I recently, finally, got an analogue synth after only ever using digital ones. I have always been a bit suspicious of digital synths. There was always something off about them. Now that I have had the chance to use an analogue synth first hand I have had my suspicions confirmed: analogue synths sound better by far.

Now, some digital synths are designed to do things that only digital synths can do, so comparing those to analogue synths is a bit unfair. It is true that digital synths have a wider range of timbres and easily do arbitrary control routing; limited only by software architecture, CPU and UI/EX, but digital synths all suffer from the same artifacts.

If you hunt around online you will find people raving about how particular digital synths so well recreate the classic analogue sounds. To some extent this is true, analogue model synths do a good job of recreating the overall tonal characteristics of analogue synths but they also suffer from some of the following:

  • Aliasing – they all have some amount of nasty harmonic distortion caused by sample aliasing. Some do reduce this to a minimum bit it’s always there.
  • Scratchy transients – they just can’t seem to handle situations involving high/short envelope settings in which you get nasty split, crackly distortion in onset transients. You often want a spike at the onset of a sound to give it a snap that your ear can catch hold of, so you might have a short envelope opening a filter momentarily, but this often introduces some scratchy high frequencies or crackly transients.
  • Gritty high end – By far my most serious complaint. The thing that always puts me off. The high frequency component in every digital synth I have ever used always has a kind of brittle, rough texture. The sound is like subtle bit-depth reduction all over the top end. Digital synths never fizz cleanly and I always find it distracting.
  • Bad aliasing during even subtle pitch modulation – one of the main characteristics of analogue synths is looseness. Pitched oscillators will slide around, if only very slightly. Many will recreate this via slight pitch modulation, say settings an LFO to wobble oscillator pitch or using some pitch shift plug-in, but these, even very subtle, variations immediately incur aliasing with a lot of digital synths.
  • Break down at all extremes – digital synths always break apart with extreme settings. You can’t have LFOs going too fast, fast attack envelopes crackle and spit, high resonance sounds aliased, high register notes sound scratchy.
  • Unstable low end – I have noticed that, to my memory, every digital synth I have used unravels on very low frequencies depending on settings. The low end seems to be detached from the rest of the signal. Maybe something to do with phase coherence of digital filters. Dunno.

It took me about 5 seconds using an analogue synth to hear that none of these problems exist in the analogue world. You can get an analogue synth to play a note at very high pitches and while the sound is whiny and difficult to listen to it sounds pure and intact. The high end is generally exactly as you would want to hear it.

On a subjective note analogue synths also have a kind of unruly quality that not many digital synths really have. With digital synths you set something and the synth hits it bang on every time. Analogue synths (and in fact gear in general) seem to be a bit more squirmy and springy. The sound also has more depth than many, but perhaps not all, digital synths. You can somehow tell that you are listening into a mechanical device, which you are. The sound is coming from a real thing and exists. Digital synths often have a flat, two dimensional quality, as if you are listening to cardboard cut-out impression of a sound.

Analogue synths probably aren’t for everyone. Sound is very subjective and I am only following my own taste. They are also kind of a pain in the arse to use compared to a VSTi. I now have ground loop issues for a start, but I have already had a quick test using the synth in a track and found it just added something great, processed beautifully and joined right in with the rest of the track. It recorded in one take and the result was just… perfect.

One way to measure a civilisation’s developmental progress is to look at the extent to which people’s lives are at the mercy of the environment. We can establish perfectly comfortable living standards in places that at one time would have been inhabitable only with extraordinary effort, or perhaps not inhabitable at all. It’s debatable about how far along that process we are, given that we are facing an imminent existential threat caused by how we have chosen to interact with the environment, but it is easy to see that technological and sociological development, at least in principal, gives rise to the possibility of completely abstracting our survival from environmental variables.

This line of thought is what, to me, uncovers how ridiculous our idea of alien invasion is.

Stephen Hawking recently said “If aliens visit us, the outcome would be much as when Columbus landed in America, which didn’t turn out well for the Native Americans”, which is almost an exact quote from The Day The Earth Stood Still. Alien invasion would involve traveling a vast distance through space, either requiring a lot of time or a lot of energy, or both. Doing that would require a level of technology so advanced it can produce the required energy and provide such a level of abstraction from environmental threats that survival in space is not a problem. Why would a civilisation capable of that invade us?

Imagine this: You live in a comfortable home in a developed country with a nice job. You don’t need to worry about anything except getting to work on time. You decide to get on a plane, fly to the other side of the planet, taking a piece of wood with a nail in it with you, so you can bludgen a few natives on some desert island somewhere and steal their huts. And you do that because you like the fruit that grows on the few dozen trees outside. Why would you do that? Do you want that fruit that much?

This is the basic premise behind the vast majority of alien invasion narratives, including Hawking’s. The narrative hangs together with a piece of story telling proclamation: they want something we have; either oil, slaves, human brains, water or some vague idea of our ‘resources’. They have the technology to get here and destroy a whole planet but they are still dependent on plundering these basic things out of the ground?

The comparison to the West Indies, and my metaphor, break down for even more fundamental reasons. In those narratives the invader and the victim are both the same type of being. They have the same biology and therefor the same basic requirements. Alien planets are … alien. We have evolved to live in our world, we would almost certainly not find alien planets particularly comfortable, to say the least. What makes those planets beautiful and welcoming to the aliens would make them biologically terrifying to us. So imagine flying to the other side of the earth to live near a sea of acid breathing carbon monoxide near trees of poisonous fruit saturated with germs that can stroll past your immune system unnoticed… that invasion seems less appealing.

There’s also a much more philosophical objection to the idea of comparing our interactions with aliens to our past: aliens may well not think like us at all. The dynamics of human thought that give rise to our patterns of history might not even exist in alien minds. It could be that those patterns are purged from the cosmos by galactic darwinian selection: those races obsessed with imperialism at all costs may well always remove themselves from the universe before ever getting the opportunity victimise other planets. We are almost a case study in that. It could be that getting to the stage to be able to tackle interstellar travel requires a level of social cohesion that would-be invaders just don’t possess.

In my opinion there are only a few simple examples of alien invasion stories that hold any water: those in which the aliens invade not for any economic reason but because it is intrinsic in their nature. One example is the Borg. Another is from Babylon 5 in which the Vorlons find a way to travel to another universe and find a race that considers all other sentient life to be an insult. The Day The Earth Stood Still is a bit of a deviation in that the aliens invade because they see humans as a potential threat. In the original they saw our development of nuclear weapons as an indication of our destructiveness, which just raises the question: why would this be a significant problem to these advanced aliens? In the recent remake the producers reverted to a more standard alien invasion premise: we are are destroying a resource, our planet, and they have to intervene to stop us in order to secure that resource. This just raises the usual questions and further, why did the aliens see their only option to be killing us all with a magic black cloud? Why not get it to wipe out all of our polluting machinery? What’s the worst that would happen? People dying?

There could be realistic examples that are far more complex. A keen reader will have noticed that I could turn this whole argument on its head. If it is more realistic to imagine the alien’s motives to be simply some ingrained and irresistible psychotic behaviour, then it could be argued that that is exactly how humans behaved in the past and so drawing analogies to those events is a valid observation. Sure we can cast our history of conquest into terms of resource and economy, but ultimately we could have found alternatives, we didn’t need to do what we did in order to get what we needed. We chose the psychotic solution from a multitude of possibilities. Perhaps alien invaders would do the same. Perhaps they would hold to an economic model that resonates with their psychotic nature because its the only one that would allow them to act on that nature. And perhaps it would raise obvious questions like: “why did you come all the way here to kill us to steal something you don’t need?” This idea doesn’t quite hold because our invader ancestors conquered places to make someone somewhere rich by gaining control of the sole supply of something (initially land, then fossil fuels). Consumption of oil, and indeed, our need for land can’t exactly be explained in terms of psychotic motivations: we really do need land to live and oil is on first sight a good source of energy. It’s more accurate to say that a small section of society was in a position to act in a psychotic manner to get more of what they like at the cost of the rest, and the rest fit into this system by having valid needs for things like land and energy. The option to gain a fair share of land and enough energy by non-psychotic means we usually kept off the table. The motivation was always economic, by which I mean it was some people getting what they want by exploiting control of the supply of what all people need. Psychosis wasn’t the only fundamental factor, it was more a choice of strategy in response to an economic reality. If you took away that economic reality would the psychotic choice still be on the table?

Is it plausible to imagine a civilization advanced enough to have the technology to travel between stars to murder aliens and plunder their worlds either for some economic reasons that persist despite their advancements or for economic reasons that some of those aliens have developed (by infliction upon themselves without wiping themselves out) in order to engineer a situation in which they can murder aliens and plunder their worlds? When they take our land what will they do with it? Sell it to each other? To do what? Grow food they can’t eat? Set up factories? Why not set them up in space? What would those factories produce? The Roman Empire plundered gold but they only did that because gold what what they made coins out of and they did that because it was a good material to make coins out of. Again, it’s just a substance that is needed for some reason. What substance and what reason would the aliens be captive to? Why? Because they’ve, by some insane marketing scheme, tricked themselves into thinking they need to invade Earth? When the US invaded Iraq they secured oil that Americans bought. What would the aliens secure? Who would buy it and why? Have the aliens sustained a price bubble in the Earth property market? How? Why?

This is why alien invasion stories are always so nonsensical to me. There is never even a partial explanation for why the invasion is happening. It’s surprising that Hawking would enter into such a discussion and make such a simple claim as to assert a similarity to human history.


This may seem like a bold claim, perhaps too bold even for critics of austerity, but if you give me a chance I can provide what I think is a sound argument for it.

I will take ‘austerity’ to mean a systematic policy aimed at reduction of the deficit.  One thing to keep in mind is that I am going to invoke no laws of nature, no physics or geological plate-tectonics, no models of human nature or culture and no philosophical ideas of value. Everything I will talk about is based on basic principals of finance and is all derivable from observations of how our financial systems actually work and that they make sense mathematically (that is that the equation 1 – 1 = 0 holds true).

There are a few ideas that I need to establish to piece together my argument:

Closed financial systems add up to zero. The balances of a closed financial system, denominated in any one currency, must add up to zero. One entity’s liability is another’s asset.

The UK’s money system is a financially closed system. Our economy is split into three parts: the government sector, the domestic private sector and the rest-of-the-world sector. The UK currency balances of these three sectors always and can only add up to zero.

The UK Treasury is the only thing that issues Pounds Sterling. I think most people would accept this but at the same time somehow forget it’s a reality. Perhaps we believe it’s too simple to think this is all there is to it, but this is all there is to it. We all pay our taxes with pounds issued by the treasury. We, as a group, got those pounds when the public sector bought something. This is just a simple matter of fact.

For the non-government sector to run a surplus the government sector must run a deficit.  This is simply an extension of the above point. The government constantly takes money out of the non-government sector through taxation (and other non-discretionary charges, like fines and duties) and injects money into the non-government sector through government spending. If the government ‘balances it’s books’ then no new money is being injected into the non-government sector. In this case the non-government sector on the whole cannot save; it has to run a surplus in order to save. This also means that any saving done by any firm or individual must come at the cost of at least one other firm or individual making an equivalent loss.

The government can refuse to issue enough currency to finance the non-government sector’s surplus. When the government issues more currency than it taxes the excess gathers in the non-government sector. This is collectively called saving. Investment is also financed by savings in the sense that the money you invest had to have been saved first. In a budget-balanced utopia if a firm is to invest in new activity it must either deplete it’s own savings or get money gained by some other firm or individual making a loss. That loss would have to be funded, ultimately, with money that that person or firm had saved, depleting their savings, or by them taking a profit cut reducing their flow of savings. Long story short: in this situation all investment is simply consuming savings. Investment, obviously, stops when the savings run out. You should also note that those savings would be made up of currency issued by a government deficit in the past, so this fiscally balanced economy is only investing because of left over’s from a time when it wasn’t fiscally balanced.

New jobs require investment. For a group of unemployed people to get jobs (without those jobs to be funded by losses elsewhere) the government must run a deficit.

Individuals and firms have varying power over their own savings. This is a side point but it is worth keeping in mind. As stated a balanced budget means that the non-government sector as a whole cannot be gaining money and therefor cannot be saving, but individuals and firms within non-government sector are free to create a situation in which they can individually save at the expense of others. And doing so will be beneficial for the same reasons saving is ever beneficial. Further, some firms and people are positioned, by virtue of distribution of control, to effectively resist reduction of their own saving. The flip side of this is that some individuals and firms will be powerless to resist running a loss and/or spending their own savings. This all means that in a balanced budget world any particular unemployment target can only be sustained under very weird and unimaginable circumstances. Firstly, unemployment can only be reduced so far as other people are willing to reduce their own savings (which they got from a historic deficit). The government would have to hope that people will sacrifice their savings to fund other peoples jobs. As mentioned, some people will resist and continue to save. Every pound saved is a pound that can’t be used to finance a new job. Secondly, even if everyone was ultra-generous and always willing to sacrifice their savings to achieve higher employment, those savings would necessarily be finite, once spent there can be no further new investment, growth would have to stop. Any particular level of employment, full or otherwise, would require that neither population nor economic activity grow, so everyone would have to agree to that too. It should be obvious that this would also be in incredibly brittle economy because no-one would have any savings. A small natural disaster, like the recent floods, would be devastating.

Austerity is the refusal to meet the non-government sector’s demand for new money. The non-government sector demands enough money to pay it’s government bills (tax, fines, duties etc.) and to finance it’s saving (from which it can invest). Trying to push the government budget to balance is the systematic attempt to refuse to meet the non-government sectors saving demand.

If this is all new to you you might be wondering: if this is all so obvious and based on a basic understanding of how things actually work why am I reading about it in an article by a random blogger? Everything I have talked about is part of a branch of marco-economic research called Modern Money Theory. It is well developed and has good researchers pursuing it. It is, however, not part of the mainstream of economic theory. Why is that? Well… why did some civilisations sacrifice people? Sometimes bad ideas are popular and nothing significant has changed in the human brain in 100 000 years that would mitigate that.

Is Austerity Really Always Unemployment?

You might be thinking that I am talking about a more vicious type of austerity and that it could take a more socially responsible form. I agree that there are many things the government could spend money on, some good some bad, and there are changes that could be made to what money is spent on. Some spending plans will give rise to an economy that is capable of doing more things but you have to recognise an inescapable truism: When the government spends it buys something produced by doing a job. What the government choses to buy dictates what jobs are to be done to get the money needed to pay the tax bills. Let’s say that the government choses to buy one thing that can only be produced by a tenth of the population. If the government agreed to buy unlimited amounts then a tenth of the population suddenly has a job (if they want it). If the government runs a balanced budget via income tax then, by pure laws of mathematics, nine tenths of the population must be unemployed. This is because whatever that tenth is doing only earns exactly what is needed to pay the tax bill. If, on the other hand, the government chose to tax everyone, rather than just workers, then the unemployed would need to find some way to get those with pounds to give some up. This is, essentially, the historic basis of taxation: the government bought military service. If the government choses to tax less than it spends, that tenth will have money left over to spend. A private sector would come into existence based on the demand characteristics of the public serving tenth. Is this an optimal economy? Probably not. Can austerity fix it? No. The government can rethink what it spends it’s money on, but there is no way to improve the economy’s employment levels through austerity. Reducing the budget isn’t just a thing that causes unemployment, it is literally the act of doing unemployment.

When talking about money, and more specifically about why we use certain things as money, the idea of legal tender often comes up. We all tend to use pieces of worthless metal, paper or cloth, or even entries in electronic databases as money worth far more than the things themselves. An intuitive explanation for this, and one I would have gone with in the past, is that it has something to do with the government designating certain things legal tender. I think people often have the idea that we all get payed in pounds because “pounds are legal tender.”

So I decided to find out what this phrase, legal tender, actually means. As it turns out it doesn’t mean very much and it has little baring in why we use and accept pounds.

In using the idea of legal tender in a country’s legal system authors of the legal system have to do the following:

1) Define what “legal tender” means

2) Establish which things are legal tender

3) Define how much those things are worth in the sovereign currency

The phrase “legal tender” is just that, a phrase. Any group of people can establish a legal framework that uses the phrase “legal tender” and then define it to mean whatever they want. Generally, however, it’s pragmatic to use the term to refer to the same basic idea. Usually “legal tender” means: “A thing that can never be refused as settlement of a debt in court”. Because “debt” is a legally defined concept debts are denominated in the legal system’s chosen currency, so by entering the court system you have established that the debt is measurable in that currency. So, if you are in court in the UK it is implicit that the debts being settled are measured in pounds. Things that are considered legal tender (according to 3) will also have a legally defined value in that currency.

You should also realise that this only refers to coins and banknotes, i.e. things, not pounds. You can have pounds in a bank account, and use those to settle debts in or out of court, that has nothing to do with legal tender because you never used any. Pounds aren’t legal tender, pound coins are. Pounds are what our legal system choses to denominate debts in, and by entering the legal system it seems a person implicitly agrees too that. I guess another way of looking at it is that within our legal system a debt is defined as a thing denominated in pounds. You could, of course, argue that there are other forms of debt, but you can’t usually take someone to court for owing you gratitude or a hug, and if you did it would map onto a case of damages or compensation in which the court would decide on a currency value, again, in pounds.

Putting this in an example: You are taken to court for not paying a debt of £100. The court demands you pay the debt. You pay by cheque. This has nothing to do with legal tender laws. You have payed a debt denominated in pounds in pounds. No things were exchanged. The banks just moved some numbers around in their accounts (and perhaps moved reserves between banks). Had you chosen to pay the debt with 100 pound coins, the court would have to accept that as payment as would the person to whom you owe the money. The debt would be settled. If the creditor agreed to accept payment in hugs, and you provided them, the case would be settled; no tender laws invoked.

In reality things are made complicated by there being many types of things that are legal tender, so the tender laws usually look more like this:

1) Define what “legal tender” means

2) Establish which things are legal tender for specific sized transactions.

A is legal tender for debts not exceeding x. B is legal tender for debts not exceeding y. C is legal tender for debts of any amount.

3) Define how much those things are worth in the sovereign currency

For example: In the UK 5p coins are only legal tender for debts not exceeding £5, while pound coins are legal tender for any amount.

Now, here’s the important point: None of this requires you to actually use legal tender. It just means that, in court, you can always use it to settle. Obviously, as mentioned, legal systems can define whatever rules they want, but we can look at actual examples of tender laws:


From the Royal Mint’s website:

Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes. In order to comply with the very strict rules governing an actual legal tender it is necessary, for example, actually to offer the exact amount due because no change can be demanded.


From the US Treasury FAQ:

This statute [Coinage Act of 1965, Section 31 U.S.C. 5103] means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. 


For the Reserve Bank of Australia FAQ:

However although transactions are to be in Australian currency unless otherwise agreed or specified, and Australian currency has legal tender status, Australian banknotes and coins do not necessarily have to be used in transactions and refusal to accept payment in legal tender banknotes and coins is not unlawful.


From the Bank of Canada‘s website:

“Legal tender” refers to the money approved for paying debts. [...] This does not force anyone to accept cash because both parties must agree on the payment method. The fact that bank notes are legal tender does not mean that there is a legal obligation to accept them.


From the Bank of Japan‘s website:

Banknotes are a widely used payment instrument, especially for small-sized payments. The Law stipulates that banknotes shall be used for payment as legal tender, in other words, they are a legally defined payment instrument that should not be refused by any creditor in satisfaction of any debt.

If you open a shop in any of the above countries you can refuse business to anyone you want. The only grounds people have to complain is perhaps human rights (for example on the grounds of discrimination or something). You could simply refuse to accept payment in the sovereign currency. No transaction means no debt, no debt means that the tender laws are irrelevant. If I agree to ‘sell’ you a car, and we agree that you will ‘pay’ for it in gold, so long as the transaction happens as agreed then there is no debt, no basis for legal action and so tender laws just don’t apply.

Imagine for a second that the government wanted to use tender laws to make everyone use pounds, how exactly would they do that? If you and I swap a pencil for a pen, that is a transaction… would we have breached tender laws? What about payment-in-kind? Some people are payed less in salary because they get perks, those are non-legal-tender transactions, right? The point is it’s incomprehensible to think that the government could mandate use of sovereign currency because it’s not clear what transactions that would apply to and policing it would be impossible. Which probably is why they don’t.

In summary, when it comes to why people use pounds or dollars or yen, tender laws don’t give us much insight. You could argue they have increased usefulness because you can always use pounds to resolve debts in a legal setting… but that has nothing to do with tender laws, that’s simply the result of the particular legal system choosing what it defines debt to mean and how it is measured.

What about taxes?

Someone might argue that we have no choice but pay our tax bills in pounds. They might imagine it would be better if the government accepted gold or bitcoins or anything as payment of tax… the thing is, they kind of already do accept payment of tax in things other than legal tender. How? Public spending. The pounds you use to pay your taxes were issued by the government when it spent them into existence. It spent them by buying something, which was sold by someone in the private sector (or possibly by someone abroad). So you can sell products or services to the public sector, gain pounds, and then use those pounds to pay taxes. We all do this as a group all of the time. It’s just done at a macroscopic level. The government accepting X in payment of tax is financially exactly the same as the government buying X with pounds. In fact, this is literally the basis of our money system, it’s how all pounds come to be. The only reason the government doesn’t buy bitcoins is that they’re useless and there is no reason to.

When it comes to organising society the fundamental question is really “what do we want members of society to do?” The answer to that question forms the basis of figuring out the nature of the systems we need to implement to direct behaviour (or not). Whether you believe in free-market capitalism, socialism, totalitarianism, feudalism or monarchy you have gone through this reasoning process (or your argument is incoherent.)

Do we want members of society to waste resources? Most would say no. Again, even free-market capitalist’s argue that a free-market is favourable because it allocates resources efficiently and therefor avoids waste.

Bitcoins are useless. You can’t eat them. They don’t cure any diseases. You can’t turn them into anything. No production process requires them. They can’t make people happy or better off or more ‘well’. They exist solely to be traded for something else. Accepted economic theory holds that they are demanded simply because they are in limited supply. I would argue that it’s more precise to say that they are demanded because people believe they can make a profit (or minimise loses) trading them. At least some Bitcoin users must want to make a profit else no Bitcoins would get produced. Bitcoins are just a speculative asset. They are the tokens you need to play the Bitcoin speculation game. Some people might just really want Bitcoins, however it’s more reasonable to assume that people  mostly produce Bitcoins because they can trade them for prizes at a profit. Note that profit is always someone else’s loss.

While Bitcoins themselves are useless, they require resources to ‘produce’. The production process is the execution of a mining algorithm. This process requires energy; if the energy costs are too high there’s no profit to be had producing them. As  a result Bitcoin production is going industrial. Production of Bitcoins has a (potentially huge) carbon footprint and requires allocation of physical resources that could be used for other things. For example the computers running the mining algorithm could be running a protein folding simulation, crunching astronomical data or whatever we can think up.

So, putting all of this together:

Bitcoin is a way to get people to tie up physical resources to produce entities that exist for no reason other than as a means to transfer physical resources into their possession. 

We have produced a system that encourages people to tie up resources in order to gain resources while doing literally nothing productive. You could argue something similar about gold coins; but at least an argument could be made (IMO an invalid one) that the upside is we get gold out of the ground. Not even this upside exists for Bitcoins. Bitcoins are literally useless whether we have them or not.

There is a general hysteria around the idea of jobs being stolen, usually by foreigners, leading to an obsession with immigration and immigration curbing policies.

It seems to me that the government’s efforts to reduce immigration is partly, of course, to pander to this hysteria but also a convenient way to off-load the unemployment that their policies are causing onto foreigners. Essentially someone is going to be made unemployed by austerity so they should try to make sure foreigners are made unemployed first [1]. They can’t complain. The received wisdom is that if you deny foreigners jobs then it frees up jobs for everyone else. People generally accept this wisdom. The trouble is that it makes no sense.

It makes no sense because jobs aren’t a resource and therefor can’t consumed and can’t be finite. We don’t have a finite number of jobs to share. Nor do we ‘produce’ jobs in any meaningful sense. Individual positions can be taken. Individual positions at any one time are finite. But jobs aren’t finite in number or restricted to resources.

It’s easy to see why jobs can’t be a resource by asking “what happens when we are out of resources?” The answer, of course, is we get resources. The task of getting resources is a set of jobs. So even in a situation where we have zero resources, we still ‘have’ jobs. So jobs can’t be said to be constrained to resources at all.

Jobs are just an organizational convention. Take an analogy: activities. Can we run out of activities? No. The idea doesn’t make sense. An activity is just a name we give to make it easier to think about and organise doing things. Can someone ‘take up’ activities? Again, not really. Sure, specific activities can require specific resources, and should those resources be restricted then the activities that depend on those resources are restricted. The word ‘job’ is like the word ‘activity’ except that jobs have the property that jobs create jobs: if jobs can be said to be consumed, then consuming them creates them. That’s an unusual property for a resource.

“We need to stop immigration because they are doing all of the things and leaving no things for us to do!”

When someone works in the UK, regardless of who they are or where they’re from, they get paid in pounds. Those pounds can only be spent in the UK. They can be transfered to an account belonging to a foreigner, but even then can only be spent in the UK. They could exchange their pounds for some other currency but that would just give the pounds to someone else that can, again, only spend them in the UK economy (or in some other country that has adopted pounds as official currency).

This is what makes it wrong to think in simple terms of a job being taken up while all other factors remain the same. The worker earns pounds in order to spend them, which they can only do in the UK. This is what economists call contributing to aggregate demand. The extra spending power is extra demand that can be met by some other firm in the UK. This demand has the potential to provide the need for new work to be done, which can give rise to new jobs. The factors that decide whether or not that demand will translate into new jobs are: is supply limited and is the money supply limited?

Theoretically speaking there are two factors: Supply and Money Supply. If supply is limited then a rise in demand causes a rise in prices. This is because there is no new stuff to buy. The thing is that ‘supply’ is an economics abstraction and doesn’t come close to mapping onto any real thing in the real world. How could ‘supply’ be limited in such a way as to stop any rise in demand causing a rise in supply? Maybe during a war? Perhaps. If we were extracting all resources at their maximum rate, then an increase in demand would definitely cause prices to rise because there definitely couldn’t be in increase in supply… well, maybe, if you ignore marketing. Are we extracting all resources at their maximum rate? Of course not. Some individual ones, maybe. I’m not sure what could manifest itself as restricted ‘supply’ in real life. Supply is rarely limited across the board, if ever. It seems that the idea of supply is so abstract that it can’t be limited, ever, without something systematically limiting it on purpose. But, there is one thing that we need to order to create jobs.  It is our chosen convention to only instantiate jobs that can be financed. No new money means no new finance, which means no new jobs, regardless of demand. So you might think “ah-ha! money is in limited supply and therefor jobs are too!” Well, money is not in limited supply. Money isn’t produced, it’s issued. We don’t dig it out of the ground. Austerity by definition the choice to restrict the money supply stopping the economy from instantiating new jobs.

The irony is that jobs are constrained to the money supply, which is restricted by austerity, so what appears to be a limited jobs supply is really a limited money supply caused by austerity.

[1] It’s interesting to realise that child birth is no different to immigration. Children being born is new people arriving in the economy. The difference being that immigrants tend to appear in the economy fully grown, and so require less investment. Why is the idea of restricting immigration so naturally accepted while the idea of restricting childbirth would be seen as hugely tyrannical?


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