Owen Jones never has quite grasped economic logic
We agree with at least a part of this analysis. That people are just happier when there’s some economic growth going on:
Europe is a continent soaked in pessimism. Nearly two-thirds of German consumers feel negative about the national economic situation. As political elites fail to deliver sustained improvements in living standards, security or the public realm, faith in democracy collapses. Just a quarter of voters in Britain are satisfied with how democracy works; in France, fewer than one in five feel the same.
Further:
The advance of the far right rests on a simple, corrosive premise. Since the financial crash, western publics have been encouraged to believe they are trapped in a zero-sum game, forced to compete for ever-diminishing resources. The far right’s message is brutally straightforward: if there is not enough to go around, why are “our” scarce resources being handed to migrants? Remove the undeserving competition, it argues, and the “indigenous” population will flourish once more.
If we are indeed in a zero sum economy then we do indeed face stresses. For a no growth economy does mean that no one can have more without others having less. We tend to think this is the answer to the Easterlin Paradox in fact. Being rich isn’t what makes people happy - not so much - it’s the getting richer that does. Not being in a zero sum economy, all can have more, children will be better off than their parents and so on. Growth is what produces the happiness that is. Rich countries are just those places that have had that growth for decades, centuries.
We’d go further too. Technology does advance and labour productivity does rise. Which means that if we’ve a zero growth economy then the unemployment rate - a source of much unhappiness - will ineluctably rise. We can think of growth as being the redeployment of that now extra labour or as growth being necessary to redeploy that labour usefully but we end in the same place - we need economic growth for a happy society.
OK, a zero growth, zero sum, society is not a good idea. So, what’s the solution?
Across the continent, both the centre right and the centre left have left voters feeling trapped in a zero-sum world. Yet the reality is starkly different. The EU’s nearly 500 billionaires alone control €2.3 trillion in wealth. In the first six months of this year, their combined fortunes grew by more than €2bn a day. That the wealth created by millions of European workers is siphoned off into the assets and bank accounts of a tiny elite is not a law of nature; it is a political choice. But when it is treated as unavoidable, ordinary people understandably conclude that their survival depends on reducing competition for scarce resources – fuel for the far right’s rise.
Which is where Owen is missing the economic method of reasoning. For he’s now agreed that we are in a zero sum economy. It’s the billionaires taking everything and if they have more then we proles out here have less. So, we should be zero sum about things and go take that more off the billionaires so we can have more - zero sum thinking.
Instead of what his analysis actually says we should do, which is gain some economic growth so we’re not in a zero sum world.
This even before we get to the observation that nicking all the money off those who have successfully invested in growth probably isn’t the way to encourage others to invest in growth. You know?
Tim Worstall