@Ed_Miliband To save the economy, leave the EU and re-employ everyone sacked by Osborne. e

If you did a PPE degree (Politics, Philosohy and Economics), you may have come across the law of supply and demand. i.e. basically Economics is about  matching up buyers and suppliers.
Usually this is seen as people with Capital, employing men and machines to supply services and goods, whilst other people are to be persuaded to buy those goods and services.

As it is the Suppliers who the hire people, who’ve studied these mechanisms, such studies are biased towards the concerns of the suppliers i.e.maximising profits and minimising costs.

Invariably the customers are ignored, except as the targets of Sales, advertising and marketing. Thought is never given as to where customers should get the money to be customers.
This is why Austerity and privatisation will fail.

Already, in the UK, we have seen highly qualified staff removed from the State’s workforce and partly replaced by cheaper less able staff.
This fits with the idea’s of opening up opportunities for supplier’s and of reducing costs, to maximise profits.¬† Unfortunately, this means that other sections of the supply industry are losing custom and they are, in turn, reducing costs by laying off staff and optimising their target market.

More unemployed people further reduces customer base and Demand.

From the supplier point of view this is attractive, in the short term, as competitor’s are killed off and the survivors get a bigger share of the dwindling demand.
No thought is given to the long term, where there is a huge virtual demand, which can not be matched. I.e. There is a large population of would-be customers but lacking any purchasing power and a few supplier’s, who, unable to reduce costs, must raise prices to maximise profits. In Science we call this a negative feedback loop. It results in a balance of zero practical demand and zero affordable supply.
In History the outcome has been revolution with the supplier’s being killed and replaced, or a rescue by a political trick.
In Germany and the US, they escaped recession by printing money to pay for large State-financed, labour-intensive public constructions.
Essentially they have resuscitated Demand by pumping in credit.
Venezuela, Bolivia, Norway and Iceland have shrugged off austerity by similar means, including the simple trick of increasing the minimum income of the customer base.
Greece will eventually resort to issuing a new Drachma and letting it find its own level. There will be an initial hardship in a country, with a benign climate, rapidly alleviated by a thriving tourist industry.
If Ed Miliband wants to be a patriotic hero, then he will have to copy Greece’s Finance Minister’s lead and leave the E.U.

Remember! Ed has only a third of an Economics degree, whilst Varufakis was a Professor at Essex teaching people who achieved degree’s (including Master’s degree’s), entirely based on Economics.


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