Tag Archives: private rental sector

The Great Lie and the Rise of Trump and the alt.right

Economists have to shoulder their share of the blame for the dawning of the age of Trump, May and Farage. Their responsibility lies with the creation of the ‘Great Lie’ which led to the economic and social change which caused the current economic malaise. Governments longer seem to be in control, they seem powerless to arrest the decline in living standards. We now have government that operates on the Pontius Pilate principle, it shares the people’s pain, but it is powerless to anything to alleviate their suffering. In such circumstances when government claims to be helpless in the face of the current crisis, it is hardly surprising that those who claim to have a solution, no matter how wrong headed that solution are now gaining  power.

The ‘Great Lie’  is the one propagated by economists that they have discovered the economic model that if adopted will resolve all the economic and social problems that beset society, that is  the free market. A great lie can be easily identified, it is when economists claim that they have the answer to all society’s problems. Usually such optimistic solutions are called utopian, but economists have greater credibility and there claims are never subject to such scepticism. Economists never seem to accept that the economy as a human creation is as flawed as its makers, mankind. They will never admit that there proposed model for change is but an experiment that may contain as many or more flaws than the system it is replacing.  It is hard to explain why the free market model was so widely accepted, when the very failures of such a system had led to the Great Depression of the 1930s. Until the 1970s it had been accepted that the unfettered free market system was subject to extremes of volatility, whose worst manifestation were the periods of economic depression. Times whne unemploynent was high and people were impoverished. Overnight economists seemed to forget all the negatives of a free market economy and all began to speak from the same hymn sheet, the free market one. The deciding factor seemed to be the unending slow growth and high inflation crisis of the 1970s. A crisis whose origin lay in politics not economics, yet this fact was ignored by politicians desperate a for a solution to the current crisis. (For this particular economist the origins of the crisis were in the excessive demand for raw materials that the Americans required to fight the Vietnam war, which pushed up prices for steel to astronomic levels.)

Economics is pervaded by dishonesty, an unconscious dishonesty but dishonesty never-the-less.The free market or monetary economists never admitted that there would be any downsides to their free market model. Humility was the one quality lacking among these economists. They could make valid and reasoned criticisms of practice of social democratic economics, but were completely blind to the failures of free market economics. When such dishonesty is prevalent among government policy advisors, it should be no surpise that the dishonest claim made by the alt. right with its claim that immigration is the cause of all the problems is an acceptable a truth as the one that the free market works,when it it obvious to many that it does not. 

What these new economists failed to admit was that in creating a free market economy that the people would be exposed to the negative effects of adverse changes in the market. There would be many more losers in the free market. One such example comes from Sunderland, one of the areas that voted in large numbers to leave the EU. One of the main employers is  the Swan Hunter shipyard, which built merchant ships. In the 1970s it was failing to win orders because it could not compete with more modern shipyards in the Far East. The government realised that if it invested in re-equipping the yard with the latest in ship building technology, it could compete with other major shipyards. This would create many new jobs in an area of high unemployment. In 1979 a Neo-Liberal government came to power who thought any government intervention in the economy was wrong and they withdrew their support for the shipyard. All the new shipbuilding technology was sold to a rival shipyard in South Korea. Swan Hunter survives as a manufacturer of warships and equipment for the North Sea oil industry. However the people of Sunderland seem never to have forgotten the government’s betrayal of them and this year they could demonstrate their hostility by voting to leave the EU, against the advice of the government.

While the economists cannot be held responsible for the decisions of the government, they were the cheerleaders for the changes in economic policy making. One of the greatest of these new economists Milton Friedman supported the government of Pinochet when it tortured and killed its opponents, claiming that Chilean society would be better off without these people. A variation on the saying that you cannot make an omelette without breaking eggs, except that in this case the eggs are people.

One chilling example of the eggs being broken is housing policy. Increasing numbers of people, particularly the young are being forced into the private rental market. There they suffer from the twin problems of exorbitantly high rents and insecurity of tenure. When it has been suggested that the solution is to give private tenants security of tenure and to introduce rent controls, the social democratic party in this country has always rejected it as an unworkable solution. They claim that the introduction of such controls would reduce the number of properties for rent and so be against the long term interests of the private tenant. In reality a policy that did both things and which included measures to prevent a reduction in the number of rental properties could be devised. Yet this party clings to the Pontius Pilate principle of politics, vicariously sharing the pain of the private tenant while saying that bad as the situation is there is nothing they can do to improve the lot of the private tenant. When such is the official policy of this party it is no surprise that it is threatened with losing constituencies to the party of the alt. right that claims to have an answer.

There is little doubt that the adoption of free market economics has created an increasing number of losers in society and it is these losers that are looking to the alternatives for a solution. The only solution to the woes of society appear to be those  offered by the xenophobic right; as all the other political parties seem to adopt the same message which is that things may appear to be bad now, but they would be much worse if the government tried an alternative policy.

One solution to the current malaise is for politicians to accept responsibility for their actions, instead of looking for unreal solutions from the world of economics. While it was the unregulated financial markets that caused the crash of 2008/9 the slow recovery has been due to the governments adoption of an austerity policy. If the governments of the West had learnt anything from the 1930s it should be that adopting those economic policies to tackle non existent problems, they should take action to ameliorate the negative effects of the crash. Austerity programmes designed to do little more than cut government debt and increase and prolong the agonies of 2008/9. What is required is imaginative solutions to the crisis, usually not available from economists who are stuck with ‘Big Lie’, that the market will solve the current crisis if left to itself,when it quite obviously won’t.


Why the wealth of Britain is more apparent than real.



Mummers of the type the author was familiar with as a child

The Idealised Non Monetary Market Economy

Having lived for almost seventy years I have witnessed a revolutionary change in society. The society I knew as a child, one rooted in a settled rural community has disappeared, to be replaced by the restless Neo-Liberal society of atomised individuals. As a child I attended a Christmas party for the estate children. The party organiser persuaded the older children to take part in a mumming play about St. George. A play in which St. George is slain by the treacherous Moor and then brought miraculously back to life by the doctor. It was a play that had been performed by mummers for hundreds of years in our community. Although were barely understood its mummery we knew it was part of our heritage and such should be cherished. Today that community has been dispersed by the forces of economic change and such a play today would only serve to remind the residents of the quaint rural past. The dairy and the houses of the dairy workers are now bijou residences for those lucky enough to have a well paid job in the new financial sector. Those inhabitants of the old rural communities have been dispersed to the margins of the rural community, living in the private rental housing in nearby towns.

The rural community in which I grew up consisted of a series of interlocking networks of supportive social relationships. When I went to a neighbouring hamlet I went there as the gamekeepers son who was friend of one of the boys living in the hamlet. Also my mother worked on the local farms fruit picking with some of the women of this hamlet. There were many other interactions between this hamlet and the one in which I lived. It gave me a seven year old boy a sense of security, if I got into trouble I could turn for help to one of the adults in this hamlet for help. I unlike the my own children could stray far from home without my parents being dogged by the fear of the stranger. Sociologists term this social capital but all too often they see it as did Pierre Bourdieu, as it being the acquisition of a series of cultural skills and attributes that make for success in society. The example usually given is being born into a middle class family and inheriting from them the cultural set that will make for a success in society. However this ignores the more important facet of social capital which is its contribution to the well being of a community. Those networks that are most supportive are developed by people living in settled communities, its part of the inbuilt sociability of being human. All this essential social capital of supportive networking requires is space and stability, people given time will always make and remake the community. Unfortunately this essential social capital that is the settled community regarded by economists and governments as a hindrance to economic development. They want a rootless labour force that moves from place to place according to the demands of industry. What others saw as misery the British Treasury saw as a success. The visitors to the Olympic games in 2012 in London had the no problem finding accommodation because the private landlords had evicted their former tenants in favour of better paying guests from abroad.
The decline of the non-monetary economy and the consequent destruction of social capital
The wealth of the British nation has increased immeasurably since my childhood. Car ownership was a rarity in my childhood, while today the majority of families own at least one car. In the street in which I live the majority of households own two cars, yet I would argue that my neighbour’s are in some ways much poorer than their predecessors. When I first moved into the street all the houses were owner occupied now whenever a house comes up for a it is likely to be bought by a landlord and the new residents are families on short term tenancies. These new residents are there on insecure short term tenancies and will rob ably be moved on within a year of two. Just as the influx of money destroyed the settled rural community of my childhood, the same is now happening to my street. Neighbour’s such as C… who have lived in this street for fifty years will become an increasing rarity, in future long term residents will be those who have renewed their tenancy agreement for the second year. To paraphrase another writer, the typical British resident will have a smart phone, a car purchased on credit, but live in unsatisfactory accommodation, possibly squalid and over crowded and working in low income insecure employment. This poses the question who lives the better life my father who having just been demobbed from the army in 1945 had a income of £4.50 on which to support his family or today’s worker on the average wage of £120 with the car etc, something my father never had. What I would suggest is that my father, had all the monetary and non monetary advantages,such as security of employment, security of tenure and the knowledge that although his income was small it be sufficient to feed and clothe his family, in other words peace of mind.

To give another example, whenever we moved into a new house, the new neighbour would always call to introduce themselves and offer the new family a cup of tea, some sugar and some basic groceries to tide them over until they could stock up on food. My first pair of slippers came courtesy of a neighbour. He stood me on a piece of cardboard and traced an outline of my foot on to the cardboard which he then cut out. Then he and his wife knitted the uppers which they attached to the sole. While it is possible to over romanticise the poor but compassionate society of the late 1940s and early 1950s, it does demonstrate that there is a wealth that is not quantifiable in cash terms. A wealth that is not exchanged for cash within the market, however as its intangible and impossible to quantify it is undervalued by economists, or more usually ignored. Yet for an economist anything that is valued should be regarded as wealth, good health is valued by all yet impossible to quantify. Economists will try to put a value on it in terms of possible days lost to work through ill health, yet this does not adequately describe the value that people attach to good health. Similarly there is no money value that can be attached to friendship or all that is good in human relationship.

The Contemporary Damaged Society

There is a canary in the mine * which demonstrates the loss of humanity within contemporary society. The canary in the mine is the young people of this society, they being the amongst the most vulnerable, will be the first to show signs of harm. Statistical evidence shows that British school children are amongst the most unhappiest in the developed world. Amongst British children there are also record levels of self harm. There further evidence which is anecdotal but there seems to be record levels of ill health amongst young women that did not seem to be there when I was young. Is this because young women are more vulnerable to stress and the ills of contemporary society? Are there additional insecurities and anxieties that affect young women in particular or is it changes in the environment that causes the harm to women’s bodies? Is it a coincidence that the two of young teenage female stars promoted by Disney, Britney Spears and Miley Cyrus, now they are adult both demonstrate the symptoms one associates with mental ill health? The struggle to reconcile the ideal female role with the reality of the real lived life, the result is unhappiness and ill health. This contrasts Justin Timberlake another former child star who seems to have suffered none of the mental health problems of his female counter parts. I know that young men have a higher suicide rate than men, but is women’s greater ill health because they are better able to handle depression, and that depression is sublimated into physical illness.

The Model for a Better Society

All the glitter and glamour of contemporary is merely the pretty surface that hides a dark interior. There is not just the physical misery of increasing impoverishment of large sections of the population but also the destruction of the non-monetary economy ( social capital) that provides the essentials necessary for a happy life. There is one interesting similarity that illustrates this and that is the prevalence of high levels of family breakdown in both the families of 19th century industrial Britain and today. Contemporary commentators in the 19th century wrote despairingly about the lack of morals amongst the working class, in particular promiscuity. Family groups were constantly breaking up and remaking themselves, either through death or the stress imposed on the family group through living in the inhuman conditions of the 19th century slum. One chilling example was the wife or companion of the ordinary soldier, usually because of the early death of the male partner, these women had to resort to prostitution to survive, taking on a number male partners was necessary to obtain the means for survival. In today’s rootless society there is a similar level of family breakdown, where it is estimated that 1 in 2 marriages will end in divorce.

Politicians and economists are obsessed with growth in the physical or monetary economy, failing to note the need for similar growth in the non monetary social economy. Whenever people are unrooted and forced to move to a new area. They immediately try to recreate the community that they have lost. Neighbours become friends and new social networks develop that provide the supportive framework necessary for individuals to thrive. In a street such as the one in which I live, increasingly the houses are purchased by landlords. The increases the material wealth of the city as the money the tenants pay for their accommodation far exceeds that paid by an owner occupier for their mortgage. In consequence the value of the houses go up in the area, the city appears to be much wealthier, as its capital stock has increased greatly in value. However the social capital is much diminished. Older people develop feelings of insecurity as they know less and less about their neighbours. The threat to the street is that it becomes a street of strangers, as the new tenants will be moving on within a year when their tenancy runs out and for such people it is a waste of their social capital to make friends. All those essential but intangible services that are provided by a stable settled community disappear. In such a society such as Britain or a society of strangers, the fear of crime far exceeds that of fear in crime in societies that experience high level crime societies. In society where you don’t know your neighbour fear of the unknown soon becomes fear of the criminal.

The solution to this problem is create a society of neighbours in place of that of strangers. The means are quite simple give the new private rental tenants security of tenure, legislate to make long term tenure the rule. Today any landlord can give their tenants two months notice to leave, and its very unusual for any tenant to remain in a property for more than 12 months. If they had security of tenure they would make friends of the neighbours and the support networks so common in the past would develop again in these urban communities. What economists and politicians never understand is that there is a wealth valued by people that living in settled communities, which is plays a key part in maximising human welfare.

The ignorance of this necessary and essential wealth is demonstrated time and time again by our political leaders. Whenever the major employer collapses in an area, such as is currently happening in the steel town of Redcar. The government sends in employment agencies for whom one of the priorities is to find work for the unemployed in another more prosperous area. Our government does not understand and therefore fails to value the social capital inherent in a stable community. Instead it sees the community as a drag on industrial mobility, that stops people leaving the area for work elsewhere. Unlike the government the residents of Redcar and other towns of the industrial holocaust recognise the value of the social capital inherent in their community.