Wednesday, December 11, 2013
Winter Deaths and Economic Myopia
A headline from ‘Metro’ 22nd November 2013 reads: “How winter kills more people in Britain than in -30C Sweden” and “There were 25,535 ‘excess winter deaths’ – people who died as a direct result of the cold – in Britain in 2011-12 compared with 3,385 in Sweden, it was claimed.” Once we take into account the differing population sizes the excess winter deaths accounted for 4.61% of all fatalities in Britain compared to 3.76% in Sweden.
Sweden suffers far more from what is designated as ‘severe’ weather than does Britain. It has up to 120 days per year of snow lying on the ground (in London it is less than 5) and the temperature can fall to as low as minus 53 degrees Celsius. In the UK the lowest temperature ever recorded was minus 27 degrees Celsius.
In 2012-13 the number of people who died due to the freezing conditions rose to 31,100. Most of those unnecessary fatalities were over 75 years of age (82%) and most of those fatalities were women.
It isn’t just energy inefficiency or sub standard accommodation that is at issue here. The attitude in Britain is that energy companies are entitled to make a profit even when, as monopolies, they enjoy protection from competition. This state protectionism encourages contempt for the consumer and creates an abusive relationship with the public.
Government exploits the poor and the middle classes through its policies and then is coerced by fear of instability to subsidise the marginalised consumer.
People are unable to borrow from banks to purchase property and rents are too high for most workers. This creates a situation in which government has to intervene to subsidise housing. The banks profit from a subsidised property market. The banks enter into a minimum risk relationship with the state to subsidise rental housing and keeps the price of home ownership artificially inflated. The rental market profits the banks that provide the loans to the well off to purchase their rental portfolio while the government controls the spigot of funds available for that housing. The poor then have to be housed in rental accommodation they will never be able to afford to buy.
Many people have insufficient funds to keep their homes warm in the winter time. Remember that statistic. The old people don’t complain, they just die - 31,100 people died from cold – the number of people who suffer in the winter (but survive) will be many times greater.
In Britain de-nationalisation was supposed to create competition and efficiency but the imperious attitude plaguing the larger corporations instead protects the economic behemoth. Banking and Energy are the twin establishment beasts. We want to keep Britain ‘British’ at least in terms of our economic independence but true competition would open up the market place to hundreds of banks and dozens of energy companies. This would reduce costs and yes, it would save lives. Energy companies would have to reduce their prices and take risks to survive. In Britain today they have no need to do either.
The ‘big six energy suppliers’ refers to Britain's largest energy companies. According to Wikipedia they supply gas and electricity to over 50 million homes and businesses in the UK and they control 96% of the energy market. Similarly, the retail and commercial banking markets are dominated by only five banks.
Economic and financial resilience is the key to weathering any downturn in the economy. But the protected juggernauts have no incentive to keep the cost to consumers low or to take any risks with their low value consumer customers and if the government bails them out in the bad times it encourages their recklessness in their high value commercial transactions. It is the reason that the global financial crisis which has now been running since late 2008 has not touched the energy company’s profits and why the banks in Britain were able to weather the storm – they retain their centrality to Britain’s economy as the government fights to protect them from European interference.
Better policy making by the government (any government) would deliver a strong economy without being reliant on high unemployment, cheap foreign labor and high government protectionism. But an economy that has so many monopolies must create movement of senior personnel between those monopolies but no advantage to those people that utilize their activities. If that distorts the economic model then social policy is created to prevent frustration from spilling over into violence and disorder. That social policy can only be financed effectively if the government has sufficient revenues to fund it. With an economy that is so besotted with central control that situation can only become less stable as more people become dependent on government assistance.
The State is influenced in its guiding principles by obsessive regulation of society which is expressed through paternalistic policies offering short term solutions to ameliorate but never solve any of the problems afflicting the economy. This paternalism has constructed a fool’s paradise in which ‘anything goes and anything is possible’ or at least that is what society, through the media, instructs us to believe. But then the reality is something entirely different. It is this contradiction that is creating much of society’s stresses and it is also the reason that nine million Britons, (that is fifteen percent of us) has a criminal record.
We are psychologically conditioned to respond to stress reactions but the purpose of that reaction is survival. We aim to return our situation to a manageable level. If we are unable to exercise effective control in our lives we become stressed. So, on the one hand we encourage unrealistic expectations and then we are dumbfounded by the panoply of medical conditions that appear to be increasing in complexity even as our medical knowledge and sophistication expands exponentially.
The unspoken question that no-one is asking is how we prevent our society from creating enormous pockets of inequality, of deprivation and violence?
And that brings me to my final economic issue.
Mark Zuckerberg believes (FP Magazine December 2013) that “the story of the next century is the transition from an industrial, resource-based economy to a knowledge economy” but that smacks of a “let them eat cake” mentality. It makes assumptions which are unsustainable without recourse to negative eugenics programs or an apocalyptic vision of death camps in our ‘green and pleasant land’.
It isn’t bureaucracy that keeps unemployment and poverty doggedly high but the attitude of politicians and business leaders that people can adapt to anything.
A member of the British governing classes very recently stated that fifteen per cent of Briton’s have an IQ that is less than 85. OK then, what are this fifteen percent going to do in the knowledge economy? They won’t become doctors or nurses and they won’t be able to compete with cheaper immigrant labor.
The politicians tell us all to buckle under. They tell us immigration is good for Britain. But they don’t have to compete for jobs. I have a friend who is a master tradesman. He was unemployable because he did not speak Polish. I am not anti-immigrant. I am ‘anti’ the idiots in government who think that the not so smart and the not so ruthless don’t matter. I am anti the politicians on all sides of the house that dismiss the ‘expensive’ tradesman who has spent most of his (or her) life perfecting his (or her) art because they assume they cannot always find a solution to the problems they created. And I am anti the educators and their bureaucratic henchmen who insist that people are machines to be engineered.
In the 21st Century, in the giddy rush to progress no-one, no group, no party has a vision for the future that has people, all people, at its centre. In a world obsessed with the rights of the individual we have raised the individual as a group identity onto a lofty peak, as gods, while we ignore the individual as if they are worthless because as individuals they distract us from the ideal.
In the 21st Century no one should freeze to death, or live in fear of the cold. Government has condemned too many to suffering and too many to permanent insecurity. We possess today a model for a society that drives the expectations of the many for a consumerist heaven that does no more than to enrich the coffers of the state and to betray the long term interests of the people.