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954   19 March 2004

We should
spend, not save

 

I am indebted to Michael Howard, in the Budget Debate, for highlighting the fall in personal savings.  We are now saving just 5% of disposable income, as compared with the longer-term UK rate of 10%-12%.  We are now at the long-term US savings-rate, which is 6%.   For those on ordinary incomes, the truth is that spending makes better sense than saving. The market institutions of market capitalism have shown themselves to be incapable of managing small savings, unreliable custodians of personal savings.

A low rate of personal savings is a prerequisite of a successful modern economy. The modern economy requires citizen-consumers to concentrate on consuming, on spending.  Domestic consumption is the primary driver of the economy.  It is the great paradox: the sustenance of the modern market economy requires the State to play a higher-profile role in the redistribution of wealth and societal advantage. This is, for me, the very stuff of the new socialism, if only Labour would realise it.  The corporate sector needs a larger and more comprehensive “State”.

This is where a “New Deal” needs to be cut, between the market and the managed sectors, between “business” and the State.  There needs to be systematic State redistribution to the young, by way of health and education services, to the sick and injured through the NHS, to and to the old by way of a much-improved State Pension, and to us all by way of better communications, savings protection, and temporary support in the vicissitudes of life.  Indeed, there are new ways in which the modern State will need to expand – and I have advocated that, elsewhere.   

For the business sector cannot get on with successful trading, unless the State creates effective remedies for the inequities of society.  It’s as simple as that.  If social division or popular resentment leads to disruptive discontent, trading activities all decline.  Similarly, terrorism is very bad for trading, and requires active State counter-measures.  

  • This has all the makings of a New Socialist Deal. 

Do you understand my reasoning?  Do you think I am right?  Drop me a line

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955   15 March 2004  

Are they trying to
tell us something?

I am disturbed, as a child fatty myself, at the current vendetta against overweight children. The thin majority is setting up, for later years, the most horrific scenario of guilt, mental disorder and depression for current and future generations of overweight children.

Obesity has clearly increased dramatically in last thirty years.  That is not to be denied.  And we are increasingly aware of the many trigger factors - lack of exercise, TV-viewing, genetic inheritance, poor diet.  But one of the best-known triggers for over-eating is simply anxiety.  And the last thirty years have, some would argue, been years of mounting anxiety.  Much over-eating, after all, is "comfort eating",,,

What if the new obesity "epidemic" is triggered by growing unspoken anxieties among our children - about family breakdown, about global conflict as seen on TV, about the warmongering of our leaders, about global warming and natural disaster?   Could our children be picking up that anxiety, even without being fully conscious of its ramifications?

  • Could we be missing an important piece of evidence, about the condition of our society?  Are we right to launch yet another "war" - this time, against obesity?

Check out my own essay Multiple Differential Uncertainty, which offers a theoretical framework for these matters.

What do you think?  Drop me a line

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- is that a deal?  Roger WE