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Thursday 25 October 2012

More of the Same, or has the Appetite Changed with the Eating?

Is it More of the Same, or Does the Appetite Change with the Eating?


Introduction

Firstly, many apologies for the long gaps between entries. My studies, and other matters have been intensely vying for competition with my sleeping patterns for a few months now. I have reached the end of my current module, and have sat the written exam, for which I am awaiting a mark, and now have a break in studies until the end of January, when I will begin my third module, DD309 - Doing Economics. This will take me from economic theories to economic calculations. (That reminds me, I must buy a calculator.) In this entry, I will be reviewing the module I have just finished. I will also be using this entry to gauge whether or not my studies have caused any change in my outlook, since many people who study on a full time basis have been known to enter the workplace with new, or newly developing changes to their outlook, often with a softening of any left-leaning political views. Champagne Socialist is a term which is often used as a description of this outcome.

Why study economics?

When the opportunity to study became available, I already felt that I would most likely study a social science. The Open University has a wide choice within this field. As a student who would be eligible for financial support, I had to give a commitment to the OU that this support would not be squandered on me, so was asked to choose a specialism from the outset. I went away, looked at the options, and settled on economics. At the time, I remember thinking that may of the specialisms would be no more than "hobby studying". Now, I have no desire to belittle people's academic aspirations, but studying, for example,  criminology is unlikely to get you a job any time soon. Why? Well, Scotland's eight police forces have now merged, so with a centralisation of resources, job prospects are probably going to be squeezed. Also, CSI is not real. So, with one eye on future employments prospects, and an innate feeling that I had a handle on the present recession, begun in 2008, (which an economics qualification was not needed to foretell), that maybe understanding the workings of economists might actually be useful in avoiding such grief in future. Again, more on that later.

The new economy. The same old story.

I wrote an entry on the New Economy (IT in the 90s) at the beginning of the year, when I had not long started on this module. Rather than go into detail, I will summarise that entry here as best I can. The new economy came about as an innovation to the market in personal computers which had begun in the 1970s. Innovations in the capabilities of processors and the advent of the internet led to the dot com boom (and subsequent bust). This also changed working practices for many people, and led to the creation of new types of jobs within the economy. This led, initially, to many people retraining in IT skills, and in some instances, moving to where the work was. A standardisation process then led to many IT based jobs becoming easier to do, and therefore, being lower paid. What began as an exciting new industry was shaped into a production line of computers. I have personal working experience of this setting, from a job I had in 1990, in an office full of long tables, with rows of computers. As I finished entering the data for one part, the next item would automatically appear on screen, and this process would be repeated all day. A similar working practice evolved from the Industrial Revolution of the early 19th century, in textile mills. Previously, spinning, yarning and looming had been done at home, paying by the amount of work done. With the innovation in energy supply, steam, water driven, then later, electricity, this work could be done in what came to be known as a manufactory, now just factory. Because of the centralisation of, and cheapness of production, home textile workers were left with little choice but to move to where the work was, in the ever-growing cities. This process is repeated in the car industry towards the end of the 19th century, when production line techniques saw the growth of huge factories, to which people migrated from all over the USA to work in. One difference in the new economy, is that more and more, people can work from home. This may be seen by some as an advantage, but in reality, you are never entirely free from your work, since in order to work from home, you must be contactable by your employer, who may take advantage of this by e-mailing, texting, or 'phoning you outside of "office hours". So, in all these instances of innovation in a market, producers benefit from the use of newly available technologies in the workplace, and in use of labour to get the most profit from their investment. In all the examples above, this has come at the expense of the rights, conditions, or pay of their workers. Mill workers were now paid a flat daily rate, rather than by the amount produced. Car workers were comparatively well paid, but were strictly refused union rights. People working from home are very rarely actually away from their work.

Competition and policy

Some of what I have to say here can be linked to the above section. At least, in terms of how firms come to maximise their profits, and about who, ultimately wins and loses in the processes. Firms compete by trying to make the most profit for the money they put in. The ways in which they manage this is by trying to squeeze the most out of their resources (equipment, materials and labour) for the lowest possible price. This may come across as a fairly simplistic view, but it is, nonetheless, the best way to describe the process. Government policy in this matter may not be an apparent factor at first glance, but government policy on such factors as minimum wage, interest rates, exchange rates and inflation control all have their part to play.

Governments have also made claims to encourage competition. There are many arguments for and against this being the case, and depending on your views, you may, or may not believe that government intervention on such matters is necessary. On one hand, the US government tried to address the issue of Microsoft's monopoly, by attempting to split the company into two parts. The problem, in my view, was not the size or profitability of Microsoft (Bill and Miranda Gates' charitible donations are no bad thing), but the fact that makers of PCs were given no choice in the operating systems. Where there is no choice, it can hardly be said that there is competition. This is akin to the standardisation of practices (as in textiles and car building) where firms either adapt, or fail.As it turned out Microsoft is still intact, and is still the industry standard, and as such, strives to constantly innovate its product. The problem here, is that this innovation is more about getting customers to spend more on a slight variation of an existing product, rather than creating new jobs.

The failure of government policy here should be a warning about any other government rumblings about competition and choice. Why? There have been more failures than than successes in this, and the most recent discussions around competition and choice from the UK government is in relation to the National Health Service. I don't think this needs any expansion, simply because, based on the ratio of failure to success, policies on keeping down wages, the prospect of people's healthcare provision being subject to the forces of markets and inflationary pressures is something to worry about.

Another issue which makes competition difficult to trust is the collusion of firms. Firms can become part of cartels, which lead to price fixing which affect not just the consumer, but their suppliers. This kind of practice can even affect government policy. The OPEC price shock in the 1970s led to all manner of cost cutting measures on a national level by the UK government, from turning off streetlights up to the decision to have a three day working week. A more recent example, and an ongoing one at that, is with banks. Banks have been proved to be in collusion over lending rates, have been selling parcels of unsustainable debt to each other, leading to the recession affecting many parts of our world now. despite the fact that taxpayers' money has been used to bail out these institututions, the possibility of government policy being drawn up to prevent further outrages,  has lead to banks threatening, yes, THREATENING governments with leaving to be based in other countries, with the loss of jobs and income from the respective countries.

So, government policy on competition does not work. Deregulation of the financial sector in the UK, begun by the Tory party, and continued by Labour, has led to the country being held to ransom by banks. It may be dramatic, but the best metaphor I can think of for this, is of a woman, married with kids to an abusive husband. To leave would, at first, make it harder to provide for her kids, but in the long run, would be better for her and them.

National Economics

This marks the change in the module from Microeconomics to Macroeconomics. Governments have, for most of the twentieth century, taken the financial state of the nation to be a source of self congratulation. That is to say, if GDP is increasing, then the country is doing well. Straight away, there is a patently obvious hole to be picked in this measurement, and it relates the recently, and much used ratio of percentages. 99% to 1%.

If a government can reduce its national budget deficit, then that is generally seen to be good for it economy. No argument there, the same applies to individuals and households. It makes sense to balance the books. The issue is how that is done. Some governments will do this through raising taxes, or cutting public spending, or through policies regarding imports. Mostly, attempts are made to balance the books through cutting spending, since no one wants to pay more tax, (or, in the case of corporations, ANY tax). A model, known as Circular Flow, shows a very straightforward illustration of the flow of money around an economy.

 Without getting too bogged down by details,  this shows how firms inject money by paying salaries to households, households spend this money, and government receives taxes, which is used to pay off loans and on public spending. Savings and imports are described as leakages to the flow. Exports are injections to the flow. This simple diagram shows how, if government spending is increased, could have a positive effect on the amount of money in the flow. Other people could argue that it might show an increase in government spending, as raising taxes, so taking money out of the flow to firms and households. This is the problem with diagrams and statistics. They can be manipulated to suit the arguments of the person describing them. In this case, I would apply  Keynes multiplier to the above diagram.

In short, Keynes multiplier effect states that, if a government injects an amount of money into a public works, eg, road building, then the financial effect does not stop there. Materials are needed to build, so are bought from firms, and labour is needed to carry out the work. The workers then have money to spend, so more money flows out in to the wider economy. Everyone who earns from the money flowing in will be keeping other people in work through their consumption, and taxes raised will flow back to the government for future spending. The other aspect of people being employed is to cut down the amount spent by governments on benefits/welfare payments. This would free up more money to further invest in public expenditure, and to reduce the national deficit, so, in future, tax rates could be lowered. The problem with this system is that people and politicians often do not take the long view that paying now will ease the burden on their children and subsequent generations. This is the tragedy of greed, self-preservation, and conservatism.

Unemployment and Stabilisation

Unemployment has been the defining feature of many of the recessions of the last 80 years. As I wrote above, unemployment need not be an option for a country willing to forego short term greed-driven policies. In fact, apart from the social problems it brings, taking money out of the circular flow is just plain stupidity, as shown in the above section. Stabilisation is something successive governments have striven to achieve. The problem is that when governments change, so do the way in which policies are used to achieve this. What has been used by many governments is to inversely balance out unemployment with inflation. So much so, that, when Norman Lamont was Chancellor to the Exchequer, he gave a speech in the House of Commons, stating that "rising unemployment and recession ..was a worthwhile price to pay to get inflation down".

So, the end result of getting prices down, and attempting to boost consumption, was to be paid by putting people in financial hardship, and the ruining of many small businesses, who were unable to sustain themselves as well as large firms, who the got the extra bonus of picking up the customers of the failed small firms, so making them even bigger. This is the same cycle as with home working textile workers trying to compete with the big mills, or with hand built cars losing out to assembly line factories. The only difference here, is that this change was not the result of innovation, or new markets, but of government policies which, ultimately, favoured the few over the many. This cycle can be seen now, in the aforementioned ratio of 99-1.

What I have 'learned'.....

I haven't covered every topic of the module in this entry. Rather, I have looked at aspects of both micro and macro economics, in order to answer the questions I posed at the start of not only this entry, but at the start of my study of economics. Are we seeing more of the same in economics, and the effects on the world?  Has my outlook changed because of my studies?

First, I will look at myself. I have always been left of centre in my political views. Recently, I have been known to describe myself as being left of left. I should quantify that by pointing out that this is my sarcastic comment on where (in the UK) the Labour party should be found, but has, since Bliar rescinded Clause 4, (the commitment to public ownership) have been sadly absent from. Some people find their views softening, or becoming more centrist as they leave education and move into the workplace. Even more so when they become parents. In my case, I came to higher education after becoming a parent. What I experienced after becoming a father was that my willingness to merely mutter under my breath about social ills, such as casual racism, smoking on buses, (the list is not exhaustive, and we all have our dislikes), became a much more vocalised and clearly defined opposition. Now that I am in higher education, I find that ignorance is not bliss. Nor is it a given that being without a qualification makes one ignorant either. I am studying economics, not to get a steady job in a bank, or to go straight into some middle-management admin role. I am studying economics in order to be able to meet head-on the so-called reasoning behind the disparity I see in the world. I need to know my enemy.


Now, to economics. Economics, as we see it around us, is based on capitalism. Capitalism is all about getting the maximum return on capital investment. This desire for profit has driven every technological and industrial innovation since Jethro Tull realised that he could do more with his draft horses than simply break up hard ground for planting crops. Every process since, has been about maximising the resources at hand. This has seen the rape and/or misuse of many ecosystems, a dangerous increase in the use and dependence on fossil fuels, and of course, the disruption to the lives of, and erosion of the rights of workers. At this time, the gambling on debts, the over use of credit, and deregulation of banks has left many parts of the world in poverty, with debts likely to be passed on to future generations. The processes which have lead to this have more to do with returning dividends to shareholders and making money, than for improving the lives of the people who work to produce goods and services. Worse still, is that the descendants of these workers will be left to pick up the pieces. The process of self-preservation means that the descendants of those who perpetuate capitalism as we know it will probably not have to concern themselves with the burdens of inherited poverty. On this basis, objections to inherited wealth are entirely reasonable.

What I would hope, after reading this, is that people ask themselves some questions.
Have my core beliefs changed over time?
Do I still display these beliefs, or pay lip service to them?
Would I choose a system which leaves my descendants trapped in the cycle described above?

I have asked myself all these questions, and I feel that I am doing all I can, including empowering my children to understand that they do not need to accept the status quo, just because that is the way it has been for so long in human history. That, is what they will inherit from me.








Monday 24 September 2012

The end of another chapter.

This is a short post to assure you all that I have not given up my writing. I am nearing the end of my first specialism module, DD209 - Economics and Economic Change. At first glance of the module materials, it seemed that there may not have been much for me to go on, in terms of expressing my world view based on my studies. Having reached this point of the module (which, admittedly I felt on two occasions may not have happened) I have to revise that opinion to say that I will have plenty to write about.

To end this module, I will sit an old-fashioned, written (by hand) examination. I will be putting much of my energy into the revision of topics for this, so will not be writing any full blooded entries before the exam takes place. After this, I will review my learning, and the write a new entry. It is likely to be a large entry, and if I feel it is too much to digest in one sitting, I may split it into parts.

Until then, that is as much as I have to say, other than I am actually quite relaxed about, and looking forward to the written exam. This is scheduled for the 16th of October, and the subsequent blog entry will appear about one week after.

Tuesday 8 May 2012

DD202, 2nd essay over

Hi all, not much to write about in this entry. Just to say that the 2nd essay of the current module has been done and submitted. It took me out of what people call the "comfort zone", due to the amount of diagrams needed (7) drawing. I am more used to taking a concept and theory, then addressing the questions or statements expressed. This essay had elements of that, in that I had tables and newspaper articles to read, then comment on. These had to be commented on, in terms of economics models, rather than in social science theories. The essay then, was mainly an exercise in interpreting the information and data through diagrams. One aspect became clear as I worked, and that was that I could use identical supply and demand diagrams to show opposing, or differing viewpoints. This is the kind of thing one can see on the news, where it seems everyone is talking without actually saying anything. Smoke and mirrors capers.

So, I have had a look towards the next block of my studies, entitled: What makes an economy successful? Work, well-being and the State, in which part of the studies includes looking at honourable business practices, health and health care -markets, ethics and equality. Well, you will be aware of my politics by now, and can also be certain that I will be getting my teeth into this next block of studies. My last assignment relating to statehood got me a 93% mark, so I hope to acquit myself as well this time around, since I have, in all honesty, struggled a bit with the last two blocks.

Anyway, I hope to be making a significant entry here prior to the next essay being written and submitted, then again afterwards. There is nothing more to add at this point, so I will crack on with the next block of study, and be back before this month is out.


Wednesday 2 May 2012

Pay, play or go away?

Here we go social sciences fans, another opportunity for me to apply my studies to my views on the world. As you will have read, I have chosen economics as my specialist subject. So far in the module, I have looked at industrial revolution, and the questions of whether we are living through a new one, or whether the process has been continuous. That is a point to which I will return. Since that entry I have read refined points on industry life cycle, entry and exit costs (to any given market/industry/business), and shakedown (the process whereby inefficient firms or those not innovative drop out). I have just finished reading about strategic competition, collusion, and price taking, and this most recent study will be the thrust of this entry.

How, then , can I apply this to my personal view on the world? In this case I have decided to look at the music scene in Glasgow, which has been in Renaissance for the last decade, having suffered from the demoralising effects of a practice known as 'Pay to Play'. In a nutshell, this policy meant musicians had to ensure a certain amount of ticket sales at their gigs, in order to avoid being out of pocket. The practice was extended by some venues by tying musicians into a deal which meant hiring the PA system and sound engineer belonging to the venue. These factors (amongst others) did a lot of damage to the music scene in Glasgow, causing many musicians, to use a local parlance, to feel scunnered.

Now, with the scene set, here's the (social) science bit. Since my last entry Long Live the (Industrial) Revolution, Feb 2012,  I have been studying cost curves, which look at various factors of production of a firm, or group of firms (industry/market), such as production costs, supply, demand and price. These factors, taken together can give a average cost curve, and parameters surrounding this usually become standard for a given market. This applies partly to the gist of this entry, inasmuch as to briefly introduce the concept of entry and exit costs. These costs are the amount of money required to enter a firm into a market, and the costs incurred to leave said market.

We have all heard of price fixing by supermarkets, and I have of course, blogged on this previously. The effect here is that when there are very few retailer to choose from, then it becomes possible for large firms to set the prices at which they sell to the public, and at which they buy from producers. The 'big four' set the price, for example, of milk which they sell on at an almost identical price. Small to medium sized firms have no choice but to adapt to this price because, although they can buy milk from producers at the same price as supermarkets, they cannot afford to undercut them, as the supermarkets will then buy more in bulk, driving the price lower, and so taking business away from small to medium sized shops. This makes the producers, small - medium retailers and the consumer 'price-takers'. That is to say, regardless of where they buy milk, they will pay much the same price.

So, why don't dairies simply tell supermarkets  to take a price set by dairies themselves? This brings us to strategic competition and collusion. Individual dairies cannot take the risk of increasing their prices, as they will drive retailers to their competition, and suffer financially for it. The supermarkets, with modern refrigeration and transport methods (usually  in house) could go abroad for their milk, meaning that dairies, cannot financially afford to do anything other than be price takers as the risk of financial ruin is too dire to contemplate. The entry cost for a dairy includes payment to farmers, transport to the dairy, the pasteurising and packaging plants, and staffing of these. A high entry cost to a market is usually mirrored closely by the exit cost. The dairies are, in this case, the victims of collusion by the large supermarkets, because they have, financially, no alternative other than  to court their custom. Small - medium sized firms could not afford the transport costs to be supplied, so dairies could not rely solely on their business.

How then, can all this be applied to your mate's band when they play a gig? Well, in the 1990s, as mentioned at the beginning of the entry, venues, presumably a bit fed up (and reasonably so) of your mate's band playing to six of their mates and the bar staff, and a music promoter being someone who dealt with big ballroom or theatre venues, came up with Pay to Play, described above. I played with bands at this time, and at first, no one really felt any issue with the policy. After all, bands could now go to a venue, be put on a bill with some other bands from the local scene, (probably friends of theirs) and get their music played, often for the first time outside a rehearsal room. Huzzah! Bands got to play, venues got a guarantee of not running at a loss. (No one sets up in business to lose money after all). Where it began to go wrong was when the amount of gigs reached saturation point. Your local boozer would perhaps have live music one night per week, but now city centre venues were putting on gigs every night of the month. On one hand, this is brilliant for music lovers, with loads of bands to choose from. On the other hand, this was a nightmare for music lovers, since very few people can afford to to go to a gig every night of the month (or sustain that physically).    This then meant that many music lovers simply stuck to what they liked, rather than take the risk of paying to see a band whom may not have floated their boat. An over supply of anything makes it cheaper. That is the most basic law of supply and demand, which inevitably meant that the bubble burst. Bands found it hard to compete with each other, and harder still to persuade all but the most devoted fans or partners to see them play so often. What remained constant then, and is still the case now, is that artists want their creativity to be on show. This kept bands coming back for more, taking the risk that, in order to showcase what they had crafted, they could be out of pocket. As long as this was true, venues were in a position of having 'price-taking' customers. Eventually, many bands were unable to maintain this financial suicide, and unable to commit to full time musicianship, keeping the dreaded "day job" for one of two reasons. 1. To support their musical ambitions, or 2. They could not earn a living wage as a musician. The proponents of this policy were able to continue operating as bars, still putting on bands, but with their draw diminished by the fall in the number of bands. This process took less than a decade.

Fast forward one decade more, and encouragingly, there are promoters working particularly within Glasgow and the surrounding area. This is a step forward for anyone who suffered from the drop in the music scene described above, since now, musicians could presumably get on with the business of crafting songs, while a promoter would, for a share of the income, book and promote your band's gig. So far, so good. Local promoters for local bands is something which, 20 years ago, could have been a boon for bands struggling to publicise their gigs, pre social networking sites. This represents, in economics terms, an innovation in the market. Innovations to an existing market always bring new impetus and customers to it. This seems to be borne out by the sheer number of gigs and bands on offer on most nights of the week. Oops, we seem to be forgetting the law of supply and demand again, no? We are now at the tipping point reached previously reached by venues in the 1990s, and this is being reflected in the reappearance of sharp practices which benefit everyone else first, and artist last. This where the idea of a continuous Industrial Revolution rears its head.

My first experience of this new breed of local promoter was as a solo artist. The deal, honestly made upfront was a 3/2 split in the promoter's favour. Entirely reasonable, since they had hired the venue. My next experience was of the same promoter, but the goalposts had shifted in a manner which I would not have agreed to had I known in advance. Instead of the previous (reasonable) deal, no it went like this. The promoter gets the income from the FIRST TEN tickets sold (they set the price), and the band would receive the income from any others sold. At first glance, some might see this as being reasonable, but it is just the same as Pay to Play because the artist will receive nothing below a minimum ticket sale. On this particular bill I had made a request to the promoter that only 3 bands ply the bill instead of the 5 normally crammed into their events. The reply was that this would mean the promoter would not cover their costs, and we compromised on 4 acts. This meant that 4 bands would be asked to play, but not to receive a penny until the promoter had made £50 from them. At a different event I attended, (same promoter and venue) to see my mate's band play, I was asked at the door which band I was there to see out of the 5 on the bill. Even though I was there to see initially one band, whether or not I had enjoyed all the acts I would have wanted them all to be paid equally.The venue being used (I researched later) cost £100 to hire, so a potential £100 to be made to simply telephone a bar and ask to hire it, then put an event page on a social networking site. On this basis, anyone could set themselves up as a promoter for an initial outlay of £100, depending on the hire cost of the venue. This is the entry cost referred to earlier, and this could be repeated. Since exit cost closely track entry costs, this is not a bank breaking risk to take, especially if you use sharp practices. If you set yourself up as a promoter, it will enable you to book many nights at venues in advance, especially during the period of early innovation when new customers will take what is on offer. This will make it difficult for a band to avoid using a promoter, and like the dairies, will become a price taker if there is only one game in town. Other bands will then potentially suffer from the lack of available gigs, so the rules of strategic competition mean that some bands will stick with the deal they are getting, to avoid the risk of not getting their music into the public domain. This is a part of the strategic competition known as 'the prisoner's dilemma', where the choice made as an individual will lead to a negative outcome for one or all players, or positive for all players, depending upon what each player wishes to achieve.

So, I've covered exit and entry costs, strategic competition, and price-taking. What about collusion? Collusion is very difficult to prove, and in some cases even more difficult to identify as being such. In this entry, I would suggest that the collusion could be between promoters and venues. Venues are guaranteed their money, because a hire contract has been agreed. Promoters stand a good chance of getting their money, since bands will use social networking and other types of advertising (the role of the promoter) to ensure they get as many people as possible to attend their gigs. But, if bands are willing to accept this type of deal, then are they more than simple price-takers? Only if they go into a deal knowing fully beforehand what the prospects are of being paid, it could be argued that they are in collusion too. Research and development costs are large parts of many firms costs. Could the prospect of playing for free, but getting your sound out here be counted as a research and development overhead? My suggestion is no. Research and development for a band is to practice playing, and writing material. Written word, music and art is an intellectual property, and the product of the artist, making the artist the golden goose in this scenario. Musicians are engaged to play. Promoters are engaged to promote the events at which musicians play, (even if the band has a Myspace, Facebook or Twitter account).

The collusion which some might argue is implicit between venues and promoters, and promoters and bands, could be ended in a choice of ways. Local promoters could innovate (some reputable promoters ask for no money, pay the artist, and offer to record and release your performance, only then requiring money to for a genuine overhead), leading to a shake-out in which unwanted promoters or venues would drop out of the running. Or, bands could simply decide not to be the price-takers of the piss-takers.





Monday 19 March 2012

DD202 - First assignment

I have submitted the first (of six) tutor marked assessments last  week. In it I was asked to explain a few economics terms, and to draw graphs, to describe figures and tables given in the paper. I do not have the marked essay back yet, so do not have a lot to write about at this point. What I will say is that, as the module progresses, I should have much more to write/rant/comment about. There are some aspects of the first essay which I will probably refer back to in the coming entries to this blog.

Aspects, such as demand, factors of production (overheads), short and long term demand curves. The first two terms are self explanatory. Short and long term demand curves are about how much control a firm has to alter factors of production. If on a short term demand curve, then the firm has no way to alter any of its factors of productions, such as staffing levels, workspace, etc. In a long term demand curve, the firm is in a position to alter any of its given factors of production. This last term is one to which I will very likely be returning to in future entries, as I explore the idea of a firm being able to make profits ethically. I should say now that, although I am to the left of left when it comes to many things, I am not against a firm turning a profit. What I am against is the level to which firms are willing to go to to maximise these profits, be it through worker exploitation or tax avoidance.

Part of my drive to study economics is the importance of "knowing your enemy". If you want to fight against something, it makes sense to know what it is you are fighting against. Is it possible for someone to become a socialist version of Adam Smith? The only way I can think of is for a socialist to become an economist. This blog will allow for people to follow this process and my progress, and will give them the opportunity to question, or open debate on anything they see written here. So, feel free to do just this. Questions and debate are entirely welcome, nay, positively encouraged.


Monday 27 February 2012

Long live the (industrial) revolution

Well, I have read chapter one of my new module textbook, (Microeconomics), entitled, "Are we living through a new industrial revolution. The evidence of the so called ,new economy, might at first suggest that we are. Since the mid 90s the global economy was given a huge boost by the advances in technology based industries and consumerism based around this. So much so that it fuelled separate share indices in the stock markets, leading to the dot com boom at the turn of the century, and subsequently, to the misplaced confidence which has led to the financial maelstrom affecting most of the global economy right now. That is a strand of the subject which I will doubtless cover as my studies progress, and will absolutely be devoting an entry too.

Back to the question in hand. We must compare previous instances of upheaval in working lives/practices to address the question. The Agrarian (or Agricultural) Revolution was driven by the study of efficiency of planting and soil use, leading to the still used practice of crop rotation. That would not have changed working lives, since a field being ploughed sown and harvested is the same process for the farm workers. The development of tools, such as the horse-drawn seed drill (among others) were the real technological change which led to farmers needing less labourers, and subsequently to huge unemployment.  (Note to prog rock fans, a book , the horse-drawn seed-drill was written by a certain Jethro Tull, now you know where the name came from)

This unemployment was one of the few times in history that farm labourers were able, or in this case forced to migrate to find work. Soon after, there were jobs aplenty in the cities, as the Industrial Revolution kicked in. The factories springing up were mainly driven by harnessing the power of moving water, then steam power to drive textile production on a scale unimagined by the people who would have previously spun yarn, and loomed cloth in their cottages, whilst the men of the family were toiling in the farmer's fields. Although they would not be affluent, they would at least have steady work, and a clean environment in which to raise their families. Within a generation, the men women AND children of these families would be working in factories. Now, regular readers of my entries will at this point be able to tell which way the wind is blowing, and you are right, I am not about to praise up factory owners for supplying steady work to displaced country folks. There are exceptions, such as Robert Owen, who developed workers' co-operatives. For every Owen there were too many others, whose workers were not even paid money. Rather, they were paid in tokens, redeemable only at shops owned by the same people who owned their factories. people would be working 14 hour shifts 6 days per week, and often ended up in slums, again owned by people who were every bit as exploitative as their factory bosses. Factory conditions changed again with the advent of the harnessing of electricity as a power source for machinery. A similar process came about in the 1920s, when car manufacture changed from being a hand crafted industry, to the assembly line which anyone could be quickly trained to work on. Artisans and craftsmen suffered, but the ordinary worker could get a comparatively good wage, resulting in thousands of people travelling from all over the US to Detroit. Work was easy to find, but the factories were run by owners who were vehemently opposed to unions. There is also a  migration similar to that of agrarian workers in the late 18th century.

To answer the question, it has to be determined whether or not people's lives have been affected by changes brought about by the 'new economy'. The rise of call centres has certainly changed peoples' work/life balance.  People are working at all times of day and night in order to deal with the queries of people using the service. This will impact on the time people have to devote to social and family life, not only at home, but abroad where the employees may be cheaper. Many businesses working practices have changed, due to people being able to shop online, not just for goods, but services such as travel agency, so leading to companies needing less employees. Also, due to the relative cheapness of labour in some countries, a lot of manufacturing work has been moved, leading to people having to find not only a job, but a new skill set. Because of this, people are working many short term contracts, rather than having a career in one post.  So, technology is still affecting people in the same ways in which it always has. People are still losing jobs. People are still having to move to find work, or accept work under reduced terms and conditions. I, and many people reading this, are probably able to quote their own experience(s) of any of these affects. As an example of how  bosses will always try to get more out their employers, and usually by introducing new technologies and working conditions, I offer this recent example. See how the employee is at first worried for his job, then is delighted by the new machine, then resigned to the new working conditions imposed upon him. Some people may think that I read too much into things. I disagree. I am simply more willing than most to peel back the layers.                                                                                                              http://www.youtube.com/watch?v=F5PO793A3jI


Tuesday 21 February 2012

Brand new module, same old politics.

Hi readers. Sorry for the long gap in entries. My first module, DD101, Introduction to Social Sciences, ended in October, and the next one only began two weeks ago. I have been ill during this time, and began my reading of the new materials yesterday, and have almost caught up. This is not to say that I'm super absorbent, or that I have skimmed through the reading. It is more that the first week of a module is an introduction, and the 2nd is not overly stuffed with detail.

The new module is entitled DD202, Economics and Economic Change, and marks the beginning of my specialist studies. I was concerned on two fronts about this module. 1. That it would be boring beyond belief. 2. That I would not have an opportunity to write (what I consider) blog entries of interest to my enjoyment of both learning, and of having a right good rant about my political leanings. I am not always right, and at this time, I'm delighted to be wrong in my concerns. I have read the first chapter of the first (of two) textbooks, Microeconomics. Straight from the off the book speaks to theories on globalisation, of inequality, of ethics, and history. This writer is looking forward to spewing forth tidal waves of vitriol about all of these aspects of economics. Only, this time around, they will be informed by my studies of economic theory.

So, no rant on this occasion about my studies. Just an introduction, and a reminder that history repeats itself, and in so doing will give me the opportunity to express my views whilst studying the processes behind the events which shape them. My first Tutor Marked Assignment (hereafter, TMA) is due for submission on the 25th of March. I may write an entry before then, but will definitely have something to say at that point.