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Trickle up: pigs in the pipe - click opera
February 2010
 
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Fri, May. 4th, 2007 12:52 pm
Trickle up: pigs in the pipe





Great news! The Sunday Times has published its new Rich List... and wealthy people in Britain have never had it so good!

"The combined wealth of the top 1,000 has soared by £59 billion in one year to just under £360 billion," reports an article entitled Wealth Goes Supernova. "This near 20% rise over 2006 is one of the highest annual increases in wealth we have recorded since our first list was published in 1989. The past decade of Labour government under Tony Blair has proved a golden age for the rich, rarely seen in modern British history. When the Blair administration came to power in 1997, the wealth of Britain’s richest 1,000 stood at £98.99 billion. The £261 billion rise in the wealth of today’s top 1,000 represents a 263% jump over the past 10 years."

Whoopee! That's great news for everyone, because wealth trickles down from the richest to the poorest! Wealth spreads around! Or does it?

According to Bryan Caplan, author of "The Myth of the Rational Voter: Why Democracies Choose Bad Policies", the general public in many democracies don't believe that wealth trickles down. And according to him, they're wrong, and need decision-making taken out of their hands; economic decisions should be taken by a specially-appointed panel of economic experts. The electorate, you see, show fundamental ignorance of economics. Speaking on the BBC's Thinking Allowed, Caplan said:

"Compared to economists, the general public is much more skeptical about the social benefits of markets. So they tend to think that just because businesses are out for money -- and they are -- that the effects are going to be negative for society. This is not really true. An example I often use is that if you're at a restaurant, would you want your waiter to not be greedy? It's the very fact that he's interested in making some money that allows you to get good service from him."

Yay! Greed is good for all of us! Rational self-interest will create, through markets, the best of all possible worlds!

Not everybody on the programme agreed, though. Paul Whitely explained "the paradox of rationality":

"What is rational for an individual may not be rational collectively, and vice versa. We know that these collective failures of rationality are quite significant. To give you an example, by comment consent the Common Agricultural Policy that Europe runs is a terrible policy. It distorts markets, produces waste, environmental degradation, etc. Naturally enough, if politicians want to get rid of it, farmers oppose this. Farmers are not being irrational opposing it... it's something that brings them benefits."

Ah, there we have it. The rather more tough-minded, less rosy-spectacled approach. Different groups in society have different interests. What's in the interest of one group isn't necessarily in the interest of the others. And that applies particularly when one group is massively more rich or powerful than the others.

The property market in Britain "is bleeding millions of Britons dry", says Bricked In, an interesting report in today's Guardian, which says that up to half of first-time buyers have now been priced out of the UK housing market altogether. And again this idea of collective rational interest being the opposite of individual rational interest comes up:

"Equity, and all the consumer buying-power it represents, has helped to keep Gordon Brown's much-vaunted economy ticking over nicely for a decade - but we have acceded too easily in the assertion that what is good for the economy is necessarily good for the bulk of people. Rising prices are turning the trickle-down effect on its head: the richer people at the top get, the more they pay for scarce housing, and the more actively difficult they make it for everyone else."

In The New Statesman Faisal Islam looks at how different generations, as well as different income brackets, have different interests. British baby boomers, he says, have kicked away the ladder for the generation following them -- effectively robbing their own children of the things they had.

"If you are over 50, you will recall a blessed carelessness about money in your twenties and thirties that you probably took for granted at the time. You had free university tuition and, if your parents were sufficiently poor, full university maintenance grants. To that, add free dental care; cheap (relatively) houses with gardens; mutualised building societies; statutory retirement at 65 (probable retirement well before then); and final-salary private pensions."

"Demographics show the root of the problem. On the Office for National Statistics website there is an animation which shows age distribution in Britain. The population pyramids that once showed many young people at the bottom supporting a small number of older people at the top is being flipped on its head."



And there it is again. Trickle up, not trickle down. The young and struggling supporting the old and affluent, when it "should" be the other way around. The poor supporting the rich. Resources going to those who already have them, not those who need them. That gravity-defying inverted pyramid is the shape of our times. There's one consolation: it's completely unsustainable, materially and morally. So it won't be around for long.

Another reason it won't be around for long is that the current situation is a result of what economists call the "pig in the pipe". The pig is baby boomers and the pipe the decades they've been charging through, changing their priorities (and the world's) as they went. "They embraced social liberalism, flower power and a large state when they were teenagers, and low taxes, a smaller state and loadsamoney individualism in their period of high disposable income," says Faisal Islam. Then the pig realised that it, too, was mortal.

39CommentReplyShare


(Anonymous)
Fri, May. 4th, 2007 11:06 am (UTC)
Momus?

What do you consider yourself Momus? In your 40s. More of a baby boomer, age-wise?


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imomus
imomus
imomus
Fri, May. 4th, 2007 11:18 am (UTC)
Re: Momus?

I'm a baxxy booxer. A bit of x and y in there.


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electricwitch
electricwitch
For anything, oh! she´ll bust her elastic
Fri, May. 4th, 2007 11:42 am (UTC)

Ugh, in Holland they´ve been going on about the babyboomers and how they´re a problem for 10 years now. But I don´t mind since they´re our parents and we live off them.


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imomus
imomus
imomus
Fri, May. 4th, 2007 11:47 am (UTC)

So you're what Faisal Islam's article calls kippers "kids in parents' pockets eroding retirement savings".


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(no subject) - (Anonymous) Expand
cap_scaleman
cap_scaleman
cap_scaleman
Fri, May. 4th, 2007 11:42 am (UTC)

Simply put: Selfish Populism is not good for anyone.


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evxanadu
evxanadu
http://evpopsongs.com
Fri, May. 4th, 2007 12:13 pm (UTC)
do the kids leave Britain?

that population animation -- WOW!

Now, where did all the kids from 1972 go?

They don't get older at a faster rate than their peers.
They're not dying off that fast, are they?

So how does it work -- do the kids leave Britain?


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(Anonymous)
Fri, May. 4th, 2007 01:52 pm (UTC)
Respect?

Often thought that the UK young have more right to ire right now, than at any 'angry young men' or punk moment. Obviously that doesn't help, but even the left-thinkers I talk to debunk the Respect party. My flatmate: "They have been hijacked by the Socialist Workers Party, who are utter classist idiots"; a girl I dated who works for Hilary Benn: "Please don't vote Respect. Please. I was there when they threw stones at Oona King." To people who think George Galloway has moments, but a clownish streak as wide as his suits. All of these things just remind me of any scrappy, newish party struggling to be heard. Never pretty. I'm sure it was said of Labour. Wondering if any Click Opera readers have anything else to swing me for/against Respect?


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mcgazz
mcgazz
McGazz
Fri, May. 4th, 2007 03:59 pm (UTC)
Re: Respect?

Not keen on Respect. It seems to be run by the SWP (who I have issues with) and various Muslim interest groups, some of whom don't seem to be madly into socialism (if I want to vote for patriarchal, God-bothering capitalists, I can vote Tory). One thing in Respect's favour is that the UK's warmongering neocon community detest them. Some Respect members are lovely, and I'm glad a UK left party exists, but, on the whole, I think the job could be done so much better.

All left movements in the UK still reckon they can turn the clock back to before neoliberalism/Thatcherism, when they should be thinking about how to turn the clock forward *beyond* it. We need to work out why the neoliberal revolution succeeded, not pretend it didn't happen.

Galloway I love - he's always great entertainment. What chutzpah! I salute his...etc


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georgesdelatour
georgesdelatour
Fri, May. 4th, 2007 02:35 pm (UTC)

This is a very interesting post. Bryan Caplan seems to be a character straight out of the Adam Curtis film, "The Trap" - arguing the game theory idea that humans are intrinsically selfish rather than co-operative or altruistic, and that society functions best when their selfishness is not inhibited by voters or the state. He's wrong, demonstrably wrong, empirically wrong.


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polocrunch
polocrunch
Polocrunch
Fri, May. 4th, 2007 03:32 pm (UTC)

I don't have anything intelligent to say, just that that demographic animation kept me occupied for a while. Thankyou.


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onthemoon
trygve
Fri, May. 4th, 2007 03:36 pm (UTC)

"British baby boomers, he says, have kicked away the ladder for the generation following them -- effectively robbing their own children of the things they had." No need to limit that statement to Britain!

Graduating into the 'real world' is akin to being still-born for my generation (on the cusp between gen x and gen y, if we are to use those silly ones). Most of my peers have gone straight from college to several frustrating years of low-wage, low-significance jobs in which financial dependence if virtually unattainable, or, in the case of a few, have had to sacrifice all of their time and passions for jobs that long abolished the 8 hour day in the name of salary and still leave them in a position where they just barely scrape by.

What are most of my friends, ranging from early 20s to early 30s, doing or trying to do now? Go back to school! Accumulate degrees and amass more debt! That seems to be the only viable option for many, myself included, and ultimately I think it may just be a matter of putting off the inevitable. It seems that those my age are left with the choice of either forsaking their passions or forsaking their financial independence and crippling their futures (of course many don't even have that choice). I've gone with the latter, choosing to dedicate myself to the creative world, and honestly, when I look to the future, it scares the hell out of me. Short of some stroke of luck that lands me financial success from my creative outlets (and I'm not even putting a single egg in that basket), I don't see myself ever having the independence or safety of my parents, and they are both self-made, degreeless, and from working class and poor families. Lord knows what it would mean for someone in my position to try to have a family or stable home.


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mcgazz
mcgazz
McGazz
Fri, May. 4th, 2007 04:04 pm (UTC)

> some stroke of luck that lands me financial success from my creative outlets

I wonder if that's part of the problem? All white (for want of a better word) Gen Y-ers I speak to seem to think they're writers, or musicians, or artists, and get treated appallingly by agencies, callcentres and the like. Meanwhile, immigrant kids study maths/computing/medicine and get the few remaining decent jobs. Why is this? Is it something to do with the education system?


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dr__ben
dr__ben
Fri, May. 4th, 2007 04:14 pm (UTC)
excellent

hahaa excellent. i was trying ages ago to flog a short book on a similar subject about how the baby boomers had selfishly rigged everything in their own interests, called "fuck off and die", but nobody would bite. i think i'm probably too childish for serious political discourse.


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mandyrose
mandyrose
Fri, May. 4th, 2007 05:53 pm (UTC)

That waiter analogy is, truly, unsavoury. It could very easily be extended all the way to Monsanto or similar corporations, as they serve you your genetically-modified monocrops that deplete everything they touch. "Oh, don't mind the blood dripping from my fangs onto your table cloth". I usually like to keep cannibalism and epicure well apart, don't you?

This whole attitude is a way of separating everything from where it comes from--- land. The cultures-- arts, music, social systems, etc.-- of the world originally stemmed from their relationship to local flora, fauna, and minerals. Culture and cultivate come from the same "root". Which has to do with revolving, a cycle. So our culture has been cut off from this root, and energies are no longer cyclical. Our culture uses energies only once, amassing them through usury in the hands of a select few, then turns what's left into noxious poisons. We think energy, and therefore our destruction of it, are infinite, but as you've said, we'll soon learn otherwise! Even Monsanto can't get something from nothing, and the only way they do this, now, is through intense use of fossil fuels. So as for what's good for farmers, this system isn't. It robs an ancient art of its dignity and turns all farmers against one another. It also turns our common home, the earth, into nothing more than a one-night-stand waystation. No wonder we all feel so dispossessed.

Incidentally, isn't it thanks to the British landed tradition that in the US we have acres and acres of perfect lawn grass as far as the eyes can see?


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uberdionysus
uberdionysus
Troy Swain: Black Box Miasma
Fri, May. 4th, 2007 06:08 pm (UTC)

I know it's no consolation, but the situation in the U.S. is even worse. Income disparity is at the worst levels since before the Great Depression. Not only that, but the myth of trickle-down business investments is disproved.

Bad times, financially.


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cheapsurrealist
cheapsurrealist
Dave Nold
Fri, May. 4th, 2007 07:28 pm (UTC)

"If you are over 50, you will recall a blessed carelessness about money in your twenties and thirties that you probably took for granted at the time. You had free university tuition and, if your parents were sufficiently poor..."

I remember 65cents for a gallon of gas and not having enough money to put gas in my car. I remember scraping by and defaulting on my school loans. But good things happened too. I think. The 70's were kind of a blur.


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(Anonymous)
Fri, May. 4th, 2007 07:48 pm (UTC)

Ultimately, would you not agree that today is the best time to be alive, ever. I wouldn't swap the internet for cheaper homes, the chance to travel the world for some myth of community spirit.


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(Anonymous)
Sat, May. 5th, 2007 12:32 am (UTC)
bacon

Good blog, it is wonderfully obscene how the compilers of The Sunday Times Rich List cavort and rejoice in the obscene, incomprehensible wealth of the featured fiscal apex predators; as if the increasing polarisation of wealth between an uber-rich tier and a wage-slave class was a cause for jubilation.
That property fetishism you mention almost defines the character of nouveau riche Ireland, there are a risable series of ads for a Dublin development in one of our broadsheets showing coupling couples wolfing pre-conjugal strawberries on a granite work-top (there's nothing like facing the payments on a 300,000 Euro plus mortgage to cause one to get wood). Incredibly people here seem to take it for granted that shackling themselves to a 1,500 Euro per month 35 year mortgage is a form of adult self-assertion, forgetting that some day they will die and may at some point before find time to muse on a youth and middle-age spent working 60+ hours a week for a pile of bricks and mortar - that is if they can momentarily avert from wet-daydreaming over those Rich Listed net worths.
Regards - Thomas S.


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(Anonymous)
Sat, May. 5th, 2007 10:34 am (UTC)
Re: bacon

Word up to the man above me.

It's even worse here (west London) - 300,000 euros would buy you a one bedroom apartment. I'd literally be looking at £500,000+ to buy a first 'family house'. My parents own two properties with a combined worth of now more than £2 million ($4 million USD?!), and no they're not rich farnsworths, it's just that their properties have both shot up in value over the past 20 years or so (literally close to 10x).

As all this money is essentially tied up in bricks and mortar, and can't be cashed in until one dies or retirees, essentially all it does is fuck over the first time buyers (*hands up*). So I'll be emigrating then (this year).


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(Anonymous)
Sat, May. 5th, 2007 04:20 pm (UTC)
So who is trickling onto who?

Did the illustrationist(who?) depict the trickler trickling onto the pigs? What did the pigs really do and do the smug on smug beaming hummer pigs really deserve it?


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