nick clegg

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What The UK’s Low Productivity Is Really Telling Us

This, I would argue, is one of the scariest charts in the world today. The green line is output per hour worked, and the dotted green line is the pre-crisis trend:

growth_fig1

It’s what the Bank of England calls the “UK productivity puzzle.” As the BBC’s Linda Yueh notes: “output per hour is around 16 percentage points lower than it should be if productivity had grown at its pre-crisis pace.”

I don’t think it should be called a “productivity puzzle”. That would imply that we don’t really understand the phenomenon. That the phenomenon is a puzzle. But it’s really a simple phenomenon. The phenomenon is that people are producing less output per hour than they were before the financial crisis. Work is getting done. But the quality of the work is not improving.

The Bank of England points to “reduced investment in both physical and intangible capital, such as innovation, and impaired resource allocation from low to high productive uses” as a cause. In other words, the work is crap because firms aren’t deploying the resources to do good work. And this is a trend that predates the election of the Coalition government in 2010. As the Bank of England notes, the UK has lagged in investment as a percentage of GDP behind its fellow G8 economies since even the 1990s.

But things got really bad under the Coalition. And that shouldn’t really be news. There was a recession resulting from the financial crisis. The recession — as recessions tend to do — resulted in a severe drop in business investment. In the wake of the recession, what did the newly elected government decide to do? It decided to enact sweeping austerity programs — to slash investment even more.

So the story is that the government decided to compound the after-effects of the financial crisis with an austerity program. That means depriving the economy of even more resources needed for productivity, growth and prosperity. And — in truly, truly shocking news — UK investment as a percentage of GDP is currently lagging at a pathetic 15 percent of GDP behind Belgium, Gambia, Jordan, Equatorial Guinea and Costa Rica, and barely ahead of Greece!

The austerian view, of course, is that the austerity was necessary because otherwise the bond vigilantes would have sold UK public debt, and we would have turned into Greece, or something.

The so-called “productivity puzzle” and the related low-investment puzzle categorically proves this claim wrong. If the austerity was imbuing the market with confidence necessary for growth, we would expect to see productivity and investment rising.

That has not been the case. What has occurred is a zombie recovery caused by zombified economic policies. Yes, there has been substantial job growth, and GDP is now above its pre-crisis peak — albeit in the slowest recovery since the South Sea bubble 300 years ago. But the weakness in productivity continues to illustrate the rottenness.

You can’t starve yourself to strength. You can’t beat yourself to growth.

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Thoughtcrime in Britain

A 19-year old man was arrested yesterday for the supposed crime of burning a Remembrance Poppy and posting a picture of the incident on Facebook.

A teenager arrested on Remembrance Sunday on suspicion of posting a picture of a burning poppy on Facebook is being questioned by police.

The 19-year-old was held after the image of a poppy being set ablaze by a lighter was reportedly posted online with the caption: “How about that you squadey cunts”.

Police said the man, from Canterbury, Kent, was detained on suspicion of an offence under the Malicious Communications Act after officers were contacted at about 4pm on Sunday.

This is simply dangerous, absurd and Orwellian.

It is just the latest in a succession of police actions against individuals deemed to have caused offence: mocking a collapsed footballer on Twitter; hoping that British service personnel would “die and go to hell”; wearing a T-shirt that celebrated the death of two police officers; making sick jokes on Facebook about a missing child. Each time the police have arrested people for nothing more than expressing an unpopular, outrageous or offensive opinion.

Britain is setting a precedent for trampling all over free speech in the interest of enforcing public morality. Mussolini would be proud.

The point of free speech is not to protect popular speech. It is to protect us from becoming a society where the expression of unpopular, offensive and distasteful ideas is criminalised. That is the surest guard against totalitarian tendencies.

This new incident is particularly bizarre. Children are taught in school that Britain fought the Second World War to defeat fascism. They are taught that the deaths of British soldiers commemorated on Remembrance Sunday were for the cause of freedom, to defeat fascism, to defeat totalitarianism. And now we arrest people merely for making offensive comments and burning symbols?

Are we turning into the thing that we once fought? 

What has happened to free speech?

What has happened to Britain?

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Britain’s Orwellian Nightmare?

As a British citizen, I find Britain’s recent authoritarian creep to be deeply unsettling. First we greatly diluted our ancient rights of habaeas corpus. Then we created the world’s largest video surveillance network (which of course was completely powerless to prevent last summer’s riots).

Now we have started locking people up for comments on Twitter.

From Brendan O’Neill:

If you thought it was only authoritarian states like China or Iran that imprisoned pesky bloggers and tweeters, think again.

This week, Britain became a fully paid-up member of that clique of illiberal intolerant, tweeter-harassing states.

On Tuesday, at Swansea Magistrates Court in Wales, Liam Stacey, a student, was imprisoned for 56 days for writing offensive tweets.

Fifty-six days. Two months. In an actual jail. For tweeting. It needs to be spelt out like that in order to show how shocking it is that in the 21st century, in a nation that gave us such great warriors for freedom as The Levellers and John Stuart Mill, a young man has now been banged up for expressing his thoughts.

Stacey’s thoughts were far from pleasant ones. In fact they were offensive and repugnant.

On March 17, Fabrice Muamba, a 23-year-old black football player for Bolton Wanderers, collapsed with cardiac arrest during a match against Tottenham Hotspurs. Many people were shocked, and before long a #PrayforMuamba hashtag took off on Twitter.

But Stacey, who claimed he was drunk at the time, didn’t fancy praying for Muamba, and so instead he tweeted:

“LOL. Fuck Muamba. He’s dead.”

(Muamba did not die, though he remains critically ill in a London hospital.)

56 days in prison? For expressing a distasteful opinion? Frankly, I find the notion of convicting someone of such an offense more offensive than Stacey’s words.

Most recently, Parliament is enacting a law to allow for the monitoring and recording — in real time — of all online activity (presumably including my work) by GCHQ.

From the BBC:

The Home Office has said laws allowing the monitoring all emails, texts and web use in the UK will be brought in “as soon as parliamentary time allows”.

Home Secretary Theresa May says “ordinary people” will have nothing to fear- but there is opposition to the idea from all sides of the House of Commons.

All of this is troubling. Throwing people in jail for expressing unpopular opinions? That seems un-British, and seems to not tally with the idea that we should live and let live. I don’t have a problem with criminalising speech that is an incitement to imminent violence (e.g. “kill that man”). But criminalising opinion? Not only is that paternalistic, that’s a sticky slope to thought crime. And why is that a problem? In a society where we are not free to express any opinion we like — even deeply unpopular ones — innovation is surely stifled. Innovators and freethinkers are forced to think tricky questions (“will I be jailed for expressing this opinion?”) before they publicise their ideas.

And why would GCHQ need to monitor the entire internet? If they need to gather evidence to prevent imminent criminality, why not get a warrant, and monitor a suspect? The fact that they are writing a law that acts as a warrant on all of us suggests that contrary to the Home Office’s statements, we are now all suspects.

Britain has a rather unique legal and political system. Nothing is really set in stone other than the supremacy of the sovereign — in other words, the Queen. Right now, sovereignty has been delegated to Parliament, and the Queen retains only a ceremonial role. But because the Parliament is sovereign, it is free to pass any law it wishes. No rights are absolute, no system is set in stone. There is no first amendment guarantee to free speech. And even though Britain is a signatory to the European Convention on Human Rights, that piece of legislation is phrased so that governments can curtail rights for the “greater good”.

Some legal flexibility can be good. British society has been remarkably free and remarkably stable, certainly in contrast to many other nations. But let’s be honest: authoritarianism can blight any nation. We shouldn’t be complacent to that threat.

And the overarching and striking problem with this authoritarian creep is mostly that it is a waste of money. As I wrote last week terrorism and civil disorder and the expression of unpopular opinions (and all of the things that this authoritarianism is supposed to quell) is of minimal threat to the West (and of course the expression of unpopular opinions is largely beneficial). More people are killed by being crushed by furniture than by terrorism. While trillions are spent on homeland security and the “liberation” of foreign lands, domestic infrastructure is neglected, and businesses and workers lose out as they pay in taxes for the expenses of large authoritarian interventionist government. CCTV has little effect on crime.

And certainly, the social effects of authoritarian creep may be huge. How many legitimate criticisms of the government will go unpublished due to fear of censorship or monitoring? How many people will spend time in jail — and face life with a criminal record — just for expressing an opinion? How many innocent people will spend time in jail as a result of monitoring mistakes or misinterpretations? How many good businesses and ideas will not receive funding due to productive capital being redirected to the government coffers to pay for authoritarian interventionism? How many people will waste their productivity working as government snoops when instead they could be deploying their minds and skills in creating valuable products and services that would improve our economy?

But above all, what would George Orwell think? Big brother is watching and recording us all. Every time we go online, we display our thoughts, our interests, our desires, our curiosities, our sexual preferences, our politics. All of these things are recorded by the state — a state which seems to have no problem with locking people up for expressing unpopular opinions.

Orwell understood that that was a peril to everything — our homes, our lives, our rights, our society, our economy and the very fabric of our existence.