Richard Murphy's proposals for running the economy

Phew - my brain hurts!

I wonder if you recognise my own contributions to Richard's blog.

McDonnell has taken up a number of Richard's ideas, but this is a comment he made on another thread:

"And they do have to organise so much better: not doing so now would be inexcusable.

But most of all I still want the vision. We did not get it from John McDonnell yesterday. There was a lot of good stuff in his speech, but it was all sound bites. There is still nothing that lays out a philosophy and an explanation of how things will actually happen."

That's my problem with McDonnell's economics. Without explaining clearly how his ideas will be costed, he lays himself open to the accusation that Labour is a party of spending and debts.

I don't understand what you mean by 'my own contributions to Richard's blog' daphnedill. Are you saying you co-wrote it?

Are you a closet journo dd ?
Have read this blog, some bits ok some not workable, eg.since we have got almost full employment it could well lead to inflation.

Although on some threads I am called 'right wing'.....but the same people are calling ab right wing, so

Agree with your point about costing.

Any party can promise all manner of things which they reckon will go down well with the electorate, but how often do governments fail to deliver on their promises for one reason or another, usually financial?

No, of course I'm not, but I've written a few contributions to the blog over the years. Anyone can, although Richard moderates all of them and, I believe, doesn't publish them all.

Roses, economists don't consider controlled inflation a bad thing. One of the reasons we have low interest rates is concern about deflation. If deflation occurs, people hang on to their money in the expectation that prices will fall. Low interest rates are an attempt to make them spend. Interest rates will rise if there are indications of inflation.

PS. We might have almost full employment on paper, but the country has significant underemployment (marginal self-employment, zero hours contracts, part-timers who would like full-time work, etc), which is why the figures for the UK's productivity per capita are so low. There's a knock on effect on tax income for the Treasury, which is one reason the debt is growing, in addition to our trade deficit.

Well, I have read it, it is all long words, mother love and apple pie. Full of pius hopes that few could disagree with with, but completely devoid of any suggestions as to how you reach the nirvana he outlines.

Which of Richard Murphy's ideas do you think are unworkable?

I am not sure how easily a government could control people's desire for 'stuff' when they are bombarded by advertisers and the media with the latest ' must have'. Even I have been known to succumb, hence my twice used spiraizer. The attitude towards stuff changed in the 80 s and is now ingrained in the majority of the population, particularly the younger generations.

@MOnica

Richard Murphy has written extensively about his ideas in the past and has published two books. It's a blog and I expects he assumes people are familiar with what he's written, without repeating himself.

Quite a number of people have had to curb their desire for 'stuff', because the basics take most of their money. It's also becoming quite trendy to buy from charity shops and local secondhand networks.

There's nothing wrong with buying 'stuff', because it provides jobs. Unfortunately, many of the jobs are in China, which is why investment in British manufacturing is needed.

I have no criticism of Richard Murphy's ideas. They are excellent. They are ideas that everyone across the political spectrum, including a lot of Conservatives would happily agree to.

What is lacking is any attempt to explain how any of these policies could be effected. To quote:

But we also need to ensure that we can live together: housing, transport, broadband, hospitals, schools and more are required to let us do that. Let’s not pretend otherwise: we need more of all of these, and it is the job of government to ensure they are supplied.

So a left wing government has a very clear role: it will build the foundation for the more equal, sustainable and services orientated future we want and need.

Who could possibly disagree with any of that? Any of us could write noble sentences like that. Take out the words 'left-wing government' and replace them with any party, you care to name from extreme right to extreme left and they would all agree on those aspirations.

What we need to know is HOW they intend to achieve it

You'd need to read his ideas on what he calls 'Green Quantitative Easing' for that.

Taking housing as an example, the market has failed. There's no point in capping rents, because that would just cause private landlords to stop investing in housing and could cause even less supply. The problem we have is lack of supply, so the only solution is to build more housing, preferably social housing. Building would provide jobs and increases in supply chains. It would also provide cheaper housing, so the Housing Benefit bill would be reduced. Adequate housing makes people happier.

I am afraid the housing problem is much more complicated than that. The main problem is affordability. This is mainly a problem in the south east and big cities, but it exists in pockets elsewhere.

Building more houses will not make them cheaper, it might make them more expensive, because in the south east of England 60 - 75%, and sometimes more, of the cost of a house is the cost of the land it is built on. If you push on with a major building programme, everyone, whether private developer or social provider will be competing to buy the same limited supply of building land and that will inevitably drive up the cost of land, which will drive up the cost of housing, which means that private sector homes will be unaffordable to potential buyers and state enterprises will not be able to afford to buy as much land as they hopes, thus limiting the number of houses they can buy.

Add to that the insecure nature of many jobs and the uncertain salaries of those in living wage jobs. They cannot afford to buy or rent because their income is uncertain and varies from week to week, let alone month to month.

Where do those people live then, out of interest? They can't all still be at home with their parents. (Serious question)

Many are living at home or they are in overcrowded poor quality unsafe accommodation, often with shared facilities.

But, to be honest, I am not always sure. Housing benefit can help and other state handouts, but it is a strange world where, in a country with a minimum wage, that is not large enough to cover the rent of a property for those earning it, not just in very high rent areas like London and environs but in many other places in the UK far from London and the south east

You're right about rents.

I'm always amazed when I look in the local paper and see what they're charging for rental properties round here in what is classed as a rather poor, semi-rural area.

Building firms already own substantial amounts of land: www.theguardian.com/society/2015/dec/30/revealed-housebuilders-sitting-on-450000-plots-of-undeveloped-land
10 months ago but I doubt that it has all been used - although wherever we go we see huge numbers of houses being built, almost like new towns.
Supermarket chains also own large amounts of land which could released for housing because they are not expanding at the rate they did.
Add in brownfield sites and there is plenty of land available for a number of years.

The houses whichI have seen being built do not all seem to be larger family homes, a good number look like starter homes.

Here is an example of what is happening:
www.redtreellp.com/housing.asp

It is indeed a very strange world. My house was repossessed when I was unemployed, after having a mortgage for my most of my life, and I now pay £825 a month, which is more than my income, for a much smaller house. I'm not eligible for housing benefit. I've just applied for a council flat, but have been told I will literally have to wait until a few people have died. I had to wait until I'd spent most of the profit from my house sale, so I'll end my life with nothing.

You are right, Jalima. Developers are sitting on land, much of it with planning permission. From memory, there are about half a million such sites. It's all a real life Monopoly game to them. This is a classic example of market failure, where government intervention is needed. Of course, it won't, because there's big money involved.

Maybe Labour should change Blair's 'Education, education, education' to 'Build, build, build'. The UK built its way out of the recession in the 1930s and I firmly believe that's what it should be doing now.

@Jalima

Just looked at the link. The trouble is that 'affordable homes' are still not affordable for somebody in my situation, because I can't get a mortgage.

It's ironic that the development is in the South Hams because, a couple of centuries ago, some of my ancestors owned large tracts of it, but sold it, because farming wasn't profitable.

@MOnica

That's why they need to be council houses. There is enough land already earmarked for building.

I agree. Blair's aim that 50% of school leavers should go to University seems to have been achieved, but what good has it done when every job seems to require a degree?

It might have been better if they'd all been trained as bricklayers and builders.