Economics – Page 2 – We Know Zero

Chasms

12. May 2023 · Write a comment · Categories: Demographics, Economics, Pensions, Science Fiction

I recently finished reading Chasm City by Alastair Reynolds, which I highly recommend. In it, sufficiently rich people have been able to buy a programme of treatments which make them immortal. Not that they can’t die, but they needn’t if they’re careful. Good science fiction, I thought.

Then I read Paul Kitson’s (the new UK Head of Pensions Consulting at EY) piece on LinkedIn where he wrote (bold mine):

Pension schemes, corporate sponsors, members – everyone, in fact – must now contend with a forward looking plan that (somehow!) considers on one side the possibility of future pandemic outbreaks shortening life expectancy, and on the other side the many £billions being spent on ‘regenerative medicine’ (AKA “the ending of ageing” or “escape velocity for death”!).

So perhaps not entirely, I thought.

In Chasm City, the immortals who live in “the Canopy” have two main problems:

Hanging on to their wealth and, if possible, increasing it, as forever is a long time to finance.
Boredom.

One particular group amuse themselves by hunting poor people in “the Mulch” (lower level where the poor live). Others indulge in increasingly dangerous pastimes to inject some urgency into the otherwise featureless expanse of their lives. No wealth moves from the Canopy to the Mulch, not even in a trickle.

I am just finishing Do Androids Dream of Electric Sheep by Philip K Dick (a classic, I know, but I hadn’t read it before, although I have seen Bladerunner). One of the features of the post-apocalyptic world of 1992 described are “mood organs” which allow you to dial up a given mood at any time, eg 481 is “awareness of the manifold possibilities open to me in the future” whereas 888 is the desire to watch TV, no matter what’s on it. Again, good science fiction, I thought.

Then I read a piece in this months’ Actuary magazine called Apt apps, about doctors being recommended by NICE to offer patients with insomnia the Sleepio app as an effective and cost-saving alternative to sleeping pills. So perhaps not entirely, I thought.

The first book was written in 2001 and the second in 1968, so it would seem that lead times are variable.

Both books deal with the fragility of identity, whether via memory implants and religious viruses in Reynolds’ book or how we go about separating androids from people from “chickenheads” in Dick’s. The divisions between the life experiences of the different groups are so stark, but it is the characteristics of the people in them which takes up everyone’s time and attention in both books, rather than the structure of the societies which create such extreme winners and losers. Which suddenly doesn’t feel like science fiction at all.

Meanwhile what has happened to England’s life expectancies by decile of deprivation in the last 10 years?

Source: ONS https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthinequalities/bulletins/healthstatelifeexpectanciesbyindexofmultipledeprivationimd/2018to2020#health-state-life-expectancies-data

So not quite immortality yet at the top, but inequality is clearly worsening in life expectancy. The Government Actuary’s Department gave an upbeat view last year on what the impact of the recent Levelling Up White Paper might be. Others are upbeat too.

However the Government’s track record is not good on inequality. Sir Michael Marmot produced the Marmot Review on health inequalities in the UK in 2010 and then followed this up with a review of what progress had been made 10 years later. As he points out in his recent interview in The Actuary:

Health spending fell from around 42% to 35% during the 2010s. He notes that this reduction was carried out in a regressive way: “There has been a 16% reduction in health spending for the most affluent, but a 32% reduction for the most deprived groups.” In addition, he says, while unemployment fell over the course of the decade, the income of employed people also went down – so the proportion of people living in poverty rose, as did child poverty.

These are the kinds of interventions that matter for most people rather than sleep apps or regenerative medicine to achieve escape velocity from death. And they are definitely not science fiction.

The Parable of the Boiling Frog

28. April 2023 · Write a comment · Categories: Birmingham, Climate Change, Economics, Science Fiction

Source: https://commons.wikimedia.org/wiki/File:Green_frog_(Pelophylax_esculentus_complex)_Danube_delta.jpg by Charles J. Sharp, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons

It has been quite a year for reading great books and being inspired by them for me: from An Immense World by Ed Yong last April, to Regenesis by George Monbiot and The Lathe of Heaven by Ursula Le Guin in October, to a great trio of reads in 2023 of The Capital Order by Clara Mattei, When The Lights Went Out by Andy Beckett and The Left Hand of Darkness by Ursula Le Guin. And that is just the books I have blogged about.

However, my stand out book this year is none of these. I have often heard people say they wish they had written some book or other, and I have never understood it until now. This is the book I would hope that a better version of me might have written in a parallel universe. Fortunately for you, Simon Sharpe has written Five Times Faster in this universe, and I am so glad he has.

Five Times Faster is funny, constantly surprising and has reframed my entire attitude to the climate crisis and what can be done about it. Perhaps it had more intensity for me as I read most of it aboard the XR bus from Birmingham down to London last weekend, but it has given me more hope for what Kim Stanley Robinson calls “dodging the mass extinction event” than I have had for some time.

Amongst the many wonders of this book is to reframe the time-worn story of the frog sitting in water which is slowly coming to the boil as a series of conversations with its science adviser, its economics adviser and its diplomatic adviser. To do it full justice you will need to read the book, but the gist of it goes as follows:

First of all, the frog asks its science adviser to investigate whether the water really is getting warmer. The science adviser confirms that it is, and also predicts that, in 5 minutes’ time, it will be a further 2^o warmer, plus or minus 1^o. The frog says it didn’t want a prediction, it wanted a risk assessment. It takes a while to get the science adviser to understand what this is but then, when asked what’s the worst that could happen, the adviser blurts out “That’s easy. You could boil to death.” In response to the question of how likely that is to happen, the adviser says that it would be very unlikely after 5 minutes, more likely than not after 10 and after 15 a certainty. So the frog now realises it needs to jump out of the pot.

The frog now turns to its economics adviser to ask how it should go about it. The economics advisor does a cost benefit analysis by first calculating the energy cost per cm of moving up the pot away from the water, converting this first into food consumption and then money, and equating this with the frog’s willingness to pay for not being boiled, which is derived from its air conditioning bill. The most efficient solution turns out to be to climb 4.73 cm up the side of the pot. Worried that it would just be replacing the risk of being boiled with one of being steamed to death, the frog ignores its economics adviser and jumps out of the pot.

Finally the general problem of the frogs and the relentlessly boiling water is put to the negotiators for a diplomatic solution. The sides of the pot are too high by now for most of them to jump out. The negotiators tell them they just need to raise their ambition and that this is the only game in town. The consequences of not accepting that analysis and looking at alternative salientian strategies make up the final third of the book.

I cannot recommend it highly enough. If enough people read it and act upon it, perhaps we can avoid this:

Source: https://commons.wikimedia.org/wiki/File:2012_Froschschenkel_anagoria.JPG Anagoria, CC BY 3.0 https://creativecommons.org/licenses/by/3.0, via Wikimedia Commons

There are three less visible battles to win if we are to decarbonise five times faster than we have done in the last 20 years – and the good news is that actuaries can help!

20. April 2023 · Write a comment · Categories: Actuarial, Cartoons, Climate Change, Economics

In Simon Sharpe’s great new book Five Time Faster, he points out that, if we are going to decarbonise everything, “it’s not just the physical plumbing of the global economy that needs to be replaced, but the intellectual plumbing.” In a blog post from January, Three less visible battles to win, Simon mentions three targets in particular for this intellectual plumbing:

Infrastructure that makes sure heads of government know just how bad climate change could get;
Ideas in economics that exert a critical influence over governments’ policy decisions; and
Institutions in diplomacy that will get the job done.

The first one means targeting the Integrated Assessment Models which have informed so much of our hesitancy and inappropriate prioritisations over the last 20 years where climate is concerned. I have written about this several times before, and this is something actuaries can contribute to much more in the future.

The second is at a much earlier stage, but the opening session in the current IFoA Presidential Speaker Series programme of talks indicates a greater confidence amongst actuaries to talk about, and influence, a more pluralist economic future.

And the third one will I believe become much more tractable once the intellectual tide starts to change.

I will be heading down with my banner to London tomorrow for Extinctions Rebellion’s Big One, alongside 90 other organisations united in demonstrating for a survivable future. Hope to see you there!

The Governor’s Own Speech Didn’t Even Justify His Monetary Policy

18. April 2023 · Write a comment · Categories: Economics

I am returning to the scene of my ~~crime~~ cartoon, which did not really deal with what the Governor of the Bank of England was saying as it was more a criticism about how he was saying it. However in response to a comment on my piece, I also realised that I was critical of what he was saying too. My criticism centres on the following graph:

*Source: https://www.bankofengland.co.uk/speech/2023/march/andrew-bailey-speech-at-london-school-of-economics*

As Andrew Bailey’s speech acknowledges:

“As you can see in blue…, long-term sickness has driven much of the persistent rise in inactivity amongst 16 to 64 year olds since the start of the pandemic. That is a striking fact.”

This is backed up by recent research carried out by LCP, whose conclusions included the following:

The rise in working age inactivity is not purely amongst those over 50; at the time of the Autumn Statement, nearly half the increase had come from the under 50s, with a big rise in the number of students a major factor;
Data on flows into and out of long-term sickness show that persistently high inflows into long-term sickness are a key problem; one growing group is those who flowed into long-term sickness having been previously categorised as ‘short-term sick’; this suggests that failure to address short-term sickness, including through clinical intervention, could have contributed to the increase in long-term sickness;
Amongst the entire economically inactive population of working age, very few of those who are retired say they ‘want a job’, whereas over 600,000 of the long-term sick say they would like to work if they could; this suggests that policies designed to help the long-term sick are ‘pushing at an open door’ in terms of supporting people who would actually go back to work given the right opportunities and treatment;

The “striking fact” for me is that the Governor of the Bank of England, faced with very similar data to LCP, instead concluded the following:

…the rise in economic inactivity is a change to the supply of labour, independent of demand, in particular by older workers. If those workers have accumulated enough savings to sustain a desired level of consumption much like the one they had before their early retirement, at least for a while, aggregate demand will not have fallen by as much as aggregate supply. We should expect this to put upward pressure on inflation in a way that would call for a higher level of interest rates to dampen demand.

But this is a comment on a dataset which shows most new inactivity is in the over 50s (which it isn’t) and that there is no large group of people currently economically active who wish to return to work given the right levels of support (there are 600,000 of the long-term sick in this category). What the LCP report concludes plausibly from the data is that policies designed to help the long-term sick who want to go back to work given the right opportunities and treatment and those designed to support the NHS to increase its capacity in primary care and mental health services in particular, would have much more impact on the number of people defined as economically inactive. As the LCP report says:

Clearly, a range of policy initiatives will be required to tackle economic inactivity, and these will include measures to reduce the ‘inflow’ into inactivity (eg people currently in work retiring or going off sick), but in terms of measures designed to increase the ‘outflow’ from inactivity, doing more for the long-term sick is likely to be far more effective than concentrating on those people who have already retired.

Meanwhile, the Governor of the Bank of England has an interest rate hammer for a tool and he therefore needs the problems he is addressing to look as much like a nail as possible (my explanations in non-italics):

So while population ageing is very likely to pull long-run R* down (this is the long-run average real equilibrium interest rate, net of inflation, averaged over the economic cycle), as I discussed earlier, the effects on shorter-run r* (which is the theoretical equilibrium rate of interest at a given point in the economic cycle) from a change in labour force participation are harder to assess. In the shorter run, by reducing the productive capacity of the economy, the rise in inactivity driven by early retirement (which is virtually non-existent as his own graph shows) seems likely to have contributed to a rise in cyclical r*. This is part of the reason why we have had to raise Bank Rate by as much as we have.

But what about a rise in inactivity caused by long-term sickness? Interestingly, Jonathan Haskel, another MPC member who also voted for the latest rate rise, recently presented some fascinating work with Josh Martin on long-term sickness and labour market outcomes. Amongst the implications of the rapid rise in long-term sick amongst the UK’s economically inactive population are:
• Long-term sickness is more than just a reason for economic inactivity – many in-work are long-term sick;
• The out of work long-term sick have high rates of wanting jobs, but less success in getting them, which suggests cultural or structural barriers.

Making their lives more difficult by interest rate rises which increase their living costs and reduce the security of any employment they may already have seems an odd way to solve either of these problems.

The Governor’s Speech

29. March 2023 · Write a comment · Categories: Cartoons, Economics

The Governor of the Bank of England gave a very long speech (with the longest, quite technical, section in the middle about R* apparently aided by ChatGPT) at the LSE a couple of days ago. This had me wondering who he thought he was talking to and therefore, by extension, who he thinks he is representing with his policy choices.

So I drew a cartoon to express my bemusement.

This actuary and science fiction

28. March 2023 · Write a comment · Categories: Actuarial, Birmingham, Climate Change, Economics, Science Fiction

I was looking through my old blog posts the other day and came across something I wasn’t looking for. Actuaries and Science Fiction told the story of a one-off visit I made to the Birmingham Science Fiction Group (BSFG), when the guest speaker had been the late great Brian Aldiss, who told the story of a time Kingsley Amis had had dinner with Margaret Thatcher. He told her what his book Russian Hide and Seek was about, to which she had responded that he needed to get himself another crystal ball.

By coincidence, I have just joined the BSFG nearly 10 years later (well I needed to think about it!), attending my first meeting online (Anna Stephens – really good about writing for Warhammer and Marvel in particular) and now very much looking forward to seeing Alastair Reynolds at my first in person meeting next month. I now have a bit more context for the Kingsley Amis story, as Andy Beckett has an account of a dinner Amis had at Thatcher’s Flood Street house in the late 70s (before she became Prime Minister). He wrote at the time:

I was rather overcome with the occasion and the fairly close propinquity of Mrs T…very much a new face to me as to most people, too much so to take in a lot about the fare except that it was properly unimaginative, and, as regards drink, ample enough. The hostess wore one of those outfits that seem to have more detail in them than is common, with, I particularly remember, finely embroidered gold-and-scarlet collar and cuffs to her blouse…[she was] one of the best-looking women I had ever met and for her age…remarkable.

And he also attributed the following quote to Thatcher herself:

People have always said that the next election is going to be crucial. But this one really will be, and if it doesn’t go the way Denis and I want then we’ll stay [in Britain], because we’ll always stay, but we’ll work very hard with the children to set them up with careers in Canada.

Anyway, back to Aldiss. He had told the story as he felt it showed how Thatcher (and he was not just picking on her as he felt this was a view held by many) misunderstood science fiction. It was not about prediction of the future, but for people who “liked the disorientation” of portraying an unfamiliar landscape.

Ursula K. Le Guin goes further in her introduction to The Left Hand of Darkness (just finished it and, if by any chance you haven’t read it already, it is an amazing piece of immersive world building which will leave you never feeling the same way about gender again). As she says:

Science fiction is not predictive; it is descriptive.

Predictions are offered by prophets (free of charge), by clairvoyants (who usually charge a fee, and are therefore more honoured in their day than prophets, and by futurologists (salaried). Prediction is the business of prophets, clairvoyants and futurologists. It is not the business of novelists. A novelist’s business is lying.

The weather bureau will tell you what next Tuesday will be like, and the Rand Corporation will tell you what the twenty-first century will be like. I don’t recommend that you turn to the writers of fiction for such information. It’s none of their business…All they can tell you is what they have seen and heard, in their time in this world, a third of it spent in sleep and dreaming, another third of it spent telling lies.

And, my favourite bit:

In reading a novel, any novel, we have to know perfectly well that the whole thing is nonsense, and then, while reading, believe every word of it. Finally, when we’re done with it, we may find – if it’s a good novel – that we’re a bit different from what we were before we read it, that we have changed a little, as if by having met a new face, crossed a street we never crossed before. But it’s very hard to say just what we learned, how we were changed.

The artist deals with what cannot be said in words.

The artist whose medium is fiction does this in words. The novelist says in words what cannot be said in words.

Who wouldn’t want to do that? It struck me while I was reading those words how the pandemic was something which changed all us survivors a little (and some a lot of course) and in ways that are often hard to put in words. But we are changed and there is work to do to try and understand how, even if that cannot be completely put in words.

The other thing from the introduction which has stayed with me is Le Guin’s contention that, while we read a novel, we are bonkers: believing in people who have never existed, hearing voices, perhaps even becoming other people. As she says:

Sanity returns (in most cases) when the book is closed.

But what about when you can’t close the book? Are we, to a greater extent, condemned to some level of future insanity? As William Faulkner said:

The past is never dead. It’s not even past.

In 2013 I tried to suggest that actuaries might also be about portraying an unfamiliar landscape and trying to work out what would hold true under different circumstances, and that they should therefore put themselves about a bit more, even if they sometimes made themselves look a bit foolish in the process. As William Hynes reminded me at yesterday’s excellent An introduction to alternative economic thinking event (recording available soon from the Institute and Faculty of Actuaries), the group of economists responding to the Queen’s question as to why noone saw the 2008 crisis coming, concluded:

In summary, Your Majesty, the failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole.

If a failure of imagination is the main problem, I would suggest that science fiction must be at least a part of the solution. Looking a bit foolish at times is a bit of a speciality for me, so you probably won’t be surprised to hear that I am devoting most of my time from here on in to an almost certainly doomed attempt to write what Le Guin might regard as a good novel. I have been here before, way back in my pre-actuarial past, and have a nice back catalogue of unpublishable books and rejection letters to look at whenever I forget that I have no idea what I am doing. But if I find myself shouting to noone in particular that what I am trying to say cannot be said in words, I might dare to believe that I am on the right track.

Price wars

23. March 2023 · Write a comment · Categories: Economics

*Source: Bank of England https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate*

The Bank of England has today raised the Bank Base Rate for the 11th time since December 2021 to 4.25%. Its stated goal is to tackle inflation. So let’s have a look at inflation since December 2021:

*Source: ONS https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7g7/mm23*

Now that doesn’t look like a policy which is working does it, but I am being a little unfair. There is supposed to be a lag between movements in interest rates and impacts on inflation after all. Opinions differ about how long the lag is: a paper from Lancaster University from 2001 suggests over a year based on US and UK data since 1953, and a generally accepted 18-24 month lag has been routinely quoted in economics text books for many years. However, Catherine Mann, an external member of the Bank’s Monetary Policy Committee, at the end of a very long speech to the Resolution Foundation on 23 February 2023 which dealt with the transmission mechanisms between monetary policy and the economy in considerable detail, concluded with the following summary of why this time is different:

So, what does this all mean for monetary policy? Typically, we assume that the world is
sufficiently stable such that the estimated relationships between, for example Bank Rate
and inflation also are stable and we can look to these when deliberating monetary policy
stance – the folk wisdom of 18 to 24 months.

In this speech, I have presented state-of-the-art evidence which shows that, in normal
times, the monetary transmission into inflation is in fact faster, peaking within the first year.
But, I have also reviewed factors that may change these relationships – change the long
and variable lags – including a) that there has been a sequence of shocks, b) that the
transmission from monetary policy to financial markets has been quick, but not all in the
direction of tightening, and c) that the degree of backward- or forward-lookingness in
expectations formation influences the effectiveness of monetary policy. Going forward,
how should this reassessment of lags determine the appropriate monetary policy strategy?

She then went on to say that financial conditions remained too loose and ended with the following chilling words:

We have an inflation remit, and we will achieve it one way or another.

Now you will notice from the CPI graph that the big increases happened between December 2021 and April 2022, when the rate of increase went up from 5.4% to 9.0%. As the price increases are always measured relative to the same month 12 months earlier, once we pass the April 2023 point, this price shock will inevitably be in all months in the comparison and the headline rate will start to plummet. The latest OBR forecast for CPI therefore looks like this:

*Source: OBR https://obr.uk/docs/dlm_uploads/OBR-EFO-March-2023_Web_Accessible.pdf*

Bearing in mind that the Bank of England’s CPI remit is 2%, and with all the usual caveats about OBR forecasts, it appears that Catherine and her colleagues are intent on over-achieving it.

One person I have been reading a lot recently on inflation is Blair Fix. He recently posted a great piece showing the empirical evidence to support the theory that higher interest rates increase inflation. His most recent piece reframes the whole question of inflation into the idea of competing price raising. When wages rise more than prices (yes, my younger readers, that did sometimes happen), people working for wages (ie most of us) win. When interest rates rise more quickly then prices, people who have assets available to lend to other people (ie not most of us) win. What we call inflation is bad because our wages don’t keep up with it. In the 1970s by and large they did and our borrowings were reduced in value by the inflation of prices. So inflation tends to redistribute wealth according to where the prices are allowed to rise.

Blair Fix also discriminates between price battles, which are the endless struggles between workers and creditors, and price wars, which are less frequent but result from an escalation when everyone joins in, normally after a price shock of some kind.

We are currently in a price war. The Bank appears to have picked the side of the creditors and the protection of real interest rates over the protection of real wages, which is perhaps inevitable when union power is now so diminished and the financialisation of our economy so advanced. It is perhaps the first real test of the economy we have created in the wake of 2007 and who it really works for when under fire. A former member of the Monetary Policy Committee, David Blanchflower, has called the latest rate rise “resignation stuff”. On the other side, Catherine Mann and her colleagues may even now be thinking they have not yet gone far enough.

Looking up

22. March 2023 · Write a comment · Categories: Climate Change, Economics

I feel like I have at least three reasons to be cheerful this morning:

Firstly, the Met Office has released the results of their latest survey (see above) on our attitudes to reducing our carbon footprint and they are very heartening. It seems that most of us are looking up after all.

Secondly, it is also encouraging within the context of Extinction Rebellion’s wider strategy to mobilise 3.5% of the population into campaigning to end the fossil fuel economy and replace it with something better which works for everyone.

On 21 April we will be arriving in London to test out the level of support we now have. My third reason to be cheerful is that an impressive list of other organisations will be joining the demonstration, including Greenpeace, Friends of the Earth, Earth Day, NHS Workers Say No, Greener Practice, Global Justice Now, Black Lives Matter local groups, Don’t Pay UK, CND and the PCS Union.

Meanwhile the Bank of England is pondering whether to raise interest rates even further in response to a vegetable shortage and panicking when the inevitable fall in inflation (which is bound to happen once the comparisons used to calculate it are post the initial price shock) does not coincide with the smooth curves in their models.

And the Government? A reminder of their top 5 priorities:

It becomes easy to see why the XR UK Strategy 2022 document says:

Those in power are neither willing nor capable of acting on the climate and ecological crisis. They lack the courage, conviction and creativity to do what is required.

So it looks like, once again, it is up to the rest of us to do what we have already understood needs to be done.

Seth Godin claims that all successful cultural change has a very simple two step loop to it: of awareness followed by tension and then further awareness, etc.

It does not look like the awareness is so much the issue any more, but what about the tension, ie why should we take action? I think the Government are providing the tension in buckets at the moment.

He summarises with a 3 point plan:

Tell 10 people.
Create tension among the 10 so they take action.
The action causes each of them to tell 10 people.

So this is me creating tension apparently. My wife would say I do that every time I open my mouth. And if 10 of you turn up on 21 April to wave a banner with me I will have a fourth reason to be cheerful!

Day 6 of the UCU Strike: a historical perspective on strikes

16. February 2023 · Write a comment · Categories: COVID-19, Economics

From the column inches expended on the recent industrial unrest, you could be forgiven for thinking that we were in the middle of an unprecedented time of strikes. More working days were lost to strike action in 2022 than at any time since 1989. However, as the graph above shows, and the accompanying ONS release details, what is in fact unprecedented is the degree of industrial peace we have had in the UK since 1985 when the miners’ strike was violently suppressed. The number of strike days lost in 2022 was 2.4 million, which sounds a lot until you realise that there were almost 30 million lost in the so-called winter of discontent in 1979 and the highest year for strikes was 1926, the year of the general strike, when 162 million days were lost.

Between 1919 and 1921 the number was above 25 million for all three years (peaking at 86 million in 1921, the second highest strike year on record). In 1919, an average of 100,000 workers were on strike every day: coal miners, railway workers, transport workers, dockers, police officers, soldiers, ex-servicemen, journalists, painters, teachers, farm workers, cotton spinners and many others. Yes, that’s right – police officers and soldiers were striking! This led to the Police Act of 1919 which established the Police Federation. As David Allen Green has pointed out, this has led to the seeming paradox of a group with no right to strike appearing to have some of the strongest employment protections.

And the soldiers? As John Westmoreland has written in Counterfire, this is even more interesting.

On 3 January 1919 2,000 soldiers in Folkestone refused to board troop ships bound for France to be deployed against the Russian Bolsheviks on the side of the White Russians. They refused orders and led a march of 10,000 through the town. They then formed a Soldiers’ Union. Despite a media blackout, there were around 50 mutinies across the UK and one particularly shocking one of the 13th Battalion of the Yorkshire Light Infantry at Archangel in Northern Russia in February 1919.

A very successful Hands Off Russia campaign increased the pressure on the Government, who were eventually forced to demobilise the troops. The mutineers largely escaped punishment, when mutiny was normally punishable by death (and General Haig indeed advocated shooting the strikers). The Government was forced to meet many of their demands. Demobilisation, which had been slow up until then because of the Russian military campaign planned, sped up considerably. British forces shrank from about 3.8 million at the Armistice to around 900,000 in late 1919 and down to 230,000 by 1922. Demobilising so many men in such a short space of time increased unemployment markedly, from just 1% of the labour force in May 1920 to 23% by May 1921.

Meanwhile, the Spanish flu pandemic, which claimed its first victim in May 2018, swept across the globe, infecting around 500 million people and killing around 50 million of them in the absence of treatments for flu or antibiotics to treat complications like pneumonia. This compares with the 756 million cases of Covid-19 recorded by the WHO to date, from which there have been 6.8 million deaths.

The strikes of 2023 are not extreme by historical standards at all. However, attempts by the Government to further muzzle the rights of people to withdraw their labour certainly are.

Day 5 of the UCU Strike: the three-day week

15. February 2023 · Write a comment · Categories: Economics

*Source: http://news.bbc.co.uk/onthisday*

This was an unprecedented event in UK history. It evoked memories of wartime privation and there were fears that rationing would return. It put households under considerable additional strain while being praised for showing us a better way to live by some commentators. Some people said that they liked the lack of traffic and sense of life slowing down. Businesses developed significant cashflow problems as a result. It left a political legacy, part of which cost the prime minister of the time his job. I am of course talking about the three-day week of 1974.

On 13 December 1973, the UK Prime Minister Edward Heath made a special broadcast, telling us that we were facing a grave emergency. A couple of weeks later, at midnight on New Years Eve, the three-day week began. The idea was to manage the low oil stocks and dwindling coal stocks through the winter by reducing energy usage.

As Andy Beckett details in his excellent When The Lights Went Out, it was a hugely complex process with many restrictions, both important and petty, to observe. All businesses, except shops and those deemed essential to the life of the country, would receive electricity either between Monday and Wednesday or Thursday to Saturday. Television broadcasts stopped at 10.30pm each night. Speed limits were reduced to 50 mph and floodlighting for sports events was banned. People reported each other for infringements on a daily basis. Patrick Jenkin, the Minister for Energy, suggested people clean their teeth in the dark before the Observer did a piece on his own electricity consumption.

Heath and his Government had a strategy underlying the three-day week, which was not voiced in public: rely on the public to respond well to a national emergency if the government looked like it was in charge. Cabinet papers spoke of the need to “appeal to moderate opinion by seeking to enlist help in the national interest” and that the “best way to bring pressure to bear…[on the miners]…was to shock them.”

Therefore, when he called an election on 7 February to ask the public “Who governs Britain?”, two days after the National Union of Mineworkers (NUM) had voted 81% in favour of a national strike in support of their pay demand of 43%, he did not expect to lose his majority at the subsequent election. Harold Wilson became Prime Minister. The dispute with the NUM was settled on 6 March with a 35% increase awarded. The three-day week ended on 7 March.

The experts weighed in on the social aspects of the three-day week. Dr Anthony Allbeury, a leisure expert at the University of Oxford, spoke of the value of “re-reading an old book or digging a garden…not spending money…finding ourselves back in that almost peasant state.” Dr Richard Fox, a consultant psychiatrist, wrote that he “approves of the three-day week…to get together, be more spontaneous, to experiment more in…sex lives while the children are doing a five-day week at school”.

However the three-day week was not popular. People had had to move to longer shifts on the days they were working and seeing friends and family on those days became difficult. However fishing tackle sales increased and golf courses were busier, often lit up by car headlights at night.

Several companies reported improved productivity and began negotiations for a permanent four-day week, most of which came to nothing. My memories of the three-day week (I was 11 at the time) are mainly confined to the 50 mph speed limit, which was much commented on, and games of ludo by candlelight in the evenings, but I think there was a sense of a folk memory being created even at the time which we would draw upon later.

And draw upon it we did when the pandemic hit. In my view it explains some of the crazier employer-driven news stories: from how we need to get back to the office to save Pret to the whole quiet-quitting debate. These only make sense when you realise that the last time we had enforced days off for a (much shorter) period, the one and only priority was maintaining as much industrial output as possible (it fell by around 20% over the three-day week period).

Our way of working is changing because technology allows us to work in ways which better fit our lives than the 1970s-designed envelope we have been struggling with for a while now. It took a pandemic to force the employer-driven envelope apart and it is no use captains of industry trying to stick the bits of torn paper back into place and demanding we jump back into it. It is not all bad for employers: for instance, the four-day week certainly looks more likely to happen now.

The balance of power has changed. Unions may not have it, but employers have less of it too. And the Government apparently wants to play politics with the disputes in the background while insisting in public that it is nothing to do with them. We have seen how these kinds of games end for governments.

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