Could Boris Johnson be Prime Minister?

“LOL Boris for PM!!!1!” tweeted one articulate person during the London Mayor's speech after the Olympic Games. The famously mop-headed Tory politician had declared a parade in honor of Team GB's medalists, and closed this event with a speech which many believe was setting him up for a bid for the Conservative Party leadership and ultimately Number 10. Pundits claim that he took credit for the games and that the success of the London 2012 Olympics reflects well on Boris Johnson. His visibility during the games and his savvy courting of the international media has propelled him to a new level of recognition which can only work in his favor should he decided to make a play for power. The idea of Boris as Prime Minister might not be a joke for too much longer - not the least because he out-danced Cameron's awkward shuffle during the game's closing ceremony.

Boris Johnson, or B-Jo to some, has always managed to use his status as Britain's most high profile joke to forward his career. His popularity lies in his appeal to people who are either not interested in politics or who believe all politicians to be grey suits, only marginally more interesting than accountants. He clearly believes himself to be the second most powerful person in the country, with eyes to take his unique brand of self-publicity to greater heights. The above quoted tweet is indicative of the fact that he appeals to people outside the main political debate.

I am yet to meet anyone who admits to voting for Boris for any position of power simply because he is funny, but the nagging suspicion that such a person is out there somewhere will not go away. Boris is the classic Cameron model of Tory, clearly a Conservative of the left of the party, a self-styled progressive and not a darling of the right-wing. His appeal to those who could make him leader is his ability to attract support from those who are unlikely to vote for traditional Tory candidates, primarily young people who the Conservatives have had little success in wooing. Rising youth unemployment under the Cameron government makes it unlikely that they will have much success among the under 25s in the 2015 election, but Boris Johnson as leader might make that more likely.

Let me lay out the case for Boris as party leader: the current economic stagnation is doing the Conservatives no favours electorally, and Cameron has a growing problem with the right of his party. He is seen as appeasing the Lib Dems too much and flip-flopping on key issues of immigration, welfare reform and – crucially – EU membership. All this could be brushed off, but Cameron cannot escape the growing feeling amongst Conservatives that the government is not right-wing enough and that this could cause the traditional Troy vote to stay home in 2015 or switch to a new party, such as UKIP. Tory strategists are concerned about the current leadership's effectiveness to mount a successful campaign for the next election, and Boris could make all the difference. He is internationally-known, watchable on TV and an effective user of modern political tools such as social-media. He appeals to the young, the politically central and the so-called “chattering classes”, what I will call the LOL B-Jo crowd. His connection with the Olympics brings positive thoughts to people's mind when musing on Boris Johnson. By contrast, David Cameron reminds everyone of government cut-backs and our own squeezed wallets. Boris also has experience of high office, and being Mayor of a city as diverse as London requires a special type of politician who appeals to different sections of society and fosters consensus. He is also of good Tory stock, Eton and Oxbridge educated, clearly a friend to wealthy and privileged, whose support the Tory party depends upon. Even his frequent gaffes come across as lovable buffoonery: Boris has turned his biggest weakness into his greatest strength.

However, there are reasons against making Boris party leader. He is clearly no more right-wing than Cameron, and thus unlikely to attract back the euro-sceptic support lost since Cameron became party leader. British politics are also very different from American politics and, although Boris considers himself to be Governor of the London (in more ways than one), being Mayor is an unlikely stepping stone to party leadership. Cameron's successor is more likely to come from a cabinet colleague, probably Osborne who occupies the traditional king-in-waiting role of Chancellor and is firmly to Cameron's right. However, the main reason against Boris becoming party leader is actually his clownish appearance. Britain longs to be taken seriously as a world power and everything about the London 2012 Games is a testament to this, but choosing a tousle-haired dandy as our leader does not project seriousness. The thought of a leader who might drop his trousers at a meeting of NATO has little appeal outside the LOL B-Jo crowd. Memories of how all of Italy was mocked for Silvio Berlusconi's gaffes are still fresh in people's mind.

The LOL B-Jo crowd may have their day: remember that in the early 1970s, the idea of Margret Thatcher as Prime Minister was laughable (remember Life on Mars?). However, Boris Johnson is clearly setting the agenda right now, with his appearance on David Letterman's The Late Show in America prompting Cameron to be a guest on the same late-night talk show. Recently, Douglas Alexander has written in the New Statesman that Labourshould take the idea of Boris as party leader seriously. B-Jo maybe the nation's favourite joke for now, but he is no fool. Boris Johnson's political foes (both inside and outside his party) would do well to take seriously the way he uses his public image to promote himself, and his appeal to people alienated by politics. No other politician better sums up the way Twitter has changed politics. It would not come as a shock to me if I were to read a tweet saying “LOL just voted for B-Jo for PM” in 2015.

Chinese democracy: is it an oxymoron?

More than a year after the Arab Spring began in Tunisia, its reverberations can still be felt around the world.  Civil war rages in Syria, Libya is attempting to rebuild itself, and Egypt is trying to shake off the shackles of a military dictatorship. However, one big question that remains unanswered is – will the Arab Spring turn into a Chinese summer?

The Chinese Communist regime is among the most unusual and interesting in the world. It maintains an ideological connection to Marxism and Maoism, but also presides over a labour market more deregulated than in most western countries, as well as owning some of the world’s largest private firms. It is somewhere between a socialist’s and objectivist’s dreams or their worst nightmares. Despite the government’s at times overbearing nature, it remains consistently popular with the one point three billion people it rules over, mainly due to the government’s ability to lift people out of poverty.

Chinese industrialization has been swift and effective, building high-tech industries where once there was subsistence farming. A country which once closed its doors to western technologies and goods now has a maglev network and is building 26 new airports. There are people in China today who run software firms whose parents farmed rice fields; one generation has gone from Milton’s green and pleasant fields to Silicon Valley. Many Chinese people do not want to change their government, because in their opinion they have the best government in the world: no other government has ever done so much to so drastically improve the wealth and living conditions of so many people. Poverty still remains a problem in China, especially for the millions of migrant labourers with no legal status or protection, but the wealth of the world is flowing into a country which throughout history has thought of itself as purely self-sufficient. Imagine if our parents and grandparents had been serfs on lands owned by feudal Barons, how much would we look up to the political party that brought us consumer goods.

The Chinese government has also recently relaxed its laws against political dissidence, and it is now acceptable to criticise openly state bureaucrats and regional officials if it is felt they are corrupt or ineffectual. What is firmly off the agenda is any suggestion that Communism should end or that the Chinese government should be elected democratically. For now this delicate balance works well, the government provides vast (but unevenly distributed) wealth for its people and they enjoy more social freedoms than their parents; in turn the party, politbureau and old guard remain firmly in charge and enjoy the universal support of their subjects.

Much like Enron, the entire system is kept afloat by rising stock prices and a healthy dose of aspiration, or the case of China rising absolute living standards and the slim chance of becoming a Communist billionaire. Should a recession strike China and living standards fall, then questions will be asked. The overbearing Communist regime will not be so popular when the trickle of wealth seeping down from the top dries up and suddenly over a billion people will want a say in their government. This will be especially true of the above-mentioned migrant works who currently have the least to gain under Communism.

No regime that has been in power as long as the Chinese Communist Party will quietly step aside, and it will be difficult for western powers to criticise any Chinese crack-down on pro-democracy movements whilst our business interests are so closely linked to the Communist Party. Pro-democracy rumblings in China, such as we have seen in the Middle East, will have disastrous effects on the global community. China owns most of the west’s sovereign debt (especially America’s) and a civil war in China (like the one we see in Syria) could involve more people than World War II. With what will soon be the world’s largest economy up for grabs, the stakes would be very high in a free and open Chinese election.  Multiply this by the problems Russia has had in transferring from Communism to democracy, and you have the potential for a very unstable situation with the very real possibility of grave consequences.

China is opposed to intervention in Syria, as they can hardly call for change in non-democratic regimes, especially as eventually the pro-democracy uprising will find its way to China. When living standards fall, when the impoverished people industrialization is built on the back of organise, when the distribution of colossal amounts of wealth becomes too uneven, calls for regime change will be inescapable.

Democracy will inevitably come to China, but just like the tide of pro-democratic uprisings across the Middle East, this will not necessarily result in the best outcome for the west. Democracy and the Chinese government might seem like strange bed fellows, much like the free market capitalism and state socialism of the current government’s economic policy. The Arab Spring is sill changing the political landscape of the Middle East, but it will be a mixed blessing if becomes a Chinese summer.

The benefit of space exploration

Last year on July the 21st NASA’s Space Shuttle programme officially came to end when Atlantis returned to Earth after completing its final voyage. Since then the US government has withdrawn from manned space flights, relying on the Russians and Chinese to ferry American astronauts to and from the international space station. Western governments are slowly abandoning space exploration and turning their attention towards more Earth-bound problems. In the age of austerity and economic stagnation, space exploration seems like a past excess we can no longer afford (along with public sector pensions and healthcare it appears). The space shuttles stand as a towering monument to the optimism of a by-gone age, when we thought the white heat of technology and Keynesian demand management could have saved us from ourselves. Many hold the same opinions of space exploration as they do of the welfare state, that it was a costly mistake fuelled by optimism and good intentions but ultimately lacking a grounding in the reality. With the space shuttles sent to museums and with no government plan in place to replace them, private companies such as Richard Branson’s Virgin Galactic are vying to be the dominant powers in our upper atmosphere. Some see this as an indication of the way the western world is heading with more and more of what we thought could only be handled by the government being taken over by private companies.

While America is already being nostalgic about the days of space exploration, on the other side of the world government space programs are very much alive and well. China and India are currently engaged in a space race of their own with the former launching their Tiangong-1 space laboratory in September last year and the later aiming to be the first nation to return the moon since Apollo 17 in 1972. In these countries their space programs are a source of enormous national pride, especially as they take over the arena previously dominated by the globe’s fading powers. As the age of US, Britain and Russia ends and their space programs are discontinued and new generation of super powers are aiming not only to conquer the world but also the space above it. Even North Korea maintains its sights on the stars with an attempt earlier this year to put a satellite into lower Earth orbit. This attempt was unsuccessful but it was unprecedented in the level of access foreign media was given to the launch, indicating how confident the famously isolationist state is in their rocket scientists. In these countries space exploration is not considered to be an extravagance of an overly confident super-power but part of the global coming of age process and vital arm of both industry and government.

However, space exploration is not just for rival super powers or a way for newly emerging economies to show off. In Nigeria firms are partnering with western experts to develop a national space industry with satellites already successful launched. These industries (supported by the government) are seen as a way of training workers in important 21st century skills of computer programming, engineering and micro-electronics. The space industry also has a positive economic effect in fostering a high tech support industry that offers well-paying jobs and boosts national income. Creating a space industry is seen as a wage to develop the national infrastructure with the aim of growing the economy and lifting people out of poverty.

Western economies showing sluggish growth could learn from these countries who are investing in an advanced technological industries and enjoying strong growth. Investing in space technology for Nigeria and China is having a positive effect on people on the ground by developing industries and training workers. It would be reprehensible to let the west’s flaunted competitive advantage in high tech industries slide to other countries because we were unwilling to spend the money needed to support it. Space exploration creates growth in in all manner of industries from software design to metal casting. Through government investment in large scale projects like space travel, money will pass to the industries needed to support space exploration and from them to the industries which provide the basic components and raw materials for these high tech firms causing the economy as whole grow. Something western governments are crying out for.

In order for the industry to progress, technical innovation is necessary. The old vertical take-off model used by the space shuttle and Apollo program might have to be replaced by the more efficient horizontal take off model favoured by Virgin Galactic and other private space ventures. Also for the industry to reach its full potential corporation is needed to spread the costs and ensure that the economic benefits reach all the denizens of Earth.

The strongest argument for global co-operation in space exploration is that the space industry is unlike any other industry in the world in its unique ability to inspire people and capture their imagination. The draw of the stars is irresistible to many and space exploration has given us the world’s most frequently used image (the Earth from orbit) as well as the iconic moon landing footage. There is no greater symbol in thawing of the cold war than a Russian Cosmonaut and an American Astronaut shaking hands in orbit in 1975. Great deeds inspire people on the ground to reach further and accomplish more, it is a symbol of how far we have come as a civilisation since we first discovered fire and a reminder of how far we still have to go to reach the heavens.

If Nigeria and China can find the economic argument for space exploration than surely it remains relevant in the west as well. In an age of tempered ambitions and cut backs we need the symbol of stirring accomplishment to inspire us. Not to mention the economic and scientific benefits that space exploration can bring. The space shuttle was an ambitious programme, much like the New Deal’s program of public works which lifted America out of the great depression. It seems our leaders are keen to remind us that we live in a time where we can no longer afford ambition and we should fix our sights lower on what we can accomplish. No wonder disillusionment has replaced the white heat of optimism. I believe there is still an argument for space exploration just as there is still an argument for ambitious government projects whether they come in the form of the space shuttle or the welfare state.

Feminism and class consciousness

The world needs feminism. In the western world one in four women will be affected by sexual violence in their lifetime and in developing economies women are more likely than men to have a lower standard of living. Any efforts to improve the living conditions of the world's poorest people will only benefit 50% of these societies if greater work is not undertaken to improve gender equality. The work of feminists is essential to our continuing social progress, not just bringing genders in line with each other but also working to combat racism, homophobia and transphobia.

There is broad support for the goals of feminism but there is also a good deal of debate as to the methods through which these goals should be accomplished. Due to the low social status of women around the world there are many factors which prevent them from uniting into a powerful political movement, as generally the politically less powerful do not engage with the political establishment as they feel the have less to gain from dong so. What I have set out below is my thesis on one way in which we can move towards accomplishing the goals of the women’s movement.

People who broadly identify as feminist come from a wide variety of backgrounds and bring their own experience to the debate, not just as women but also members of other minority groups. Feminism is in itself a Universalist ideology about readdressing the balance of power between minority and majority groups. As an inclusive movement it has many crossovers with similar struggles and causes, however here in lies a challenge that faces feminists, namely in building female class consciousness. Women (and indeed feminists) typically primarily identify as belonging to a more specific socioeconomic group, rather than simply identifying as being 'a woman'. More prevalent class signifiers incorporate a combination of class, race, sexuality and sub-culture as these have a large impact on someone's identity as well as gender.

Traditionally class consciousness is viewed as the Marxist idea of the proletariat becoming aware of how they are exploited by the bourgeoisie and banding together against their oppressors. In the 21st century where the struggle against oppression has taken on many different forms I feel the concept is still valid but needs to be expanded. We need to stop thinking of class in a rigid way of factory owners and labourers and apply this model to the various different power relationships in society that can be exploitative. In this case the privilege men have over women. This is not to say a means of pitting women against men but a way to spread understanding of how women are opposed by the patriarchy.

Earlier this year, noted feminist blogger Helen Lewis wrote about the challenges facing feminism as a movement in 2012. The piece, which focused on the need to keep the feminist debate current, can be found here. Central to the article is where she asks "What is the biggest, most important single issue for feminists in 2012? What should we get angry about?" I agree with the conclusions Helen Lewis reaches and want to now add my own answer to the question which that it is important to create the idea of women as an oppressed class and to show that the same patriarchal systems which oppress poor black women in developing countries also affect rich white women in the OECD. However there can be problems in creating united class identity as there are a lot of differences between poor black women and rich white women, for example access to affordable childcare. Instances of rape and domestic violence are an example of an issue which affects women as an entire class and poor support for victims is an example of how women as an entire class are oppressed by the patriarchy.

In America, African Americans have been very successful in building a class consciousness that transcends economic background. This is partly through the emergence of an African American culture uniting the class, a culture which places emphasis on exploring how the current system oppresses African Americans and on overturning the barriers society places against members of ethnic minorities. For more details on this see, the documentary The Black Power Mixtape 1967-1975.

If this example of how African American culture transcends the gender and economic divides within African Americans then it can be used by feminists to develop a women's class identity. There is already a women's culture which is as diverse as women themselves but feminists need to use this culture to openly explore how women are oppressed and what unites them together in their oppression, much in the same way African Americans have used their culture to advance their liberation. Many feminists are already doing this, so in answer to the question posed by Helen Lewis above, I would say an important challenge and opportunity is supporting the work of these feminists in creating a women's culture to unite diverse women together in a single political movement. In other words developing a united female class consciousness.

Class consciousness makes a diverse movement a more effective political force. The high level of African American class consciousness creates social pressure to tackle issues which affect African Americans such as poor funding for intercity schools and gang outreach programs. The status of Africans Americans within American society is still low but the government programs to tackle racial issues receive more funding than those designed to reduce gender equality. Programs supported by feminists such as women’s shelters or outreach programs to victims of domestic violence less finical support. Most of the hard work in these areas is performed by charities with little support from the government.

Developing the idea of 'woman' as class consciousness will help  bring political pressure on governments to address social and economic issues which affect women. However there is a problem with class  consciousness which is the homogenising effect it has on the class. In other words it creates pressure for the entire class to conform to the opinions and values of the prevalent subgroups within the class. A good example of this is seen again in African American culture where there is a lot of pressure within the class to identify as heterosexual. Class consciousness has created a hegemony of people identifying as heterosexual African Americans which makes it difficult for the oppressed class to connect with other oppressed classes in America to effect social change. For example homosexual Americans. An indication of this effect was the passing of Proposition 8 in California during the 2008 election, California being a state which also voted for Obama. Millions of African Americans went to the polls to support someone from their class but also support a law against another oppressed class because people identifying as African American also prominently identify as heterosexual.

One of the great strengths of feminism is it is a movement that can incorporate people from a variety of different oppressed classes. There are many crossovers in ideology between feminism and movements to liberate ethnic minorities, LGBT people, the poor and the disabled from the constraints that society places on them. This broad background is a great strength to the movement but also a handicap as it inhibits the emergence of a single united female movement as a class consciousness.

The development of woman as a class consciousness will create political pressure to improve the status of women the world over. This is no easy task but a good way of developing class consciousness is through the development of a feminist culture which would use the strength of the movement (its inclusiveness) to explore the problems being faced by women of different backgrounds and create a desire for political change. Hard work is already being done in this area and it is important that this work is encouraged and supported to protect the future of the movement. The world needs feminism, without it we cannot progress socially as half of society will be born into a world which restricts their freedoms.

Austerity or growth: a politician's dilemma

With Karolos Papoulias emerging as the new Prime Minister of Greece, the nations of the Eurozone hold their collective breaths to see what approach to the crisis the new government will take. In some ways, Merkel and friends must be breathing a deep sigh of relief at having dodged the bullet of a coalition involving the ΚΚΕ (the Communist Party of Greece) who wish to renounce austerity and and leave the Euro. After the election dust has settled, a coalition has emerged between the parliament's largest party, New Democracy, Pasok (the Socialist party) and the Democratic Left. All three parties are broadly in favour of remaining in the Euro and desiring a less radical renegotiation of the bailout. However, the new government does seek some changes to the demands placed on Greece, and this must worry Merkel and co.

Across Europe, austerity is looking less attractive to politicians, as voters turn towards parties which favor growth. In France, François Hollande defeated Nicolas Sarkozy on a platform of taxing and spending. This is a sign of how much things have changed in the two years since the last UK general election, where austerity was taken as common sense. Since then, European economies have seen little growth, and the prosperity that has been created has not helped where it is needed most. As government budget cuts force roll-backs across the services which are available, most people feel worse off under austerity. Now the Tory-led government talks about efficiency and promoting growth, realising that if the situation does not improve then re-election looks unlikely. As well as watching Greece, keen eyes are also focused on France to see if Hollande's policies of tax-spend will boost the economy faster than Merkel's austerity.

In the UK, boosting growth has support on both side of the political divide not the least because GDP must rise if tax revenue is to increase enough to meet the government's deficit reduction targets. Further stagnation in the economy will hinder growth in the long term and cause lasting structural damage. Aside from the much talked about 'lost generation' of young people locked out of jobs and the housing market through increased scarcity, social problems are becoming exacerbated through a lack of prosperity – see last summer's London riots for evidence of this. Faced with the prospect of the economy tanking, the government's austerity programme now looks a lot less like common sense and a lot more like an ideological commitment to privatization and rolling back the state. I have blogged before about the roots of the government's philosophical commitment to austerity.

If austerity is ever going to work, it will have to deliver some growth soon. In the meantime, the people of Greece are facing a fifth consecutive year of recession and world greatly appreciate some growth. The austerity conditions imposed on Greece are very harsh and surely smothering the green shoots of recovery. However, the new government has little room to maneuver, as they are reliant on the support of the rest of the Eurozone to manage the country’s enormous debt. Papoulias needs growth and austerity, but it is becoming evident that the two are mutually exclusive. Greece will be watching both France and Germany to see which economy grows the fastest. The divisions across Europe are summed up last Friday's Euro 2012 match between Germany and Greece, a contest of the prosperous against the impoverished. Germany's victory does not silence the doubts about the merits of austerity.

The leaders of Europe are in need of some answers to the question of austerity verses a bold dash for growth, and are keen to see what happens in the countries which have most openly embraced either stance. The new Greek government will have to make some difficult economic choices and the continuing existence of the Euro maybe rest on these decisions. One thing that is certain – politicians will need to embrace either harsh austerity or a strong push for growth soon, as the current stagnation is unsustainable.

The end of the high street: not with a bang but a whimper

It's easy to live in a left-wing bubble: between organic toiletries, pubs with locally-sourced food and shopping on the internet, sometimes it is easy to forget there are High Streets where a large number of people do the majority of their consuming. A few days ago, my delicate shield of ethical consumption was smashed when I spent a few hours inside the Westfield Shopping Centre near Shepherd's Bush, west London.

The phrase 'fish out of water' does not cover the experience that I went through. I assumed that Westfield employed people specifically to keep dirty lefties like me out of their palace of consumption. Much to my surprise, I was welcomed in and dazzled with the bright lights and the range of shiny baubles available for me to purchase. I had some time to waste, and decided to find a music shop to pass the time in. I briefly considered unraveling a thread from my shirt and attaching it to the door so that I could find my way back later, but then I noticed the handy maps available from an information stand. Armed with a plan of the place, and mentally comparing myself to Livingstone, I set out to explore this strange and unfamiliar land of retail.

As I walked past the juice stands and Sky TV sign up booths, two things become almost immediately apparent to me: firstly, that there were no music, DVD, books or games shops anywhere to be seen, and secondly that the shops which did make up the Westfield were almost exclusively either clothing or jewellery shops. This confused me, for surely the main point behind a large-scale retail development is to get as much diversity of shops into as small a place as possible, thus allowing consumers to satisfy all their needs at once. Apparently not, as the Westfield caters to a very small section of consumption, mainly high-end up-market deeply personal. For those who shop in the Westfield, the particular boutique they frequent is a statement about their individuality made through mass consumption, the triumph of late-stage capitalism. In short, I discovered that the Westfield is the last bastion of the high-end High Street retailers against the advancing tide of internet shopping.

Later in a gastro-pub serving organic, locally-sourced pies, I was firmly back in my element and discussing my afternoon with a friend. I said that clothes and jewellery were one of the few areas where internet shopping and has had little impact. My friend informed me that he purchases T-shirts and shoes online, to which I agreed. The internet's particular brand of culture is very suited to the T-shirt business and allows the consumer to seek out designs which speak to them. Here the internet has had success in breaking the High Street's stranglehold on fashion. I asked my friend, however, if he would consider buying trousers online and we both agreed the idea seemed somewhat perverse.

The internet has taken over from the High Street in areas where it does best: bulk selling of goods, mainly entrainment goods, where the major factors are price and range. The last time I went into HMV to purchase a DVD, a friend told me not to bother and that it would be 'cheaper online'. He did not specify a website or have any data to justify his claim, which was built on a cultural understanding that this variety of shopping is simply better on the internet.

So where does this leave the High Street, other than with pound shops and clothing outlets? Some things have to be brought in the flesh, and the time delay involved in internet shopping means some goods will always be purchased in meat-space. However, with the rise in smart phones, tablets and app stores, immediate entertainment purchases online are a reality. All that is needed is a shift in social conventions, to make the giving of online content an acceptable present, and there will be no need at all for High Street entertainment retailers.

The High Street is certainly in a bad state, and a simple Google search for 'the end of the high street' returns thousands of blog posts and broadsheet articles bemoaning the end of face-to-face retail and making lazy observations comparing the closure of Game to the rise of Angry Birds. The truth is that this is hardly a recent phenomenon. It was nearly two decades ago that Amazon's diversification into VHS selling meant that Saturday afternoons were no longer spent wandering into the city centre to buy the latest Simpsons collection. One article I read claimed that 2012 was the year the High Street would end, as if most people had only just discovered the internet. In fact, most High Street retailers discovered the internet a long time ago and have also moved into online shopping.

Most likely the current process will simply continue. Places like the Westfield will hold their own in certain sectors for a while, but eventually changes in technology and social conventions will move our lives and consumption almost entirely online. If the High Street does end, it will be slowly over many decades, and not because everyone turned exclusively to online shopping over one Christmas period. If the High Street does end, it will not be with a bang but with a whimper, and one which is already well underway.

The Hunger Games and Game Theory

I do not usually write posts about popular culture topics, so this blog will open with a first which is a SPOILERS WARNING. This article may ruin the ending of The Hunger Games if you have not seen the film or read the book yet.

With that out of the way, I can move onto the main area of discussion. One might think that The Hunger Games, which opened at cinemas nationwide on the 23rd of March, might not have much to teach the viewer about economics, but that would be a mistake. The film has some important insights into the nature of competition and game theory.

The film follows the story of Katniss Everdeen, a teenage girl who volunteers to combat 23 other juveniles in a battle to the death in order to avoid the same fate befalling her sister. She strikes up a friendship come romance come rivalry with one of her opponents who hails from the same district of the film's dystopian future as she does. Katniss has to rely on her own survival skills to make it back to her family but is also faced with difficult decisions along the way in regard to who she can trust. There can be only one winner of The Hunger Games and only one can return to their home, co-operation in this environment can only go so far.

This is very similar to game theory and I am sure that had John Forbes Nash been alive today he would have found the questions raised by this literary sensation fascinating. Nash's game theory is a study in human selfishness which attempts to find mathematical and logical optimal solutions to real world problems. His results are bleak and frequently point to the power of human greed as a means to achieve the optimal result from any situation. Nash won the Nobel Prize for economics for his efforts and his theories underpin a lot of the prevailing market ideology and government policy. I have blogged on Nash and his theories before.

In a typical game theory situation there is a trade off between cooperating with the other player(s) and behaving selfishly for personal gain. Frequently you do not know what the other player's moves are or how they affect yours until after you have made a key decision. Nash found that there is always an incentive to betray trust for personal gain as in any one moment the other player(s) is likely to be betray you if they are behaving logically according to game theory.

In The Hunger Games itself there is an incentive to cooperate with one or more opponents against further opponents. Katniss teams up with Rue during the game to great effect whereas Peeta Mellark (her rival/love interest) allies himself with the stronger and better trained players. However there is an incentive to betray trust at any point as there can only be one winner. During the course of the game Peeta switches sides to help Katniss defeat his former allies. Signs of personal weakness are rewarded with timely betrayal and several characters come to an abrupt end at the hands of their recent allies. At any moment there is an incentive to betray trust just as whoever you are allied with is likely to also be planning the moment they turn on you.

This all sounds very bleak and has led many to doubt the human virtues of cooperation and altruism but there is a positive side to game theory. More recent experiments have been based upon the idea of iterated game theory where games are not played in isolation but repeated over and over with the long term outcomes monitored. These studies have shown that there is a mathematical advantage to altruism in iterated game theory. If you cooperate in the long term, through repeated games then all parties can each gain greater results than they could have achieved through seeking personal glory.

The Hunger Games also has an argument for cooperation and altruism if you view not as a single game but a series of games Katniss repeatedly plays against a changing series of opponents. There is a clear incentive for her to cooperating with weaker plays against the players with advantages. Ultimately Katniss's victory in The Hunger Games is achieved because she works together with others and uses their competitive advantage against her opponents. She also exploits the selfish players willingness to turn on each other to thin the field. At the end of the film Katniss is able to save herself and Peeta not because of their ability to work together to achieve a common goal but because they are able to trust each other.

The Hunger Games shows that there is not only an incentive for cooperation but also for trusting others even in an single victor environment. It is a strong argument against Nash's dark view of human nature as motivated by selfishness and personal gain. In our personal lives as well in society as a whole we need to learn from Katniss example of helping the weak, harnessing the power of cooperation over selfishness and above all that we need to trust each other.

A budget to reward work?

Politicians are always looking to incentivise employment. The general means of accomplishing this is by either cutting taxes on high earners and corporations to encourage entrepreneurship or cutting benefits to get the unemployed off the dole and contributing to GDP and tax revenue. In the run up to today’s third budget of the coalition government Chancellor George Osborne claimed he was planning a “budget to reward work”, i.e. one which will benefit those already in employment and encourage the unemployed to get a job.

Now with the details of the next 12 months of government spending announced we can ask ourselves: to what do degree has he succeeded? There was some welcome news, such as raising the level at which someone in employment begins to pay income tax to £9,205 a year with the aim of raising it to £10,000 next year. Not only will this reduce the tax burden on those with the lowest incomes but all those in employment will pay less tax; the average basic rate tax payer will now be £305 a year better off. This may not sound like a lot but it will boost consumption and aid the economy. Another good idea was tax breaks for firms working in the fields of computer games, animation and high end television manufacture. These are important sectors to the UK economy where we have a competitive advantage and are vital to our growth.

However, over the last year those in employment have had their prosperity dogged by the spectre of inflation above the Bank of England’s target. Although inflation has fallen back in the last few months (currently the CPI is at 3.4%) higher inflation erodes the value of income made from working and reduces the incentive to enter work. Firms have tended to give lower than inflation pay rises recently so as inflation remains high and those in work are finding themselves worse off. Inflationary pressure is largely the result of rising fuel costs caused by the soaring price of oil and gas on the global market. A domestic fuel subsidy or measures to reduce transport costs could have reduced inflationary pressure and made the income from work more valuable. This, however, was never on the agenda.

Another consideration is where will the funds come from to pay for this tax reduction? Borrowing is projected to be £1bn lower than anticipated which has given the Chancellor room to manoeuvre. A certain amount of the slack will be taken up by the rise in stamp duty for properties over £2m and the proposed clamp down on tax avoidance. The majority of the additional revenue will be raised by an extra 37p per unit tax on cigarettes. It is worth remembering that taxes on commodities disproportionately affect low earners as they spend a higher proportion of their income on the taxed commodity. A tax break for lower earners could be a double edged sword for those who also smoke – which there is also a higher instance of among the poor.

The other main highlight of the budget was the reduction in the top income tax bracket - from 50p in the pound to 45p – aimed at encouraging entrepreneurship and investment from overseas. I have blogged about this before but investment will remain low and the rate of business start ups will be sluggish while GDP growth is lack luster. With growth in 2012 projected at a mere 0.7%, Osborne should consider a growth strategy if he wishes to stimulate investment and create a fertile environment for new businesses.

Job creation and a plan for boosting growth were not overtly stated in today’s budget. There was protection for some vital areas but others important growth sectors (such as renewable energy) were all but activity discouraged – mainly through the government’s continual commitment to non-renewable energy. Unemployment is projected to hit a peak this year at 8.7% and a clear plan for job creation is needed to protect the recovery. Unemployment and the low growth rate are the biggest problems the UK economy faces right now and the government should commit to a clear strategy for tackling these before it leads to endemic social problems. Such a plan would also send a clear signal to overseas investors and aspiring entrepreneurs that the UK is committed to economic prosperity above political goals.

Overall this is a budget lacking in ambition or a clear plan to boost the economy out of its current dire situation. There were no sweeping cuts, surprise new schemes or massive tax boondocks. Just a few tweaks to the system with the vague goal of stimulating growth and getting more people off benefits and into employment. If Osborne really wanted to create a budget that would reward work he would take measures to reduce inflation or help get more people into work. More employment and a better growth rate would benefit both those in and out of work as it would grow the economy overall. The Coalition maybe attempting to incentivise work but while the economy remains weak, their efforts will be unsuccessful.

50p Tax: What’s going through the Torys’ heads?

It is no secret that the Tories want to abolish the 50p tax band. There are few points more fundamental to Tory ideology than the belief that taxing the wealthy is not only bad for the economy but also morally wrong. It runs to the heart of their belief in individual freedom, economic liberalism and personal responsibility. The most surprising fact about the rumoured plans to abolish the 50p tax rate in the forthcoming budget is that it has taken the Tories the better part of two years in government to consider acting.

This is partly due to their coalition partners. The Liberal Democrats oppose the removal of the tax without the instigation of another tax on the wealthy in its place. They would prefer the Mansion Tax they proposed in their 2010 manifesto – which is also vehemently opposed by grass roots Conservatives. If the Tories were to repeal the 50p tax rate without implementing the Mansion Tax (or something similar) it could derail the coalition’s remaining legislative agenda at a time where Lib Dem support is essential to pass the government’s welfare reforms.

The second reason why the Tories have waited until now to considering removing the tax is fiscal. The government’s argument that the nation’s coffers are in such a dire state that all must make sacrifices for the economic wellbeing of the country carries little weight if it emerges that there is room in the budget to cut a substantial revenue stream. The Conservatives would be on dodgy political ground if as soon as they entered government they cut the essential services lower income earners rely on (such as EMA) and introduced a tax which falls disproportionally on the poor (the VAT rise) whilst also passing a tax break for the highest earners.

Sound economics does also lie behind the decision to keep the 50p tax rate. To reduce government borrowing as quickly as possible, tax streams would have to be kept at the current level or raised – hence the rise in VAT. Income Tax is the largest proportion of the government’s income from taxation, and high earners pay the lion’s share of this income.

So why act now? Again there is an economic case to repeal the tax. Growth has been poor since the coalition came to power, and many think tanks and economists believe that repealing the 50p tax would stimulate consumption of consumer durables (predominantly purchased by high earners) and boost the economy. It would also go some way toward attracting investment from overseas - although investment will be limited whilst growth remains sluggish. The Tories’ re-election and deficit reduction programme depend on growth rising in the next few years, and cutting taxes on high earners is seen as a short cut to achieving this.

There is also pressure to repeal the tax from within the Tory Party. Cameron has a problem with his own right flank, who feel that too many Liberal Democrat policies are on the agenda, that the government has not played hard ball sufficiently with the EU, and that Cameron is not doing enough to protect the international standing of Britain as a great nation. These MPs are also concerned about their own re-election under the Tory banner, and are crying out for some traditional Tory reforms to take back to their constituencies. Cameron’s failure to support the back-benchers’ proposed EU membership referendum has created resentment within his own party, and he needs a bone to throw to them to ensure they keep supporting the continuation of the coalition.

The Tories do have to consider the strong case for keeping the higher tax rate. Firstly, it generates essential revenue at a time when growth is slow and tax receipts are lower accordingly. Another key point to consider is that those who stand to benefit from the repeal of the rate are the very wealthy, and studies have consistently shown that the wealthy save a higher proportion of their income, whereas those with lower incomes spend the majority of their income out of necessity. If the government’s plan is to boost consumption, then conventional logic suggests the amount of money that circulates around the economy should be raised, rather than the amount left inactive in bank accounts.

Aside from this, the government is faced with a moral responsibility that any government should have, which is to help the less fortunate, the vulnerable, and those who cannot look after themselves. This government is failing in that regard as its austerity programme is cutting the services needed most by those whom society is supposed to look out for. To reduce taxes paid by those most capable of providing for themselves at this time would be a failure on a moral level.

If Osborne wishes to abolish the 50p tax band in tomorrow's budget, then he must consider the political fall-out with his Lib Dem coalition partners as well as the wider economic implications. He must also bear in mind that the most obvious logic of cutting taxes to boost consumption does not always hold true. Whatever decision is reached, it will certainly be considered a test of the Tories’ claim that all sections of society must make sacrifices in order to tackle the budget deficit. The Conservatives certainly would love to abolish the top tax bracket; whether they are willing to spend the political capital needed to do so will be a question that can only be answered by Wednesday's budget.

Austerity economics: how we were misled

Hindsight is wonderful thing in economics. Knowing exactly what should have been done at certain cross road in history to avert catastrophe has been the subject of many books and PhD thesis. The Former US Defence Secretary Robert S. McNamara once said that “historians are not interested in counterfactuals. The what might have beens.” Economists certainly are. Economists use the data from lead indicators, current indicators and lag indicators to work out exactly what the state of the economy is and what would be the best course of action. Sometimes this is simple, growth is low interest rates are cut and households have more money. Thus aggregate demand is boosted and there is a spike in growth. Usually it is much more complicated than that and the data shows no clear path to be taken out of a crisis.

In the absence of knowing for certain what needs be done, politics often comes into play in making the decision. In other words, the debate becomes about what should be done. The root of all politics is philosophy. Governments decided on a philosophy of marketization or state intervention and from this their politics and the economics follows. By the time this reaches the public in the form of social pressures it often appears that the facts have been twisted to be in line with the philosophy.

With the benefit of hindsight we can see that the Thatcher government’s curtailing of union powers was philosophical and not economic. It stemmed from her government’s ideological commitment to neo-liberalism and not a genuine need to decrease union powers to make the economy more prosperous and therefore grow faster. At the time it was sold as such but now we can see how the economics flowed from the politics and that the politics had its root in her philosophical views.

It is no longer fashionable for parties to have a clear ideology but there is still philosophy at the root of their politics. Nearly two years into the coalition government, with the benefit of hindsight, we can start to see how the philosophy has guided the economics and where the mistakes were made.

Austerity is the economics of the coalition government. In the campaign there was also a commitment to opening public services to market competition but this has been less forthcoming, especially with the woes associated with NHS reforms. When George Osborne became Chancellor he offered us a simple economic parable, cut the state and the private sector will grow. Two years later with growth lacklustre at best, unemployment higher than it has been at any point under Labour and the country teetering on the brink of another recession this parable seems more like a fairy tale - or a coma fantasy. In years to come Osborne’s austerity program will be seen as a result of his philosophical commitment to neo-liberalism rather than a response to the economic necessity of cutting the budget deficit. This goes hand in hand with his proposals to open public services to competition from private firms. Right now the philosophy is still being sold as economics, but it is politicians who are driving the economics and their philosophy which drives them.

Sociology is applied economics and the social consequence of economics facts - such as rising number of the unemployed – are seen in urban decay and public order offences. Last August’s riots were in essence the application of economic factors to the population and as incomes continue to fall and more and more people are out of work social breakdown becomes more likely.

Social breakdown is also in evidence in Greece were rioting against the government’s austerity program has become a feature of daily life. The Greek coalition government is attempting to impose a gruelling program of public sector cuts in order to secure essential funds from the European Central Bank and the International Monetary Fund to prevent a default on their sovereign debt. However with the Greek economy entering its fifth consecutive year of recession and the most recent data indicating that this recession is depending and not improving, austerity does not seem like the best course of action. Couple this with evidence from the UK that our recovery has faltered since the beginning of our program of cuts and the case for austerity in Greece looks pretty week. Of course the pressure for austerity emanates from the ECB and IMF and their control of the bail out money. These bodies, the IMF especially, also have philosophical ties to neo-liberalism and use their status as the world’s creditor to pressure their own political agenda. Economic good comes behind a philosophical world view and social consequences to the ordinary Greeks comes last of all. Hence the neo-liberal agenda of the IMF and others leads to rioting on the streets of Athens.

Austerity was sold to the public as economics when in actual fact it is a philosophy; a philosophy which the data – the life blood of economics – does not support. Until economists can see the future, they will always need philosophy and politics to guide them. Yet philosophy and politics need be informed the data of economic reality and must consider the social consequences of their actions. Philosophy and Politics are essential to governance, as they are a vision to aim for and a direction to travel in. Even this blog, ostensibly an economics blog, frequently wonders into politics and philosophy.

Hindsight is useful for knowing exactly which economic policy should have been adopted at a cross roads - like the one Britain and the Euro face. Lacking hindsight in the present we must always be aware that sometimes when politicians are selling us economic necessity they are in fact selling us their philosophical desires.

The Rolls Royce Government: The case for big government protecting social values

What does the Continental European model of social democracy and a Rolls Royce have in common? We will return to this metaphor after some brief analysis.

Last week David Miliband wrote in the New Statesman that Labour should not be the party of the “big state” - this comes against a recent trend of criticism of large governments, which many politicians believe, are bad for the economy and unpopular with voters. Western governments are not without their legitimate criticism as anyone who has had to claim benefits or submit a planning application will be aware of. The marsh of bureaucracy that the public has to deal with when they want something from their government creates a feeling of disillusionment with the virtues of the public sector which turns voters away from any politician who claims that we need more government to solve societies’ problems. The slick efficiency of the tills at Tesco stand in sharp contrast to the long periods of standing around waiting at the Job Centre. It is no wonder politicians who favour the selling of public services to private companies find voters agreeing with them at all levels of society.

The scepticism directed towards big government is partly a result of real fear caused by the European Sovereign Debt Crisis but it is also a definite effort to shift the agenda towards a free-market small government approach by those with vested interest in this opinion. This being large companies and right leaning governments keen to drum up support for their ideologically motivated austerity programs. Miliband argues that it was faith in big government which caused the Labour party to lose the public’s trust over the economy. He is pandering to the view that Labour is the party of the “nanny state” and that the Conservatives are the party of individual freedom.

I personally, have never had a problem with the label nanny state. When you think about it, who is a nanny? A warm and comforting figure that looks after children when they are cannot look after themselves. I cannot think of a better role model for government. However western voters are opposed to oppressive, overbearing regimes which meddle in the daily lives of their citizens. The fear behind this is also legitimate, only a fool in the West would want to live under a Cold War Communist regime. However, in the left learning parties of Europe’s desperate attempts to escape the spectre of being labelled a Marxist-Leninist, some of what was truly important about socialism has been washed away in the bland acceptance of the free market.

What is important about socialism is not a commitment to the big state but to a set of underlying principles that society should be directed towards income equality, the removal of class divides causes by wealth inequality, an equality of opportunity for all citizens as a birth right and safety net for those who are unable (temporally or permanently) to provide for themselves and their families. Self-reliance should not be the governing rule of society and the collective should look out for the individual. In exchange for this the individual must be willing to make a sacrifice for the good of the collective in terms of personal wealth and some degree of personal freedom. The social democratic parties of European - some of which are differentiated from the socialist parties of Europe and some of which are not – maintain the commitment to these values on a social level but not an economic one. In place of the economic proportion of socialism there is a general acceptance of the virtues of free market capitalism as the best method to allocate societies’ scarce resources.

David Miliband and the Brown Government embodied this notion of a commitment to social justice along with a commitment to small state free market capitalism. The coalition government has continued the shift towards right wing economic principles by further reducing the state at the expense of any commitment to the values of stated above. Miliband’s insistence that Labour move beyond the big state verses small state argument may win him support with voters but will do little to reassure those who believe that Labour has lost touch with the key values at the root of socialism from which the party draws its ideology.

I submit that a rebranding of the virtues of big government is needed by social democrats if they are to distinguish themselves from the economically right leaning parties and reconnect with the values at the root of their past popularity. This rebranding should be focused on the core values stated above. There are many who are concerned about the growing divide between the rich and the poor and how unevenly wealth is distributed across society. This is also where Rolls Royce comes in.

The typical criticism of big government by the right is three fold: 1, that state involvement in the market causes a problems for industry, 2, that that it requires higher taxation and 3, the old nanny state argument. I will take each point in turn:

Firstly, I have already written on the need for Capital Conscious Socialism. I have said that government should always be mindful of the needs of private business to provide employment when intervening in the economy. It is also worth considering that state invention is often necessary to make sure that industry allocates societies’ scare resources so that they create the most social good not economic good. An example of this is medicine, which should be allocated where it benefits society by curing diseases rather than where it is most profitable.

Secondly, the cost is key to the value of large Government. We should think of Government like a car. If we opt for the cheap option (economically right wing with low taxation and spending) then we will receive a cheap government, one which is ineffectual at meeting our needs and protecting our values. If we opt for the Rolls Royce government, which is expensive but capable then we will have a government that is empowered to tackle social problems and is something to be proud off. Spending more on our government should be viewed the same as buying a luxury car. That the price tag is part of the appeal because only with an expensive product can we achieve satisfaction from our spending.

Thirdly, social democrats should remind the public that it is their government’s duty to look after them and not simply get out of the way of private businesses. It is the role of government to embody the values of altruistic medieval kings. To clothe the naked, feed the poor, provide shelter for the homeless. Those who have the least are the most vulnerable to the problems created by wealth inequality and the basic safety net provided by the state ensure that the needs of the very worst off are not forgotten. The state may intervene in our lives to protect us from letting the selfishness - which the free market uses to drive economic growth - from entering our social conscience and thus kicking aside the poor, the vulnerable and the politically weak.

The values at the heart of socialism and big government will resonate with voters once framed within the right context. The argument of big state verses small state is not the right context. The argument of Rolls Royce against a budget banger is the right context. It is important that social democrats across Europe defend these values less society become deeply divided between rich and poor. The core values behind socialism are important in building a fairer society and there is still merit to the argument that big government can help to achieve this.

Ed Miliband would do wise to bare this in mind during his review of Labour’s policies - rather than listening to the supposed wisdom of his older brother. Many on the left hope the results of the policy review will bring the Labour party out of inertia and back into the business of providing a genuine alternative to the methods of the coalition government. Until that time we should remember that we get back from our government what we put in. If we give it scepticism and starve it of funds it will be ineffective at protecting our core values. If we view government spending as an important step to having a fairer society then we can empower government to tackle the root causes of social ills.

Facebook’s IPO: Are those adds worth $100bn

In the eight years since Facebook first appeared online, the site has gone from a way to waste time to a social necessity. Today (especially for younger users) not having a Facebook account is akin to not having a mobile phone, in that you are likely to be left out of the loop by friends and work colleagues. Now the internet giant’s recent IPO suggests that this social necessity could be worth up $100bn as a company.

Facebook was founded in 2004 by Harvard University undergraduate Mark Zuckerberg, and since then has taken the internet by storm. First it became the world’s largest social network with over 800 million users. Then the site replaced Google in its position as the internet’s most visited site. Now Zuckerberg and his team have earned a new record after raising over $5bn from an initial public offering, the largest ever for an internet firm. More than just a commercial success, Facebook has added new terms to the popular lexicon such “to friend” and has redefined the use of the verb “to like” online. Brands large and small have rushed to establish fan pages on the website and entire real world conversations focus on events which took place in the entirely virtual social network.

What is interesting about Facebook’s petition to be partially floated on the Stock Exchange is that the information they have released has given us a rare glimpse at the numbers behind Facebook’s success. Facebook and other internet companies that offer a free service lack a traditional revenue stream upon which to draw. Most fall back on the tried and tested method of advertising. The value of an advertisement on a website is determined by the “click through rate” in other words the percentage of users who click on an advertisement to be taken away from the page which they were browsing to one which they had not intended to visit, prior to seeing the advert. Research has suggested that click through rates for most websites are very low as most users are resistant to the idea of following links online. This is partially due to a legitimate concern about internet security but also a response to the degree to which users are saturated with banners and links tempting (often unsubtly) users to leave behind what they were interested in the first place. This has prompted concerns that that this revenue model has become out dated and that many internet firms might be overvalued.

Facebook has relieved that a substantial amount of their $1bn annual net revenue comes from advertising, leading to speculation that intelligent internet advertising is having a degree of success in tempting users. Firms like Facebook use the personal information supplied to them to customise their advertising space to a user’s tastes, and thus boost the click through rate. This in turn makes advertising space on Facebook more valuable, not simply because of the larger audience but because of a greater degree of success. Try, for an experiment, changing your relationship status to “engaged” and witness the barrage of wedding goods and services that will come out of Facebook’s proverbial woodwork to tempt you to their pages. Often the advertising is more subtle than this, and usually it is from a trusted website. It is this clever use of Facebook’s greatest asset (its members’ data) which makes it a viable company.

However, all is not rosy in Zuckerberg’s world. Internet users are becoming increasingly aware about how their data is being used. The wealth of information which Facebook has built up is also a liability as the public demand restrictions on how this data is used. Facebook’s privacy settings are becoming increasingly complex, which is creating an incentive for uses to switch to a network that is more mindful of privacy.

For now Facebook retains its dominant market position, and the necessity of having an account means this situation is unlikely to change soon. The site has seen off competition from a variety of other social networks seeking to challenge its dominance, and even Google entering the fray with their Buzz and later Google+ services have had little effect on the state of the market.

Facebook should be applauded for changing the way we relate to one another. Upon meeting a new friend at a party it is easier (and seems less forward) to connect with said person via Facebook than to ask for a phone number – mainly because it is also easier to remember a name rather than an 11 digit number.

However, Facebook would do well to consider an alternative revenue model as users become more concerned about privacy. It is also worth considering that the click through rates of intelligent advertisements will eventually fall as users become tried of their saturation, just as we all became tired of banners atop websites in the early days of the popular internet.

This week Facebook’s founders and executives will be congratulating themselves after their IPO sets another record for the company – but if the site’s meteoric rise proves one thing, it is how quickly the internet can change and how complacency is severely punished. For further proof of this, simply ask anyone who still has a MySpace account.

Capital Conscious Socialism

The state intervention versus free market argument has been raging for a while. It is an old debate about whether a large public sector chokes economic growth or whether there are issues of such importance that they should be decided by government and not left to private businesses. In the UK the three main political parties have adopted a lassie fair free market approach to capitalism but recently they have all been discussing the idea of ‘socially conscious capitalism’.

This is partly in response to the gross excesses of the financial services sector which lead to the several of the world’s largest banks having to be bailed out by their respective governments. Many feel that the banks owe us a debt for this beyond the amount of money spent propping them up. A lot of voters believe that there needs to be a change in corporate culture so that large companies become more aware of their debts to society and to their shareholders. Socially conscious capitalism appears to be the method of achieving this.

Socially conscious capitalism takes many forms but in general it entails giving shareholders more power to set board room pay and bonuses, the curtailing of bonuses for underperforming firms and greater transparency in terms of pay and bonuses for top earners. There are also general murmurs about working conditions and pay for those at the bottom of the pay scale but these are less and frequently ignored. Generally the later issues effects supermarkets more than banks as they have more employees earning minimum wage but a macro level it scales but to rising concern about business practices and noises from politicians that firms should be respectful of their stake in society.

David Cameron and the coalition government maybe in favour of socially conscious capitalism but I feel there is still a case for ‘capital conscious socialism’. This in essence is the case for government intervening in the market to prevent excesses, rather than encouraging companies to voluntarily behave in a socially responsible manner. Whilst the government is doing this it must remember that the private sector employees the majority of the people in the UK and is responsible for the lion’s share of our GDP. Therefore any inventions or legislation must also be in the interest of protecting jobs and growth.

In essence moral standards should be left to the government to enforce (who is accountable to their citizens) and private business should be responsible for providing employment and wealth to the citizens. This is similar to the means by which the government enforces safety standards. Would car companies have voluntarily agreed to seat belts and air bags were these measures not legally binding? The thought of simply encouraging car companies to include safety features or suggesting that the makers of house hold cleaning products put warnings on the packaging seems painfully week. Surely laws are the only way to protect the public and to ensure that we have the necessary information to look after ourselves. Implying that firms should be aware of their social obligations will have little success as firms are not compelled to alter their behaviour and there is no incentive for them to do so.

State invention is a harsh phrase that echoes back to the days of lumbering nationalised industries. I prefer to the use term ‘government planning’ to describe what is needed. The government should use its ability to legislate industry to plan our national finances to prevent economic collapse. This works on a micro scale, business and families plan their finances and set necessary controls to make sure they do not suffer financial ruin. However, the government’s planning of the economy must always be mindful that private business must thrive if we are to achieve a low level of unemployment.

A good example of government planning the economy is the proposed Tobin or Robin Hood tax; a small tax on finical transactions (that firms will not impose on themselves) the proceeds of which can be used to bail out companies that get into trouble and not leaving the bill to the tax player. The tax must be expectedly levied with the consultation of firms so not to cause harm to firms - which would restrict the amount of revenue generated by the tax.

Planning the roles of supermarkets in our economy would also offer a better social outcome. Supermarkets employee many poor and unskilled workers and offer a minimum wages which is far below what is needed to raise a family on. Reminding a supermarket that it has an obligation to consider wider society and the poor will do little or nothing to raise the wages and improve the working conditions of those at the bottom of the social pyramid. Government planning is needed to legislation a living wage that will ensure that families have enough money to afford essential. I do not see any provision or this in the coalition’s plan for socially conscious capitalism.

Placing the maintenance of society in the hands of private companies will not lead to optimisation of social goods. Socially conscious capitalism will not compel firms to be respectful of their stake in society. Capital conscious socialism will give government the mandate to intervene to the benefit of all whilst protecting private enterprise and our jobs.

Internships and Wealth Inequality

Internships have long been blamed as a means by which wealth remains concentrated amongst the upper classes. Most of the positions available at some of the UK’s largest and most prestigious firms to young people starting out on their careers are unpaid or come with a bare minimum of transport fees reimbursed. For young people looking to gain the vital experience necessary to secure a job, an additional source of income is needed to pay their cost of living during an internship which could last for several months. Firms expect an intern to be present during normal office hours which rules out most forms of employment and the long hours and demanding timetables frequently placed on interns also makes evening employment difficult. Generally interns rely on what has become known as ‘the bank of mum and dad’ meaning that only the children who have parents wealthy enough to pay their way can afford to take up an internship.

To a firm, having an internship is not only a desirable characteristic in a prospective new recruit but is increasingly become essential. In a government survey, one third of British firms said they would only hire a new recruit who already worked for them. The most obvious illustration of class perpetuation through internships is an annual Conservative Party fund raiser to which Mayfair based capital and equity firms donate internships which are then bid for by part donors, the proceeds going to the party. At this event, those who can afford to spend several thousand pounds to secure their child an internship at a top finical firm (as well as paying their children’s living cost during the internship itself) spend their money to guarantee one of their children will have a well-paid career.

The incentive for parents who can afford this for their children is clear. Not only is it a good way to give your child an advantage over the competition in beginning their corporate career but by ensuring your child has a well-paid position, parents are preparing for the retirement by providing their children with financial success. The net effect of the recruiters relying on internships to vet candidates at the beginning of their careers is the concentration of wealth amongst the privileged class. Only the wealthy can afford to furnish their children with the internships that are necessary to secure well-paid jobs.

Recently Nick Clegg and the coalition government have announced plans for major companies to offer more starting positions to people from less well-off backgrounds and to offer payment or living expenses to interns while they are working. Although this is noble in intent it fails tackle the root of the social inequity caused by the internship system. It is impressive that Nick Clegg has managed to convince so many large companies to agree to a scheme which offers firms little more than a PR boost, but by making the proposals opt-in rather than legally binding there is no incentive for most firms to alter their behaviour at all. An outright ban on internships would force firms to at least offer minimum wage to those gaining work experience which would go some way towards leveling the cost barriers to most young people taking up internships.

The plans are welcome news to those with an eye on becoming a senior corporate executive but hint at a fundamental flaw in the collation government’s approach the issue of wealth inequality; in that they expect private business to tackle the issue with government only very gently prodding the companies in the directing of socially conscious capitalism. Making internships more accessible to those who dream of vast corporate wealth is one thing but the issue at the heart of capitalism is the fact that regardless of how level you make the playing field, the majority of people will end up owning a small percentage of the wealth mean while a few people will own the majority. The question is what can be done about this and the answer the government suggests is ‘nothing’.

Reforming the internship mechanism may make it easier for those from poor backgrounds to get internships but will do almost nothing to tackle wealth inequity. It will also have a negligible effect on social mobility as there will remain a finite number of internships and even smaller number of people who reach the higher echelons of the corporate hierarchy. The people at the top of pyramid may vary slightly but this does nothing to comfort those at the base or those who question the virtues of a pyramid structure.

Hinting to large companies that they should be more socially aware will not solve the problems of a widening gap between the rich and the poor. Most of the coalition government’s austerity program is cutting the services that the poorest members of society depend upon. The government needs to do more to tackle wealth inequality rather than smoothing off the edges or implying that large firms should be readdressing the wealth balance themselves.

Should we spend away stagnation?

The Christmas period is traditionally a time for indulgence. Between company Christmas parties and drinks with friends one usually exceeds the usual level of food and drink intake. Most people also spend more during the holiday season. As well as gifts for friends and family, decorations for home and work there is the general spirit of excesses and the desire to treat oneself after a year of hard work. You would think that so many people letting loose with credit cards and Christmas bonuses would kick the economy into gear and begin the climb out of the stagnation that has dogged business since the end of the recession.

It’s logical but not always true. During last year’s Christmas period the British economy actually shrank for the first time since the recession official ended. Economists posted negative growth for the fourth quarter of 2010, two such consecutive quarters of negative growth constitute a formal return of the recession. So why did the economy shrink with all this over spending

There are a number of reasons for this. One was an increase in costs of production. Rising international oil and gas prices pushed up the cost of UK manufacturing and squeezed home’s budgets throughout the winter. Excesses around Christmas were matched by a cutting back elsewhere. The rise in production and transport costs restricted exports ultimate because our goods cost more and less money ended in the hands of the firms that produced the goods. When production costs are higher firms are unlikely to invest in new employees.

Not all of our present woes are the result of high energy prices. Partly it is the result of our patterns of consumption. Mince pies and turkeys are very pleasant but it is not the consumption of perishable goods that drives the economy. It is the purchase of consumer durables that drives growth and development. Although some people purchase fridges and television as Christmas presents this behaviour is hardly normal. If we are all perfectly rational in regard to the macro-economy in our Christmas shopping , we would all buy each other consumer durables. However in such a world we would all own too many fridges and have no food to put in them.

Politicians and executives of high street retain chains are keen to expose the values of spending away economic stagnation. As if the only thing prevent global economic recovery is austere Christmas parties. The solution to the problems of economic growth is not over spend now then have to cut back later. If you are especially concerned about growth rate of the British economy then consider buying a new car, television or computer system. Although in the current climate such purchases are out of the reach of most households.

The problems of our macro-economy require macro solutions such as investment in infrastructure to promote growth, guaranteed loans to business to encourage investment and programs to allow the unemployment access to jobs that go beyond simply slashing benefits. Encouraging the general public to over spend (especially financed by credit) is reckless and boost the revenue of Tescos but will not raise the long term trend rate of growth.

My advice to anyone during the holiday season is to reward yourself for a year’s hard work during difficult times but to remember that over spending is not the solution to your personal finical problems or the national ones. National problems require national solutions are not an increase in personal debt.

Kim Jong-il: An obituary

No right-thinking person would want to live in North Korea, or The Democratic People’s Republic of Korea to call it by its official name. Aside from the general advice to avoid any country with the word “Democratic” in its name, North Korea is a poor nation, gripped by famine and an overbearing authoritarian government. They are politically isolated and potentially unstable. Most of this is largely due to the personal influence of their recently deceased supreme leader, Kim Jong-il.

Kim Jong-il led one of world’s few remaining Stalinist states and the world’s only hereditary Communist authority. He became leader following the death of his father Kim Il-sung in 1994, who lead the nation since he was installed as the head of state following the Soviet invasion in 1945. The Kim’s created a vast personality cult surrounding themselves and their accomplishments. It is worthy of note that Kim Il-sung is still technically the Korean head of state as he was made Eternal President of the Republic after his death. Kim Jong-il was the de facto leader as he was the General Secretary of the Workers' Party of Korea, Chairman of the National Defence Commission and the Supreme Commander of the Korean People's Army.

During the 17 years of Kim Jong-il’s leadership, North Korea faced political isolation and came close to wars with South Korea, Russia and Japan on several occasions. When Communism collapsed in Russia, North Korea lost its main trade partner and economic hardship sent in. Their isolation from their neighbours and poor management by their central government has led to economic ruin and a famine reported to have claimed the lives of over 2 million North Korean citizens.

Kim Jong-il’s rule also been characterised by Stalinist totalitarianism. Rumours abound about state repression in ordinary North Koreans’ lives. Allegedly citizens are required to sing songs of praise for their leaders and homes come fitted with radios which broadcast state propaganda. Radios which not only cannot be turned off, but which it is illegal to tamper with.

Pursuit of nuclear weapons and missiles capable of reaching Japan and the United States has led to a breakdown in relations between North Korea and the rest of the international community. Despite this, Kim Jong-il made some efforts to repair damaged relationships, meeting the South Korean President in 2000 and taking meetings with Russian and American representatives. He also requested aid from the international community in dealing with the famine.

Those close to Kim Jong-il have described him as having a passion for Marxist-Leninism and a strict belief that North Korean society should follow this economic philosophy. Despite this, his personal life epitomises the worst excesses of capitalism. While he dined on fresh lobster and other exotic foods his citizens starved. While he owned private cars, planes and jets, the people of North Korea lacked essential services. While he enjoyed his collection of Hollywood films his government restricted all access to foreign media.

Kim Jong-il’s death can also be situated in the wider context of the end of Maoism and Marxist-Leninism, with private businesses bombing in China and their government moving ever closer to floating their currency on the international market. It also fits into the narrative of the end of authoritarian, centralised government, with 2011 seeing people all over the world rising up against their overbearing rulers. The age of big government might not be over, but the age of the all-encompassing government is.

The legacy of ruin and hardship left behind following the fall of the Titans of Communism is a reminder to those on the left that although our ideology should be informed by Marxism, we need to grow beyond the confines of this restrictive and incomplete philosophy. The left requires a new mode of thinking, focused on decentralised self-organising networks rather than the all-powerful state.

Kim Jong-il’s death leaves North Korea’s future in an uncertain state - even his son, Kim Jong-un’s succession is not certain. The world watches with bated breath to see how the famously unpredictable regime will respond. It is the hope of this blogger than the North Korean people will see an improvement in their political freedoms and material circumstances. Kim Jong-il has failed to deliver the abundance promised in theory by Marxist-Leninism and as a result is responsible for creating a society whose citizens are impoverished, hungry and repressed. Changing is sweeping across the world and we hope that in some way it can benefit the people of North Korea, who have suffered for so long at the hands of their supreme rulers.

Immigration and the flexibility of labour

There are few issues in politics that are as deeply dividing as immigration. Everyone holds an opinion on the topic, how much is appropriate, of what sort, from which country, etc. Immigration is blamed for many problems in society from crime to traffic congestion but has also advanced British art and engineering. A case in point, the Mini, that British icon of style, was created by Alec Issigonis, who was born in Smyrna (now Izmir in Turkey). Perceived failures of immigration policy can have dire consequences for a government; case in point is the hammering Gordon Brown received in the 2010 after a perceived rises in immigration. Anti-immigration outbursts can be equally as ruinous to a career, for example Maurice Glasman suffered a fall from grace after endorsing a halt on immigration.

As well as the economic implications, it is generally viewed that the problem with immigration is the divisions in society it causes can culminate in either acts of terrorism or violence directed at immigrants themselves. Many also argue that the economic impact of immigration is at the root of the social divisions it causes. In this article I hope to show that the social disorder caused by immigration is a response to market inefficiencies and not a problem with immigration itself. In essence it is weaknesses in our economy which make both immigrants and the indigenous population poor and angry.

The market based economy does not allocate resources to where they create the most social good. Some areas of society have an excess of economic resources and some have a great lack. This is partly because not all resources are perfectly mobile to where they are needed or to where they can create the greatest good. A clear example of this is housing which cannot be moved to take advantage of where there is a shortage. Without state intervention there is no way to correct the uneven distribution of quality housing. These market inefficiencies and misallocation of resources will always mean that some lack essential goods and desirable luxuries. Those who lack resent other social groups who have been allocated extra. This has driven many of the poor all over the world towards Socialism and other left wing movements. However this resentment is not always directed at the cause of poverty (flaws in the market based system) but at those who it is perceived possess more and have not worked hard to earn it.

Amongst the poor white population this resentment can be directed towards immigrants when individuals feel that they have been allocated a larger slice of society’s scarce resources simply because they belong to a different social group. The same can be said amongst immigrants who can become resentful of an indigenous population who they feel find it easier to acquire essential goods and luxury items simply due to being born in a country. On both sides of the divide people with a specific agenda can harness the anger at society’s uneven distribution of resources to push the disaffected towards either terrorism or hate crimes.

This fact applies to both sides. The EDL and Muslims Against the Crusade are images of each other. Young, poor and angry. Politicians and community leaders are unwilling to tackle this issue partly due to the difficulties with effecting real change but also because they risk losing the support those who the current distribution of resources benefits. Following being let down by community leaders and politicians, the disenfranchised taking matters into their own hands. These tensions which occasionally spill over to acts of violence are caused by an uneven distribution of resources and a lack of political engagement with this issue which create poverty and fosters feelings of alienation.

If the government were to intervene in the free market to correct the uneven distribution of society’s scare resources, then there would be less poverty and less anger to exploit.
Those who speak out against immigration often cite the effect it has on the wages of indigenous people, especially those in the lowest paid manual and unskilled jobs. However this effect can also be explained by inefficiencies in the labour market. The immigration can lead to an oversupply of labour especially in these low paid industries. A rise in supply of labour reduces the unit cost of labour (in this case wages) as the jobless are forced to look for a wage lower than their desired wage to remain competitive in the more crowded labour market. When firms see that the labour supply is increasing they desire to reduce unit costs of production and thus lower the wage they are offering to new employees. They can expect to find applicants for the role as an increase in labour supply has caused a job shortage.

Wages fall as a result of immigration not because of the actions of immigrants but because in an unregulated labour market increased supply will reduce wages mainly because firms seek to reduce costs of production. Like housing labour is not perfectly mobile. People are tied to a certain area by family commitments or the cost of moving which prevents labour from being reallocated from areas of surplus to areas of shortage. Similar labour markets where there is a short of supply often have barriers prevent entry to these markets by immigrants and the poor - barriers such as expensive qualifications or many years of experience.

This effect on wages can also be corrected by government intervention in the labour market. Access to education can break down the entry barriers to certain labour markets, especially training for the long term unemployed. Also the introduction of a living wage would ensure that even when there is excess supply firms are not able to drive down the wage price to point where it puts people into poverty.

Society’s scares resources are allocated in large quantities to a small section of the population. This does not just apply to wealth and material goods but also access to important services like education and health care. This divide is growing wider and those who which society has allocated less resources are growing poorer and angrier. This anger is often directed at the wrong parties where it is the system by which resources are allocated at this at fault.

The government needs to do more to address labour market inefficiencies to tackle the social problems caused by immigration. One possibility is to consider a return to the objective of full employment and guarantee a living wage. Both of which will involve government legislating the labour market but will result in higher wages for immigrants and the indigenous alike.

Until these inefficiencies are tackled, immigration will still be an issue dividing both society and political debates. This divide will always be to the loss of the poorest members of society both immigrants and indigenous alike.

Is the IoD putting business before growth?

In the year and half since the coalition government came to power economic growth has been lacklustre at best. In the second quarter of this year the Bank of England and the Office of National Statistics put the UK economic growth figure at 0.2%. If the economy does not improve the government will face dire political consequences at the next election. In addition they risk not meeting their budget deficit targets due to the lack of growth in tax revenue associated with periods of economic stagnation.

The Institute of Directors (IoD), a professional members body made up of the directors many private businesses, has suggested several reforms to government policy that they believe will boost growth. I believe that economic progress is not at the heart of these proposals but making conditions easier is for private business is. These changes are steeped in the ideology that if markets are deregulated and taxes reduced then businesses will flourish and the economy will grow.

I could write an article on the motivation and the advantages or disadvantages of each of their proposals, but instead I will summaries and quickly evaluate each below.

Cutting corporation tax to 15% by 2020

This assumes private business is being suffocated under oppressively high corporate tax rates which it clear it is not. It also ignores the issue of where in their tight budget the government would find the money for such a give-away.

Improve labour market flexibility

This basically breaks down into making it easier for firms to hire employees (reduction in security checks and equal opportunities quotas) and to fire employees. In times of high unemployment labour markets become more flexible as jobs become scarcer. There is a limit to how flexible labour can be as there are ultimate restrictions of people’s job search such as being tied to a geographical area by having a family.

Ring-fence transport, energy and IT and telecoms spending

This does make sense, cutting government spending is having a negative effect on growth, especially during a time when business are being cautious and not investing. I have said before that infrastructure investment will suffer due to the short-termism of the government’s market reforms.

Ensuring that energy policy "does not sacrifice UK competitiveness for green credentials

The government commitment to investment in Green energy is one of their better ideas. It creates job and develops the infrastructure of the country. It could potentially lead to a whole new industry which we will be an international leader in. Also having “green credentials” attracts much needed foreign investment to the UK.

Expand free school provision with profit incentives

The profit incentive will not make our public services more efficient. See my previous article on this topic here.

End the £100,000 personal allowance taxation "anomaly"

This is the idea that those earning £100,000 a year are paying more tax then those earning £150,000. This is cover for cutting taxes on the wealth which is deeply unfair during a time where government cuts are hitting the poor.

Intensify competition policy, both domestically and within the European Union

Intensifying competition is synonym for privatisation. As I said have before, it is the belief that the profit maximising incentive can be used to harness the power of human selfishness to deliver efficacy gains which can create new inefficiencies through perverse incentives. Also some of the IoD’s members represent monopoly or oligopoly industries and if they want to increase competition in the economy they should consider breaking up the strangle hold large companies have on certain industries.

Carry out radical civil service reforms to promote deregulation

This is based on the myth that there are unrealised business opportunities that are blocked by cumbersome legislation. A lot restrictions placed on business can be for good reason, such as to protect public safety or prevent a single firm from becoming disproportionately powerful. Deregulation will only encourage firms that cut corners and will spur a ‘race to the bottom’. There can be net benefits for the economy by working within the existing legislative framework.

Reduce political influence over infrastructure planning

More deregulation. More privatisation. One would think that there had never been an economic boom in the past as private business is clearly wilting under oppressive government over-regulation.

Reduce public spending to 35% of GDP by 2020

This also means create business opportunities by cutting government services. If public spending falls then that means that some services will have to move to the private sector. Creating opportunities for businesses to deliver service is only one of the many roles of government. More important roles are providing essential services to the public and ensuring there is an eco-system that encourages economic growth. Cutting spending on the economy and raising unemployment does not create confidence in private business and can lead to a stifling of investment.

Repatriate key employer power rules from the EU

This is another by word for making labour markets more flexible which is also known as making jobs less secure and repealing employment rights.

It will come as no surprise that the IoD has also called for the scrapping the top 50% tax rate on income. This is itself a further example of the neo-liberal political agenda being pursued by the IoD above the needs of the economy. It is also worthy of note that a reduction in taxation will cause the budget deficit to rise.

Privatisation may seem like a good way to boost the economy in short term but in the long term it can lead to gaps in services which used to be filled by the government but are now empty as no firm can make a profit in these areas or delivering these services.

Degradation can be dangerous in certain industries where government oversight is seen as in the public interest. For example, in planning where rushing the approval of new construction projects can lead to unsafe buildings or projects being placed in the wrong location.

These changes are ideologically and not economically driven. They have the interests of the IoD’s members at their heart, i.e. directors of (mostly larger) private businesses, and not the health of the economy overall. The government would do well to avoid pandering to invested interests when economic stability is at stake.

Occupy the Economy

Much has been written recently about the rise of a new protest movement. A movement that occupies commercial space to protest against the global capitalist system which they believe to be steeped in inequality. They claim to represent the 99% of society that have suffered from the credit crunch, high unemployment, low growth rate and the government's austerity program. In New York this has taken the form of Occupy Wall Street where a camp of protesters has taken up residence in Liberty Plaza. Occupy Wall Street itself takes its inspiration from the Egyptian protesters whose occupation Tahir Square in Cairo was instrumental in the downfall of Hosni Mubarak earlier this year. In London a similar demonstration was planned to occupy Paternoster Square outside the London Stock Exchange. Upon finding that this square had been closed by the police, they instead have set up camp in the adjacent area outside St Paul's Cathedral.

These occupy movements are different from previous anti-capitalist protests in that they lack a central leadership, a core demographic of members and clear stated goals or grievances. They use a consensus decision making model to plan action across the myriad of different groups which have joined the protest. In many ways the Occupy Movement is The Culture of Resistance, although they do not represent all of the Culture which is an even more diverse anti-establishment group. But the Occupy Movement represents a subset of the Culture of Resistance that has mobiliaed to take direct action. The Occupy Movement is an expression of dissatisfaction with the current capitalist hegemony. It is not exactly a defined political movement in itself as it lacks set goals and memberships, which is also one of the defining features of the Culture of Resistance.

Technology has allowed these decentralised protests to take place. Social networks such as Twitter and instant messaging programs such as BBM have allowed the disaffected to communicate with each other and organise a protest without the need for a central authority. The new technology has allowed those looking to start a protest to connect with those who are feeling alienated by the current political and economic system.

Expressions of alienation and dissatisfaction via online social-networks have culminated to create an Ecosystem of Discontent within the social network. Heightened chatter in the Ecosystem of Discontent creates the feeling that the physical space is safe for direct action. In other words the more people discuss the Occupy Movement on a social network, and how alienated people are by mainstream politics, the more appealing the occupation itself becomes to members of the Culture of Resistance. The ecosystem just needs a single event focused around a specific action or group to begin the chatter. Unlike in the past, the vanguard that begin the chatter and created (sometimes without intention) the ecosystem are not necessarily the ones who shape its development into direct action. Any node in the ecosystem can influence its development and those involved in its creation frequently have nothing to do with the point when the ecosystem achieves the critical mass required to spill into a real world protest. It is the Ecosystem of Discontent and the connections to strangers possible through social networking that allow the idea of the protest to spread beyond the group who initially conceived it to encompass the huge variety of seemingly unconnected people found in the Occupy Movement.

The existence of the Occupy Movement is evidence of the growing mobilisation of the Culture of Resistance and growing dissatisfaction with the status quo. Unemployment, poverty and poor growth is drawing more people into the Culture of Resistance and technology is allowing them to become involved with ecosystems facilitating direct action.

The next question is, what can economists do about the situation to improve people's material circumstances and halt the growing tide of alienation. The answer is not the obvious one of getting the economy growing again as fast as possible, as the dissatisfaction currently felt has its roots in the recent decades of economic prosperity.

What economists can do to help is reexamine their thinking. The Occupy Movement is further evidence that current neo-liberal consensus is not working. Previously we believed that the best course of action was to grow the economy as a whole, and through the infamous Trickle Down Effect all sections of society will benefit from increased wealth. Although during the boom all sections of society where wealthier than they had been the past this did not make everyone content. Inequality between the rich and the poor has grown during the Thatcher, Major, Blair and Brown years. The divide between the rich and poor is greater now than it was in the late 1970s. Class mobility has decreased over the same period. If you are born poor now you are more likely to die poor than if you were born in the years following the Second World War. This situation has been created by our neo-liberal economic policy and huge sections of society are clearly not happy about this.

Many people in the Occupy Movement are middle class. The people who stand to benefit from the neo-liberal agenda but have grave concerns about the kind of society that we are becoming by following this agenda. To continue down the route we have been following is for the gap between the rich and poor to grow wider and wealth to remain trapped amongst a privileged few.

We need a new way of thinking about our economy which must involve a revival of the economics of equality and full employment. We need to do away with the attitude that by making it easier for private business we are benefiting all of society. Other new as yet unknown ways of thinking about economics will also be needed but I feel that certainly a good place to start is look at a commitment to greater wealth equality. The outdated neo-liberal view of economics is not working and people know it. Inequality will not stand and the best thing we as economists can do is find a way to more evenly allocate society’s scares resources.

Steve Jobs: An obituary

"It was sponsored by that guy from Apple computers." - Homer Simpson, 1996.

Today the word of Information Technology mourns the passing of a giant in the field, Steve Jobs. The Apple logo, and technical innovations such as the iPod and Macs, have become synonymous with the information age and the very idea of western capitalism. No one more than Jobs incorporated the ideal of the capitalist system. Adopted by a working class family, Jobs grew up to co-found the world's largest technology firm and amass a personal net worth of $8.3bn. He also embodied a middle-class aspiration of incorporating creativity and design into his firm's USP. Apple's innovations were as much artistic and design triumphs as they were technical and financial successes.

It is difficult to overstate the influence Jobs has had. His early Macs where the first computers to use a mouse and the Graphical User Interface (GUI), which allowed them to move away from the previous Command Line Interface and bring personal computing to the less technically minded. It is very telling that Apple's OS operating system has the most logical names for features (Finder and Trash versus Explorer and Recycle Bin); this is because they were the first into this brave new territory and were able to coin the names. As well as defining the personal computer, his firm still sets the benchmark in modern computing. All modern smart phones are modelled heavily on the original iPhone design, and the iPod is the baseline by which all personal MP3 players are measured.

Jobs' financial successes are also many. When he returned to Apple in 1997, he took the firm from being literally a joke (see the 1996 Simpsons episode Homerpalooza for proof how much of a joke Apple was before Job's return), to eclipse the behemoths Microsoft and IBM and become the world's largest technology company, with a market capitalisation of over $350bn. More than any other CEO, Jobs led from the front, his personality being inseparable from the brand and his trademark keynote addresses a defining feature of their new product launches. Apple more than any other technology company has fans as opposed to customers, and devotees would queue for hours to see the man in person and catch a glimpse of the latest products.

Tributes to Steve Jobs outside the Apple Store on Regents Street, London

Under Job's leadership Apple have become a powerhouse of creative and technical accomplishments. The brand has a reputation for being original and for being the best choice for digital artists, graphic designers, and many others in fields where computing and creativity go hand in hand. Always with a keen eye for good business ventures, they have sponsored smaller firms to great technical innovations. It is telling that it was Jobs who first saw the possibilities that Pixar offered when he bought the company in 1986. It is difficult to say which direction the company will move in now, but it is clear that the new CEO, Tim Cook, has some very large shoes to fill.

I started by saving that Steve Jobs epitomised a western capitalist ideal and I will conclude by returning to this point. The foundation stone of western capitalist society is the belief that personal individualism can be expressed through mass produced consumer products. Apple is the pinnacle of this, as being an apple customer makes a statement about you as a person. No other innovator or company has been the alternative, rebel in the market (against the mainstream Microsoft) whilst being the larger, dominant, top-dog firm. The mark Steve Jobs left behind will be felt by his firm and his fans, and his accomplishments will belong to the ages. Truly today we have lost a great innovator and businessman.