Arrangements by which influential firms receive economic favors, has been documented in numerous case studies but rarely formalized or analyzed quantitatively. We offer a formal voting model in which political influence is modeled as a contract by which politicians deliver a more preferential business environment to favored firms who, in exchange, protect politicians from the political consequences of high unemployment. From this perspective, cronyism simultaneously lowers a firm’s fixed costs while raising its variable wage costs. Testing several of the implications of the model on firm-level data from 26 transition countries, we find that more influential firms face fewer administrative and regulatory obstacles and carry bloated payrolls, but they also invest and innovate less. These results do not change when using propensity-score matching to adjust for the fact that influence is not randomly assigned.
We argue that the tilt towards donor interests over recipient needs in aid allocation and practices may be particularly strong in new partnerships. Using the natural experiment of Eastern transition we find that commercial and strategic concerns influenced both aid flows and entry in the first half of the 1990s, but much less so later on. We also find that fractionalization increased and that early aid to the region was particularly volatile, unpredictable and tied. Our results may explain why aid to Iraq and Afghanistan has had little development impact and serve as warning for Burma and Arab Spring regimes.
A high wire balancing act conservative voice paperGed Mirfin
A Paper entitled A High Wire Balancing Act – Reshuffles, Reform, Modernization and Policy Making in the Coalition: UKIP & Cameron’s Attempt to Overcome the Limitations of Electoral Groupthink published on the Conservative Voice Web-Site which can also be downloaded here: http://www.conservativevoice.co.uk/wp-content/uploads/2014/08/A-High-Wire-Balancing-Act-Conservative-Voice-Paper.pdf
The accompanying article Are We All the Victims of Electoral Groupthink Now? – The Death of the Middle Classes & Reshuffles, Reform, Modernization and Policy Making in the Coalition can be accessed here: http://www.conservativevoice.co.uk/category/popular/
Poverty is associated with political conflict in developing countries, but evidence of individual grievances translating into dissent among the poor is mixed. We analyze survey data from 40 developing nations to understand the determinants radicalism, support for violence, and participation in legal anti-regime actions as petitions, demonstrations, and strikes. In particular, we examine the role of perceived political and economic inequities. Our findings suggest that individuals who feel marginalized tend to harbor extremist resentments against the government, but they are generally less likely to join collective political movements that aim to instigate regime changes. This potentially explains the commonly-observed pattern in low- and middle-income countries whereby marginalized groups, despite their political attitudes and high-levels of community engagement, are more difficult to mobilize in nation-wide movements. We also find that arenas for active political participation (beyond voting) are more likely to be dominated by upper-middle income groups who are committed, ultimately, to preserving the status quo. Suppressing these forms of political action may thus be counterproductive, if it pushes these groups towards more radical preferences. Finally, our findings suggest that the poor, in developing nations, may be caught in a vicious circle of self-exclusion and greater marginalization.
Anders Olofsgård (with R. Desai and T. Yousef).
Dictatorships do not survive by repression alone. Rather, dictatorial rule is often explained as an ― authoritarian bargain by which citizens relinquish political rights for economic security. The applicability of the authoritarian bargain to decision-making in non-democratic states, however, has not been thoroughly examined. We conceptualize this bargain as a simple game between a representative citizen and an autocrat who faces the threat of insurrection, and where economic transfers and political influence are simultaneously determined. Our model yields precise implications for the empirical patterns that are expected to exist. Tests of a system of equations with panel data comprising 80 non-democratic states between 1975 and 1999 confirm the predictions of the authoritarian-bargain thesis, with some variation across different categories of dictatorship.
Arrangements by which influential firms receive economic favors, has been documented in numerous case studies but rarely formalized or analyzed quantitatively. We offer a formal voting model in which political influence is modeled as a contract by which politicians deliver a more preferential business environment to favored firms who, in exchange, protect politicians from the political consequences of high unemployment. From this perspective, cronyism simultaneously lowers a firm’s fixed costs while raising its variable wage costs. Testing several of the implications of the model on firm-level data from 26 transition countries, we find that more influential firms face fewer administrative and regulatory obstacles and carry bloated payrolls, but they also invest and innovate less. These results do not change when using propensity-score matching to adjust for the fact that influence is not randomly assigned.
We argue that the tilt towards donor interests over recipient needs in aid allocation and practices may be particularly strong in new partnerships. Using the natural experiment of Eastern transition we find that commercial and strategic concerns influenced both aid flows and entry in the first half of the 1990s, but much less so later on. We also find that fractionalization increased and that early aid to the region was particularly volatile, unpredictable and tied. Our results may explain why aid to Iraq and Afghanistan has had little development impact and serve as warning for Burma and Arab Spring regimes.
A high wire balancing act conservative voice paperGed Mirfin
A Paper entitled A High Wire Balancing Act – Reshuffles, Reform, Modernization and Policy Making in the Coalition: UKIP & Cameron’s Attempt to Overcome the Limitations of Electoral Groupthink published on the Conservative Voice Web-Site which can also be downloaded here: http://www.conservativevoice.co.uk/wp-content/uploads/2014/08/A-High-Wire-Balancing-Act-Conservative-Voice-Paper.pdf
The accompanying article Are We All the Victims of Electoral Groupthink Now? – The Death of the Middle Classes & Reshuffles, Reform, Modernization and Policy Making in the Coalition can be accessed here: http://www.conservativevoice.co.uk/category/popular/
Poverty is associated with political conflict in developing countries, but evidence of individual grievances translating into dissent among the poor is mixed. We analyze survey data from 40 developing nations to understand the determinants radicalism, support for violence, and participation in legal anti-regime actions as petitions, demonstrations, and strikes. In particular, we examine the role of perceived political and economic inequities. Our findings suggest that individuals who feel marginalized tend to harbor extremist resentments against the government, but they are generally less likely to join collective political movements that aim to instigate regime changes. This potentially explains the commonly-observed pattern in low- and middle-income countries whereby marginalized groups, despite their political attitudes and high-levels of community engagement, are more difficult to mobilize in nation-wide movements. We also find that arenas for active political participation (beyond voting) are more likely to be dominated by upper-middle income groups who are committed, ultimately, to preserving the status quo. Suppressing these forms of political action may thus be counterproductive, if it pushes these groups towards more radical preferences. Finally, our findings suggest that the poor, in developing nations, may be caught in a vicious circle of self-exclusion and greater marginalization.
Anders Olofsgård (with R. Desai and T. Yousef).
Dictatorships do not survive by repression alone. Rather, dictatorial rule is often explained as an ― authoritarian bargain by which citizens relinquish political rights for economic security. The applicability of the authoritarian bargain to decision-making in non-democratic states, however, has not been thoroughly examined. We conceptualize this bargain as a simple game between a representative citizen and an autocrat who faces the threat of insurrection, and where economic transfers and political influence are simultaneously determined. Our model yields precise implications for the empirical patterns that are expected to exist. Tests of a system of equations with panel data comprising 80 non-democratic states between 1975 and 1999 confirm the predictions of the authoritarian-bargain thesis, with some variation across different categories of dictatorship.
In this paper we argue that aid effectiveness may suffer when partnerships with new regimes need to be established. We test this argument using the natural experiment of the break-up of communism in the former Eastern Bloc. We find that commercial and strategic concerns influenced both aid flows and the urgency of entry into new partnerships in the first half of the 1990s, while developmental objectives became more important only over time. These results hold up to a thorough sensitivity analysis, including using a gravity model to instrument for bilateral trade flows. We also find that aid fractionalization increased substantially, and that aid to the region was more likely to be tied, more volatile and less predictable than to aid to other recipients at the time. Overall, these results suggest that the guidelines for aid effectiveness agreed upon in the Paris Declaration are likely to be challenged by the current political transition in parts of the Arab world. Hopefully being aware of these challenges can help donors avoid making the same mistakes.
Arrangements by which politically connected firms receive economic favors are a common feature around the world, but little is known of the form or effects of influence in business-
government relationships. We present a simple model in which influence requires firms to provide goods of political value in exchange for economic privileges. We argue that political influence improves the business environment for selected firms, but restricts their ability to fire workers. Under these conditions, if political influence primarily lowers fixed costs over variable costs, then favored firms will be less likely to invest and their productivity will suffer, even if they earn higher profits than non-influential firms. We rely on the World Bank's Enterprise Surveys of approximately 8,000 firms in 40 developing countries, and control for a number of biases present in the data. We find that influential firms benefit from lower administrative and regulatory barriers (including bribe taxes), greater pricing power, and easier access to credit. But these firms also provide politically valuable benefits to incumbents through bloated payrolls and greater tax payments. Finally, these firms are worse-performing than their non-influential counterparts. Our results highlight a potential channel by which cronyism leads to persistent underdevelopment.
In this paper I examine the development effects of coups. I first show that coups overthrowing democratically-elected leaders imply a different kind of event than those overthrowing autocratic leaders, and that these differences relate to the implementation of authoritarian institutions following a coup in a democracy. Secondly, I address the endogeneity of coups by comparing the growth consequences of failed and successful coups as well as implementing matching and panel data methods, which yield similar results. Although coups taking place in already autocratic countries show imprecise and sometimes positive effects on economic growth, in democracies their effects are distinctly detrimental. I find no evidence that these results are symptomatic of alternative hypothesis involving the effects of failed coups or political transitions. Thirdly, when overthrowing democratic leaders, coups not only fail to promote economic reforms or stop the occurrence of economic crises and political instability, but they also have substantial negative effects across a number of standard growth-related outcomes including health, education, and investment.
Find more research publications at https://www.hhs.se/site
In this paper I examine the development effects of military coups. Whereas previous economic literature has primarily viewed coups as a form of broader political instability, less research has focused on its development consequences independent of the factors making coups more likely. Moreover, previous research tends to group coups together regardless of whether they overthrew autocratic or democratically-elected leaders. I first show that coups overthrowing democratically elected leaders imply a very different kind of event than those overthrowing autocratic leaders. These differences relate to the implementation of authoritarian institutions following a coup in a democracy, which I discuss in several case studies. Second, I address the endogeneity of coups by comparing the growth consequences of failed and successful coup as well as matching and panel data methods, which yield similar results. Although coups taking place in already autocratic countries show imprecise and sometimes positive effects on economic growth, in democracies their effects are distinctly detrimental to growth. When overthrowing democratic leaders, coups not only fail to promote economic reforms or stop the occurrence of economic crises, but they also have substantial negative effects across a number of standard growth-related outcomes including health, education, and investment.
Read more: https://www.hhs.se/site
We use a novel approach to address the question of whether a union of sovereign countries can efficiently raise and allocate a budget, even when members are purely self-interested and participation is voluntary. The main innovation of our model is to explore the link between budget contributions and allocation that arises when countries bargain over union outcomes. This link stems from the distribution of bargaining power being endogenously determined. Generically, it follows that unstructured bargaining gives an inefficient result. We find, however, that efficiency is achieved with fully homogenous countries, and when countries have similar incomes and the union budget is small. Moreover, some redistribution arises endogenously, even though nations are purely self-interested and not forced to participate in the union. A larger union budget, however, entails a trade-off between equality and efficiency. We also analyze alternative institutions and find that majority rule can improve efficiency if nations who prefer projects with high public good spillovers are endogenously selected to the majority coalition. Exogenous tax rules, such as the linear tax rule in the EU, which is designed to increase efficiency on the contribution margin, can also improve overall efficiency despite decreasing the efficiency of the allocation of funds.
Although there exists a vast literature on aid efficiency (the effect of aid on GDP), and that aid allocation determinants have been estimated, little is known about the minute details of aid allocation. This article investigates empirically a claim repeatedly made in the past that aid donors herd. Building upon a methodology applied to financial markets, this article finds that aid donors herd similarly to portfolio funds on financial markets. It also estimates the causes of herding and finds that political transitions towards more autocratic regimes repel donors, but that transitions towards democracy have no effect. Finally, identified causes of herding explain little of its overall level, suggesting strategic motives play an important role.
Anders Olofsgård (with A. Boschini).
Published in Journal of Development Studies.
In this paper, we test the argument that the sizeable reduction in aggregate aid levels in the 1990’s was due to the end of the Cold War. We test two different models using a dynamic econometric specification on a panel of 17 donor countries, spanning the years 1970-1997. We find aid to be positively related to military expenditures in the former Eastern bloc during the cold war, but not in the 1990’s, suggesting that the reductions in aid disbursements are driven by the disappearance of an important motive for aid. Our results also suggest that aid allocation may have become less strategic in the 1990’s.
We use newly compiled top income share data and structural breaks techniques to estimate common trends and breaks in inequality across countries over the twentieth century. Our results both confirm earlier findings and offer new insights. In particular, the division into an Anglo-Saxon and a Continental European experience is not as clear cut as previously suggested. Some Continental European countries seem to have experienced increases in top income shares, just as Anglo-Saxon countries, but typically with a lag. Most notably, Nordic countries display a marked “Anglo-Saxon” pattern, with sharply increased top income shares especially when including realized capital gains. Our results help inform theories about the causes of the recent rise in inequality.
“THE END OF THE AGE OF ENTITLEMENT”
ADDRESS TO THE INSTITUTE OF ECONOMIC AFFAIRS LONDON 17 APRIL 2012
JOE HOCKEY MP
THE END OF THE AGE OF ENTITLEMENT
INSTITUTE of ECONOMIC AFFAIRS
LONDON
Americans feel isolated from the leaders that they sent to Washington to represent them. Therefore, it is imperative, more than ever, that our leaders in Washington focus on addressing and confronting the problems that afflict America today- with both foresight and determination. I am a firm believer that what the American people deserve is a clear and concise explanation from our leaders as to how they do plan solve the most pertinent issues facing the country.
Amplifying and nullifying the impact of democratic sanctions through aid to c...Paulina Pospieszna
Both foreign aid and sanctions are foreign policy tools to promote
democracy. Yet, it is unclear how far incentives and coercion
enhance democratization. Since sanctions and aid are often
employed at the same time, the goal of this study is to determine
their joint effect on democratization in target/recipient countries.
We argue that sending democracy aid through civil society organizations
enhances the effectiveness of sanctions as a democracy
promotion tool because the civil society is empowered to introduce
democratic changes. Thus, in addition to the top-down
pressure on the target government created by sanctions, there
is a bottom-up pressure exerted by the civil society. Our empirical
results show that democratic sanctions by the European Union
and the United States are more likely to have a positive effect
when aid flows bypass the government. Conversely, aid channeled
through the public sector mitigates the generally positive
effect of sanctions on democracy. In order to estimate these joint
effects, we employ a new comprehensive dataset on economic
sanctions: the EUSANCT Dataset which integrates and updates
existing databases on sanctions for the period between 1989 and
2015, merged with disaggregated OECD aid data and V-Dem
democracy scores.
Buyers no longer use voicemails and emails from strangers to learn about products. This information is online, whenever buyers are interested. This SlideShare presentation show sellers how to connect in a meaningful way by starting conversations around the buyer’s plans, goals and challenges.
This presentation is one class in HubSpot Academy's free sales training course. You can enroll here: http://certification.hubspot.com/inbound-sales-certification
In this paper we argue that aid effectiveness may suffer when partnerships with new regimes need to be established. We test this argument using the natural experiment of the break-up of communism in the former Eastern Bloc. We find that commercial and strategic concerns influenced both aid flows and the urgency of entry into new partnerships in the first half of the 1990s, while developmental objectives became more important only over time. These results hold up to a thorough sensitivity analysis, including using a gravity model to instrument for bilateral trade flows. We also find that aid fractionalization increased substantially, and that aid to the region was more likely to be tied, more volatile and less predictable than to aid to other recipients at the time. Overall, these results suggest that the guidelines for aid effectiveness agreed upon in the Paris Declaration are likely to be challenged by the current political transition in parts of the Arab world. Hopefully being aware of these challenges can help donors avoid making the same mistakes.
Arrangements by which politically connected firms receive economic favors are a common feature around the world, but little is known of the form or effects of influence in business-
government relationships. We present a simple model in which influence requires firms to provide goods of political value in exchange for economic privileges. We argue that political influence improves the business environment for selected firms, but restricts their ability to fire workers. Under these conditions, if political influence primarily lowers fixed costs over variable costs, then favored firms will be less likely to invest and their productivity will suffer, even if they earn higher profits than non-influential firms. We rely on the World Bank's Enterprise Surveys of approximately 8,000 firms in 40 developing countries, and control for a number of biases present in the data. We find that influential firms benefit from lower administrative and regulatory barriers (including bribe taxes), greater pricing power, and easier access to credit. But these firms also provide politically valuable benefits to incumbents through bloated payrolls and greater tax payments. Finally, these firms are worse-performing than their non-influential counterparts. Our results highlight a potential channel by which cronyism leads to persistent underdevelopment.
In this paper I examine the development effects of coups. I first show that coups overthrowing democratically-elected leaders imply a different kind of event than those overthrowing autocratic leaders, and that these differences relate to the implementation of authoritarian institutions following a coup in a democracy. Secondly, I address the endogeneity of coups by comparing the growth consequences of failed and successful coups as well as implementing matching and panel data methods, which yield similar results. Although coups taking place in already autocratic countries show imprecise and sometimes positive effects on economic growth, in democracies their effects are distinctly detrimental. I find no evidence that these results are symptomatic of alternative hypothesis involving the effects of failed coups or political transitions. Thirdly, when overthrowing democratic leaders, coups not only fail to promote economic reforms or stop the occurrence of economic crises and political instability, but they also have substantial negative effects across a number of standard growth-related outcomes including health, education, and investment.
Find more research publications at https://www.hhs.se/site
In this paper I examine the development effects of military coups. Whereas previous economic literature has primarily viewed coups as a form of broader political instability, less research has focused on its development consequences independent of the factors making coups more likely. Moreover, previous research tends to group coups together regardless of whether they overthrew autocratic or democratically-elected leaders. I first show that coups overthrowing democratically elected leaders imply a very different kind of event than those overthrowing autocratic leaders. These differences relate to the implementation of authoritarian institutions following a coup in a democracy, which I discuss in several case studies. Second, I address the endogeneity of coups by comparing the growth consequences of failed and successful coup as well as matching and panel data methods, which yield similar results. Although coups taking place in already autocratic countries show imprecise and sometimes positive effects on economic growth, in democracies their effects are distinctly detrimental to growth. When overthrowing democratic leaders, coups not only fail to promote economic reforms or stop the occurrence of economic crises, but they also have substantial negative effects across a number of standard growth-related outcomes including health, education, and investment.
Read more: https://www.hhs.se/site
We use a novel approach to address the question of whether a union of sovereign countries can efficiently raise and allocate a budget, even when members are purely self-interested and participation is voluntary. The main innovation of our model is to explore the link between budget contributions and allocation that arises when countries bargain over union outcomes. This link stems from the distribution of bargaining power being endogenously determined. Generically, it follows that unstructured bargaining gives an inefficient result. We find, however, that efficiency is achieved with fully homogenous countries, and when countries have similar incomes and the union budget is small. Moreover, some redistribution arises endogenously, even though nations are purely self-interested and not forced to participate in the union. A larger union budget, however, entails a trade-off between equality and efficiency. We also analyze alternative institutions and find that majority rule can improve efficiency if nations who prefer projects with high public good spillovers are endogenously selected to the majority coalition. Exogenous tax rules, such as the linear tax rule in the EU, which is designed to increase efficiency on the contribution margin, can also improve overall efficiency despite decreasing the efficiency of the allocation of funds.
Although there exists a vast literature on aid efficiency (the effect of aid on GDP), and that aid allocation determinants have been estimated, little is known about the minute details of aid allocation. This article investigates empirically a claim repeatedly made in the past that aid donors herd. Building upon a methodology applied to financial markets, this article finds that aid donors herd similarly to portfolio funds on financial markets. It also estimates the causes of herding and finds that political transitions towards more autocratic regimes repel donors, but that transitions towards democracy have no effect. Finally, identified causes of herding explain little of its overall level, suggesting strategic motives play an important role.
Anders Olofsgård (with A. Boschini).
Published in Journal of Development Studies.
In this paper, we test the argument that the sizeable reduction in aggregate aid levels in the 1990’s was due to the end of the Cold War. We test two different models using a dynamic econometric specification on a panel of 17 donor countries, spanning the years 1970-1997. We find aid to be positively related to military expenditures in the former Eastern bloc during the cold war, but not in the 1990’s, suggesting that the reductions in aid disbursements are driven by the disappearance of an important motive for aid. Our results also suggest that aid allocation may have become less strategic in the 1990’s.
We use newly compiled top income share data and structural breaks techniques to estimate common trends and breaks in inequality across countries over the twentieth century. Our results both confirm earlier findings and offer new insights. In particular, the division into an Anglo-Saxon and a Continental European experience is not as clear cut as previously suggested. Some Continental European countries seem to have experienced increases in top income shares, just as Anglo-Saxon countries, but typically with a lag. Most notably, Nordic countries display a marked “Anglo-Saxon” pattern, with sharply increased top income shares especially when including realized capital gains. Our results help inform theories about the causes of the recent rise in inequality.
“THE END OF THE AGE OF ENTITLEMENT”
ADDRESS TO THE INSTITUTE OF ECONOMIC AFFAIRS LONDON 17 APRIL 2012
JOE HOCKEY MP
THE END OF THE AGE OF ENTITLEMENT
INSTITUTE of ECONOMIC AFFAIRS
LONDON
Americans feel isolated from the leaders that they sent to Washington to represent them. Therefore, it is imperative, more than ever, that our leaders in Washington focus on addressing and confronting the problems that afflict America today- with both foresight and determination. I am a firm believer that what the American people deserve is a clear and concise explanation from our leaders as to how they do plan solve the most pertinent issues facing the country.
Amplifying and nullifying the impact of democratic sanctions through aid to c...Paulina Pospieszna
Both foreign aid and sanctions are foreign policy tools to promote
democracy. Yet, it is unclear how far incentives and coercion
enhance democratization. Since sanctions and aid are often
employed at the same time, the goal of this study is to determine
their joint effect on democratization in target/recipient countries.
We argue that sending democracy aid through civil society organizations
enhances the effectiveness of sanctions as a democracy
promotion tool because the civil society is empowered to introduce
democratic changes. Thus, in addition to the top-down
pressure on the target government created by sanctions, there
is a bottom-up pressure exerted by the civil society. Our empirical
results show that democratic sanctions by the European Union
and the United States are more likely to have a positive effect
when aid flows bypass the government. Conversely, aid channeled
through the public sector mitigates the generally positive
effect of sanctions on democracy. In order to estimate these joint
effects, we employ a new comprehensive dataset on economic
sanctions: the EUSANCT Dataset which integrates and updates
existing databases on sanctions for the period between 1989 and
2015, merged with disaggregated OECD aid data and V-Dem
democracy scores.
Buyers no longer use voicemails and emails from strangers to learn about products. This information is online, whenever buyers are interested. This SlideShare presentation show sellers how to connect in a meaningful way by starting conversations around the buyer’s plans, goals and challenges.
This presentation is one class in HubSpot Academy's free sales training course. You can enroll here: http://certification.hubspot.com/inbound-sales-certification
Modern Prospecting Techniques for Connecting with Prospects (from Sales Hacke...HubSpot
Sales is a difficult world to be in because buyers aren't putting up with salespeople anymore. Instead of helping and building relationships, sales reps are still focused on closing prospects - even when they aren't ready to buy! So buyers ignore them. Because of that, even great sales reps would be lucky to get on the phone with someone.
While buyers have evolved and become more sophisticated, sales reps and training programs have been slow to adapt to that change.
Learn actionable modern prospecting techniques you can apply immediately from two best selling authors and sales experts: Max Altschuler CEO of Sales Hacker, and Mark Roberge CRO of HubSpot.
Why People Block Ads (And What It Means for Marketers and Advertisers) [New R...HubSpot
HubSpot Research shares new data on why people use ad blockers and what marketers and advertisers need to do to keep people from blocking out ads completely. Hint: it's stop using interruptive and annoying ads.
3 Proven Sales Email Templates Used by Successful CompaniesHubSpot
76% of emails never get opened. That makes life for salespeople very difficult. So we've partnered up with Breakthrough Email to bring you email templates that are proven to engage prospects and close more deals. Start using them today and grow your revenue.
The lack of visible female role models is pervasive in the tech industry, particularly on Wikipedia, where just under 17% of Wikipedia biographies were on women. That's why HubSpot wrote fourteen Wikipedia entries for remarkable women in tech to help inspire young women to reach positions at the highest levels of STEM.
A Presentation delivered at the International Enterprise Promotion Conference outlining how the Business Performance Index was built and how to target and deliver support to struggling and high growth businesses
A Presentation delivered to the ISBE Institute of Small Business & Entrepreneurship in Liverpool to a Select Audience of Academics Specialising in Small Business Economics
An Analysis of the Electoral Socio-Demographics in the Oldham & Royton Constituency which draws on the literature of Blue Labour, the Revolt on the Right and Co-operative Councils as explanations for the rise of Populist Parties on the Radical Right in the Constituency
A Presentation prepared to inform participants in the inaugural workshop about the proposed Fylde Coast LEP on the role and purpose of Local Enterprise Partnership
Đặc sản làm quà tặng- Cung cấp những món ăn đặc sản Việt Nam ngon bổ dưỡng cho du khách mua làm quà tặng biếu cho người thân bạn bè trong chuyến du lịch
Bureaux professionnels : Achat ou Location ? FIDAQUITAINE
Fidaquitaine et Tourny Meyer ont répondu à la question suivante lors d'un petit déjeuner organisé par Hauts de Garonne Développement à Floirac le 20 mars 2017.
ZRR / ZFU / Bordeaux Métropole / Immobilier professionnel Bordeaux / Acheter ou Louer
A paper which analyses the concept of Political Inertia from a number of different theoretical perspectives including Adversarial Politics, Consensus Politics, Failure to Deliver Economic Growth, Sequencing of Political Democracy, Social Acceleration, \M|ixed |Economy Models, Path Dependency, the \Winner-Takes-All-Politics thesis, Political Drift, the Political Science of Lobbying, the Off-Center Republican Revolution Thesis, the Captured Economy Model and Economic Rent Seeking, and the Decline of Nations Thesis and the Logic of Collective Action.
Taxation, Inflation and Public Debt Basic ModelPedroGeyer
In this essay, we present a model of optimal taxation, money creation, and public debt policies chosen by the ruling elite in a society with three social classes: the ruling elite, the middle class, and the poor. The ruling elite seeks to maximise their own utility while preventing rebellion or coups by the other social classes. We also consider the indirect effects of money creation and public debt on wealth redistribution and economic stress. Our results show that the ruling elite will seek to take as much wealth as it can, maintaining the other individuals at the edge of their tolerance. Thus, by providing insights into the trade-offs and incentives facing the ruling elite, this model can help inform policy, political choices, and thought.
The best data we have on the
upper tail of the income distribution come from Piketty and Saez’s (2003, with
updates) tabulations of individual tax returns. (Even these numbers, though, are
subject to some controversy: the tax code changes over time, altering the incentives
to receive and report compensation in alternative forms.) According to their
numbers, the share of income, excluding capital gains, earned by the top 1 percent
rose from 7.7 percent in 1973 to 17.4 percent in 2010. Even more striking is the
share earned by the top 0.01 percent—an elite group that, in 2010, had a membership
requirement of annual income exceeding $5.9 million. This group’s share of
total income rose from 0.5 percent in 1973 to 3.3 percent in 2010. These numbers
are not easily ignored. Indeed, they in no small part motivated the Occupy movement,
and they have led to calls from policymakers on the left to make the tax code
more progressive.
uicfise 8f Tea Par . A coherent and strong national leadership is an .pdfarchiespink
uicfise 8f Tea Par . A coherent and strong national leadership is an important A large population
is an important . The rise and fall of the Soviet military power shows that . A state is a political
entity with is one in which the national government is granted the preponderance of power under
the state\'s constitution- for example Japan ·According to the idea of“ \", states should possess
more than right to rule such as the wherewithal to provide political goods for its citizens Quasi-
states, which are political units that possess some, but not all. of the basic characteristics of a
state. Which of the following is one of them? ]
Solution
1.
To say we are in interesting times would be an understatement, the recent general election has
plunged us further into uncertainty. Putting aside the rights and wrongs of holding the election
and the unfolding political alliances it’s important to remember that on the ground people and
businesses are struggling to keep up with the changes and the potential impact. Most of us get on
with our lives despite the national turmoil. But the effect of that turmoil is to dampen investment
and decision making; which slows growth. Latest research by the Institute of Directors highlights
that 92% of respondents see current uncertainty over the make-up of the government as a
concern. There has been a negative swing of 34 points in confidence in the UK economy from
their last survey in May. This has serious implications for business growth, as how we interpret
and perceive our future, our risk aversion and our need to have good information to make
decisions can stifle our ability to act.
The national situation we are seeing unfold, in terms of lack of clear majority for either side, and
regardless of eventual party outcome, will be a government relying on a brokered deal to get
things through parliament which will exacerbate this uncertainty and the impact of Brexit fears.
So where can we look to for leadership?
A recent blog by the World Economic Forum has highlighted that in many places the nation state
is looking outdated, and even dangerous. Where power is too centralised and focussed on
national interests, policy is disengaged from the local, from the day to day lives of people and
businesses. The populist movement we are seeing globally is a reaction to this; dissatisfaction
with the way countries are governed creates turbulence in the current way of thinking and doing,
and challenges political structures. Shifting of decision making to a more local level eases
tensions as people see change locally and impact can be seen quicker. Cities are therefore
emerging as key leadership nodes, galvanising action and responding to local need. Focussing on
regional economic growth and giving powers and funding to local delivery structures to improve
growth can help alleviate the social and political tensions that have led us down this unfortunate
path to instability.
Half of humanity lives in cities and urbanization is set.
Using individual data on voting and political parties manifestos in European coun- tries, we empirically characterize the drivers of voting for populist parties (the demand side) as well as the presence of populist parties (the supply side). We show that the economic insecurity drivers of the demand of populism are significant, especially when considering the key interactions with turnout incentives, neglected in previous studies. Once turnout effects are taken into account, economic insecurity drives consensus to populist policies directly and through indirect negative effects on trust and attitudes towards immigrants. On the supply side, populist parties are more likely to emerge when countries are faced with a systemic crisis of economic security. The orientation choice of populist parties, i.e., whether they arise on left or right of the political spec- trum, is determined by the availability of political space. The typical mainstream parties response is to reduce the distance of their platform from that of successful populist entrants, amplifying the aggregate supply of populist policies.
Critical DebatesNeoliberalism and Democracyin Latin AmerMargenePurnell14
Critical Debates
Neoliberalism and Democracy
in Latin America:
A Mixed Record
Kurt Weyland
ABSTRACT
This essay argues that neoliberalism has strengthened the sustain-
ability of democracy in Latin America but limited its quality. Drastic
market reform seems to have abetted the survival of competitive civil-
ian rule through its external and internal repercussions. By opening
up Latin American countries to the world economy, neoliberalism has
exposed them to more of the international pressures for preserving
democracy that intensified with the end of the Cold War. At the same
time, the move to market economics has weakened leftist parties,
trade unions, and other proponents of radical socioeconomic reform,
reassuring elites and preventing them from undermining democracy.
But tighter external economic constraints limit governments’ latitude
and thereby restrict the effective range of democratic choice; and the
weakening of parties and interest associations has depressed political
participation and eroded government accountability. The available
evidence therefore suggests that neoliberalism has been a mixed
blessing for Latin American democracies.
How compatible are neoliberalism and democracy in Latin America?How do economic adjustment and market reform affect political
liberty and competitive civilian rule? This question is highly relevant for
the future of the region. The experience of First World countries might
suggest that democracy and the market system tend to go together; after
all, no democracy has existed in nations that did not have the basic con-
tours of capitalism; namely, a large extent of private ownership and
competition as the main mechanism of economic coordination (Lind-
blom 1977, 161–69). Latin America’s experience, however, used to differ
from this happy convergence. Given the severe social inequality plagu-
ing the region, political liberalism historically tended to trigger calls for
social redistribution and state interventionism; that is, for significant
deviations from economic liberalism. The free-market system, by con-
trast, used to be an elitist project that was often associated with support
for or acquiescence to authoritarian political rule. During long stretches
of Latin American history, therefore, a clear tension existed between
135
chf
political democracy and economic liberalism (Sheahan 1987, chap. 12;
Gibson 1992, 168–71).
Furthermore, even if the free-market system—that is, the end prod-
uct of neoliberal reform—is compatible with democracy, the process of
neoliberal reform might not be; after all, it involves the forceful dis-
mantling of the established development model, and may therefore
require a significant concentration of political power. Indeed, Latin
America specialists used to have strong concerns that neoliberalism
would destroy democracy. These fears reflected the experience of the
1980s, when many new democratic regimes in the region postponed
economic stabilization and structu ...
Good Judgement And Shared Commitment To Long-range Educational Objectivesnoblex1
College and university leaders may recognize that realistic solutions will require an end to "business as usual," and may be reluctant to explore options that will be painful and disruptive on campus. And yet, the growing numbers of young people wanting and needing higher education are (and will be) there, and it is foolish to think that denial is an effective long-run strategy. The ideas advanced later in this paper may ultimately be easier for an outsider to propose than for those enmeshed in the system.
A case can be made for increased student fees in public institutions that enroll large numbers of students from high-income families, provided the higher fees are accompanied by increased need-based aid directed to students from low-income families. This policy calls for the state to redirect some of the savings achieved from reduced institutional appropriations into student financial aid.
The patterns are consistent with short-run decision making under financial duress, not guided by an overarching policy. While "muddling through" might suffice for a few years with limited damage to student access and institutional quality, it is a recipe for disaster if continued, given the demographic tidal wave about to wash over the states. The time has clearly come for a longer view, before what remains of the promise imbedded in the master plan is lost.
Clearly, we face a budget crisis - not a transitory problem that likely economic growth or the usual policy changes can address, but a fundamental and long-term change in the options we can choose from. A small set of essentially fixed demands will soon consume virtually all of the state's unrestricted income. Only a few basic options seem to present themselves, and none appears attractive.
The most one can say about economic projections is that they are subject to considerable uncertainty, and thus the course of wisdom lies in not fixing a policy based on any single estimate of funds likely to be available in future years. The sensitivity analyses of the technical report and the research demonstrate convincingly, however, that higher education is not going to be able to meet its obligations to the next generation of students through increased state support.
Although it would be easy to criticize the actions (or lack thereof) of state and university leaders over the past ten years, there is no point in such a negative exercise. Given human fallibility, several years' experience may have been necessary before the enduring nature of the financial crisis facing higher education could truly sink in. College and university leaders reacted to the events of the last five years defensively and protectively, seeking to preserve educational quality and minimize damage to the institutions.
Source: https://ebookschoice.com/good-judgement-and-shared-commitment-to-long-range-educational-objectives/
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Are we all working class now the rise of white collar working class voters
1. Are “We” all Working Class Now?: The Rise of the New White
Collar Working Class and Why Radical Tax Cutting Measures are
Key to restoring the fortunes of the Tory Party
The link between economic performance and voter behaviour appears to be
broken. Three consecutive Quarters of improving Economic Growth have
failed to dent a stubborn lead in the Opinion Polls for Labour. Despite the
usual caveats warning of margins of error, that lead appears not only to have
grown but to be extending into the 7 to 10% territory associated with an
opposition victory by a healthy majority.
Hold on you argue, this is simply a function of the time-lags that exist between
improved economic performance and the inculcation of a feel-good factor in
the population as a whole in the UK, as the beneficial effects of Economic
Growth are ultimately felt beyond the confines of Greater London and the
Home Counties. Or is it? Has the impact of a prolonged recession and the
impact of Austerity policies in Britain effected fundamental changes in the
nature of both the class structure as well as the behaviour of key sociodemographic groups? Political affiliation has become less about aspirant
lifestyles and more about the maintenance of living standards in which,
despite the rate of inflation being much reduced in absolute terms in
comparison to previous eras, inflation in the price of commodities and utilities
in particular continue to far outstrip that of wages. The resultant impact is that
the effect of inflation is actually felt far more than when it was at double digit
levels because wages were rising much faster to compensate for this.
Consequently, it is taking far longer for the feel good factor to be felt in Voter’s
pockets, particularly amongst current or former Public Sector Employees who
have either been subjected to a pay freeze for the last three years or are
having to face the brutal realities of working in a far more insecure private
sector in which they are much more expendable commodities. It is an
experience that many are not enjoying and blame the Conservatives for their
plight. Public Sector Employment was seen by many as a safe haven. Exposed
to the brutal realities of the Private Sector from which they were cushioned
from the effects of, they are adopting a fundamentally different outlook indeed reverting back to their roots. These are Working Class Strivers who
sought through Education and Professional Qualifications a root into White
Collar Employment.
Suddenly, as a consequence of the Economic Insecurity they face they are
beginning to question what it means to be Middle Class. Being told that
everybody is in it together has made them look over their shoulder, seeing
where they have come from and question hard whether their situation is infact
not dissimiliar to the Working Class lifestyle that they originally escaped from.
The result is that they are asking themselves the question: Are “We” all
Working Class now? and turning to the Labour Party as the Party that is most
likely not only to give them back their Middle Class status but also critically as
far as they are concerned to rebuild the Public Sector through an increase in
Spending thus providing them with employment and a greater bulwark of
relative economic security than they possess at present.
2. It is a false dawn. We need to disabuse what I call the New White Collar
Working Class that it will be possible to build a Public Sector State as large as
the one that is taking so long to dismantle now, ever again! It will simply not
be possible to finance a Public Sector that absorbs close to 50% of GDP as it
did under Labour and was 25% deficit fiunded through Government borrowing.
Lean Public Sector Institutions are the order of the day. The consequence is
that Government will no longer be able to formulate policy directly to the
benefit of a major client group of Voters. That raises long-term questions
about the political loyalty and allegiance of a key constituency: Public Sector
& Former Public Sector Employees.
The problem has been compounded by the length of the recovery and the time
it is taking to rebuild the economy. Elsewhere I have argued that the squeezed
Middle Classes in the UK are suffering from what I have called Post Traumatic
Debt Stress. The Squeezed Middle which have been economically hit the
hardest as demonstrated recently by the ONS now fear that Britain’s economic
problems are so intractable as to be resistant to even the strongest fiscal
medicine. This sense of powerlessness with an increasingly traumatized
population watching from the sidelines as the crisis unfolds and is being
played out in the media has fostered unrealistic expectations as to what is
achievable in the short to medium term. As a population we have been
conditioned to believe that things are going to get better and that
Governments will be able to deliver during the period of an electoral cycle and
in some cases - like Former Public Sector Employees - that we can simply turn
back the clock. The current recession has elongated the political business
cycle. Governments for the foreseeable future will be faced with managing
expectations over a much longer economic horizon. For that to occur they
have to be able to date precisely when the economy will enter a sustained
phase of growth to deliver a political feel good factor and with it electoral
success. The polls already suggest that debt fatigue has already set in. The
problem is that certain parts of the electorate are struggling to see the light at
the end of the tunnel. After an artificially overextended credit fuelled period of
growth the electorate is struggling to come to terms with the prospect of an
equally long period of economic rebuilding. It is akin to some form of posttraumatic economic stress.
The consequence is that there is a danger for the foreseeable future of single
parliament governments or a willingness to turn to political alternatives
offering simple reflationary solutions or more extreme political solutions like
withdrawal from the EU. Neither are they likely to deliver a permanent feel
good factor or one sufficiently long lasting to sustain a government in office
for the long-term. This is the enduring paradox that the current economic
recession has bequeathed to Britain.
Peter Kellner’s recent article for You Gov: “What the ‘squeezed middle’ really
want” is particularly revealing. He rightly identifies that Ed Miliband’s call for a
twenty-month freeze in gas and electricity prices has struck a chord with White
Collar Working Class Voters. Where I take issue with him is the ephemeral
nature he accords to the debate over living standards, which he argues “is
likely to ebb and flow” in the run up to the General Election. Instead, I would
3. argue that it has become a much more permanent fixture in of the political
narrative in the UK as a direct consequence of deep changes that have taken
place in the class structure. His problm is that he fails sufficiently to
understand that the “squeezed middle” is not ill-defined. Yes its politics are
currently confused and ambiguous as it continues to Janus face upwards
looking at what it could aspirationally achieve but also downwards looking to
what it needs to protect and maintain. The ultimate political allegiance of this
group unfortunately will not necessarily be a bellweather perception of the
performanc of the economy it will also be as much about political personalities
and whether the area that they live and the services they receive are perceived
to be rising or falling. That perception will be heavily influenced by key peer
groups such as colleagues at work and neighbours in the community where
they live.
This idea was first articulated by John H. Goldthorpe and David Lockwood et
al in their series of The Affluent Worker studies published in the mid to late
1960s and which made major contributions to the debate on Social Mobility.
Are we perhaps witnessing the first indications of Negative Social Mobility and
what Marxist tinged Sociologists have dubbed the “Proletarianization of the
Bourgeoisie”? The class schema that Goldthorpe established was ultimately
much more sophisticated than more orthodox pyramid shaped models and
approaches with the Upper Class at the summit, the Middle Class in the Middle
and the Working Classes clustered in large numbers at the bottom. He
identifies eleven classes, which are grouped into three main clusters—the
service class, the intermediate class – covering a wide range of occupations
and employment types, and the (manual) working class. Central to
Goldthorpes approach is his theory of social mobility.
In The Affluent Worker: Political Attitudes and Behaviour published in 1968
Goldthorpe and Lockwood report on the voting and political attitudes of highly
paid manual workers employed in Luton, a town which benefited faster and
more consistently than almost any other in Britain from the economic
progress of the 'fifties and early 'sixties. The sample was chosen as a 'critical'
case to test some widely accepted views on the assimilation of the working
classes into patterns of middle-class social life. On the basis of material from
interviews, the authors give an account of the workers' political orientations,
and this is followed by an analysis of voting in relationship to income house
ownership, social origin and trade union membership. The main findings - that,
despite their affluence, the majority of these workers remained staunch
supporters of the Labour Party - runs counter to contemporary beliefs about
working-class embourgeoisement.
Embourgeoisement theory posits that as a result of their economic efforts
Working Class people tend to assume the lifestyle and individualistic values of
the so-called middle classes and hence reject commitment to collective social
and economic goals. It is argued that this change is the result of the postindustrialization of society, in which there are far fewer manual labor jobs,
which is the main classification of blue-collar work. With post-industrialization,
former upper-level Blue-Collar workers move to White-Collar work because of
the decreased availability and prestige of manual labor jobs. Even when their
4. actual jobs do not change, their lifestyles based on their job situation often
change into a lifestyle which more closely resembles the Lower-Middle Class
than the rest of the Lower Blue-Collar workers. The result of this idea of
embourgeoisement is that more people are incorporated into the Middle-Class.
As a result, there is decreased class consciousness and declining working
class solidarity
The question is, has the process gone into reverse? Indeed as Goldthorpe
argues in The Affluent Worker in the Class Structure, because of competing
social influences on political behaviour this dispels the notion that affluent
Working Class Voters necessarily adopt Middle Class lifestyles or that your
position within the Middle Class and with it Middle Class attitudes are
necessarily fixed or irreversible.
The idea was given much fuller treatment originally by David Lockwood in his
book “The Blackcoated Worker: A Study in Class Consciousness”.This is a
study of the clerical worker, his aspirations, his view of himself and his
relationship to the manual worker and the trade union movement. The author
documents how the development of class consciousness and trade unionism
among clerical workers reflected changes in their economic position. The
black coat of the mid-19th century had symbolized his middle-class status.
The black coat he wore was, however, only one mark of his distinction from
the working classes. The education required for his job, the rewards and
responsibilities it offered, and the fact that it was clean and non-manual
established themselves as key determinants of social standing.
Consciousness of status deriving from the workplace came to reinforce class
consciousness thereby enhancing social distinctions.The main argument of
the book is that clerks from the mid-nineteenth to mid-twentieth century, have
viewed themselves as being ‘of different clay’ from the manual labourers
despite being regarded as working class. He illustrates to what extent the
clerks and manual workers shared the same class position. To contrast the
nineteenth and twentieth centuries he uses the ‘Counting-house’ and the
‘modern office’ of the twentieth century. The message is clear that outside the
‘modern office’ or ‘Counting-house’ it has sometimes proved difficult for
clerks – White Collar Workers to distinguish themselves as being above the
working class once one goes beyond the issue of employment status,
particularly in periods of economic upheavul when that status is threatened
placing Middle and Working Class alike on the same footing in terms of the
day to day struggles they face in their non-work home life situation which are
not markedly dis-similar. Indeed the position of the White Working Clas Voter
is likely to be more fraught because of the volume and scale of the financial
commitments they have taken on.
A modern take on the issue has been offered by David Boyle in his recently
published book, “Broken: Who Killed the Middle Classes?” For the first time
ever, he argues, today’s middle classes will struggle to enjoy the same
privileges of security and comfort that their grandparents did. Those born after
1985 are the first generation in Britain who can expect a lower standard of
living than their parents.
5. Boyle addresses the question of why the middle classes are diminishing and
how their status, independence and values are being eroded. This isn't the life
that the Middle Classes were aspiring to. Middle Class strivers who worked
hard to get into University, funded recently by expensive student loans have
found that their career advancement is blocked as large blue chip companies
struggle in the post Banking Crash environment with many facing the threat of
redundancy and permanent job insecurity. Stagnant wages meanwhile have
severely limited people’s ability to climb up the housing ladder and more often
than not find themselves in negative equity because they bought at the top of
the market. This is most notable in his take on the property market. He rightly
points out how the idea of owning your own home is becoming a less and less
achievable ideal, with renting now on the up again in the UK. Such people feel
conned and cheated, not by a Conservative Government facing insuperable
obstacles to repair the damage done by the previous Labour Government but
by the Political System itself. The very institutions that used to serve them
have turned against them without their realising it.The enemy, in Boyle’s view,
are the politicians and the bankers, for whom ‘a culture of greed and
corruption’ became endemic. Banks and building societies are ‘so
deregulated, they also have immunity for the results of their negligence’. Not
only that, the taxpayer obligingly bails them out when they fail. Add to that the
loss of many certainties (such as job security, professional development,
ability to afford a new house and a decent pension) and one is confronted with
a poisenous mixture of uncertainty and doubt about their position and role
which reinforces their self-view that maybe they are not Middle Class after all.
Returning to the issue of the disambiguity of the political allegiances of White
Collar Working Class Voters it is worth deconstructing Peter Kellners recent
analysis. According to Kellner a typical member of the “squeezed middle” can
be defined as having a white collar job but say either that they can’t afford
luxuries or that they struggle to make ends meet. Kellner calculates that just
over a quarter of the whole electorate (26%) are White Collar Workers who say
that either they can afford essentials but have nothing left over for luxuries (18
of the 26) or “can only just afford my costs and often struggle to make ends
meet” (8). It is these 26 that are classified here as “squeezed middle”. Kellner
shows that Labour has made significant gains among “Squeezed middle”
voters, comparing Voting intentions now with how the group voted at the last
election.
The big losers, he points out, however, are the Liberal Democrats. Their vote
among the “squeezed middle” has collapsed by almost three-quarters, from
29% to 8%. Most of the Lib Dem deserters have switched to Labour, but UKIP
6. has also made gains. A sizeable proportion of UKIP support is based on their
appeals to White Collar Working Class Voters who are financially insecure.
This is actually an unremarkable story, representing the realignment of former
New Labour White Collar Working Class Voters Employed or Formerly
Employed within the Public Sector who abandoned Labour during the Brown
Years as a consequence of the Financial Collapse suddenly discovering that
the Liberal Democrats were not the comfortable Social Democratic Home that
would restore their jobs and thus their fortunes in the medium term. Their
return to Labour is thus unsurprising.
It is a group however whose base political instincts are immediate centred on
the pursuit of short-term self-interest. For some this is selfish, greedy and
ultimately self-defeating. It is no less true. What they care about is very much
themselves. The coalition is slowly beginning to win the argument on whether
public expenditure is being cut too far and too fast. What they want is to be
able to maintain their standard of living during this period. The best way they
see of doing this is by radical tax cutting measures allowing them to keep as
much of the money in their pockets to counter the imapact of wages not
keeping pace with persistently stubborn inflation and rising commodity and
energy price rises.
I would argue that the Conservative Party is missing a trick in pushing
immediately for deep cuts in the Rate of Income Tax for Middle Income Groups
not only to make them feel more prosperous at precisely the time when the
Economy is beginning to demonstrate real sustained growth but also critically
to shorten the time-lag between the beginning of recovery and the beginning
of a feel good factor. It is the shortest route to bringing White Collar Working
Class voters back onside and kickstarting genuinely sustainable consumer led
growth.
Rather than presenting Labour with an opportunity, as Kellner states, the
opportunity is actually there for the Conservatives for the taking. If anything
we need to be more, not less Thatcherite in our instincts appealing to the selfinterests of Voters whose fundamental concern is the erosion which has taken
7. place in their income over the last 5 years. As Kellner rightly identifies there is
a very real opportunity to tailor individual policies to the concerns of voters
about their living standards. It is not however, a trade off between measures
that put more money into people’s pockets and keeps down prices, it is
ultimately about allowing people to keep more of their own money that they
work so hard to earn. As Mrs Thatcher rightly identified it is not the
Governments money which it spends it is our own.
Q. If the Government were to decide to put more money into people’s pockets,
which two or three of these would you most like to see?
Freezing home energy prices has proved a popular soundbite with White
Collar Working Class Voters but I wonder how much of a passing fad this is, if
we consider just how important they value lower taxation in general alongside
this? This is where therir true interest really lies.
Q. If the Government were to decide to spend more on public services, which
two or three of these public services would you most like to get the money?
The Table above, which provides only a sample of responses from the You
Gov Survey, is also highly indicative. What it shows is that there is rapidly
declining support for infrastructure spend. What White Collar Working Class
Voters want to see is an immediate improvement in their circumstances and
not the unclear delivery potential of large scale infrastructure projects with
uncertain time hoizons.
8. In a previous article I argued that economic decision-takers have not only to
demonstrate that the economic climate is improving but also when things do
get worse their plan for improving economic performance has credibility.
Credibility, unfortunately, is not simply a black letter exercise in demonstrating
clearly that a range of indicators are heading in the right direction, it is also an
exercise in political popularity. Popularity, however is time delimited. As a
population we have been conditioned to believe that things are going to get
better and that Governments will be able to deliver during the period of an
electoral cycle. The current recession has elongated the political business
cycle. Governments for the foreseeable future will be faced with managing
expectations over a much longer economic horizon. For that to occur they
have to be able to date precisely when the economy will enter a sustained
phase of growth to deliver a political feel good factor and with it electoral
success.
The most effective way of date stamping the beginning of the feel good factor
and squaring the circle by, as I also argued, combining periods of extreme
economic surgery and radical restructuring with periods of economic recovery
and intensive economic care is via radical tax cutting measures in the run up
to an election to put money back in people’s pockets. This is not simply a case
of maintaining a certain level of disposable income nor is it about maintaining
a level of affluence. Affluence is a state of mind which is as much a function of
being a beneficiary of Government Spending in Policy Areas where White
Collar Working Class Voters have been the ultimate beneficiaries in areas like
Health Care, Schools and Nurseries. For that reason it is about restoring the
differentials that existed between themselves and their Blue Collar
compatriots. In that sense it is about the distance they maintain between
themselves and Blue Collar Workers. White Collar Working Class Voters
therefore are happy to see cuts in spending on areas like Defence and the
even the Police as long as money is diverted and seen to be diverted to real
issues that matter to them closer to home like Hospitals, Schools and
Childcare. This has been born out by a whole host of surveys which have
shown that far from reducing the quality of service delivery across Central and
Local Government people are broadly happy with the service they receive and
in many cases have actually seen an improvement in the quality of that
service. Indeed to be truthful unless it affacts them directly White Collar
Working Class Voters simply haven’t noticed.
As Kellner correctly concludes the political priorities of the “squeezed middle”
are heavily influenced by their day-to-day struggle to keep afloat and build a
better life for their families. Boyle, meanwhile goes further arguing that the key
to winning back the support of White Collar Working Class Voters is to fix the
Banking System.
Vince Cable in his book “The Storm: The World Economic Crisis and What it
Means” rightly identified that rebuilding the economy is ultimately dependent
on rebuilding a banking system which had completely collapsed, a situation
which has no historical precedent. It has proved a hugely problematic
balancing act. Growth in the economy is driven in part by bank lending but the
balance sheets of the major banks need rebuilding in order to both erode the
9. still very sizeable amount of bad debt which sits on their Balance Sheets but
also to maintain the enhanced levels of reserves that are now required under
the Basle Three Multilateral International Protocols that the UK Government
has signed up to in order to mitigate the threat of default created by risk based
lending strategies.
For Boyle the reason why fixing the Banks is so important is that the avilability
of easier Credit is the Key to the economic Mobility which White Collar
Working Class Voters feel has been increasingly denied them. It is not
Mortgage Lending for first time buyers that is the problem it is the fact that
existing Home Owners are finding it impossible to trade either up or down
because of either a fall in house prices or a reduction in the availability of
Mortgages particularly for slower moving Properties on the lower rungs of the
price curve. It is the most fundamental differentiator that exists beween the
Old Blue Collar Working Class and the New White Collar Working Class. So
called mortgage portability is one of the most visible physical aspects of the
White Collar Working Class lifestyle allowing them to maintain a distinctive
identity. The recent collapse in house prices particularly that outside London
and the South-East has not helped trapping them in a situation which they feel
is not of their own making.
That feeling of a lack of financial empowerment is the principal reason why we
should engage in radical tax cutting measures sooner rather than later in order
to rapidly restore the fortunes of the Conservative Party.
The question posed at the beginning of this essay – whether the change in the
class structure of the UK is fixed and permanent or is a temporary blip in the
fortunes of certain groups of White Collar Woring Class Voters remains
unanswered. In his groundbreaking study “Turbo Capitalism: Winners and
Losers in the Global Economy” and the book which proceeded it, “The
Endangered American Dream: How to Stop the United States from Becoming a
Third-World Country and How to Win the Geo-Economic Struggle for Industrial
Supremacy” Edward Luttawak argues that the whole world is inevitably
moving in a turbo-capitalist direction. "Turbo-Capitalism" is defined as the
worldwide trend toward unregulated markets, free flow of capital and the
pervasive impact of information technology which he argues has been a net
destroyer of jobs in those areas of the economy and professional srvices that
used to be dominated by White Collar Working Class Employees. He argues
that via University Education, Professional Qualifications and Technical
Training White Collar Workers had achieved a margin of Economic Affluence
which allowed them to achive a degree of separation from less Skilled and
Qualified Blue Collar Workers in terms of their occupancy of positions on the
managerial hierarchy but also critically in terms of lifestyle based on the
trappings associated with holding down well paid jobs. The pervasive impact
of neo-liberal economics and information technology has kicked that out from
under them.
Privatization of formerly nationalized industries and de-regulation are now the
driving forces, bringing rapid change, dislocation of labor, uncertainty of
employment and anxiety about economic security.Turbo-Capitalism Luttwak
10. argues breaks up families; discourages investment; generates structural
unemployment; and the simultaneous retraction of state social welfare
provision established as part of the post-war consensus.
For Luttwak these changes represent a permanent fixture of life for members
of the New White Collar Working Class. Life is becoming more uncertain, jobs
being eliminated, families and societies being torn apart, and "job security"
becoming a thing of the past. According to Luttwak today's capitalism with it’s
managing for the short time, profits the happy few, but is a disaster for the
many: abrupt mass firings, disruption of individual lives, of families, of
communities and even of entire regions – represents permanent insecurity for
the middle classes. Turbo capitalism he demonstrates utilising a range of
statistical evidence has accelerated and accentuated class divides, reducing
the influence and size of the middle class.
A less more philosophically based critique of the same phenomenon has been
offered by the English Neo-Conservative philosopher John N. Gray in his
book, “False Dawn: The Delusions of Global Capitalism”. For Gray the Banking
Crash of 2008 and the deep economic recession which followed was the
inevitable climax of the process of neo-liberal ascendancy.
The deep irony of the situation is that deliberately holding Interest Rates at
their lowest level since records began since the deepest point of the post
Banking Crash recession, the most beneficial aspect of the Governments
Economic policy as far as members of the New White Collar Working Class are
concerned has the potential to be the most destabilising off all in the long-turn
as long suppressed Interest Rates and with it Inflation take-off. All we are
doing is digging ourselves an interest rate trap. Historically Interest Rates
have averaged in the region of 5 per cent region. Home buyers will now be
incredibly sensitive to interest rate hikes. Buying a Home at such Low rates of
Interest now represents a considerable Financial Risk. A 2.5 per cent increase
in the interest rate would cause considerable discomfort for these borrowers
with an extra £300 per month potentially falling due for a £200,000 mortgage. It
is little wonder therefore that there is felt to be no hurry to rebuild the banking
Sector. The last thing the Treasury wants to do is to have to deal with another
Economic crisis when the Banking Sector is insufficiently prepared and when
Bank Balance Sheets have been inadequately rebuilt. I personally believe that
this will take far far longer than anyone imagines.
The Bank of England are right to be cautious about raising interest rates until
there has been a dramatic reduction in Unemployment and when the Private
Sector has even greater capacity to absorb the further reductions in Public
Sector Employment that will be required to reduce the deficit in Government
Spending. I have no doubt that over the coming months there will be a greater
focus on the kind of Jobs that are being created in the Private Sector: FullTime versus Part-Time and especially the issue of Zero Hours Contracts and
Permanent versus Fixed & Short-Term Contracts. A far greater of transparency
and honesty is likely to be required in an area of the Reporting of Employment
Data than has been seen previously in an area which has been one of the
11. Black Arts of Government Media Management & Communications. MPs are
already asking such questions in PMQs on a regular basis.
It is also hardly surprising therefore that there has been relentless public
criticism of the behavior of Big Business in the Energy and Banking Sector. A
structural feature of the British Economy which is a greater cause of
imbalance than any other is the lack of sufficient competition in key functional
areas of the Economy as a consequence of Concentration of Monopoly Buying
Power – the Big Six (Energy Companies); the Big Five (High Street Banks) and
the Big Four (Supermarkets). What we lack in the UK in comparison to the US
according to Edward Luttwak is effective Anti-Trust legislation to force the
break-up of Private Sector Monopolies and literally force greater competition
into key areas of the Economy to the greater benefit of White Collar Working
Class consumers.
I failed initially to make the connection between some of the initiatives that
David Boyle puts forward in his 12 Point Plan at the end of “Broke: Who Killed
The Middle Classes” but the logic of creating local institutions, especially a
Network of Local High Street Banks makes absolute sense. Indeed, if anything,
the desperate plan that has recently been put in place to rescue the Co-op
Bank demonstrates the continuing redundancy of the national Banking
network model. Philip Blond in his controversial book, “Red Tory: How Left
and Right have Broken Britain and How we can Fix It” advocated the creation
of a series of regional or indeed locally based networks of Savings & Loan
Banks on the Dutch and German Model.
I therefore advocate the setting up of a Royal Commission to look at The
Future of High Street Banking in the UK. As the Bank of Dave has shown us
Local Banks not only fulfil a need but they work and can be seen to work.
I applaud and commend such an initiative. Ultimately the future financial
prospects of the New White Collar Working Class will depend, and here I agree
wholeheartedly with David Boyle, less on national solutions and more on
locally based initiatives.
Dr. Ged Mirfin
07841 729 146
ged@mirfin5064.freeserve.co.uk
Friday 08th November, 2013