Money and Value

It is a key principle in my text Personal Political Economy - PPE [see link from this blog] - that while value is a common noun in everyday speech, and to value is a verb that matters hugely to anyone who is contemplating selling a house or an antique cabinet, the search for a comprehensive 'theory of value' has been one of the most useless components of academic Economics. Sometimes a chapter heading on the lines of The Theory of Value appears in a textbook above an exposition of the idealistic, mechanistic, normative model of Supply and Demand that has only ever applied to any real-world situation by chance for a very short period in specific circumstances. The concept that the untrammelled operation of Supply-and-Demand would 'in the long-run' produce an equilibrium, under which the optimum distribution of the available resources would be achieved throughout the economy, is utterly impractical and unconvincing.

In examining what is the 'optimal' allocation of wealth, Economists have no concept of justice that they assume to underpin their value theory. Tutored in Economics, the contemporary pack of machine politicians present voters with promises that they will promote fairness, which boils down to a variant of the package of trivial changes in taxes and benefits that the civil service Grauniadistas consider to be feasible. Fairness is one of the woolliest slogans that can be devised; but in contemporary politics it is a descriptor of a mixture of policies that intrude into the economy, and divert the patterns of payments, to achieve social objectives that might satisfy naive concepts of 'justice'. The dogmas of Market Economics that drove politics in Britain and the USA from 1980 to 2008 are in direct conflict with the 'fairness' agenda, which implies increasing transfers of wealth from those who generate it to the mass of dependants of the state: requiring more taxes from the diminishing minority of the population who can be classified as 'productive', and more government activity. While the Obama administration has increased state spending, especially through benefits and by funding projects that would not attract market investment in current circumstances [if ever], the UK government is committed to containing government spending and - in particular - capping benefits. The US economic data appear to show modest recovery [but not enough to pay for the increase in borrowing]: the UK data show less certainty of growth and increasing state borrowing. Benefits have been restricted for many tens of thousands of people, who will experience real hardship, while spending on benefits in total is still increasing.

Tens of thousands of immigrants are admitted every year to the UK who have no prospect of employment, and often a positive intention not to work. These people are admitted as asylum-seekers and as 'family members' of settled immigrants and as 'students' [notwithstanding efforts by the underperforming UK Border Agency to stem the flow]. These new migrants, and the children of settled immigrants, increase the total cost of benefits plus social housing plus schools plus health care: while the government attempts to reduce the rate of increase in spending on all those services by reducing eligibility to indigenous British subjects, many of whom have become retired or redundant after a lifetime of taxpaying employment. The resentment that has built up is not simply directed at the Conservative-LibDem coalition; voters recognise that a Labour government would not depart significantly from these policies, whatever the windbags say in their tedious speeches where attacking the coalition is much easier than making convincing policy proposals.

Economists [who are still being over-produced by the bloated university system] are now finding employment as 'valuers' of medical treatments, environmental 'assets' and other assets and actions that nobody considers can be traded on a basis of market Economics. The Health service evaluates treatments by setting the improvement in patients' lifestyle, or the prolongation of their lives, against the price of the medicine and the wages of the staff who administer it and the estimated cost of space and supplies in the hospital. It is impossible to 'value' a human life, and it is mere charlatanry to purport to state a 'benefit' that is equal to, or superior to, the computed cost of the treatment. Similarly any attempt to state the 'value' of a clean river or pollutant-free farming in money terms is simply voodoo Economics since nobody ever would, or could, set a price on such 'benefits' that the public would be willing to pay. There are areas of life where most mature people would agree that those who want to consume a product should be free to do so if their earnings enable them to afford the price. There are many other areas, such as healthcare and the preservation of parkland, where the vast majority would agree that the cost should be met from taxation. Whether it is local taxation or national taxation, whether it falls on income or spending [or whether the taxation is disguised as levies on water companies or petrol sales, so that the consumers paying the tax do not even recognise it] it is a societal levy. The more that deluded politicians follow the Economists' advice to 'privatise' public assets, the more they promote either the degradation of the environment or of health care or of education or the concealment of taxes within the prices that people pay for the output of the privatised businesses. The whole thing is a con: and the proof of that is that there is no credible system for the valuation of the 'benefits' that can be claimed to offset the costs of providing these services. The outcome is diminishing credibility for politics.

Colonists Smash Consensus

George Galloway, a former Labour member of the British parliament, has spend the past decade establishing his new Respect party which seeks pacifist and Muslim votes against wars on Islamic countries. He won an election in east London but left the seat to be retaken by Labour in 2010 when a majority of his Bengali supporters were snatched back to their former voting pattern by the complex of tribal networks to which they are susceptible. Galloway transferred his primary efforts to the ethnically different people from the northern parts of the Indian sub-continent who have colonised the former mill towns on both sides of the Pennines. There is a good chance that those populations will be less amenable to recapture by Labour. While the voting in recent by-elections has been only 30% of the roll, yesterday in Bradford West 51% turned out. In round numbers, 18,000 voted for Galloway, 8,000 for the [Asian] Labour candidate, 2,000 for the Conservatives and 1,000 for the LibDems: Galloway's vote exceeded that of all the established parties altogether.

The political class will spend the next week pretending that the Bradford by-Election result that was announced announced this morning was utterly unimportant. In a couple of weeks, when their pollsters and focus-group technicians report back on the new questions [those their masters had not cared to ask previously] that are raised by the Galloway result, they will find that there is elation among the mass of immigrants who voted for Galloway feeling that they have been patronised and mollified with benefits for decades. They will also report new pressure on the Asians who remained Labour voters to reconsider their position, and despair among the ethnic British who have been coaxed and bullied by patronising politicians who have suppressed discussion about immigration and the benefits bonanza.

These are not trends that the government are capable of understanding. The leading cabinet ministers simply do now know that in addition to the massive Greggs chain of bakers' shops is a mass of well-loved local bakeries and well-used garage forecourts where hot pies and pasties have for generations provided modest refreshment for millions. They are uncomprehending of the fuss that has been created by their decison to levy Value-Added-Tax of 20% to the prices of hot pies and pasties. They have no comprehension of the social structure and daily habits of their fellow-countrymen. There may well be some 'sleeper' in the Treasury who advocated the pasty-tax in full awareness of the probable impact on the popular press and the mass of voters. The nauseating scene of Gordon Brown's mass welcome to the Treasury by its Grauniadista denizens should have been sufficient warning for the Tories when they returned in 2010 to beware of a coven of socialists. But the major political issue is the incomprehension of the future Sir George Osborne Bt, the craven eurorat Clegg  and the Etonian Prime Minister. The pasty tax had no influence on the Bradford West election: but it did enhance the gulf between the government and the people; which is a completely outre way was also George Galloway's charge against the political establishment.

The Labour opposition is almost equally composed of 'intellectual' life-long would-be politicians, most of whom are as remote from the mass of the electorate as the similarly clad people on the government benches. They go through puerile rituals to make themselves seem - in their own conceits - to have speech patterns not unlike some of the lower orders; but examples like the fake-fishwife utterances of a shadow treasury minister [who spent years as a Bank of England official] produce only ridicule. Those like the Labour leader, Ed Milliband, who cannot even affect working-class accents equally fail to display the sort of articulateness that makes Galloway so devastating.

Galloway has exposed eighteen thousand of a million-plus Asian Muslims in Britain to the euphoria of defeating the political establishment. There are at least fifty seats that could fall to the Respect Party unless the indigenous British, with Hindus, Sikhs, Afros and EU immigrants can unite in voting for single candidates: the emergence of another party or network, with the primary object of stopping Respect, is highly probable.Unable to influence Respect, the established parties would bend all their efforts to denigrating and obstructing that new movement; with the result that in some places the new group will fail and in other places the established parties will be eliminated.

British politics suddenly got more exciting, more dangerous, and more likely to be followed by increasing cohorts of Islamic colonists and by those who become scared by the Muslims' new militancy all over Europe.

Nobody predicted this: one can search in vain for any hint in the press [up to and including early editions of March 30 newspapers] that Galloway's victory was even a remote possibility. I was not even aware that he was a candidate. But I live in the parliamentary constituency for which he formerly sat as MP: I recognise his intellect, his speaking ability and his political agility. He has changed British and world politics, and anyone who tries to ignore the fact will come to rue that day.