Apparently The New Economics Foundation Employs Gibbering Idiots

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We should all have a four day week, oh yes, we should. And, of course, in the fullness of time, we will, for that’s what human beings do. We take some portion of our increasing wealth as extra leisure.

That doesn’t excuse this from someone who is apparently paid by the New Economics Foundation – works there would be an exaggeration.

The four-day week – without a reduction in pay – would drastically improve our economy and our society.

Well, difficult to see that but let’s have a look at what he says:

Beginning a steady and managed transition to a four-day working week without a reduction in pay would result in an hourly increase in wages of 20%.

Yes, it would. So, yay for 20% pay rises. Where’s the money to come from?

As hours are reduced, some of the profits of businesses can be effectively transferred to workers.

Ah yes, thought it would. So, will this work?

Note that profits are about 20% of GDP

So, understand our basics here. GDP is everything done by everybody. Labour currently gets about 60% of this. Taxes less subsidies is VAT, farmers’ subsidies, all that sort of stuff. Other income is the self-employed. Business profits are that 20% of everything. But that number includes all depreciation and stuff. The amount that has to be spent again each year just to keep productive equipment up to scratch. The actual profits profit bit, the amount the filthy capitalists leech off us to pay our private sector pensions is more like 10% or so. 10% of everything.

So, we’re going to give everyone a 20% pay rise, that’s a 20% rise in that 60%. Err, there’s not room to do this is there? Not if we’re still going to reinvest in keeping the economy going. And that’s even before we think that perhaps if there are no profits at all for the capitalists to take home they might take their money home?

So, yes, it appears that the New Economics Foundation does employ gibbering idiots.

Owners of capital may lose out in this relationship

Gee, ya think?

There is a reason Giles Wilkes told us that NEF stands for not economics frankly.