Britain's economy is broken apparently. Everyone is simply intellectually bankrupt other than those brave people at the IPPR who are going to do all that heavy thinking for us and put the world to rights. You know, with a properly radical and progressive list of the things we must all be forced to do.
One minor point we would make:
In the early 19th century, the process of mechanisation created mass destitution and misery. The Luddites were right that new technologies were taking their jobs, even if they were wrong to think they could face this threat down by breaking the machinery. How will we manage the 21st-century disruption better than we did last time? How can we imagine new jobs that make the best use of uniquely human talents? Should we explore a universal basic income or not? Is it time to reopen questions of common ownership in a machine age in which capital is likely to dominate?
There is something called the Engels Pause. The Industrial Revolution was revoluting, GDP and output climbing sharply, yet pay didn't seem to be rising. One part of this is simply that at this distance we're not measuring living standards properly. To be trite about it the replacement of woollen underwear by the newly cheap cotton we think a decent advance in living standards. Try wearing woollie undies for a week between washes to get the point. Not being trite the vast reduction in female household labour brought about by the Spinning Jenny was not a minor matter. Near every woman we meet in literature all the way back to Homer, rich women and all, spends inordinate amounts of time hand spinning. By Jane Austen it's not even mentioned.
That Pause ends in the 1840s in terms of wages paid. Which is also the time that Britain adopts free trade with the repeal of the Corn Laws. This is not a coincidence. The greater competition from that trade means that the rentier and capitalist profits are competed away to the benefit of the workers. Thus one part of the solution is clear today, unilateral free trade, as last time.
And now a more major point:
Britain has an enormous trade deficit, since we buy more from the rest of the world than we sell to it. The result is that the British economy is dangerously dependent on what the governor of the Bank of England has described as the “kindness of strangers” – borrowing from foreigners to keep us afloat. Our economy has not achieved sustained trade surpluses since the late 1970s and early 1980s.
We do not borrow in order to fund a trade deficit. We most certainly have, must have, a surplus on the capital account. But that surplus is made up of portfolio and direct investment by foreigners, only some of which is borrowing. And the idea that "we," the country, borrow from foreigners is because the government is borrowing, nothing at all to do with a trade deficit.
Wrong in micro, wrong in macro therefore. But it gets worse, with the major point:
In Britain in 2017, the gap in wealth (rather than income) between top and bottom is almost the same as in Russia.
We are directed to this page. Where we are told:
The UK's wealth distribution is roughly average compared to the other OECD countries. The UK has a wealth GINI coefficient of 73.2% compared to an OECD average of 72.8%.
That is, wealth inequality in the UK is lower than it is in Denmark, Sweden, Finland and Norway. Lower than all of the Nordic social democracies. It would appear therefore that social democracy does not reduce wealth inequality, no?
But this is what makes it all so appallingly bad. The IPPR is not just wrong in micro and macro they're not even reading their own evidence.
And these are the people who should plan what we should all be forced to do?