Saturday, 13 November 2010

Britain's Trillion Pound Horror Story

The Guardian (link above) has a discussion about this TV programmed and an article about it in the guise of a TV review.

Presenter Martin Durkin set up the private sector good, public sector bad dichotomy early on, and said more than once that the public sector is now BIGGER [his emphasis] than the private sector, as if that was inherently bad/wrong/stupid. He made repeated reference to 'the productive economy', giving me the impression that it was identical with the private sector, but later in the programme he visited the NE for a nostalgic look at how it was an industrial powerhouse in the 19C. He was appealing for a manufacturing led recovery.

He didn't address the point that the technological advancements of the 19C and since have increased productivity wildly, reducing the need for work. We can't possibly as a planet keep consuming more and more to generate enough work for people to do so they can get money to spend on consumption. This isn't a moral imperative - there is a physical upper limit to the planet's resources.

The documentary's cartoon, parodied civil servant was seen taking money out of a restaurant's till to pay his wages, and then using the same money to buy himself food in the restaurant. Thus taxation was demonstrated as being 'theft' - one of the refrains of the programme is that government is spending OUR money. But this is just money circulating. It has to do that to work. In the private sector you may go into a coffee shop (these seem to be held up as the pinnacle of private sector achievement) and pay for your coffee. Some of the money will go to workers in the shop and some to the owners. The people who receive that money will go to other shops to spend it by the same process and so on. Why no shouts of "they're spending MY money" here?

I think we're supposed to be quite happy handing over money in the private sector as we do it willingly and have a choice, but this is disingenuous. You might have a choice of where to buy your food, but you have no choice but to buy food. You'd rather not have to pay it - free would be better - but you accept (grudgingly perhaps) that you have to. Rather like taxation, in fact.

I'm not saying tax couldn't be simpler, fairer, or lower, but paying for goods and services is part of the system we live in.

Durkin's point that pretty much everyone should have a job in the "productive economy" is standard fare, but let's examine it. You need to have a job to earn money so that you can buy things to keep companies in business so they can employ people. This is the cycle of consumption and it's one of the big problems of the monetary system.

Another key problem Durkin didn't really touch on is where "our" money comes from. The answer is that it is created by banks, and as you know they don't give it away, they want it back with interest - ie more money - but as they are the sole purveyors of money (ultimately) you can only ultimately get the money to pay the interest from them - at more interest. It is of course impossible to pay this back.

The programme's contributors mention "creating wealth", without really explaining what wealth is. We might understand it as making money, but  as the programme commented, creating money ("printing money") is pointless and wrong if there are no goods and services behind it. Exactly. This applies to all money in both sectors, not just the public sector.

Wealth is not money. Wealth is the beneficial resources we have available to us.

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