The Guardian reports this morning that:

Overall, during the year [2022-23] 12 million people were in absolute poverty [in the UK] – equivalent to 18% of the population, including 3.6 million children – levels of hardship last seen in 2011-12 after the financial crash.

Growth will not solve this. We know that wealth never has and never will trickle down.

In that case, nothing will change under Labour without radical reforms to benefits, minimum wages, worker rights, trade union rights, and the probable creation of wage councils. So far, I am not hearing nearly enough about those reforms, which instead already appear to be at risk of being watered down.

We do, however, keep hearing from Labour about the need for growth.

As I argued yesterday, this is the wrong policy for this era in history. Meeting everyone's needs within sustainable limits should be our priority now. Unless that change happens, 12 million people will continue to live in absolute poverty in the UK.

Is that what Labour wants?

I don’t believe in growth as an economic panacea. There, I’ve said it, and most economist will be horrified.

Why say so now? Because Rachael Reeves, referred to growth 58 times in her Mais lecture this week.

She, admittedly, said it was not the solution to all problems. But, you could be mistaken in thinking that she did not really believe that, given how often she referred to it, and how everything that she offered was premised upon the possibility of its delivery.

So why don’t I believe in growth?

Firstly, that is because the way we record growth does not in any way indicate the value of economic activity . As I used to say to students when I was talking about this subject, one of the easiest ways to deliver growth would be for everyone in a society to get divorced. The expenditure on legal fees and splitting up of households would significantly boost GDP, but the sum of human happiness would undoubtedly reduce.

Then there is the matter of distribution . Most measures of growth are not even related to GDP per head. Worse still, very few provide any indication as to who has enjoyed the benefits of that growth. The best example of the resulting nonsense is found in Ireland. Approximately one quarter of its GDP is made up of the profits of multinational corporations recorded in that country, none of which are attributable to any person living there. In that case, GDP growth in Ireland might bring no benefit whatsoever to its population as a whole, let alone any one Irish person in particular. More commonly, elsewhere, when we know that most GDP growth goes to those already wealthy, it is a particularly poor target for any society.

Then there is the sustainability issue. As a simple matter of fact, we cannot consume ever more physical resources on a finite planet without destroying its capacity to sustain us.

But most of all, I do not believe in growth, because I do not think that it is nearly as important as the goal of meeting needs.

We all know what needs are. We require clean air and water. Good food is essential for a good life. So too is warm shelter. And we need education so that we can integrate in our communities, and help advance their understanding.

Much of healthcare is about community provision, by necessity. And when the events that require a personal healthcare intervention also very largely arise as a result of randomised risk, it is always the case that the community as a whole is the agency best able to carry that risk, and so meet it. The same is true for so many other needs that have to be addressed if we are all to have access to a reasonable quality of life.

Nothing about this denies the existence of wants. Meeting needs does not say that wants should not be fulfilled. But there is an order of priority here. The meeting of wants is not nearly as important as the meeting of needs.

Implicitly, GDP does not recognise that fact. The pursuit of growth does not, therefore, do so either. For that precise reason, I think that both are morally suspect, at best, and profoundly ethically biased at worst.

Nor do, I think that either can be amended to address those deficiencies. Growth is the wrong goal. Meeting need is what we must do, for everyone. Only then  can we consider meeting wants, and then only within sustainable limits.

For those who think that this suggests that we will have a miserable existence, think about what it is that have created all the most valuable memories and experiences in your life. I can almost guarantee that none of them related to  material consumption that satisfied a want. Almost all of them will relate to an occasion when you shared an experience with others, whether that was an intimate moment, or a family event, or a concert, or some similar  experience, such as the celebration of an achievement. What all these things have in common is that each also relates to the meeting of the need, whether that be be for emotional, intellectual, or spiritual well-being.

Meeting those higher order needs is harder, however, if our material needs are not met . It is very hard to be joyful when you are hungry, cold, destitute, or are living in fear. Meeting need is, then, the precondition of happiness. Supplying the wants of some, at cost to meeting the needs of others must always, in that case, be a sub-optimal objective. GDP growth is, in that case, always the wrong goal in economics.

That economics has moved far from its roots in moral philosophy is evident from its focus on growth . It needs to go back to its roots and talk about what is right. Meeting everyone’s needs is the right goal for economics. It is what any government should do. And that is why I will criticise any government that fails to achieve that, most especially if it does not even try to do so.

This Tweet includes words that I think to be important from the Irish Taoiseach (prime minister):

I think he really does reflect Irish feeling when he says this.

But also some aspects of Scottish opinion as well.

And maybe the opinion of many in Wales as well.

But I doubt Westminster focussed political parties will ever understand that when they have not come close to doing so to date.

This was posted in the Financial Times over the weekend but remains well worth sharing because of its broader significance:

Parts of South Africa’s largest city have been without running water for almost a fortnight, a reminder to voters of the parlous state of the country’s infrastructure just two months out from a general election.

Africa’s most industrialised economy has been buffeted by power blackouts, transport problems and a crippling failure of service delivery that threaten the rule of the governing African National Congress.

That largest city is Johannesburg. The problem does undoubtedly have local dimensions to it. But it also has portents within it that are well worth noting.

Firstly, and most obviously, it should be apparent that we, as a society and, more particularly, as an economy within that society, are utterly dependent on the delivery of essential services for our survival. We cannot exist without water, energy, food and housing. We also need (and it is often forgotten in this list) clean air. We have taken for granted that these things can be delivered. The warning from Johannesburg is that the assumption that this might continue to be the case might be seriously misplaced.

The supply of basic infrastructure services in South Africa, the UK, and many other countries are at serious risk of failure.

We have not invested enough for many decades to ensure their continuity of supply, not least in the face of growing demand. We have assumed that they will be supplied. We have not guaranteed that they will be.

We have failed to heed warning signs. Most especially we have ignored the risk of flooding, which I now think to be very significant, but about which almost nothing is still being done when the evidence that sea levels are rising is very obvious. Just about the only sector that I can see that is reacting appropriately to this risk is nature conservation, where right across East Anglia new inland reed beds are being created to replace those on the coast that it is known will have to be abandoned soon. Sizewell nuclear power plant is next to one that will, almost inevitably, be lost to the sea.

We also continue to presume that our past failings, reaching back over decades, can now be made good without any impact on our ability to consume. It is presumed that even if we must invest more, which will impose real new costs on us because we have been paying too little for these essential services in the past because, firstly, we have not priced in the cost of our destruction of nature, and, secondly, we have not priced in the cost of replacing life expired infrastructure, this will have no impact on our disposable income. As a matter of fact, it will.

Supplying essential services is going to cost more in proportion to income in the future. Clean water has a price. So, too, does sustainable energy. And, come to that, so too do houses that do not flood. That price is quite high. That price will be plenty high enough to be utterly economic disruptive. By that, I mean that it will be sufficiently high to force many households into poverty, shortage, and maybe destitution unless other fundamental reforms to our economy take place.

There are those who say that as a result we should do nothing about these matters. They are on the economic right wing. This will be a major part of the Reform Party's offering now and in the future in the UK. Others, like Trump, will be saying the same elsewhere. It is not hard to work out why this will be appealing.

It is also not hard to work out why they are doing this. Their actual aim is to keep in place the returns paid out of household incomes that fuel the inequality in our society. So, they want to perpetuate high-interest payments, high rents, and high wealth extractions in the form of profoundly profiteering activity, which is much of what the addiction to tech subscriptions fuels. Together, these absorb large parts of income whilst perpetuating our deeply divided society. That division can only be maintained if there is the means for these payments - all of them rents in one form or another - to be made. When the need for additional payment for our essential costs of living rise - and they need to and are going to if we are to survive - then something has to give if society at large is not going to collapse.

During recent energy price crises what gave way were government tax revenues. Subsidies to cover energy costs were paid. Now there is a backlash against that, with the claim being made that we must suffer crumbling public services as a result. That is clearly not sustainable.

What needs to be cut is the return to bankers, landlords, monopolists, oligopolists* and others who exploit our current society at a cost to most who live in it. In other words, what must give way to provide the means for settlement of the additional costs of the investment required to make good mechanisms that ensure that everyone can meet their basic needs in life are those things that have been created to exploit the surpluses that ignoring this necessary investment has created.

The belief that we have had an economic good life that has become commonplace among some over the last few decades has resulted in increasing costs of rent, interest, financial services more broadly and in exploitation by profit gouging. It is these activities that must give way to permit the additional costs that necessary investment to make good past deficiencies in investment will now require.

This is not a capital versus labour conflict, not least because the one thing that we most definitely need is more capital.

It is, however, a rentier versus the people struggle. Who will survive in the face of the need for running water in Johannesburg, and essential services in the world at large? Will it be the landlord or the people? That is the question. It will define the new economic and the new politics that we need.

* Oligopoly exists when a small number of firms control a market. They successfully prevent competition from other firms and, as a result, keep prices above those that an open market might otherwise set. Oligopoly is widespread within the modern economy.