- Is the gender pay gap a failure of society or economics?
That income inequality and wealth distribution can differ based on gender is nothing new. Economic freedom is still restricted for many women in the world, and it was less than a 100 years ago that only men could inherit real estate in Britain. Yet today, there remains an 18% gender pay gap in favour of men. On an individual company basis, this can skyrocket (or sink) to +/-80%. Less income means fewer potential investments, fewer assets and a smaller pension. Women entering retirement now face a 40% gender pension gap and are more likely to live in poverty as a result. How much of this is down to societal factors and how much down to a failure of economics and the labour market? Is this a simple matter of teaching women better negotiating tactics or financial literacy? Is more concrete support needed to ensure the labour market does not split down gender lines, and is this something we should be aiming for? Julia will present the research on the gender pay gap before opening up for debate.
- Should CEO pay be capped?
Inequality is a big issue of the day. We discussed before at LEDS how “the 1%”, or “the 0.1%”, have seen both their income and assets rocket up, when the rest of the population in the Western world hardly enjoyed an increase in their living standards over the past twenty years. Corporations are leading the way in this. The spread between the highest remuneration and the average wage has surged to 144:1 (an eye-watering 237:1 when compared to the lowest rung of the pay ladder). And in the US, it's worse. Is there an economic justification to these disparities? Are companies so much better managed today than they were a few decades ago? What is the social effect, let alone the moral one, of rewarding executives disproportionately? There is an offer of a solution on the table... should such eye-watering earnings be capped? Say, 20:1? Michael will be introducing the topic before we switch over to passionate discussion and debate.
- Who should regulate the internet?
Our first LEDS meeting after a long pause will be very special for two reasons. First, the session will be introduced and moderated by Julia French, who becomes our co-organiser. Julia read Economics and Geography at the University of Leeds, was Vice President of the OPEN Economics Society, and an active member of the Rethinking Economics movement. Since graduating two years ago, Julia works as a sustainability and CR consultant in Central London. And the second reason for joining the meeting is, of course, the subject. Monopolies, or responsible businesses? What games are the internet giants playing? One thing seems clear, the tide is turning. In the land of the free and home of the brave, regulation is creeping in. As with many industries and sectors, which at one point could ‘do no harm’, mistakes were made, security and safety became an issue, ethics became a grey area. Examples include pharmaceuticals (whose interests have they got at heart?) and finance (hello crisis!). Now, the internet. The new UK law regulating the web around ‘online harms’ is particularly fitting. Now is a fine time to discuss this issue: should the internet be regulated? And if so, by whom? Or can it be trusted to govern itself? We all use the internet. Therefore let's have a voice in who regulates what we do online, what we read, streamline, download, buy, and associate with. Join the debate on Wednesday, the 25th June.
- On the Phenomenon of Bullshit Jobs
After the long summer break, let’s put our thinking caps on again. The next LEDS meeting will take place Thursday, 27th September. See the sidebar on the right for details. Our guest will be LSE Professor, anthropologist, and patented anarchist, David Graeber. Not in person, sadly, but through one of his most discussed pieces, a short article he wrote five years ago, under the provocative title On the Phenomenon of Bullshit Jobs: A Work Rant https://strikemag.org/bullshit-jobs/ Follow the link to the article, which you can download and print from the site. it is a lively read, worth the five minutes you’ll spend enjoying the argument. BS jobs have always existed. Bureaucracies grow by employees giving each other work to do, without any production benefitting the world outside. Think of Parkinson’s Law http://www.businessdictionary.com/definition/Parkinson-s-Law.html The question that springs to mind is, “In the harsh competitive environment of neo-liberalism-and-all-that, why do for-profit firms continue to pay useless employees?” Following the viral success of his article, Graeber produced a full book, published last May. BS jobs, he writes, fall into five categories: 1. flunkies (who make others feel important), 2. goons (there to be aggressive on their employers' behalf), 3. duct-tapers (who sort out problems others have created), 4. box-tickers (who allow a company to claim it's doing something it isn't), and 5. taskmasters (who "supervise people who do not need supervision"). We will ask ourselves whether we recognise these categories in our work experience, whether they are as widespread as Graeber believes (check the short video on the author's website: https://davidgraeber.industries/artifacts/bullshit-jobs ). Graeber appears to have problems identifying what a useful job is, or isn’t (for instance, in the Strike! article he quotes London tube workers as “necessary”, when we know trains could have been automated a long time ago, as the DLR is). Automation, massive unemployment, universal basic income – or BS jobs forever? Let’s see where the conversation will take us. Christian
- Private healthcare – a privilege, or a system to bring costs down for everyone?
A common belief is that private healthcare is a luxury only the elite can afford. A public health system, it is claimed, is the way to achieve a high accessibility of medical services for everyone. In movies such as ‘Elysium’, Hollywood portrays private healthcare as unaffordable but by the mega rich – such as Matt Damon and Jodie Foster, who star in the film. On Tuesday, 26 June, Fred Roeder will introduce a LEDS discussion on the benefits (or not) of private healthcare – whether competition in the provision of medical services leads to better, more affordable, and more comprehensive care for everyone. Fred is a health economist and has worked in health systems in post-communist countries, North America, Germany, and South East Asia. He currently works as Managing Director of the Consumer Choice Center in Brussels.
- The End of Growth?
Statistics show major economies have hardly recovered from the recession following the 2007 financial crash that warning signs are flashing again. We are not returning to the pre-crisis rates of growth (let alone the ones experienced in the 1950s and 60s). And the question is: Why? Pundits and politicians are offering a range of reasons, with varying degrees of plausibility. 1 “It’s all the bankers’ fault.” It sounds like a populist slogan. It does have merit, paradoxically, for the ultra pro free markets Austrian School. The bloated financial sector carries with it a massive misallocation of assets in speculative instruments, overvalued share and property prices. Growth won’t return until the debt bubble is deflated, these free market advocates maintain. 2. “The age of massive productivity increases is over.” The steam engine, railways, electricity, the conveyor belt, etc., drove down industrial prices, and made products available to (nearly) all. Nothing on that scale has been introduced since the shipping containers in the 1960s. We wanted flying cars, all we are getting is 140 characters, Peter Thiel famously remarked in a Yale University speech. Will robots and AI deliver that growth? It is far from sure. What about the employment issue? 3. And then humanity’s own demographic growth is abating (except in Africa). Fewer people lead to reduced consumption, older people represent only a replacement market. This lack of aggregate demand leads economists like Larry Summers and Nobel laureate Paul Krugman to believe we have entered a period of “secular stagnation”. 4. Many environmentalists welcome a lower, or zero, growth rate. Maybe if we readjusted the figures of past industrial growth to include environmental costs, growth would not have taken place at all. Projects would have been abandoned, because environmental constraints would have made them unfeasible. Is today's concern for the environment, the fear of global warming, and the adoption of Hans Jonas’s “precautionary principle” not a cause for economic stagnation? As happened in previous sessions, I will introduce the subject, and invite all participants to contribute their documented opinion (or just relax and enjoy the conversation). Christian
- Nationalisation? Privatisation? What is at stake?
The purpose of any economic activity is to generate a revenue that is higher than the cost of production. Higher, not equal to, so that the operation leaves a profit. The question then becomes, Who owns that profit? What to do with it? In all circumstances, part of the profit needs to be reinvested in the activity itself. Ideology kicks in regarding the surplus. Classical economists and other thinkers (in Islam, for instance) maintain that those who have contributed the capital to establish the activity and support its expansion are its legitimate owners. They are entitled to the profits. Marxists, on the other hand, observe that ‘capital’, whether machines or intellectual property, is only the result of past labour. Those, whose work make the activity possible, are the true owners of any profit generated. In practice, few firms are the property of their employees. A government agency is rather the legal owner, theoretically as trustee, for either the workers, or more generally, a collective, such as the city or the nation. There is a call in this country to (re)nationalise several industries: railways; electricity, gas and water distribution; airports; maybe public works and defence contractors; maybe education. There is no reason why a state-owned, or employee-owned, business should be less efficiently managed than a privately-owned one. Yet, with few exceptions (John Lewis), public ownership has not delivered much consumer satisfaction. This Thursday, 5 April, we will discuss several issues of the public/private property opposition: - Why would a nationalised company provide better client satisfaction? At what cost? - How to create a level playing field between state-owned and privately-owned businesses operating in the same field? - Are not nationalised industries prehistoric structures in the era of multinationals? - Are nationalised companies necessary to implement an industrial policy? Those, and other questions, will emerge in our discussion. I will briefly introduce it, and it will be over to you. Participate, voice your opinion, or silently enjoy the conversation, it will be up to you. Christian
- Digging under the debt mountain
Debt has a bad reputation. Indebtedness to someone reveals a position of weakness. In Germanic languages the same word - Schuld - indicates both 'sin' and 'debt'. Lending at interest was prohibited in Judaism and Christianity, and still is under Sharia. At the same time, debt is one of the ways of building capital (as buyers of houses well understand in this country). A company or a nation that would not borrow would effectively be declaring "We can't think of nothing to invest in, we have no future." The issue is never debt, but the use of the sums borrowed. Paying current expenses (for a household, consumer goods or leisure; for a state, pensions and civil servants' salaries... ) is a shortcut to ruin. It is the reason economists today consider that a country's debt should not exceed 60% of its GDP, ensuring there is enough wealth creation to service all loans. Bear this ratio in mind. The UK is at 87%, the European Union average is 83%, the USA chalks up at 105%. And those are the prudent ones. The total debt in the world stands at a totally scary 325% of world GDP! In money terms, the equivalent of 215 trillion dollars is owing at this moment on the planet, a quarter of it by governments. Has this money been invested wisely? Will it cause more wellbeing for humans? Will it generate revenues enough to be all repayable? Our LEDS debate on Thursday, 8 March, will examine the issue of debt. We will analyse some statistics - who owes how much to whom? - and discuss what policies governments could implement to prevent massive defaults, both in the public and private sectors. The discussion will probably take us to question the present financial system, which creates such a debt mountain, and then gets buried under its collapse. But what else could replace it? We will have no speaker for that evening. I shall briefly introduce the subject with some figures and charts, and open the discussion. See you all on Wednesday, 8 March.
- Are we all protectionists now?
History does not move in a straight line. What seems to mark an advance is soon reversed, at least partially, at least for a time, until people decide whether it was a progress, or not. Global trade is one such move. Hailed as the surest way to prosperity, allowing poorer nations to catch up with the early beneficiaries of industrialisation, it is now blamed for causing financial imbalances, job losses in the West, pollution everywhere, and fostering the rise of nasty political movements. Global trade made headlines last week, as the World Economic Forum was being held in Davos, and throughout the year we'll hear more about US protectionism, China’s trade ambitions and the New Silk Road, the UK’s Brexit negotiations, not to mention commercial sanctions against the likes of North Korea, Iran, and Russia. Pundits and politicians will update the arguments. Surely, one camp will contend, industry needs buffer against unfair trade practices and the dumping of commodities, like steel, or goods produced in sweatshops; there must be a level playing field when it comes to environmental issues, they will argue; even Adam Smith, the herald of free markets, saw merits in a country wanting to protect a nascent industry. The other side will remind us that the wealth of nations comes from the division of labour, both within each one, and between them; if speaking of fairness, shouldn’t the poorest producers have unrestricted access to the richest markets? and why would a government deny its population the opportunity to buy better, cheaper goods, simply because they are made abroad? Then there is the matter of currency rates. When international agreements, such as under the World Trade Organisation, prevent a country from slapping high tariffs, or quotas, on imports, it can resort to driving down its currency, making foreign goods expensive domestically, and subsidising exports. Is this not a form of protectionism? What is the evidence? Let’s hear it from both sides at our forthcoming LEDS meeting. Maybe the discussion will lead us to consider, not just the benefits of free trade to countries as aggregates, but the impact on specific populations diversely affected by global competition. And finally, we may ask whether more transnational trade is compatible with democracy, which is national by nature? I will briefly introduce the subject, and open the conversation to all who want to participate. See you all for a lively LEDS discussion on the hot topic of the day Christian
- The Problems with tax havens
Two years ago LEDS hosted a discussion on the use, misuse and abuse of offshore jurisdictions. The issue has resurfaced last month. The publication of the “Paradise Papers” and the ensuing agitation raise several questions, straddling economics, politics and the fair values that hold societies together. The nature of tax havens means we don’t know the extent of the economic problem. Estimates of offshore wealth vary between 50 and 80 trillion dollars, as high as 10% of the world’s GDP. But whatever the figure, the questions come fast and furious: How much of this money is there illegally, originating from criminal sources? How much is the consequence of individuals and corporations taking advantage of tax facilities (as we all do)? Are assets hoarded in tax havens lost for the world, or simply allocated differently than the taxed money would have been? Are not sovereign jurisdictions allowed to set their own fiscal policies, and is it not bullying on the part of great powers to force these small states to change their ways? Should we ban tax havens – however defined – or only demand more transparency, or just accept their existence, and change our own tax laws in the UK and other rich countries? We won’t have a speaker this time. I will briefly present various aspects of offshore jurisdictions, offer a few figures and charts, and the discussion will start. Outraged by tax evasion, wealth inequality, the differential treatment between domestic companies, which can’t use tax havens, and multinationals, which thrive on them, or supportive of fiscal competition, do join a lively and courteous discussion, on Wednesday, 10 January Christian