Cut Inequality not Public Services

Molly Scott Cato

Reader in Green Economics, Cardiff School of ManagementEconomics Speaker, Green Party of England & Wales

The Grand Larceny

• grand larceny n. the crime of theft of another's property (including money) over a certain value (for example, $500), as distinguished from petty (or petit) larceny in which the value is below the grand larceny limit.

• The first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, Inside Job traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia.

What Mervyn King Said

• ‘Unemployment is up, businesses have closed, and the direct and indirect costs to the taxpayer have resulted in fiscal deficits in several countries of over 10% of GDP – the largest peacetime deficits ever.’

• ‘Of all the many ways of organising banking, the worst is the one we have today.’

Projected borrowing(PSNB), 17 Dec. 2009

Projected borrowing(PSNB), 21 April 2010

97% of money is created as debt by banks: 95% of money transactions have no contact with real

goods Allows people to make a claim on future value

And what he didn’t say

The Crises are the Same Crisis Sustainability requires

equality Sustainability requires

financial stability, because debt-free money forces economic growth

Debt requires inequality, because of interest transferring money from poor to rich

Independent Commission on Banking?

• Sir John Vickers, former Chief Economist at BoE

• Clare Spottiswoode, NED of nuclear waste and oil company

• Martin Taylor, former CE of Barclays

• Bill Winters, former CEO at JP Morgan

• Martin Wolf, the FT

Independent Commission on higher education?

• John Browne, BP• Michael Barber, McKinsey• Diane Coyle, ING, EDF• David Eastwood, VC of

Birmingham University• Julia King, VC of Aston

University; Rolls Royce• Rajay Naik, OU and Big

Lottery• Peter Sands, Standard

Chartered

Privatisation of higher education

• Hefce’s funding for teaching will be cut to£700m; the current sum is £3.9bn.

• This would represent a 79% cut in the teaching grant.

• Costs of education shifted to students and staff• Business determines the curriculum but does not

pay the cost• Time for some ‘free universities’?

The End of Civilisation

• No subsidies for arts and humanities

• Focus on STEM: science, technology, engineering and maths, plus languages

• No discussion of education as a social benefit

The Big Society

Never have so many crustacea died in such a msguided cause

1973 to 1985: the financial sector never earned more than 16% of domestic corporate profits

1986: 19% 1990s: 21 to 30%, higher than it had ever been in the

post-war period In the noughties it reached 41 per cent Pay rose just as dramatically: from 1948 to 1983,

average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

Simon Johnson, ‘The Quiet Coup’, The Atlantic magazine, May 2009

Shift the burden onto the wealthy

• £50bn. Extra from tackling tax avoidance (Finance for the Future)

• A 50% higher rate on incomes above £100,000

• Raise the capital gains tax rate to the recipients highest income tax rate

• Introduce VAT and fuel duty on aviation

Green New Deal

• Create 1 million new jobs in energy efficiency, low carbon public transport and renewable energy

• Build our skills and engineering capacity for the economy of tomorrow;

• Reduce our dependence on expensive and dwindling oil and gas;

• Pensioners and families living in warm, efficient cheap to run homes;

• Cutting 80% of our carbon emissions by 2030

The planet doesn’t do bailouts

‘A crisis also an opportunity’

• Stabilised economy in ‘dynamic equilibrium’

• More equal economy and society• Focus on well-being not on consumption

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

Low Income Low-Medium Income

Medium Income High-Medium Income

High Income

Lif

e S

ati

sfa

cti

on

(0-1

0)

Income and Social Connectedness

Strong Social Connections

Average Social Connections

Poor Social Connections

• 'When rulers take action to serve their own interests,Their people become rebellious‘

•Verse 75, Tao Te Ching

Find out more

www.greeneconomist.org

gaianeconomics.blogspot.com

Green Economics: AnIntroduction to Theory, Policy and Practice (Earthscan, 2009)

Environment and Economy(Routledge, 2011)