Ethics
Advertising is designed to make you miserable
I posted this video on YouTube this morning:
In case the link does not work for you, it can be found here.
The transcript is as follows:
Advertising is meant to make you unhappy. That is its single sole objective.
The whole of the advertising industry exists to make you feel inadequate. Isn't that obvious? What it's trying to tell you all the time is that whatever you have, however well off you feel, you could feel better off if only you had whatever it is they're trying to flog to you.
You need the latest iPhone.
You need to go on holiday, wherever they're saying.
You need to buy this financial product.
You will be insecure unless you buy their insurance. Whatever it might be, they are trying to make you feel as though there's a better world over there, which you didn't even know existed until they blasted it in front of your screen, onto your radio, or wherever else you might see it.
And the fact is that most of the time you don't need any of that stuff because you were already feeling okay before this happened. And they have tried to undermine your well-being by creating a sense of dissatisfaction with where you were. Now, that's really important because this process of making you feel inadequate does of course drive our material growth.
When we look at the whole of the fashion industry, it is of course effectively driven by advertising, continually presenting us with different images of how we want to look. But the consequence is we have vast quantities of clothing now being sent to landfill sites, clogging up not just this country but because we export a lot of that waste to many developing countries as well.
We have waste in the form of excess energy because we're trying to buy all these new products and throwing away perfectly workable ones.
And perhaps worst of all, we're all - well, not all of us, but a lot of us - are getting into debt to actually buy these products because there is a form of pernicious agreement between the advertisers, the producers and the finance industry that whenever you buy something, you will be offered credit to make payment for it - keeping you in debt and therefore in hock to the finance companies, the banks, and so on of this country and elsewhere.
You are therefore not only meant to be miserable because you haven't got what you want, but you're also meant to be in debt, forcing you to stay on the treadmill to buy more of the product, the service, whatever it is they're trying to sell.
Is that a wise way to run an economy? Personally, I don't think so. I believe we have to change if we're going to become sustainable. And the quickest and easiest way to achieve that goal is to say that advertising is not a universally good thing. Most of it isn't. In fact, except for the small ads in newspapers, I can't think of anything that is.
So, we should stop tax relief being provided on expenditure by large companies on advertising and we should stop them being able to reclaim VAT on the advertising costs charged to them by those who broadcast these things.
Are there consequences? Yes. It will change the way that we see and consume media. I have no doubt about that. We have to, therefore, rethink that issue.
But the world will be a better place because there'll be less waste, we'll be more sustainable, and, ultimately, we will be happier because we won't be told all the time by everything we see and hear that we are inadequate.
Labour Party? Pull the other one….
It is, of course, May Day. Or Workers Day. And so, the FT reports this morning that:
Sir Keir Starmer’s Labour party is set to unveil a weakened package of workers’ rights in the coming weeks in its latest softening of radical policies ahead of the upcoming general election, the Financial Times has learnt.
They added:
The package, first outlined in 2021, has been billed by Starmer as the biggest increase in workers’ rights for decades, with the Labour leader warning business chiefs in February it would “not please everyone in the room”.
But behind the scenes shadow ministers have been discussing how to tone down some of the pledges to ease employer misgivings as the party tries to boost its pro-business credentials.
So, there goes another one of the very few identifiably left of centre policies Labour was promoting, and all to appease the business community.
Labour Party? Pull the other one....
Inflation always goes away
I posted this video on YouTube this morning:
In case the link does not work, you can watch the video here.
This is the transcript:
Inflation always goes away. Now, that's an extraordinary claim to make, but I can show you it.
This chart, produced by an American central bank called the St. Louis Fed - which always produces amazing economic statistics for those who want to look at such things - is actually a reproduction of research undertaken by the Bank of England, which shows the inflation figures in the UK since before 1200. I don't mean before midday. I mean literally from 1200, 800 years ago.
What you see is that the chart shoots up and downwards in the early eras on the left hand side, and gradually it tapers down so that these days we have much smaller oscillations when it comes to inflation.
The peaks are smaller than they used to be, and there are almost no negative troughs, i.e. we don't have periods of deflation in this country now. But the critical point I want you to note is, that after any inflation spike, there's a downturn.
Now historically, that downturn was almost invariably a period of deflation. In other words, real prices fell.
Now that, in the last century or so, is not the case. After a period of inflation, real price. changes fall, but prices don't go back to where they were. So, over the last century or so, we've had a period of steadily rising prices. But it's still true that after any period of inflation, really quite quickly, excepting periods of world war, prices return to relatively low levels of inflation.
And the critical point to note is that all that happened when we didn't really have a central bank who did anything whatsoever to control inflation.
The Bank of England might have been created in 1694, but it didn't get a mandate to control inflation until 1998. So, for the vast majority of the time that that chart was being plotted, there was no central bank raising interest rates, trying to control inflation, setting a 2 percent target, or any of that other nonsense that Governors of the Bank of England now talk about.
And yet inflation went away, anyway. And that's because markets always correct for the panics that create inflation in the first place.
Inflation is almost always created by a panic. There's a shortage caused by plague, pestilence, war, you name it, something's gone on in the world. Trade has broken down, and therefore there's a shortage and prices go up.
Once we get over the panic, we realise that actually the world did not end as everybody thought it would.
Remember the toilet roll crisis of March 2020 everyone went out and bought toilet rolls as if there were never going to be any available ever again. Well, it's exactly that sort of panic multiplied by an enormous factor that creates the shortages in world markets when a big event like the outbreak of war happens and market traders panic and try to buy things as if there will never be wheat, oil, gas, fertilizer, or anything ever again.
There were toilet rolls after March 2020. There has been oil, gas, wheat, fertilizer, and everything else since March 2020. The prices, once the traders realised that they had simply panicked inappropriately, went back to normal. They didn't necessarily go back to the price that they were in March 2020, but they certainly returned to a very normal level.
Inflation went away.
We did not need interest rate rises.
We did not need austerity.
We did not need the Bank of England telling us that none of us would do a pay rise.
We did not need them to say to the government that they should not be spending because they had to pay interest - extra interest - instead.
No. We just needed to wait for the markets to stop panicking. But instead, we had the Bank of England doing something quite different. They put in place policies that were designed to exploit the situation where inflation had started so that the wealthy became wealthier because money was moved from most ordinary people who pay interest to those who have very large sums on deposit.
That, again, is something we do not need again. Inflation goes away. It's a lesson we have to learn. And until the bankers do that, frankly, we shouldn't be giving them any power over our economies at all. Because they use that power wholly inappropriately and against the public interest.
On university protests
Robert Reich wrote this a few days ago. I share it because I think it wholly appropriate to do so, and that his words were wise:
Let’s be clear about a few things.
Antisemitism should have no place in America — not on college campuses or anywhere else.
But there is nothing inherently antisemitic about condemning the ongoing bloodshed in Gaza that has so far killed at least 34,000 people, mostly women and children.
Protesting this slaughter is not hate speech. It is what should be done on a college campus — taking a stand against a perceived wrong, at least provoking discussion and debate.
The mission of a university is to coach students how to learn, not tell them what to think. Peaceful demonstrations should be encouraged, not shut down. And having armed police arrest peaceful student demonstrators is never acceptable.
His Substack is worth subscribing to - and there is a free version.
The Premier League is an oligopolist erecting effective barriers to market entry. What is anyone going to do about it?
As the Guardian notes this morning, this is the current state of the UK's football premier league:
There is, I promise, good economic reason for noting this.
The bottom three clubs in the league will be relegated at the end of the season, which is now just three games away. And it so happens that all three of those clubs now facing the likelihood of relegation were promoted from the second-tier league, the Championship, just one year ago. After a single season in the top flight of English football, they will very likely be returning whence they came.
The economic point that I am making is a very simple one. As is apparent to anyone who follows football, the English Premier League acts like an oligopoly. In other words, the well-established clubs within it make sure that it is organised to their advantage. They do, as a result, collect vastly more revenue than anyone else in the football. Their players are remunerated at extraordinary levels that would be exceptionally difficult to justify without this oligopoly power. In economic parlance, they earn rents on top of any reasonable level of reward they should enjoy. And, as is all too commonly the case when oligopoly exists, there are massive barriers to entry into this market, as the likely relegation of all three clubs that were promoted into it last year makes abundantly clear.
The current UK government has suggested that the UK needs a football regulator. I agree. One of the things that it needs to do is to control the abuse of market principles by the most powerful football clubs in the country. I am not anticipating that any such thing will happen. The idea that fair competition might prevail is, I think, very unlikely to win the support of those who might lose out as a result.
Freedom from fear
I posted this video on YouTube this morning:
The transcript is as follows:
Freedom from fear is one of the things that every politician should seek to provide. And I don't think it's a priority for any politician, from the major parties at least, in the UK at present. And that, to me, is incredibly worrying.
Freedom from fear was one of the four fundamental freedoms that US President Roosevelt, Franklin D. Roosevelt, the Second World War leader of the USA, outlined in a speech in 1941, not that long before the US joined the Second World War. He said there were four fundamental freedoms. The freedom of speech, freedom of worship, freedom from want, and freedom from fear. Fear, to me, is, however, the most important of all of those because if you don't have freedom from fear, well, that's probably because you don’t have one of the others. So, it's the overarching need that we as humans have, to live free from fear.
And yet we have governments that tell us unless we comply, we will be punished. How? Look, right now, our current Conservative government is saying to people who have mental health issues, unless you stop your anxiety, unless you deal with your fears, unless you go back to work, even though you are incapacitated, we will punish you financially.
We've had the bedroom tax.
We have the idea that benefits are a scourge on society, even though that's clearly untrue. There are people who need them, and it's darn hard to get them.
What we need is a society where we let people prosper, where we provide them with the hope that they can fulfill, not the fear that they will fail.
And those two approaches are fundamentally different. One is about the politics of aspiration. The other is about the politics of oppression.
I'm all for aspiration. I'm all for hope. I'm all for people fulfilling their potential. I loathe those politicians who want to crack big whips and hard sticks over us.
For me, carrots work and what's more, carrots should be provided to everyone because everybody has something to offer in a society.
We need to live free of fear and that means our major political parties have to change their entire attitude towards the way in which they govern because right now they don't believe in it.
Do we have a sickness culture or a sick benefits system?
The FT has offered an an analysis in so-called sick note culture today. Its conclusion is that there is no such thing.
The data on sick notes shows that. The situation now is no worse than in 2019. Short term sickness rates have not changed.
However, as the FT notes, this is due to the reason why sick notes are requested. They are only needed to claim statutory sick pay and that is miserably low in the UK, meaning that we have very low numbers of days off work on average in this country as a result. So, if there is a sickness problem in the UK it is not due to people off work in the short term.
The problem, if there is one, is people off work in the longer term. The caveat in that sentence is there for good reason. As the Office for National Statistics admits, its data on many labour statistics is now very unreliable. The information it uses is based on survey data, and since Covid, the responses it gets to requests for information are so low that the information it produces might be inherently unreliable. That is caveat one.
The second caveat is that since it has become increasingly hard to get benefits for being unemployed, the number of people claiming benefits for incapacity has grown. It is not rocket science to see how the two might be related. If you are forced to live without income, you suffer stress. Stress then becomes the cause of incapacity. Benefits are then paid on that basis instead.
The data does, maybe, support this claim. This is also from the FT:
Stress-related disorders have grown in scale, and the number of claims is rising.
But that does not prove there is more stress, per se. It might prove that we have a system that is so mean that it results in hardship, and that creates stress. But that is not the same as stress rising otherwise.
So have we got a sick note culture? No one really knows. The data is weak, and the causes are uncertain.
On the other hand, we can say with certainty that we do have a benefits system that encourages people to claim sickness-related benefits resulting from the meanness of those benefits paid to those out of work through no fault of their own.
So where is the problem? Wouldn't it be wise to end the meanness within the benefits system, reduce the resulting stress, and so encourage people back to work? Wouldn't that make the most sense? And if not, why not - because the evidence of people actually wanting to live on benefits is very low indeed.
I offer a prior warning to benefit system trolls: I will be heavy-handed with the delete button when dealing with comments in this post.
We need to be awake to nature
One of the strangest consequences of running a blog that has quite a high volume of traffic is that I receive a great many press releases a day. Most go straight into the electronic bin, but there are exceptions that demand that I read them. One of those came in from Extinction Rebellion this morning.
It said, and I unashamedly quote:
Extinction Rebellion, BBC Wildlife legend Chris Packham and tens of thousands of members of the public will ‘unite for nature’ by joining a legal and family-friendly demonstration on the streets of central London on Saturday 22 June 2024.
Backed by a wide-range of nature, wildlife and climate groups, from RSPB to the National Trust, the demonstration aims to be the biggest-ever gathering of nature and climate supporters in the UK.
The Restore Nature Now demonstration will bring thousands of people together to call on all political parties to take action to restore nature and tackle climate change in the UK, as one of the worst nations for nature loss.
Environment campaigners are urging everyone who cares for nature to unite and march through London to Parliament Square on Saturday 22 June, with a simple demand to all political parties: Restore Nature Now.
The press release includes quotes from Chris Packham, the RSPB, the Wildlife Trusts and others. XR is clearly working with them on an agenda that they say demands:
- A pay rise for nature – Farmers manage 70% of UK land and have a huge role to play in supporting environmental recovery. But they need more support. We want to see the nature and climate-friendly farming budget doubled.
- Make polluters pay – Big businesses – from water, to retail, to energy – all contribute to environmental decline. We want new rules to make them contribute to nature and climate recovery, and an end to new fossil fuels.
- More space for nature – Just 3% of English land and 8% of waters are properly protected for nature and wildlife. To meet UK nature and climate commitments we need to expand and improve protected areas, and ensure public land and National Parks contribute more to recovery.
- A right to a healthy environment – Limited access to nature, and pollution in the air and water, affects everyone’s health. We’re calling for a commitment to an Environmental Rights Bill, which would drive better decisions for nature, improve public health and access to high-quality nature.
- Fair and effective climate action – We cannot save nature without solving the climate crisis. We want to see investment in warm homes and lower bills by increasing home energy efficiency, supporting active travel and public transport, and replacing polluting fossil fuels with affordable renewables to ensure we at least halve UK emissions by 2030.
As they also note:
Polls have revealed that the British public is highly concerned over inadequate UK climate and nature action. Results from two UK-wide surveys conducted by The Wildlife Trusts showed that irrespective of voting choice, nature matters to people across the electorate, with 93% of voters reporting that they believe nature loss is a serious threat to humanity. Recent YouGov UK polling on behalf of WWF-UK also showed that the majority of people (70%) think it’s possible to avoid the worst effects of climate change but more than half (58%) think it’s only possible with more drastic action.
I am in that last category.
As a founder member of the Green New Deal Group, as well as an enthusiast for nature, I unsurprisingly support these demands made by organisations, many of which I belong to. I will look to take part in this activity in some way.
There is, however, I think much more to this. As John Harris suggested in an article in the Guardian earlier this week, our attitude towards nature might now represent the real faultline in politics and the source of the new radicalism that we need if our society is to survive.
Business does, through its actions, deny the reality that we are facing. For example, I noted a Telegraph headline this morning suggesting that airports want more tax exemptions for tourists to encourage greater air travel to the UK, which is exactly the opposite of what our planet needs.
Similarly, tech companies work their very hardest to make sure that children’s exposure to nature is minimised as their screen time is maximised. In the process they undermine the understanding that our existence is utterly dependent upon our relationship with nature, which relationship is in peril.
Despite these best efforts by those businesses and others, I am also quite sure that a growing majority are aware of the risks that we face. There may not be enough people willing to take action as yet. Far too many remain dedicated to consumption-based lifestyles. The reality of the need for change has not permeated the consciousness of sufficient people as yet, but maybe it is beginning to be a major concern for enough people to effect change.
That is my hope. That is why I share this. That is why I am more than happy to be considered decidedly woke on this issue. I am awake to nature. We need everyone to be so.
What is fair when it comes to tax?
I posted this video on YouTube this morning:
This is the transcript:
Taxes should be fair. I think that's obvious. Well, it should be to anyone.
They're not in the UK at present because we know that the wealthy underpay tax compared to those on lower incomes, and that's one of the reasons why I wrote the Taxing Wealth Report, precisely because we do need to redistribute income and wealth from those who've got high levels of both to those who have very little of either.
So obviously, that's one reason why we can increase tax fairness, but we need some sort of guide as to what we mean about tax fairness. And in the Taxing Wealth Report, I use two guides. One is horizontal tax equity, and one is vertical tax equity. Now, let's just explain what they are.
Horizontal tax equity means that one pound arriving in your pocket from whatever the source should be taxed the same way, whatever that source was.
So, if you got your earnings from work, say one pound, then I am saying that the tax due on that should be the same as if you got that one pound from interest received, or rents, or capital gains, or anything else. Whatever the source of your profit, the one pound that increases your well-being - because we generally recognize that more money available to you does usually increase well-being - the amount of tax you pay should be the same.
That is the argument that horizontal tax equity makes, and that is why, for example, I argue that capital gains should be taxed at income tax rates. It's straightforward, it's clear, it's obvious, and “£1 is £1 from wherever it comes” is a simple motto but it's absolutely true as well.
Vertical tax equity is a different form of tax justice.
Vertical tax equity says that those on low incomes who lose a pound in tax suffer much more in terms of their well-being than a person who's on a million pounds a year who pays £1 in tax.
Why? Because the person with a million a year doesn't frankly notice whether they've got one pound more or less. The marginal cost of them giving up one pound in tax is insignificant because they don't notice the difference, whereas the person on a very low income does notice the difference. So, what vertical tax equity tries to do is equalize the broad cost in terms of well-being foregone of tax paid.
The result is that the tax system must be progressive. Those on low incomes must pay a much lower proportion of their income in tax than those on high incomes because, relatively speaking, the impact on their well-beings is equal. And that is tax justice.
We haven't got that at present. We need to have it.
The Taxing Wealth Report tries to produce that outcome. It's a move towards a fairer tax system for the benefit of everyone - and I stress everyone - in the UK