FionaK |
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| I have some difficulty with numbers, as is obvious from some of the errors I make. But when things are presented in the form of numbers they seem to gain some kind of authority, no matter how unwarranted. For this reason it is important to get a grip on some of the statistics which come up again and again in discussions about economics. So I am going to do another sticky thread where I can store some of the facts, for ease of reference. Please do feel free to add in your own as you come across them.
1. It is argued that rising inequality will benefit everyone, through" trickle down".
It is important to elaborate a bit, because it is not fair to judge a policy except in its own terms: so for this purpose questions of fairness or justice or other social values are excluded. All that counts is the economic outcomes deemed relevant to the assertion. So what are reasonable measures in their own terms? I would suggest that Economic Growth, Inflation, and the Share of GDP which goes to wages would be fair. I would further suggest that the comparison should be done for the period 1945-1979: and 1980--->
In the first period inflation averaged 6.51%: in the second it averaged 4.61%
On the face of it the neoliberals have reduced inflation: which is a major policy aim of theirs. I have noted elsewhere that the figures for the earlier period are distorted by the 1973/4 oil crisis. But since there have been other crises it may not be fair to exclude those figures and I have not.
Unemployment figures are not so detailed in any of the sources I have found: and they are distorted by the changes to how they are recorded. However from 1948 until 1970 there was "full employment", which is defined as as an unemployment rate of no higher than 3%. It worsened in the 1970's and one of the main reasons for the election of the Thatcher government in 1979 was anger at the prospect of 1.1 million people on the dole: the slogan to remember was "labour isn't working". Unemployment rose to 2 million in 1980 and to 3 million in 1982- 12.5%. It remained at that sort of level until the end of the decade when it fell to 1.6 million: where it remained till 1999. It's lowest level in the period was in 2005 when it registered at 1.3 million and then it began to rise again, worsened by the recession financial crisis of 2008 when it once again reached 1.79 million: it is now about 2.8 million.
Far from leading to prosperity for us all it is obvious that the unemployment rate has been vastly higher in the second period: with benefits at poverty level it is clear that the neoliberal prescriptions have done exactly the opposite of what has been promised
The average rate of economic growth between 1945 and 1979 was around 3%. In the second period it averaged about 1.9%. Once again the outcomes do not match the theory's predictions
The share of GDP which went to the labour force in the earlier period averaged about 58%: and it has fallen to about 53% now. What that means is that the workforce are not sharing in any increase in prosperity: and that is the source of the greater inequality: the rich have taken that increase for themselves
So far as I can tell those are the facts. So when trickle down is presented as a justification for neoliberal policies I think it is safe to say it is demonstrably false
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