Liz Truss is a belter.

The formless nought. That was my thinking when I heard Chancellor of the Exchequer, Kwasi Kwarteng mentioning ‘the people,’ ‘the people’ he talked to, ‘the people’ he listened to, ‘the people’—

Not my people. Not me.

Benjamin Disraeli, 1st Earl of Beaconsfield, friend of Queen Victoria,  leader of the Conservative Party and twice Prime Minister but also a writer. Sybil (1845), for example, brought the two nations argument into dining rooms. The working class, of course, did not need to read about it in novels they couldn’t afford to buy, we lived it.

‘Two nations: between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts and feelings as if they were dwellers in different zones, or inhabitants of different planets; who are formed by different breeding, are fed by different food, are ordered by different manners, and are not governed by the same laws.

You speak of… the rich and the poor.’

 PM Liz Truss and her chancellor no longer are going to implement a 45p tax rate for top earners, equivalent to Thatcher’s hated poll tax, but worse, because that possibility remains.

Liz Truss puts her faith in trickle-down economics. Also called supply-side economics, or monetarism as opposed to Keynesism. Thatcherism. Reaganomics. Trumpism. Lowering taxes and cutting regulation will promote economic growth.  A coded form of letting the rich grow rich. 

Margaret Thatcher, Conservative Party leader but not yet Prime Minister in a speech given in early1975, to The Institute of Socioeconomic studies in New York, outlined her philosophy in her ‘Let the Poppies Grow Tall speech’. ‘I would say, let our children grow tall and some taller than others if they have the ability in them to do so’.

Greed is good. Money trickles down the economy and everyone wins. But some more than others. There’s not much trickle down from King Charles III’s conservatively valued £10 billion of art work. But he gets to put his mugshot on our notes and coins. Its value goes on rising as the economy goes into triple-dip recession. He’s looking down on us. Sterling tanks, allied to the economic folly of Brexit which knocks around five-percent off Gross Domestic Product. The price of money goes up. Mortgages go up, the value of our homes fall, for the first time since the financial crisis, but not too far. There’s a safety net for investment. Demand for housing outstrips supply. The oldest, most costly and least energy-efficient housing in Europe (50% built before 1965, most of it council stock, 20% built before the end of the first world war, housing for heroes). Price, in theory, will find a new equilibrium under Alfred Marshall’s original supply and demand diagram. The free market will have done its job of allocating scarce resources.

The Tory government refused to let the Office for Budget Responsibility audit these tax cuts. But According to the Institute of Fiscal Studies, only taxpayers whose earnings are £155 000 or more would have paid less tax in the government’s mini-budget. Millionaires would, nominally, become £40 000 per annum better off. Spending and welfare payments to be cut, and not to rise with inflation, which is another way of penalising the poor.  Austerity the answer for one of the two nations. Withdrawing free child care for three-to-four-year-olds marked down as a saving. According to the Child Poverty Action Group, 800 000 children living in England are missing out on free-school meals and going hungry.  Ten-to-fifteen percent, the amount house prices are likely to fall next year according to analysts. Eight million households struggling to pay telecom bills, according to Offcom, a record.

Fredrich Heyek (1944) The Road to Serfdom argument that a central bureaucracy will lead to militarism and fascism. Council houses equals fascism. British Rail equals fascism. Public control of water companies equals fascism. Health Care and the NHS equals fascism.

Arthur Scargill, President of the National Union of Mineworkers, the class enemy of Thatcher’s government. 85 000 coal miners and then there were none.  His mantra that not a seam of coal would be left in the ground has much the same ring as Secretary of State for Business, Energy and Industrial Strategy, the Right Honourable Jacob Rees-Moggs’s claim that no untapped gas should be left in the North Sea. No great surprise that deniers of manmade climate change and deregulation have the same office and same ideology.

BP, which used to be owned by the taxpayer, who like other energy companies have had a good war in Ukraine, and enjoyed massive windfall profits with sky-high oil prices, chief executive, Bernard Looney was paid £4.46 million in 2021. Like his colleagues in Shell and British Centrica, top ups range from around £75 000 to just over £550 000. More is on the way for less.

The Rand Corporation in the United States shows decades of tax cut and deregulation of labour markets have taken around $50 trillion in wage growth from the bottom 90% of earners and given it to the top 1%.

We talk about subsidising Putin’s war by buying Russia’s oil and gas. We are familiar with sanctions against Russian oligarchs who have supported the Conservative Party. But we remain wilfully blind to who helped the moron’s moron get Trump elected in the United States in 2016, supported Nigel Farage and engineered Brexit. We’re talking Moscow.

  But as James Meek argues in Private Island, the free marketeers in selling off public assets at knockdown prices effectively subsidised other nation’s public sector, privatised and taken back into state control. The French state energy company EDF is a good example. The company we hoped would build new reactors for us with Chinese partners. Our government ditched the Chinese for political reasons. EDF ditched our government for financial reasons. There wasn’t enough cash in it for their private monopoly. Win-win for them.

Meek tells the reader what we already know about privatisation.

‘The Spanish economist Germa Bel traces the origins of the word to the German Reprivatiserung, first used in English in 1936 by the Berlin correspondent of The Economist, writing about the Nazi economic policy in 1943.

‘The Nazi Party facilitates the accumulation of private fortunes and industrial empires through “privatisation” and other measures thereby intensifying centralisation of economic affairs in an increasingly narrow group.’

Ironically, Karl Marx’s dictum that all value comes from the surplus value of labour shows best how deregulation worked in concentration camps that benefited the national socialist elite and their eugenic philosophy. Heinrich Himmler, a leading architect of the holocaust, had a sign over the entry to Auschwitz: ‘Work makes you free’. He benefited from the unit cost of labour. Worker’s wages were driven down. Uniforms, housing, and food were provided by the SS. They acted as a modern employment agency where workers were replaceable parts. The commodity price of labour fell to the bare bones with sick days limited and near to zero. A right-wing paradise and the trains ran on time. Even Amazon or Uber would find it difficult to beat such benefits.

Surplus value. The gap between the price the worker can sell his or her labour for and the price of the commodity on the free market widens. Win-win for efficiency and the capitalist mode of production. The hidden cost of labour is taken out of the equation. Low cost labour labelled workshy or lazy by the right-wing media or lacking the prerequisite skills, until we’re told to clap them as they worked throughout the pandemic. Now those same workers are labelled greedy and unreasonable for not agreeing to inflationary pay cuts.     

 Thatcher did not have a patent on privatisation.  The Common Lands used for the good of communities was made uncommon. Those that owned the land owned the people on the land.

Unchained Britannica, the cabal of free marketeers who seized power committed themselves to the same path as Cameron and Osborne’s austerity budgets or Johnson’s levelling-up agenda. Taking money from the poor and giving it to the rich (the reverse-Robin Hood, I’ve been saying that for ten years or more). But they talked about it in the wrong language. They scared Tory voters. And they scared the markets they claimed to understand better than anyone else. George Soros bought sterling and sold sterling. Black Wednesday, 16th September 1992, wasn’t black for him. He made billions of dollars. Sterling’s weakness  was regarded as a snapshot of the economy by trading markets. Hedge funds are similarly piling into the pound, borrowing to bet it will fall to parity with the dollar. Money for nothing. Who works for it?

Chrystia Freeland (2013) in the introduction to Plutocrats: The Rise of the New Global Super Rich noted the super-rich, or the one-percent, didn’t like being called rich. They prefer the term affluent. Winners and losers. We’re all in it together rhetoric of David Cameron. Bumps in the economy ahead. A 2011 experiment conducted by Michael Norton of Harvard Business School with behavioural economist Dan Early, Duke University showed people the wealth distribution of the United States (top 20% own 84% of wealth) and compared it to Sweden’s (top 20% own 36% of wealth), and asked them where they would like to live.

The predictable answer is Sweden wins, even as it is becoming more right-wing, insular and moving towards the American model. Ironically, the Swedish model of wealth distribution was similar to the American model and indeed the British model of the 1950s.

What happened?

‘The skew towards the very top (accelerated after the moron’s moron, Trump took office in 2016) is so pronounced that you cannot understand economic growth figures without taking it into account.’

Trussonomics and the Tory Party, and the magic money tree, follow this model of deception based on nominal economic growth. After the 2008, $700 billion banking bailout in which unregulated (which they termed self-regulation) money men were given public money, which was mirrored in Britain and around the world at no cost to the rich. Boom and bust for some. Greed is indeed good. All the gains, none of the losses. America’s economic recovery in 2009-10 of 2.3% of GDP could be considered impressive out with China and Asian economies.

Economist Emmanuel Saez had a closer look at these growth figures. ‘99% of American’s incomes increased by 0.2%. Incomes for the top 1% rose by 11.6%.’

Tweets, President Joe Biden: ‘I am sick and tired of trickle-down economics. It has never worked. We’re building an economy from the bottom up and the middle out.’

Thomas Piketty (2014) The New York Times Bestseller, Capital in the Twenty-First Century was based on fifteen years of research. He acknowledges the empirical data provided by Simon Kutznet and compared him to Karl Marx. Kutznet’s theory could be summarised in a single sentence spouted by President Reagan, ad-libbed by numerous politicians, the latest being Prime Minister Liz Truss.

‘Growth is a rising tide that lifts all ships.’

Kutznev, like Piketty, was measuring income distribution. Who gets what, without providing the why as Marx did.

‘He (Kutznev) noted a sharp reduction in income inequality in the United States between 1913 and 1948.’

America was becoming a more equal society. Income equality would follow the path of the Kutznet Bell Curve. Inequality was shrinking as Americans and the world became more middle-class.

Freeland compares Alexis de Tocqueville’s prediction to Kutznet’s, which sounds very like a justification for the modernity of colonialism and the white man’s burden. He was writing in the early years of the industrial revolution, when the wealth and status of landowners was being undermined by industrialists who poured labour into the coal mines, shipyards and sugar plantations (that’s not to claim that many industrialists weren’t also aristocratic, the two aren’t mutually exclusive) and took out vast sums of money or capital.

‘If one looks closely at the world since the beginning of society, it is easy to see that equality is only prevalent in the historical poles of civilisation. Savages are equal because they are equally weak and ignorant. Very civilised men can all become equal because they all have at their disposal similar mean of attaining comfort and happiness. Between these two extremes is found inequality of condition, wealth, knowledge—the power of the few, the poverty, ignorance and weakness of the rest.’

Piketty worked with other economists to analyse, like Kutznet, wealth distribution and inequality in around twenty nations using historical and contemporary data such as income tax returns. His findings are clear. Hayek believed we were on the The Road to Serfdom. Much the same road as Marx envisaged in his theory of infinite accumulation. Wealth increasingly flows from the poor the rich, who use their resources to deregulate and create an environment in which inequality as measured by the Gini coefficient, like global warming, reaches increasingly new highs, which become the new norms to further pauperise society and call for more tax cuts for ‘the people’. We lost the propaganda war. Fox News is no news. Plutocrats might not like to be called rich or super-rich. No bell-shaped Kutznet curve, but the hockey stick of man-made global warming shooting up year on year, running in tandem with the wealth of the super-rich and growing inequality. In our new gilded age, the must have is a bolt-hole away from common humanity and the coming apocalypse. Liz Truss could play her part as being the useful idiot that builds a fence to keep out the poor. Inside the gilded escape pod, the problem of labour returns in a familiar form. How do we keep the servants servile? How do we keep labour labouring? Discuss, Liz Truss.         

Martin Ford (2015) Rise of the Robots

ford rise of robots.jpg

Robots are pattern-recognition machines who have grown arms, legs and visual awareness. Each time we take a step, for example, we are continually falling. Robots face the same problem, but they have not had tens of millions of years of evolution to solve it. Moore’s Law comes into effect here. Computing power which provides the software for computer hardware; robot’s arms and legs and eyes (these are anthropomorphic attributes) doubles every eighteen to twenty-four months. Software engineers are coming up fast against the physical limitation of the materials used to encode machines. With the development of quantum computing that problem seems –temporarily- to have been solved, but few people can explain the mechanics. Martin Ford’s analogy of driving speeds highlights where we’ve come from and where we’re going. Imagine you’re in a car he says, driving at five-miles-per hour (mph). Drive for a minute. 10mph. fifth minute, 80mph. Imagine you’re on the twenty-seventh minute. We’re approaching the speed of sound. Then the speed of light. That’s Moore’s law. That’s where we are.

Another way of looking at it is to think of the brain power at Los Alamos around 1944 when plans were being developed to develop the first atomic bomb. Most of the great Western minds of maths and physics were working on the probability of different scenarios and outcomes. Unless you were a future Nobel winner, you were probably working in the canteen. Now that kind of mathematical grunt work could be done by a ten-year old boy or girl with an iPad. What direction are we going in? Think in terms of a continuum.

Where we are now, I’d guess is similar to the place where the Crow Indians were in Jonathan Lear (2006) Radical Hope: Ethics in The Face of Cultural Devastation; a place and time before the white man came, before around sixty million migrating buffalo were indiscriminately killed,  and with the mass cull went their food source and way of life. Lear writes of the Crows, but he might as well be writing of the Greek, the Roman, the Holy Roman, our own sense of the possible and the impossible: ‘The inability to conceive of its own devastation will tend to be the blind spot of any culture’.  Martin Ford suggests we are at endgame and the chess analogy is appropriate.

Graphic evidence comes from games. It was no great surprise when IBM’s software Deep Blue beat world chess champion Gary Kasparov over a six-game match. While the possibilities in chess are quantitatively enormous, we tend to think of it being on rails. Daniel Kahnerman (2011) Thinking, Fast and Slow uses the example of a chess master looking at a chess board, and intuition will suggest the best move for him or her to make. That’s thinking fast, but it takes years of training. Software such as Deep Blue travels all the lines of the board at speeds faster than human thought. Speeds that we think of as simultaneous.  And if it makes a mistake it learns from it. Software does not forget. Given such enormous computing power it seemed inevitable that the machine would beat the man.

IBM’s success on Jeopardy! was a different level of success. Deep Blue had been taken off the rails. The brute force of computing power was competing in a general knowledge quiz with idiosyncratic questions and an idiosyncratic format. Computers don’t do spontaneity or intuitive thought over a wide range of subjects. Yet Watson, IBM’s software, triumphed in two televised matches over Jeopardy! champions Ken Jennings and Brad Rutter in February 2011.

At one end of the continuum humans become grey gloop. Nothing is wasted. Eric Drexler one of the leading proponents of this theory suggests the combined effect of nanotechnology and increasing computer power to develop their own heuristic, and innate ability to shape the world in their own image, human will be little more than feedstock. If this sounds a bit corny (pun intended) then the co-founder of SunMicrosystems, Bill Joy, article in 2000, ‘Why the Future Doesn’t Need Us’ runs through the existential dangers of cross fertilisation in the fields of genetics, nanotechnology and artificial intelligence. Nobel winner Stephen Hawkins has also signalled his belief that this is a real danger. And Nick Bostrom (2014) in his New York Times Bestseller, Superintelligence: Paths, Dangers, Strategies, argues the future is already here. We’re nurturing artificial intelligence and like a cuckoo’s egg it will outgrow the nest, feed on the hominoid family, and colonise space in its search for perfection.  These Jeremiah voices seem more science fiction than science fact. But look around you. Self-driving cars, drones and rocket back packs. Not in the pages of comic books, but on our roads and buzzing in the air.

Ford identifies other trends that any moderately sophisticated pattern-recognition software would immediately identify. One of them is climate change. He talks about the declining price of solar panels, technological innovation and government innovation. Or what the British Prime Minister called ‘all that green crap’ while withdrawing funding in the areas we really need to invest in.

Money flows unevenly from the rich to the poor. The only place it sticks is with those with money or capital. That’s another trend or pattern. Ford suggests the evidence points to a longer-term trend in which  the five percent who claim ownership of the world’s wealth, and in particular the moneyed-class in the richer nation, those who have cannibalised the wealth of the other ninety-five percent, then the one percent will cannibalise the wealth of the other four percent. Winners take all. Losers take the fall.

“The last capitalist we hang shall be the one who sold us the rope.”
― Karl Marx

Marx was wrong of course. Let us look at the data.  Losers are not sold the rope, only leased it and have to pay economic rent for their funeral. The triumph of capitalism is it is the only game in town. Communist China and Russia, for example, mirror the inequalities of the West. Martin Ford offers sobering statistics. An Oxford University report published in 2013 suggests 50% of US jobs will be automated. And a parliamentary report in the House of Lords in 2015 estimate 35% job losses in the UK. The flight to higher education with the promissory note of a well-paid job at the end of it is the same sort of myth building as, from a different era, Tony Benn’s ‘white hot heat of technology’ changing and modernising society. Thirty percent of employees are currently overqualified for the job they are in and while wages have declined in the last thirty years, the cost of education has more than doubled from £22 billion 2007/8 to £46 billion 2012/13 and that trend looks to continue.  This is one form of credit poorer members of society have access to and they are signing up in record numbers, both in the UK and the US. But not only is their grade deflation, but those printing presses we call universities, some of which  are more equal than others, can demand a premium for their gilt-edged qualification, in a race which our leading universities largely exclude the poor from entering. It would be interesting, for example, to look at what Oxford University defines as those in need of such a leg up. But this is hardly surprising when social housing is defined as costing up to £450 000. And our public-school educated Chancellor of the Exchequer, George Osborne, boasts of conducting ‘the most sustained squeeze on public spending for one-hundred years’. Back in 1918 the upper classes contact with the working class was likely to be a master and servant relationship, and as an employer. Those that owned the land owned the people on the land.  But in a contemporary global market as Ford notes, if cognitive ability follows the usual bell-shaped distribution curve, and India and China’s top five percent of intelligentsias adds up to around 130 million, almost double the population of the UK. Technology, based on deep neural learning models makes the universal translator inevitable. See, for example, Megaphoneyaku digital megaphone developed by Panasonic in 2014, which translates whatever language is bellowed into it according to the setting required.   If the offshoring of university graduates and teaching programmes move online, as they are likely to do, then the current crop of graduates will find it even more difficult to find paid work commensurate with their education. Software such as Geekie, launched in Brazil in 2011 because of a shortage of teachers, delivers the whole high-school syllabus, monitors pupils and designs courses based on individual responses and aggregate scores. A movement into higher education and universities with their expensive living costs seems inevitable.  It also seems to me likely that health care assistants will be the add on element of general health care practices with all the heavy lifting done by machines designed like Geekie to have the knowledge element built in and modified and upgraded with each interaction.

A trumpet it a wind instrument. It has the highest register in the brass family, which brings us nicely to Donald Trump and Trumpetism. We’ve had the bit player and actor whom Betty Davis called little Ronnie Reagan getting to play the role of US President. Then we had George Bush senior and then junior getting on the same horse. Anything is possible in the good old US of A. It’s dressed up in frontier ideology and the analogy of a rising tide of wealth lifting all boats. But as Chrystia Freeland says in Plutocrats: The Rise of the New Global Super-Rich, ‘the super-rich don’t like to talk about rising income inequality’. The rising tide lifting super yachts that leave the rest stranded in their wake. They like to talk about the Kuznet’s inverted U-curve, how as societies become more complex and productive, high inequality peaks at the top of the U and falls. Wealth generated by a nation’s better-educated workforce is able to get a bigger slice of the national pie in terms of wages is proven to be a short-lived myth. Thomas Piketty, Capital in the Twenty-First Century, using historical data going back to the eighteen century from twenty countries showed that the thirty years following the Second World War was a golden age in which wealth re-distribution did take place, but it took two catastrophic world wars for that to happen. Piketty and Ford both suggest the fallout from the golden age is toxic for all but the gilded few, and aligned with climate change and the rise of the robots it’s a good time to be rich. For the rest of us…man the lifeboats.