Reducing the cost of labour to create full employment (1978) | Brussels Blog

Reducing the cost of labour to create full employment (1978)

posted by on 29th Aug 2015
29th,Aug

This was published in the Computer Weekly in 1978. Key point:

“technological change can bring about conditions under which
a large proportion of the population cannot live by the sale
of their labour alone, and they should not be expected to do so.”

Headings have been added.

BEFORE discussing the details of the different methods for reducing the cost of labour to create full employment as discussed in your correspondence columns. it is worth pointing out that the general principle behind such policies has not yet been given sufficient consideration. For example. no such policy was considered by Barrie Sherman (Futureview, February 23). even in the form that Keynes proposed: reducing real wages by creating inflation.

No to the Keynesian solution

Naturally, I would have been shocked if Barrie Sherman had suggested a further dose of the Keynesian solution with the lowering of workers‘ standard of living at a time when technological change is making large increases in real wealth possible. It does need to be appreciated, however, that the present phase of technological change is likely to bring a fall in the real value of labour, just as happened in the first industrial revolution.

This point was well understood at that time .by Robert Owen and well expressed by his son:

“Will any man who stands on his reputation for sanity affirm that thenecessary result of over production is famine: that because labour produces more than even luxury can waste. labour shall not have bread to eat? If we can imagine a point at which all the necessaries and comforts of life shall be produced without human labour. are we to suppose that the human labourer is then to be dismissed to be told that he is now a useless encumbrance which they cannot afford to hire.”

To me the message is simple: technological change can bring about conditions under which a large proportion of the population cannot live by the sale of their labour alone, and they should not be expected to do so.

Labour subsidies instead of the dole queue

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Will low paid workers pay the price for saving the planet?

posted by on 24th Aug 2015
24th,Aug

Job losses reversed by economic growth

In the 19th century Robert Owen predicted unemployment and a decline in the value of labour due to industrialisation

“If we can imagine a point at which all the necessaries and comforts of life shall be produced without human labour, are we to suppose that the human labourer is then to be dismissed to be told that he is now a useless incumberance which they cannot afford to hire.”

What Robert Owen did not foresee is the increased demand for the “comforts of life”. This increased demand has generated extra production and extra jobs. In modern terms economic growth has created jobs.

For developing countries, the World Bank’s advice is to industrialise and end extreme poverty by “sustaining high rates of economic growth”. In developed Europe, the European Commission recommends more industrialisation for growth and jobs :

“Europe needs its real economy now more than ever to underpin the recovery of economic growth and jobs and it needs to re-industrialise for the 21st century.”

Economic growth can replace jobs lost to industrialisation. It can relieve poverty. However, there have been periods when the job destroying effects of industrialisation have caused unemployment and poverty. In the words of the Economist magazine

“The great inventions of the 19th century, from electric power to the internal-combustion engine, transformed the human condition. Yet for workers who lived through the upheaval, the experience of industrialisation was harsh: full of hard toil in crowded, disease-ridden cities.”

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A minimum wage is bad for the planet

posted by on 10th Aug 2015
10th,Aug

Could giving everyone an equal carbon dividend
support a low waged economy
with a happier less polluting work force?

Carbon Fee and Dividend

In a previous post “Stop growth, redistribute wealth and try to save the planet” the idea of green redistribution is described:

One possible scheme to avoid dangerous climate change is this: Levy a high tax on carbon emissions and share the proceeds equally. To avoid dangerous climate change, the tax will need to be high enough to substantially reduce carbon emissionsn. Howevver, this will cause a fall in production and consumption.
Compared to the poor, the rich and affluent cause more carbon emissions simply because they consume more. Their share of the proceeds would not cover their increased taxes. For the poor, who have lower emissions there would be a net gain. Ther is therefore a redistribution from the rich and affluent to the poor. The post World Wide Carbon Fee and Dividend describes such a scheme.
It is not Green Growth but it is Green Redistribution.

To avoid dangerous climate change, the tax will need to be high enough to substantially reduce carbon emissions. This will cause a fall in production and consequent consumption.  Applied to nations this becomes James Hansen’s Carbon Fee & Dividend. The key point here is that everybody has a basic income from their carbon dividend.

The minimum wage

All political parties in the UK support a minimum or living wage, although the Liberal Democrats have expressed some caution about its effects on employment:

Liberal Democrats will ask the Low Pay Commission to look at ways of raising the National Minimum Wage as the economy grows without damaging employment opportunities.

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Research into Housing and Housing Service Systems (1973)

posted by on 7th Aug 2015
7th,Aug

A proposal from the past (1973)

0.0 – PREFACE

For some time now I have thought that housing and associated service systems were, as a whole, much neglected and have been frustrated at the thought that there was little chance of many good ideas for improving housing ever getting put into practice.

There seemed to be many ideas that were talked about but nothing much beyond that. Meeting others that felt the same and had the will to do something about it (mainly Norman Fellows and Heimir Salt) and given the opportunity to do some research into housing this year I was prompted to start writing what follows which is meant to explain our objectives.

One of the first things we did was to approach Bob Jefferies of the Dept of Town Planning and discuss it with him. He has given much valuable critical comment and has made us see the significance of what we want to do and put it in its context.

With limited resources it is unlikely that we ourselves shall achieve much but at least we can hope to influence thinking on the subject so that others may be able to.

1.0 – INTRODUCTION

Although there is a general awareness that there are radical changes occurring in our society, (and it is not clear whether these are really social economic, political or ecological) and although there are many professionals and academics saying that to cope with these changes interdisciplinary barriers must be broken down, these barriers seem as high as ever.

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www.RenewalCities.org (2008)

posted by on 7th Aug 2015
7th,Aug

This post was the contents of RenewalCities.org

(now retired)

RENEWAL CITIES

Renewal Cities are developments that use the wealth they create to sponsor grand and worthwhile projects.

Our first scheme – a city in North Kent.

The Hoo Peninsular Renewal City will be a modern carbon negative city where people from varying walks of life will want to live. Its predicted population is 250,000. This is much larger than any of the proposed ecotowns. As well developing carbon negative lifestyles, some of the wealth created by this development will finance carbon capture and storage at the neighbouring Kingsnorth power station. The city will be funded using the value inherent in planning permission.

The value of planning permission

Development creates value. In Britain, a large proportion of this value can be recognised as the value of planning permission. The values of land is greatly increased when planning permission changes agricultural land into building land. The difference is the value of the planning permission. A typical figure for the planning permission value of a house is £100,000.

3 million new homes – £300 billion to spend

The UK government is planning 3 million new homes. A reasonable estimate of the planning permission value of these homes is £300 billion. With the correct mechanisms in place this can be captured for good causes. One advantage of using planning permission value is that the source of the value is opaque – it needs a good understanding of the economics to see how the value is created.

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The carbon cost of achieving low carbon lifestyles

posted by on 5th Aug 2015
5th,Aug

The transition to low carbon, “modern” lifestyles
may break existing carbon budgets.

Carbon Brief reports: the remaining carbon budget to give a 66% chance of keeping global warming below 1.5°C is 243 billion tonnes. That means, if humanity emits another 243 billion tonnes of CO2e, global temperatures will rise to 1.5°C above pre-industrial levels. Using the same calculations, the remaining carbon budget, to keep below 2°C is 843 billion tonnes.

An earlier piece, “Is Green Growth a Fantasy?“, explained how this was converted to personal carbon budgets:

“World population was estimated recently at 7,317,801,293 by Worldometers. Dividing the remaining carbon budgets by the world’s population gives 33 tonnes of CO2e for a 1.5°C rise. For a 2°C rise this calculates as 115 tonnes per person.”

Is Green Growth a Fantasy? also made the assumption that this budget should last until it is possible to extract carbon dioxide from the atmosphere on a mass scale. It assumed this could start in 2050. Relying on carbon extraction maybe risky, but, according to the IPCC (and now others), there is little choice.

The report, Zero Carbon Britain,  (ZCB) from the Centre for Alternative Technology (CAT) examines carbon reduction targets to avoid dangerous climate change

“Zero Carbon Britain (ZCB) scenario demonstrates that we could rapidly reduce UK greenhouse gas (GHG) emissions to net zero by 2030, using only currently available technology.”

“We can do this whilst maintaining a modern standard of living.”

ZCB envisages some changes to lifestyles: Less travelling, a changed diet but at the same time maintaining “a modern standard of living”.

The embodied carbon in low carbon infrastructure

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Stop growth, redistribute wealth and try to save the planet

posted by on 22nd Jul 2015
22nd,Jul

Stop growth, redistribute wealth and try to save the planet

Consume less or consume more?

A previous piece, A green recession and full employment, starts

To save the world from climate catastrophe we need a recession because we have to cut consumption that pollutes. We need a “green recession“.

In the section, On the need to decrease economic growth in the Encyclical Laudato Si, Pope Francis says

given the insatiable and irresponsible growth produced over many decades, we need also to think of containing growth by setting some reasonable limits and even re- tracing our steps before it is too late.

re- tracing our steps before it is too late” means reverting to previous less polluting lifestyles and reducing consumption. Less consumption would mean a recession.

However, the World Bank advocates more consumption. In End extreme poverty and promote shared prosperity, it says

[To end extreme poverty] will require sustaining high rates of economic growth across the developing world, as well as translating growth more effectively into poverty reduction in each developing country.

Ending poverty

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BBC promotes growth & ignores climate dangers

posted by on 20th Jul 2015
20th,Jul

The BBC is reckless in continually presenting economic growth without warning about its climate dangers. (See a previous post Is Green Growth a Fantasy? or  Kevin Anderson’s impressive interview in Climate targets ‘impossible’ unless rich cut emissions 10%}

What follows is the tail end of the BBC’s response to my complaint that there are no warnings. The complaint was not considered because I did not give a specific example.

The BBC still says

Our core mission remains the same as it was when we were established back in 1922:

to inform, educate and entertain.

But the BBC does not inform us on the dangers of growth to the climate.

 

Request for review by Trustees

The complainant [Geoff Beacon] asked that [BBC] Trustees review the decision of the Senior Complaints Adviser that the appeal should not proceed.

[Geoff Beacon] said:

1) All BBC business output promotes growth.
2) No BBC business output notes its climate dangers.

He also enquired if he should complain about a few business programmes at random.

He objected to the BBC Audience Services’ stance whereby they wrote to him:

We can only investigate complaints when we are given a specific example of when a said incident occurred on output produced by the BBC. If you would like to give us a specific example of a story on economic growth that we covered (transmission date, programme etc), where you feel it would have been relevant to the story to mention environmental issues, we can investigate and respond in detail.

He stated that his complaint is that:

The BBC never mentions the economic causes of the environmental disaster that is clearly on the horizon. Even if this disaster is not clear to the BBC, it is clear to many scientific observers, who deserve a mention. Does the requirement to give a specific example of something that never happens, mean that it is impossible to make a complaint to the BBC on this issue?

The Panel’s decision

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Is Green Growth a Fantasy?

posted by on 14th Jul 2015
14th,Jul

Is Green Growth a Fantasy?

Carbon emissions must be reduced to avoid dangerous climate change. Economic growth will increase emissions unless production is decarbonised.

Can the world’s economy be decarbonised fast enough to allow growth that is also green?

Or must the world’s economy shrink?

The carbon intensity of production

The total production of the world economy is the combined production of all the countries in the world. It is called the gross world product (GWP). In dollar terms, this has been estimated as $87 trillion for 2013.

The amount of greenhouse gasses humans emit is determined partly by GWP. It is also also determined by how much greenhouse gas is emitted for each unit of GWP. Roughly 400 grammes of CO2 are emitted for each dollar’s worth of production. This the Carbon Intensity. It gives

Global_emissions_of_CO2 = Gross_World_Product*Carbon_Intensity

Global_emissions_of_CO2 in numbers is:

$87 trillion * 400 grammes CO2/$ = 35 billion tonnes

The goods and services the “average” person produces is the Personal_Product so

Gross_World_Product= World_Population*Personal_Product

Gross_World_Product in numbers is:

6.8 billion people * $1300= $87 trillion

This means Global_emissions_of_CO2 is (1)

World_Population*Personal_Product*Carbon_Intensity

This helps us see that there are three ways of reducing carbon emissions:

1. Reduce World Population
2. Reduce Personal Product
3. Reduce Carbon Intensity

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Embodied carbon recognised at last

posted by on 5th Jul 2015
5th,Jul

Embodied carbon means…

We must rethink Sir Peter Hall’s eco-town vision

The carbon dioxide emissions due to construction are called “embodied carbon”. It has only recently has it been acknowledged that building homes, offices, factories, shops and roads is very carbon intensive.

In November 2008, I attended a talk by Sir Peter Hall. The slides he showed are on ECO-TOWNS: Will they be Eco-? Can they become Towns? After a short introduction about climate change and the need for more housing, he described eco-towns in England and a few in Europe. He gave a positive impression of all of them and how they were reducing carbon emissions.
Most of the English examples were proposed eco-towns that had not been built at the time – and they probably never will be. However, the first one he showed had been built. It was the Beddington Zero Energy Development (BedZED) for which he noted:
BEDZED: UK’s largest eco-village• Opened March 2002

• BioRegional/ Peabody Trust/Bill Dunster Associates
• 100 homes, community facilities and workspace for 100 people
• Heating requirements: ca 10% typical home
• 60% recycling aim
• Target fossil fuel car miles: 50% national average
• Hackbridge Station 5 mins
• Car Club
• Local facilities: football pitch, club house….

Carbon emissions from construction

What Sir Peter didn’t know was that BEDZED created large carbon dioxide emissions due to its construction. These emissions are called “embodied carbon”. I can confirm he didn’t know because when I told him and didn’t believe me until a subsequent email exchange. The correspondence is described in the Appendices.
Sir Peter’s reply acknowledged two points:

–The embodied carbon in BEDZED is 67.5 tonnes of CO2 of CO2 for a three bedroomed flat.
— Government aims to cut the carbon emissions per person to 2 tonnes CO2e per year by 2050.

I estimate that the embodied carbon in the infrastructure required for a new resident in a “city of BEDZEDs” is of the order of 100 tonnes CO2e: Building homes, offices, factories, shops and roads is carbon intensive.

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