One of the great joys in life is to watch people who have no clue about economics trying to do economics. It’s even more amusing than Dr Johnson’s woman preacher. Here the attempt is from Autonomy, a non-think tank apparently. They want to show us that if we beat climate change then we can all work only 10 hours a week, or nine perhaps, and won’t life be lovely then? The answer to which is no, it won’t, because we’ll all be, by our current standards, dirt poor. Actually, we won’t be able to afford anything at all other than government. Even then, we’ll not be able to afford all the government we’ve currently got.
This is even before we get to the more detailed mistakes they’ve made in their economics.
Much shorter working weeks needed to tackle climate crisis – study
UK workers must move to nine-hour week if carbon levels do not change, says thinktank
Well, relying on The Guardian to tell us about economics is always going to be risky. But they’ve not misrepresented the report.
It’s a fairly simple idea. Makin’ stuff produces emissions. Makin’ stuff requires working hours. So, how many hours can we work to make how much stuff if we’re to stay under the emissions limits?
The answer being 9 hours a week for the English bod. QED and ain’t it wonnerful?
Well, no, not really. Average work week is 37.5 hours at present b(I disagree with their reported figure but that only makes the fall in living standards they’re calling for worse). 9 hour week is divide by 4.1. An economist knows that production equals incomes equals consumption. If we’re not producing stuff then there’s nothing to consume and incomes can only be calculated in what it is that we can consume out of what has been produced.
Median household income is some £23,000 a year. Divide by 4.1 and we’re all getting £5,700 a year – per household – that we can consume. Because, again, production by definition equals consumption.
Another way we can approach the same caclulation is by using Angus Maddison’s numbers of GDP per capita over time. Again, p = c = i, GDP per capita is currently some 39,000, the last time it was about a quarter of that – obviously after accounting for inflation – was 1953. Or, to run the same numbers another way, living standards in England will be somewhere between the Angola and Albania of today.
And again, another method. Currently UK government consumes 34%, in taxation, of all that is done by everyone. We’re now saying that we can only have just under 25% of what we do. Thus we can have a little less government than we currently have and absolutely nothing else.
No, we can’t go off and be more productive to get around this. Because their calculation is starting with the amount of stuff we’re makin’. More productive labour, in their calculation, just decreases the number of hours that can be worked because their limit is the amount produced.
So, what does this actually tell us? Bugger climate change and we’ll be boiling Flipper in the remnant fumes of that last ice floe soon enough. Because we Brits simply aren’t going to agree to a 75% reduction in our living standards.
There is, of course, still a method of gaining what we desire, higher living standards without drowning London. That being as the IPCC has been saying, the Stern Review and all assembled economists in chorus. Use markets and capitalism – of the global variety – to drive forward both economic growth and the adoption of non-emitting technologies.
The Green solution, of shrinking our consumption to meet current environmental limits, allows us all to party like it’s 1953. Which ain’t gonna happen, is it?