Tagged with Investment

What do Britain’s private sector firms contribute?

investment, pic by 123rf.comThe main factors that account for economic growth are increases in the workforce or in the amount of productive capital in the economy. A far smaller contribution is made by improvement in productivity as a result of innovation.

Since mid-2009 the British economy has grown. But this is wholly accounted for by growth in the workforce, which is made up of both an increase in the number of people in work and in the number of hours they work. As a result the average person in work cannot experience any improvement in living standards as economic growth is simply made up of more people working longer hours. Worse, those on very high pay, senior executives and shareholders, have claimed any benefits of that moderate growth in the British economy. Average real pay continues to decline. Continue reading →

Strip the private banks of the power of money creation

Banking trade screensThe House of Commons held a very important debate this last week on the creation of money, a process which the Big 4 banks have monopolised and thus privatised the money supply.   The abuse of this power over the last 3 decades has been enormous, and I used this debate to propose an entirely different system which would remove this power from the present banking cartel in order to ensure that what was maximised was the national interest, not the banks’ own selfish interests.   I said this: Continue reading →

There is a magic money tree. It’s called investment

Supporters of austerity have long argued that there is no viable alternative because of persistent government deficits and rising debt. David Cameron put it starkly arguing that “there is no magic money tree“. However these assertions contain two important fallacies.

Firstly, it is evident that, if government is increasingly indebted it must be the case that the private sector is also an increasing owner of that government debt- government cannot be a net debtor to itself. Therefore rising government debt represents a transfer of incomes, from the public sector to the private sector.

Secondly, economies can grow. Otherwise human society would still be in its most primitive phase. Therefore there is no fixed amount of output in the economy, or the monetary denominator of that output. Continue reading →

Fall in construction output shows Osborne “recovery” has lost momentum

8075194_sThe latest economic figures revealing a shock fall in construction output of more than 1% between April and May this year are alarming, but might be brushed off as an isolated quirk if all the other evidence pointed the other way. But it doesn’t.

The construction slowdown is matched by an unexpected slump in factory output as well as a worrying widening of an already bloated trade deficit. The latter reflects the dampening effect on UK exports as the pound has steadily strengthened over the last year, reaching the highest level (£1=$1.70) for 5 years. UK export prospects are further deflated by the way the eurozone is mired in seemingly endless austerity because the major debtor countries – Greece, Portugal, Spain, Italy – cannot while locked inside the single currency achieve the growth necessary to cut their deficits when their debts are still rising.

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94 reasons why French trade unions have boycotted Hollande’s job summit

Francois HollandeFrançois Hollande’s jobs summit is becoming a farce. Unemployment in France has risen to a new high of 3.4 million. The socialist President is desperate to be seen to be doing something about it. But Monday yet another union walked out of the two day ‘social summit’, an unprecedented desertion by organised labour for any administration in Paris, let alone one with a centre left political colour.

The CGT and FO, no.1 and no.3 respectively in terms of size, had already decided on Monday to boycott the summit. Solidaires didn’t turn up at all. And now teaching union FSU has told the government where to get off. Continue reading →