From a divided to a sharing economy

Transcription

1 The Equality Trust From a divided to a sharing economy Stewart Lansley

2 Where do I park!

3 UK Plc: The falling wage share share of wages in GDP, Source: ONS National accounts

4 UK Plc: Too Big to fail: the dominance of large firms Top 4 firms control over 40% of output ( oligopoly ) in: - energy supply - supermarkets - food production - accountancy - banking - soft drinks, - pharmaceuticals, - electrical retail, - mobile phone networks

5 UK Plc: Increasing concentration of ownership of UK corporations UK individuals own 12% of shares, down from 54% in 1963 (held by global asset mng cos, investment banks and high frequency traders) Avg length of time shares held down from 6 yrs in 1950 to less than 6 months today

6 UK Plc: A low paid economy USA UK Canada Germany Ireland Netherlands Austria Spain Japan Australia Portugal Denmark Greece New Zealand France Finland Italy Norway Belgium Percentage of employees Source: Lansley and Mack, Breadline Britain: the rise of mass poverty, Oneworld, 2015

7 Poor Britain Ratio of poorest fifth by country compared with UK, UK=1

8 UK Plc: record since 2008 : Trends in real GDP per head 2007=100 Source: Maddison Project Database

9 Recovery in Gt Depression v Gt Recession Real GDP per head, UK

10 UK Plc: inequality/ living standards since 2008

11 Top executive v mean pay (nominal), Index: 2000 = 100 Source: Income Data Services

12 The wage squeeze Real hourly median earnings ( adjusted by CPI ), index, April 2009 = 100 Source: ONS Annual survey of hours and earnings

13 The record on jobs Unemployment fallen from over 9% to 5.2% But quality mixed: of 1.5m net jobs created since 2008: - 46% are self-employed (15% on avg) - 30% are p/t ( 22% on avg )

14 Trends in aggregate wealth, GB to % 29% 19% Source: ONS Wealth and Assets Survey

15 Post-2008: the changing role of the state economic policy pro-rich social policy anti-poor QE/low interest rates Fiscal austerity Tax/benefit changes

16 Verbal war on inequality Inequality remains the great social and political challenge of our time. The Conservative Party needs to become the warriors of the dispossessed.` Michael Gove, 2015

17 The old orthodoxy: inequality is good for the economy Equality and Efficiency, The Great Trade-Off. Arthur Okun, 1975 'Of the tendencies that are harmful to sound economics, the most poisonous is to focus on questions of distribution.' Robert Lucas, 2003

18 Effect of inequality on economic growth: the evidence Lower net inequality is robustly correlated with faster and more durable growth IMF In Italy, the UK and the US, the cumulative growth rate would have been six to nine percentage points higher had income disparities not widened OECD

19 Effect of rising inequality on economy Stifles demand Cuts investment Makes economies more dependent on artificial stimulants that raise the risk of crisis

20 The rising profit share and falling investment,

21 Artificial stimulants QE Property boom Share price boom Personal debt

22 Let them eat credit Household unsecured debt as % of income Total loans ( excluding mortgages ) Source: Bank of England

23 The lessons Structural faults of pre-crash economy still there Endemic vicious cycle inequality, demand stifling, debt, crash - still at work Current policy mix austerity, QE, credit regressive and made Britain s structural problems worse

24 Feb 20th 2016 IMF Neoliberalism: Oversold? Finance & Development, June 2016, Vol. 53, No. 2

25 Towards a sharing economy` rebalance monetary and fiscal policy new forms of credit control that boost investment helicopter money/ people s QE raise the wage-share by strengthening labour institutions and building counter-veiling power deconcentrate capital ownership` by socialising more economic activity (social wealth funds) building a robust income floor (universal basic income)

26 The potential of social wealth funds Collectively held financial funds fully owned by the public: more national wealth held in common and used for public benefit. With more of the benefits of economic activity pooled and shared, such funds have a pro-equality bias. Widely used in other countries Used to boost public investment/other social programmes.

27 How to pay for a fund? dividends from a range of assets that should be held in common, including natural resources such as oil, urban land, the electromagnetic spectrum one-off taxes on windfall profits, paid in the form of shares a Public Ownership Fund by pooling all publicly owned assets to form a giant pool of commonly held wealth. charge on certain forms of financial activity eg M&A deals annual levy on share ownership