is not Conservative by any definition.

The IMF's Misdiagnosis

The International Monetary Fund has downgraded its world growth forecast for this year by 0.2 percentage points to 3.2%. That is the fourth cut in a year, and not much more than the 3% rate that the IMF has previously regarded as a ‘technical recession’.

So why the downgrade – particularly when the IMF is predicting slightly higher than forecast grown in China, of 6.%? They cite many factors. Chinese growth is still a lot slower than it was a few years ago. Europe and Japan seem stuck in low growth despite their central banks' expansionary policies. A strong dollar has caused America to make less and import more. Then there is Greece and doubts about the Eurozone.

And the IMF solution? The world has been growing too slow for too long. It needs a boost. Central banks should keep down interest rates, print money and spend taxpayers’ money on infrastructure improvements.

Wrong diagnosis, wrong. Things always change: economies go up and down, exchange rates fluctuate, markets rise and fall. And easy money, cheap credit and government overspending is what got us into this boom-bust cycle in the first place.

What’s happening is perfectly simple. The eclipse of communism saw countries – like China – joining the world trade system and developing their production markets. Technology helped the globalisation of world trade. So stuff got a lot cheaper. But Western governments still stuck to their generous inflation targets, their central banks pumping out money and keeping down interest rates. It was a huge boom – some of it down to trade making things cheaper, right enough: but more of it down to the continuing, misguided expansionism.

So consumers bought luxuries like crazy, government built new motorways, bridges, schools and hospitals, and people invested in the land, plant, equipment and workers needed to produce these things. When the music eventually stopped, our productive assets were in the wrong places, producing the wrong things for our post-crash economies.

It might have been right to palliate that with an immediate monetary expansion. But should interest rates have stayed at ‘emergency’ levels for the past five and more years? That just perpetuates the artificial boom and means we get by, without doing much. If you want to know why productivity is falling, look no further. If we want to return to economic growth, we have to recognise that the 2000s boom made us malinvest on a huge scale. And we need to grit our teeth and write off those malinvestments. Not perpetuate them with further expansions.

New paper: Stuck in the middle with EU

Why it’s time we cut out the middle man and become global citizens.

EU membership has been made redundant by global regulators, according to a new paper from the Adam Smith Institute released today. Published independently of both the major campaigns, the report reveals that the UK often has little say over EU regulation, as in reality so much of it originates at the global level. 

Rather than the expected ‘bonfire of regulations’ upon exit, or a situation where the UK is at the mercy of Single Market regulations without having any influence on them, the free-market think tank has highlighted that 80% of Single Market legislation falls within the ambit of existing international organisations and is consequently open to global regulation. The EU itself originates very few market standards and rules, the study shows, despite its sprawling size, and it frequently outsources and copies global agreements verbatim.
 
The new paper Global Regulators: Stuck in the middle with EU, written by European Union expert and ASI fellow Roland Smith, lays out how the UK’s ability to influence global legislation would change for the better following an exit from the EU.
 
The author notes that whilst we are told EU membership is necessary so that we “have a say” in the rules affecting our industries, the fact is that everything from fishing to food packaging and car standards to disability rights are now driven by a myriad of global organisations – even the infamous rule on straight cucumbers is now in the hands of a global body.
 
Contrary to popular belief, the adoption of standards by the EU from bodies such as Codex is not voluntary, and is enforceable by the World Trade Organisation’s Technical Barriers to Trade Agreement. The TBT Agreement makes global bodies the ‘manufacturers’ of the law, whilst the EU is often merely the ‘wholesaler’.
 
The paper goes on to argue that rather than stay in the EU, the UK should focus on formalising and democratising the UK’s global governance involvement, bringing the UK’s full voice to it as an open, global trading nation. In the context of Brexit, ‘isolation’ is near impossible in the globalised world, in which Britain could operate at the new global top table as opposed to the EU’s shrinking one.
 
Author of the report Roland Smith said:

“The rhetoric about the UK being isolated is out of place when you consider the global landscape. If the EU didn’t exist, we wouldn’t be in a rush to invent it. The global single market is overtaking the EU, and since we are not in the Euro and have no need for political integration, it is time to leave and take our place as a truly global citizen.”

Sam Bowman, Executive Director of the Adam Smith Institute said:

This report shows that the strongest argument for staying in the EU is actually rather weak. The EU is increasingly best understood as a regulatory intermediary, codifying for member states rules that have been agreed at an international level. If so, it is not clear at all that the UK would have less influence on global regulation if it left the EU – indeed, paradoxically, Britain may have a louder voice at the top tables if it was outside the EU rather than in.

Read the whole paper here.