Monday, Dec 14, 2009

Cleaners 'worth more to society' than bankers

BBC: Cleaners 'worth more to society' than bankers

The research, carried out by think tank the New Economics Foundation, says hospital cleaners create £10 of value for every £1 they are paid. It claims bankers are a drain on the country because of the damage they caused to the global economy. They reportedly destroy £7 of value for every £1 they earn.

Posted by cat and canary @ 09:18 AM (1895 views)
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30 Comments

1. tpbeta said...

"Golgafrincham

Golgafrincham is a red semi-desert planet that is home of the Great Circling Poets of Arium and a species of particularly inspiring lichen. Its people decided it was time to rid themselves of an entire useless third of their population, and so the descendants of the Circling Poets concocted a story that their planet would shortly be destroyed in a great catastrophe. (It was apparently under threat from a "mutant star goat"). The useless third of the population (consisting of hairdressers, tired TV producers*, insurance salesmen, personnel officers, security guards, management consultants, telephone sanitizers and the like) were packed into the B-Ark, one of three giant Ark spaceships, and told that everyone else would follow shortly in the other two. The other two thirds of the population, of course, did not follow and "led full, rich and happy lives until they were all suddenly wiped out by a virulent disease contracted from a dirty telephone"."

Monday, December 14, 2009 09:25AM Report Comment
 

2. mark wadsworth said...

Woo hoo! The taxpayer funded NEF reckon bankers destroy £7 of value for every £1 they earn (which might or might not be true) but that tax accountants destroy £47 in value for every £1 they earn. I assume that "destroy £47" means "reduce their client's tax bill by £47 for every £1 they charge".

Now I am pretty good at my job, but I'd put the ratio at about ten-to-one, but if they credit my profession with £47 then that's the best advertisement I've seen in ages!

Monday, December 14, 2009 10:16AM Report Comment
 

3. montesquieu said...

Much as it would be nice to believe this fairytale, they have said nothing about their methodology and it looks like complete B****c to me. 'New Economics Foundation' look like a crusty-greenie-vegetarian-cyclist outfit, sort of types who think the state should subsidise wimmin's housework and that cars should be made illegal.

Monday, December 14, 2009 10:31AM Report Comment
 

4. inbreda said...

montesquieu - that's an excellent idea!

Monday, December 14, 2009 10:38AM Report Comment
 

5. mrmickey said...

Yes sounds like the usual Marxist claptrap the that comes out of the BBC. I've just given my own desk a good dusting that's got to be worth at least a fiver to the economy.

Monday, December 14, 2009 11:03AM Report Comment
 

6. charlie brooker said...

@3

"Much as it would be nice to believe this fairytale, they have said nothing about their methodology and it looks like complete B****c to me. "

I think they used the the Black Scholes formula.

Monday, December 14, 2009 11:42AM Report Comment
 

7. nickb said...

Sounds reasonable to me. What do bankers contribute to the economy exactly? They create credit by loaning out multiples of other people's deposits and charge interest for this. This creates asset price bubbles which can deprive the productive economy of resources. It also drives ecological destruction as interest rates imply discounting and the resultant short termism you see everywhere. There's no reason it has to be this way, it's perpetuated by vested interests of ... the bankers. Governments could spend money into existence instead.

Monday, December 14, 2009 12:32PM Report Comment
 

8. rumble said...

monty, "...cyclist...." easy there, lardo. Living in London, a ride to the coast or countryside is about the only source of sanity and peace.

Monday, December 14, 2009 12:32PM Report Comment
 

9. timmy t said...

The whole term "wealth creation" is a scam. If we could create wealth there wouldn't be a third world. There is a fixed amount of wealth in the world, and some are more hellbent than others in trying to ensure that their share of it increases. Surely its about distribution rather than creation or destruction?

Monday, December 14, 2009 12:43PM Report Comment
 

10. mark wadsworth said...

Timmy T: " If we could create wealth there wouldn't be a third world."

Wot? Compare living standards in this country with a few hundred years ago. We were third world then but we aren't now. Of course 'wealth' is created, by people going out to work every day and making things a little bit better or inventing new stuff (whether banks create wealth on that metric is questionable, of course). If the third world wanted to be wealthier, they'd chuck out their despots and go over to free market democratic capitalism. Preferably with land value tax.

Monday, December 14, 2009 12:48PM Report Comment
 

11. cat and canary said...

interesting postings here, I agree with several above posters, that the study makes loads of generalisations.

But perhaps more to the point is the fact that this is receiving media attention on both the BBC and Telegraph website, and also broadly agrees with several of Lord Turner's comments. Factor in the public's rant at just about anyone earning plenty (bankers, footballers, MPs) and maybe this is the beginnings of a majour cultural shift away from blatant profiteering and towards more justifyable reward-based renumeration? So long as we are bogged down by debt and unemployment, I don't see the "witch hunt" stopping anytime soon.

Monday, December 14, 2009 12:51PM Report Comment
 

12. timmy t said...

Mark, our standard of living is better because of the inventions that have come about, not because we have created wealth. When you go out to work, you don't create wealth, wealth gets transferred from your employer to you. If we could create it, we'd just make loads and loads of the stuff and hand it out to everyone. But wealth is relative - you're only wealthy if you have more than the next guy, so human nature makes us try to funnel more of it towards us.

Monday, December 14, 2009 12:58PM Report Comment
 

13. jonny parker said...

The witch hunt in full flow: -

http://news.bbc.co.uk/1/hi/england/suffolk/8410453.stm

Monday, December 14, 2009 12:59PM Report Comment
 

14. Carol said...

It's an old idea in economics -- that GDP/income measures only things that can be monetised. That's one of the flaws with using GDP as a measure of the health of the economy. The West has "succeeded" in turning the unpaid work of women into the paid work of women (and some men) -- childcare, restaurant meals, housecleaning, eldercare, etc. Are we better off as a result?

Oh, and I wouldn't call John Kenneth Galbraith (the American economist who popularised lots of these ideas) a "crusty-greenie-vegetarian-cyclist."

You can see the methodology of the report at http://www.neweconomics.org/sites/neweconomics.org/files/A_Bit_Rich.pdf
The 44-page report explains how they have arrived at their conclusions -- a bit much to expect some fluff article in the BBC to do an in-depth analysis of it!

Monday, December 14, 2009 01:00PM Report Comment
 

15. matt_the_hat said...

Mark sorry to add injury but accountants, lawyers, bankers and dare I say tax advisors are a drain on society.

The government creates increasingly more complex rules (tax, laws) and in turn valuable resources (peoples time) are spent trying to manipulate the rules in their favor. The overall benefit to society is negative, we would do better employing people to go down the high street smashing shop windows every Friday (adds value and creates jobs in the same way).

For every banker that adds value - another loses, so roughly zero-sum apart from the interest and fees that are deducted. 7 squid your aving a laugh

Monday, December 14, 2009 01:10PM Report Comment
 

16. cat and canary said...

haha, jonny, where can I buy one??!

=======

timmy t, shame that scientists and engineers (in this country/world) dont get paid anywhere near as much as other professions. Reminds me of the Fujio Masuoka story, http://www.forbes.com/global/2002/0624/030.html, the inventor of flash memory (sales estimated to be worth > $100 Billion), yet he got a a few $100's bonus from Toshiba!! Forunately, ~20 years later he recently sued them for $9million recently for patent royalties. Classic case of corps exploiting inventors.

Monday, December 14, 2009 01:11PM Report Comment
 

17. mark wadsworth said...

@ Matt The Hat "Mark sorry to add injury but accountants, lawyers, bankers and dare I say tax advisors are a drain on society."

I didn't say that we weren't a drain on society (not as bad as Home-Owner-Ists, but hey) my point was this is superb advertising for tax advisors - "give your tax advisor £1 and he'll save you £47 in tax."

Timmy T, OK, maybe we are only wealthier because of all the inventions. But we are still wealthier.

Monday, December 14, 2009 01:23PM Report Comment
 

18. timmy t said...

Mark - if you mean that our share of the wealth has increased then I'm glad we're in agreement!

Monday, December 14, 2009 01:30PM Report Comment
 

19. shipbuilder said...

"looks like complete b******s", "sounds like the usual Marxist claptrap"

Maybe try having a look at the report on their website, or any of their other ideas.

"Economics as if the people and plant mattered."
"We aim to improve quality of life by promoting innovative solutions that challenge mainstream thinking on economic, environmental and social issues. We work in partnership and put people and the planet first."

How awful!

Great to see the usual open-mindedness on here - cheering on the ridicule of such ideas is hardly likely to get people to see the benefits of, say, Land Value Tax, is it?

Fingers crossed, vote for Labour or Conservative, eh?

Monday, December 14, 2009 01:59PM Report Comment
 

20. ontheotherhand said...

Do people think there is a whiff of anti-foreigner possible in all this? In the Great Depression Hitler was keen to blame those owning the private banks and trading on the stock exchange. Is there danger this bigotry could reemerge into hatred of foreigners as a disproportionate number of city workers are world citizens? I don't think it will happen, but dabbling in bigotry for populism is very dangerous.

Monday, December 14, 2009 02:36PM Report Comment
 

21. Jim Green said...

nickb - my thoughts exactly! Since nearly all money (apart from hard cash) is created out of thin air - this fuction should be the perogative of governments who can issue credit interest free, rather than bankers who create money out of thin air by issuing debt and charging interest, which requires continual expansion of debt to repay. Until, that is, the interest burden gets so large even that cannot be repaid (the whole world seems to have given up on government debt principal ever being repaid) and the whole house of cards collapses. Then we need a new game with a new set of rules.

Monday, December 14, 2009 02:51PM Report Comment
 

22. rumble said...

I think a disproportionate number of cleaners are world citizens too.

Monday, December 14, 2009 02:51PM Report Comment
 

23. mark wadsworth said...

@ Shiplbuilder, the NEF are a taxpayer funded Labour think tank that peddle the same old myths. They are not in any way innovative and do not support small state free market capitalism or LVT or anything like that.

Monday, December 14, 2009 03:15PM Report Comment
 

24. letthemfall said...

Good post cat & canary

I would have thought there is no argument that bankers destroy wealth - the evidence is there is the huge bailouts. But it may well be more than £7:£1. Interesting to see occupations like advertising mooted as destroyers of wealth. I have long questioned the value of such activities: seems to me they are the only way that some products are ever sold. Where is the value in that?

mark w launches his usual attack on anything publically funded. As to the value of tax advice, that depends on how much of that £47 is a legitimate avoidance of overpayment, a loophole jumper, and fee to adviser. In the case of the highly paid, the loopholes are like those of a string vest - with rips.

As others have already pointed out, the way value is calculated is very narrow, takes no account of quality of life, pollution, environment, etc, etc. Good on the NEF. But it seems there are always a few who are happy to embarrass themselves by trotting out the usual benighted tabloid views.

Monday, December 14, 2009 03:34PM Report Comment
 

25. letthemfall said...

From the NEF website:"nef (the new economics foundation) is an independent think-and-do tank that inspires and demonstrates real economic well-being."

Can't see anything about the Labour party there. Same old myths? Such as the trickle-down effect, monetarism, high pay for the wealth creators (viz bankers, CEOs and assorted managers), Europe bad for this country. I rather think the old myths lie in a different direction.

Monday, December 14, 2009 03:40PM Report Comment
 

26. shipbuilder said...

23. mark wadsworth said...

"@ Shiplbuilder, the NEF are a taxpayer funded Labour think tank that peddle the same old myths. They are not in any way innovative and do not support small state free market capitalism or LVT or anything like that."

Mark, I wouldn't know, but I did find this -

http://www.sourcewatch.org/index.php?title=New_Economics_Foundation

As for innovative, that depends what you mean - I would hardly call small state free market capitalism innovative.
My point was that you do your promotion of LVT no good by dismissing anything new that looks vaguely 'socialist'. You certainly spend enough of your time on here defending LVT against claims of it being socialist.

Monday, December 14, 2009 03:47PM Report Comment
 

27. mark wadsworth said...

SB, just look at the list of funders - it's all government departments or corporatists.

And the NEF do not promote anything new apart from higher taxes and more state interference. I have been reading their output sporadically for three years, if they had something interesting to say (whether new or old) I would welcome it.

LVT isn't socialist, and in any event it's certainly less socialist than taxes on income and production. Further, I for one have never said that state-backed banks are in any way "small government" or "free market" in the same way as I lambast Home-Owner-Ism as being neither "small government" nor "free market". It's the Blue Socialists who claim that banks and Home-Owner-Ism are "free market" which is clearly untrue. If some people get richer but only at the expense of others getting poorer, that's not capitalism, that's corporatism (much beloved of the EU). The hallmark of capitalism is that you do your best for yourself but end up benefitting others as well (invisible hand and all that).

Monday, December 14, 2009 04:47PM Report Comment
 

28. letthemfall said...

mark w
I believe the NEF is actually a registered charity, and as such are funded by donations from a variety of sources, and by offering out consultancy services.

As for invisible hands, is not that the biggest myth of all? The EU loving corporatism? Are you not thinking of the US?

Monday, December 14, 2009 05:02PM Report Comment
 

29. shipbuilder said...

Mark, I'm not really bothered about what is socialist or not, I just like ideas that work and don't dismiss them because they involve public bodies or not. You must have asked yourself about the thinking of the legions who dismiss LVT as socialism and why they think that.
I'm bored of hearing the argument that somehow we didn't get 'real' capitalism, so it couldn't be blamed for the banking crisis, yet 'real' socialism is responsible for government inefficiency and corruption. It's just paper-thin nonsense.
I don't claim to be any expert, but I do know that what is needed is a debate on radical economic change that works and not arranged along the tedious lines of left/right, public/private. It's clear, from all types of economies across the globe, that both approaches work when done correctly in the right areas. Any contributions are welcome as far as I'm concerned.

Monday, December 14, 2009 05:09PM Report Comment
 

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