Looking at the ‘Great Black Cloud of Uncertainty’

by jayaydee

UK businesses are are NOT “holding back on investment and spending” because  of the Eurozone situation alone!

The “great black cloud of uncertainty” is as much due to the UK’s and the world’s precarious and worsening economic situation and lack of real leadership and actions, including your own and the government’s.

However, the REAL, underlying, problem, of which Mervyn King and Chancellor Osborne should, by now, be well aware of, is as follows:

The effects of the ever-increasing use of technology on jobs and work (“The JCB Factor”), and population increases (ie: labour supply), has now ensured that there will be an ongoing, non cyclical, depression for many years to come.  Incidentally, the old, Luddite misconception, argument is no longer valid, in that modern technology and its application is far removed from the 18th and 19th century period at the start of the Industrial Revolution, when a large labour input was still needed.

Because of those two factors, the old, proven, method of moving from bust to boom, ie the synchronous creation of growth and jobs, obviously also no longer applies.  In fact, it hasn’t applied for a very long time, but the, now well past and impossible, ability of governments, businesses and individuals to borrow significant sums of money, masked that fact.

Even the wealth of the richest depends on the ability of poorer folk to buy goods and services from the businesses owned by the former.  They need work to pay for that ability.  A point which greedy individuals and businesses appear to have overlooked in their mad scramble to maximise their income and capital assets which have been amassed, in effect, at the expense of the purchasing power of the less-well off and of the state services and benefits they receive?

Therefore, we can only hope that the existing capitalist model (Corporatism or selfish geed?) will be replaced by a social democratic model which reflects the obvious need for wealth to be both created and shared amongst all levels of society.

Furthermore, what is needed NOW, is that wealthy individuals and banks, who have been hoarding income, profits and capital, for some considerable time, should be incentivised to invest it in the UK.

If they don’t, then they should pay far higher income, corporation and capital taxes which the government should then invest and distribute into the economy itself, preferably where it will create the most productive or socially necessary jobs.  At the very least that can only but improve the situation and increase business confidence in so doing.

Dithering any longer, at the edge of the abyss of economic disaster and its far reaching social consequences, is no longer an option.

No more excuses then?

Action, action, action!

8 Comments

Filed under Economic Crisis

8 responses to “Looking at the ‘Great Black Cloud of Uncertainty’

  1. Pingback: Holiday. | theneedleblog

  2. Mark Deacon

    Apologies for the length and it is my perspective on where we are in the grand scheme of things. Read both this and the peak employment article.

    Just to clarify not a technophobe I love technology. I also look at the actions of politicians, if they say anything is good for you look at what they are trying to hide.

    The social and economic structure has not evolved to support this new equilibrium in humanity. In fact if anything the powers that be continually manipulate the structure to suit themselves, all the money, power etc. so you end up with the strife. There is no solution to the problem as it is a human flaw but the structure if not allowed to evolve will turn on itself. The argument is future or no future and we either create the former or allow the latter and the flood of social unrest that goes with it. I do not agree with people getting benefits, but what else would you expect people to live on so consider this “by your own thoughts you condemn yourself to be allowed to live or die” and a brutal truth.

    This is different to times in the past, because of the coupling of computers, automation of machines of 100 years ago amplifies the problem. Like one computer working at GHz can control how many machines? So it scales up rather dramatically and robotics are here now just not fully implemented yet. Wait till we have austerity for a few years those automated processes will be implemented to turn a profit and maximize efficiency. China on the other hand is retaining its people in super duper factories who make solar panels by hand assembly just to keep people in work as it is cheaper than turning the machines on.

    Now if you ask me when peak employment had hit try “circa 1908” and inauguration of two things the Red Cross and pensions. So what is the Red Cross about please do explain? Poverty? Ironically we were sold the concept of pensions by the politicians at the time because they used the doublespeak this is good for people so as not to mention the real underlying problem.

    So what comes first the chicken or the egg or as in this case an industrial society or the economy? The economy is now a reflection of the society we live in and it is industrial and trying to grow ever bigger. Big problem, any growth will need consumers and to be honest as a consumer I “can’t afford” to eat any more of those technological goodies.

    This thought, peak employment is not the sole issue “production max” is going to be the killer. Where every person in the globalized world produces with all the new technologies. Can you see the oversupply where everybody produces more than they can consume will collapse profits closer to the cost value. “Peak employment” is only an early stage of the inevitable end result of “Production Max”. Only in the modern world so globally connected could you achieve this “Production Max”.

    That is the structure to contend with so from that perspective we need to build an economic system that works with the end outcome. Not one that evolved for a subsistence economy and is then bodged, manipulated, etc to work. Not into the politics of it all neither a pure waste of time and so is all the associated manipulated value as the mechanism is still there alive and kicking.

  3. blackadder50

    so what you are basically saying is there is not enough underlying (spending power) demand in the UK economy, (and presumably also a lack of it coming in from abroad?) because there are no longer enough people productively employed, leading to firms not investing etc .

    If this is true of the UK then it must also be even more true of many other countries, especially the PIIGS

    I’m not sure exactly what is the “Action, action , action” that you are now demanding of government?

    • Jayaydee

      Yes, presumably you have also looked at the Peak Employment article on this site? My article and that one were completely independently researched, and their posting here came about as a result of we two authors making fortuitous comments on a newspaper web site.

      It is, indeed, very true of the PIGS and, incidentally, is becoming so of the BRICs, as they move closer to fully developed or post-industrialised societies, ie beyond further development potential of the Tertiary stage. Furthermore, there will be nothing left of any significance, still in the early Tertiary stage, beyond China – certainly not Africa.

      The action I ask of government, is that they:

      1. recognise what is happening (and some in government may already be aware but don’t know how to make it public). And, also, that things have changed, forever;

      2. create a model of how its immediate effects can be handled, ideally by redistribution of wealth;

      3. plan for a sustainable future, in this vastly changed economic and social environment.

    • Jayaydee

      Apologies, black. I’d overlooked, in my haste, that you had already seen and commented on “Peak Employment”. A stupid mistake on my part!

      • blackadder50

        well, Jay, how would you suggest wealth is redistributed practically whilst also being acceptable politically, socially and economically?

        is Robin Hood your role model or Karl Marx?

  4. George Two

    My only comment is philosophical. The mighty little island of Kings and poets is fighting for its life, again. Is this article on the “techno” issue true or just another diversion from the existing realities of Britain? What I bring up here is way too complicated for a blog, but seems begging nonetheless by gojam (the Gotham crusader .)

  5. Romford Dave

    Entering the abyss does offer an alternative solution for those who have already amassed their wealth even if it’s not so good for those who haven’t.