The Teen Economists

'This House' - Political Play by James Graham

2013-04-15T09:59:00.002+01:00

by Hannah Gent

The National Theatre Play 'This House' by James Graham

"1974. The UK faces economic crisis and a hung parliament. In a culture hostile to cooperation, it’s a period when votes are won or lost by one, when there are fist fights in the bars and when sick MPs are carried through the lobby to register their vote"

'This House' is set between 1974 and 1979, showing the political climate of the Harold Wilson and James Callaghan governments. The Labour Party started out as a minority government in 1974 and only had the majority by a few votes in the second election of that year. Therefore, every vote counted for the Labour Party as they had to fight to pass legislation. In order to do this they had to win over as many of the ‘odds and sods’ as possible. These 'odds and sods' were the MPs from minority parties such as the liberals. With an extremely slim majority the Labour Party need every other vote possible as the vote can be won or lost by just one.

Eventually, every MP is required to be present in Parliament to avoid losing a vote of No Confidence. However, this results in MPs who are sick and unable to attend being forced to even though their health is in danger. A 'tradition' that the two parties often relate to in this play is pairing. This occurs when an MP from one party is unable to attend so the other party take one of their MPs out of the vote to make the numbers even and the vote fair. This 'tradition' does get questioned as these single votes can make such a difference and at one point it is discarded which means that the two parties (the Labour Party in particular) have to do everything in their power to make sure all of their MPs are present to win, or at least draw, the vote.

I went to see this play a few weeks ago with not much previous knowledge of politics around this time. However, leaving the theatre I realised how much I had actually understood from this play and the problems that occur with these voting systems and the 'traditions' within. It was an excellent play that would suit a variety of audiences with humour and an excellent cast. Personally, I really liked the on-stage seating (the first three rows were turned into the green benches of the House of Commons) as it gave the crowded and busy atmosphere of all the activity in Parliament.

Life of a Legend: the Iron Lady

2013-04-08T20:21:00.000+01:00

by Shireen Avasthi

"Being powerful is like being a lady: if you have to tell people you are, you aren't." - Margaret Thatcher

There are three types of people in the world: people who are for Margaret Hilda Thatcher, Baroness, LG OM PC FRS; people who are against her; and people who are on the fence regarding their opinion of the Iron Lady. Be that as it may, one thing we can all be sure of is that she was a legend whom the world will remember for many years to come.

"Defeat? I do not recognise the meaning of the word."

Thatcher was the longest serving British Prime Minister during the 20th century as well as the first and only female to have held office. A Soviet journalist presented her with the nickname "Iron Lady" because of "her uncompromising policies and leadership style." In fact, Thatcher's time in office was so ground-breaking that her conviction politics, economic and social policies, and political style became commonly known as "Thatcherism."

"I love argument. I love debate. I don't expect anyone just to sit there and agree with me - that's not their job."

Despite the ongoing world recession in 1981, Thatcher and Chancellor Geoffrey Howe managed to raise taxes and cut government spending, therefore allowing cuts in interest rates. Economic revival began soon after this. In 1982 Thatcher led Britain to military success regarding Argentina's invasion of Falkland Islands. The Iron Lady continued her winning streak in 1983 due to her re-election in the landslide election.

Margaret Roberts was born on October 13th, 1925 in Grantham, Lincolnshire. Her father was a shopkeeper who also happened to be active in local politics. Because of this, Margaret was exposed to the world of politics from a very young age. She went on to study chemistry, then law, at Oxford during the years 1944-1950. Margaret helped develop the first soft frozen ice cream during her time as a research chemist. During the years 1950-1951, Margaret ran as Conservative candidate for safe Labour seat of Dartford twice (both attempts were unsuccessful) and married businessman Denis Thatcher.

"Any woman who understands the problems of running a home will be nearer to understanding the problems of running a country."

After investing much time into her studies, Thatcher finally qualified as a barrister during 1953, the same year her twins, Mark and Carol, were born. Margaret entered parliament as an MP for Finchley in 1959 and was promoted to front bench as parliamentary under-secretary in Harold Macmillan's administration in October 1961. In 1964 Thatcher became the shadow minister in opposition and then in 1970 she took on the post of Education Secretary in government of Edward Heath. Margaret's decision to abolish free milk in schools resulted in the nickname"Maggie Thatcher, milk snatcher."

"Disciplining yourself to do what you know is right and important, although difficult, is the high road to pride, self-esteem, and personal satisfaction."

In 1975 Thatcher successfully challenged Heath for Conservative leadership. Unfortunately, this was at the cost of their relationship: Heath never forgave "that woman."

"I always cheer up immensely if an attack is particularly wounding because I think, well, if they attack one personally, it means they have not a single political argument left."

In 1979, the British government was being tormented by trade unions' many demands and strikes. This was a big contribution to the Labour party losing the general election. On May 3rd, 1979, Margaret Hilda Thatcher became the first female Prime Minister Great Britain has seen.

"What is success? I think it is a mixture of having a flair for the thing that you are doing; knowing that it is not enough, that you have got to have hard work and a certain sense of purpose."

In march 1984, a national miners' strike commenced under the direction of Arthur Scargill (NUM leader), in protest to the closing of uncompetitive mines. National news was swamped with broadcasts of riots and miners' strikes as Britain crept closer and closer to unbridled chaos. The government finally managed to resume forming its legislation restricting trade union strikes, after a year of ongoing strikes.

"I am extraordinarily patient, provided I get my own way in the end."

In October 1984 an IRA bomb directed at Thatcher exploded during the Conservative party conference at the Grand Hotel in Brighton. Five people (including Conservative MP Sir Anthony Berry) were killed as a result of the bomb. Thatcher, however, came away unscathed. On June 11th 1987, Thatcher won the general election for the third time. In April 1990, she introduced the extremely unpopular "poll tax." In fact, it was so unpopular that it soon led to riots. In November 1990, a distressed and tearful Thatcher departed from Downing Street having lost the support of the party over differences on European Economic Community policy and the poll tax conundrum. She resigned as Prime Minister and party leader soon after this event.

"You may have to fight a battle more than once to win it."

On June 30th 1992, Margaret Thatcher took her seat in the House of Lords as Baroness Thatcher of Kesteven. During March 2002, doctors advise Thatcher to give up making public speeches for the good of her health, as by this point, she had suffered a series of strokes.

"To wear your heart on your sleeve isn't a very good plan; you should wear it inside, where it functions best."

Later in 2002 (July), Thatcher published a book on international relations. It covers many topics, even rather controversial subjects, such as whether or not the UK should leave the EU and join Nafta. In June 2003, Thatcher's husband, Denis, passed away at the age of 88 years and after 52 years of marriage.

"I usually make up my mind about a man in ten seconds, and I very rarely change it."

On October 13th, 2005, Thatcher celebrated her 80th birthday in a Hyde Park hotel. There were many high profile guests in attendance, such as Prince William and the Queen. In September 2007, Thatcher was invited back to visit 10 Downing Street by Gordon Brown and in January 2008, David Cameron presented Thatcher with a lifetime achievement award at a Great Britons award ceremony. Thatcher returned to Downing Street in November 2009 for the unveiling of an official portrait. In June 2010, David Cameron, the first Conservative Prime Minister in 13 years (since the Iron Lady herself), invited his predecessor to 10 Downing Street for a private meeting. In November 2010, Thatcher was named the world's most influential woman in a YouGov/AOL poll.

"I've got a woman's ability to stick to a job and get on with it when everyone else walks off and leaves it."

Thatcher was unable to attend Prince William and Kate Middleton's wedding (although she was invited) in April 2011 due to health issues.

"There is no such thing as society. There are individual men and women and there are families."

On January 6th, 2012, the film The Iron Lady was released, starring Meryl Streep as Thatcher. It prompted a lot of media coverage about Thatcher's time in office.

"It is not the creation of wealth that is wrong, but the love of money for its own sake."

Baroness Thatcher's passing was announced on April 8th, 2013, at the age of 87 years.

"To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say. You turn if you want to. The lady's not for turning."

Easter Reading List

2013-03-31T18:58:00.000+01:00

by Viva Avasthi

By the end of this holiday, despite the huge pile of revision I need to get through, here's what I plan to have read:

Books

The State We're In by Will Hutton
The Problems of Philosophy by Bertrand Russell ✔
Marx: The Key Ideas by Gill Hands (Finish off) ✔
The Undercover Economist by Tim Harford (Finish off)

Essays/Articles

Dilemmas of an Economic Theorist by Ariel Rubinstein
Quality of Life: India vs. China by Amartya Sen ✔
The Tragedy of the European Union and How to Resolve It by George Soros ✔

The Economist: Special Reports

I'll put a tick (✔) next to each text after I have finished reading it. Links have been provided to all of these texts so that if you're interested you can read them too. The books need to be bought or loaned if you wish to read those, but the other texts can be read free of charge by following the links. Enjoy!

Shrinking economy; Increasing waistlines

2013-03-31T18:55:00.000+01:00

By Krupa Popat

Britain’s economy is shrinking but its health problems are certainly not.

With 25.1% of women obese and 32.3% of women overweight, 24% of men obese and a staggering 42% of men overweight, weight problems are amongst the highest costs for the government to fund through the NHS.

Perhaps unsurprisingly, statistics show that between the years of 2006 – 2010 (during some of the hardest times due to the onset of the recession), the most obese were those who had the lowest income. This could be linked to the fact that unemployment was on the rise. As Marx’s theory said, “the reserve army of labour fight amongst themselves for scarce jobs at lower and lower wages”. Inflation increasing didn't help, as people who are on job seekers allowance or have low disposable income cannot afford the rocket prices of food, which is inelastic. Many people are sacrificing being healthy because they can only eat what they can afford, which is more fatty foods.

“Obesity is associated with a range of health problems including type 2 diabetes, cardiovascular disease and cancer. The resulting NHS costs attributable to overweight and obesity are projected to reach £9.7 billion by 2050, with wider costs to society estimated to reach £49.9 billion per year (Foresight 2007). These factors combine to make the prevention of obesity a major public health challenge.” http://www.noo.org.uk/slide_sets

As the government is cutting back on spending to save money, it seems like they’re spending just as much because of it…

Let me know what you think and find out more at: http://www.bbc.co.uk/learningzone/clips/health-problems-facing-the-uk/5078.html

Should Charities Replace the Welfare State?

2013-03-17T13:37:00.000Z

by David Rovick

The Russian philopsopher, Ayn Rand

Ayn Rand was a Russian Philosopher born in 1905. She is probably most famous for writing the novel ‘When Atlas Shrugged’ and developing a philosophy called Objectivism, a philosophy supposedly based on reason, self-esteem or selfishness, and fundamental human rights among other things. I am a huge fan of Ayn Rand and her ideas, but enough about her for now at least.

I will first attempt to answer the question: should charities replace the welfare state, using objectivist reasoning. First of all I will derive the answer to why welfare states are morally wrong almost all of the time.

To do this I will derive a philosophy using nothing but reason and logic, starting with a ‘clean slate’ of thought, and first ask what the purpose of philosophy, or moral code, or morality (I will use the terms interchangeably) should fulfil. I think we can all agree that the purpose of a human being should be to further and maintain human life, and therefore human life is the highest moral standard. Animals do it in nature, acting consistently in a way that will sustain and further life, indeed it is necessary for their survival, for their life. In the same way, a human’s morality must be what allows him to further and sustain his own life, so that he can live as joyful and fulfilling a life as possible and this is to be the purpose of our morality. What’s more, man’s morality must fulfil its purpose when applied consistently, for what good is a morality if it can only achieve its purpose when inconsistently applied, or even worse (and more commonly unfortunately when not applied at all?

Next I will make the observation that we are each observable individuals; that is we own our bodies, our minds and ourselves insofar as we are the ultimate deciders of our own thoughts and actions. This is evident in the fact that humans have free will, which is the ability to act and think independently, thusly the ability to use reason if we choose too in acting and thinking independently. And because we have given ourselves the purpose of using reason in order to further and sustain human life, it is morally right to use it, and morally wrong to not.

Next, we arrive at the conclusion that we need values to decide what will promote human life, and we must accept that each individual can use reason to deduce values different to our own. For example, one person may value their own good nutrition higher than another values their romance, and in the same way must accept that one person may value driving a fast car more than that same person values another’s desire to drive a nice car. Because of this we are to grant ourselves the right to deduce our own values and act upon them, and as we are not to have double standards we are to grant everyone that same right to pursue the moral standard, human life.

Using again the observation that we are each observable individuals; that is we own our bodies, our minds and ourselves insofar as we are the ultimate deciders of our thoughts and actions, then we are morally responsible for ourselves. Therefore it can only be said that if we do in fact own 100% of ourselves, then we cannot be owned at all by another, and by the same principle we cannot own another. In this sense we are morally responsible to ourselves and only ourselves, we cannot be held morally responsible for others because others do not own us, and we cannot hold other morally responsible for us because we do not own them.

Now many people have tried to argue that we are morally responsible for others. That is, that even if one has used reason derived from free will to decide that they value their own life more than the life of others, they are still morally obligated to place the values of others above the values of their own. In other words, to sacrifice what they place a higher value on for what they place a lower value on. This is the very definition of sacrifice, and it is what Altruists say should be practiced consistently, despite the fact that a consistent practice of sacrifice for others leads to a premature death in all instances. This means that a) altruism as a morality does not work, b) that altruism’s true purpose is to promote one’s own death or c) that altruism’s true purpose is to promote people who aren’t yourself’s welfare at the expense of your death. Is this what you want from your moral code?

Now at this point I’d like to settle any doubts you guys have. You may be reading this and have thought “How can you say sacrifice is always wrong. Even according to personal gain one must make sacrifices if one is to further their own life in romance, education, and their chosen career?” You would be right to ask this question, but you would have not understood properly what a true sacrifice is. Remember that a sacrifice is giving up what you value more for what you value less; thusly the student who spends time studying for an exam is not making a true sacrifice as he values his education and grades, upon which his career will depend, higher than he does free time spent relaxing.

Now despite this, Altruists still attempt to provide an argument for being Altruistic. The only problem we have in accepting these arguments is that they are not based in reason or logic. They are always one of the following:

Based on or appealing to emotion, i.e. sympathy and pity for those less fortunate than us. This is emotion, not reason and thus this argument is to be rejected.

Based on what society believes, i.e. you should sacrifice for others because others do. As objectivism promotes individual reason this is to be rejected.

Based on self-gain, i.e. if you sacrifice for others then society will think better of you, furthering your relationships with others, furthering you own life. This is merely diverting from what we originally asked: Why must society in the first place be altruistic and is therefore rejected.

Based on metaphysics, which means that which is not rooted in observable reality, which takes the form of religion. I.e. the bible says we should five to others. Now for this to be valid we must first accept the existence and authority of a God. But one man cannot request another to prove a negative, i.e. saying ‘I have a theory that there are parallel universes, and until you prove there are not (which is impossible with today’s technology) the whole scientific community must uphold this theory to be correct.’ Now this would be absurd in a scientific community, it is up for the person whose theory it is to provide evidence that the theory is correct, just as every scientist from Newton to Einstein had to. Now assuming we are to be a scientific community in the sense that we use reason to arrive at conclusions, the Altruists must provide us with satisfactory evidence that a higher authority exists, which they have not done.

Based on a personal attack or insult i.e. ‘You are not normal if you don’t understand’, only ‘psychopaths don’t care about others’ or ‘you are a horrible human being’. These are to be rejected on the grounds that whoever makes these arguments hasn’t given a reason, and has instead refused to acknowledge that we have free will and from it deduce different values.

All this points to the fact that if the welfare of others is not as valuable to one as the sustaining and advancement of one’s own life, and as had been established there is no reason for it to be, then we must accept the right of others to pursue their own Human Life, the right to morally own themselves, and the right to not be morally owned by another.

Now to answer the why welfare states are morally wrong almost all the time.

Welfare states are morally wrong, or evil, because they force one to make true sacrifice for others, which we have used reason to establish is not a moral obligation. Further, the only way to truly force someone to do something against their will is physical force or the threat of it, which we believe is wrong. Exactly as slavery forces people to sacrifice against their will through violence or the threat of it, people who are better off economically are physically are physically threatened, and thereby truly forced, to sacrifice, by people denying the basic right to morally own oneself 100%, and not to be morally owned by others at all. Let’s be trivial and call these people ‘Government’. They force people to do that which has been established as morally right by imposing, or forcing wealth redistribution by the physical threat of putting one in prison ,which can only be done against one’s will through physical force, and in doing so deny liberty.

So the answer we have so far is that if we wish to preserve liberty and individual rights, then welfare states must be abolished. Now, should charities be the institutions to replace them? Let’s see if they shape up to some criteria.

If there are still humans left who value the welfare of other humans, for whatever reason, do they serve the purpose of improving the welfare of those humans who have little? Yes. Are they private institutions, so as to be aligned with an objectivist’s view promoting laissez-faire Capitalism? Yes, they are private institutions. Are they aligned with respecting the human right to free will, and any deduction derived from it that the welfare of others is not valuable, allowing people to act on that deduction if they reach it? Yes, charities would be an optional thing to donate to. And finally, can charities do as good a job of government in improving the welfare of others? You would think not, simply because one can assume that the welfare of others would not receive any where near as much capital as a welfare state would.

However, unlike a Government, charities work to provide global equality, not just national equality. In addition, supporters of capitalism would argue through complex economic theories that completely free markets improve the quality of the human race, globally, for everyone, and in a sustainable way whereas Governments tend not to. Further, they supposedly do it faster than Government! These theories have tended to stand true in history, and capitalism is supposed to promote industry, growth, development, and ultimately modernisation which leads to a better quality of life for all, especially in poor countries where cheap labour is available. And the proof is in the pudding! Take China, for instance. Capitalists have taken advantage of its abundance of cheap labour, and this has brought wealth into China, stimulating the economy, modernising previously primitive settlements by attracting people to live in capital efficient cities, drawing capital to development, ultimately for the goal of human life. Further, we cannot deny the truth that in this modern society, welfare states are unsustainable, relying on success, growth and profit in the private sector, while crippling these three foundations that keep it alive.

Remember that living in poverty now would not have been living in poverty one hundred years ago. By being so concerned with equality, the world has not come to care about standard of living in absolute terms, only in relative terms.The only equality which a welfare program could sustain-ably implement today is not one which makes everyone not equally rich, but one that makes everybody equally poor.

Are Human Rights Under Fire...Literally?

2013-03-06T18:42:00.001Z

by Eyrie Clark


A Reaper Drone Credit to The Guardian

A 16-year-old boy was murdered. He never did anything wrong. He never even saw his death coming. The crime was his father's, and he was executed because of association even after his father had been killed. Do you think this is wrong? It's already happened.

As technology progresses, humans find more and more ways to use such technology to satisfy their agenda - which usually means someone has to die.

And, sadly, that is the case now, as the public has recently found out about a secret government program, that was apparently so top-secret that former White House Press Secretary Gibbs was ordered to deny its existence.

This alone is obviously VERY alarming. Any program the government tries so hard to keep a secret obviously spells bad news.What is so bad that they're afraid of their own citizens knowing of its existence?

Well, that program is the 'Drone' program. It is a billion-dollar program to create and pilot unmanned, armed drones to use as scouts and, when needed, the middleman who carries out the sentence for the executioner. Someone in Florida could press a button and and blow up a wedding in the middle-east, all in real time.

The main aggressors in this are the United States, but also the UK, and the technology has even found its way to China, which already spells disaster. Sadly, there has been no end to the atrocities. Just one example among a sea of them, in the wedding I mentioned earlier, a total of 47 civilians were killed, after they were hit THREE TIMES. The first one hit a group of children travelling ahead of the group. The second strike hit the main party. The third was to make sure there were no survivors. Let's make something clear: the victims were not armed at all. The majority of them were women and children, escorting a bride to her wedding. Perhaps what's even worse is that although the bride-to-be survived the second bomb, which hit the main group, she was killed by the third bomb when trying to flee the area. Imagine how that must feel, about to get married, surrounded by your family and friends, and then, all of a sudden - BOOM! No more wedding, no more friends, no more anything.

And you remember that 16-year-old I mentioned earlier? It's not something I just made up. September 30th, 2011, 16-year-old Abdulrahman al-Aulaqi had a bomb dropped on his head. He was a United States citizen, studying to be an engineer. He was killed by a United States Reaper drone! Does this mean the government now has the right to execute their own citizens without judicial process? But, to be fair, his father was known to be an active recruiter for terrorist organizations. So he MUST be guilty by association, right?

The sad part of this is that I've barely scratched the surface of it all. There are countless violations of international laws and humans rights I could write here. For instance: did you know that the White house refuses to publish the memos that has the legal justification to killed US citizen without trial? Only this last February has the White House agreed to share this memo with congress. With CONGRESS. Not the public.

And while I could rant on and on about these horrible violations of basic human rights and international laws, I'll leave you with this.

Congrats ladies and gentlemen, and welcome to planet Earth. This is how things are done here. Any questions?

Death and Capitalism at Oxford Think Week

2013-02-20T15:41:00.000Z

by Viva Avasthi

On Monday I attended a Think Week event entitled 'Death and Capitalism' which has been given the following description by its organisers:

Here I am with Mr Hutton

Death is a given. We will all die at some point. When you strip away all the emotion, all the psychology, all the cultural impacts, is there something about death, something very practical, that we are missing out on? Death, it turns out, is also an opportunity. It is inextricably linked to wealth and property. So, as we strive to build a stronger, more equitable and more prosperous society, what opportunities does death afford us?

I went primarily to see the main speaker, Mr Will Hutton, who is currently Principal of Hertford College, Oxford and is a prominent Keynesian economist. During a discussion with my economics teacher where I was wondering whether there are any modern equivalents to Keynes (that is, whether there are any prominent economists today who would adapt their ideas and thoughts to suit the economic problems facing them, rather than holding on desperately to fixed ideologies), she mentioned Will Hutton and Amartya Sen. Although I had heard of Amartya Sen and knew that he specialises in development economics, I had not heard of Will Hutton. For this reason, when I found that Mr Hutton would be speaking at an event at Oxford, I was immensely excited and made sure to attend so that I could find out about his ideas and meet him in person.

In his speech, Mr Hutton argued the case for increasing rates of inheritance tax as well as ensuring that the loopholes currently used by the wealthy are closed. In starting his speech by mentioning that the 5-7% levee the Romans used to place on young men from wealthy families was just one of many examples of inheritance tax throughout history, he argued that humans have always been determined to create equality by rewarding people according to the amount of effort they put into their work. He pointed out that in observing this idea, the young Marx was, in fact, wiser than the old Marx to some extent, because the young Marx understood that everybody being paid equally no matter how hard they work is fundamentally against human nature. This aspect was particularly interesting for me as I have just finished reading a book on Marx's ideas, and will be publishing a relevant article very soon.

Some of the main problems outlined by Mr Hutton regarding our society were that wealth distribution is unfair and that it is ridiculous that people such as Bob Diamond (former CEO of Barclays) have been able to steal extortionate sums of money from organisations and their shareholders. His ideas were thought-provoking, but I would like to read his latest book, Them and Us: Changing Britain - Why We Need a Fair Society, where he extends his arguments, before commenting on them.

It was to my delight then, that when I spoke to him at the end of the event, he was so impressed that I had travelled from Birmingham to attend the lecture, that he insisted on buying me the very same book I was intending to read! He signed it with, "Viva, thanks for coming! Enjoy, Will Hutton", dated it, and wrote Oxford at the top. I think it's amazing that the very first signed book that I own was bought for me by its author. Afterwards, we discussed Keynes and what I plan to do in the future, and when Mr Hutton realised that his book The State We're In would be more relevant for me as a student of economics, my dad bought it for me, and Mr Hutton very kindly proceeded to mark out the chapters I would find most relevant.

I am looking forward to reading both of these books and would like to thank Mr Hutton again for his kind gestures. All in all, it was a wonderful experience!

And so it Spins

2013-02-19T11:22:00.000Z

by Eyrie Clark

Thanks to Matt Wuerker and the Cartoonist Group.

When talking about politics, politicians, and especially political corruption, you often hear the term 'Revolving Door' come up. 'They are just a part of the revolving door,' or 'It's all just one big revolving door'. But what does that even mean?

Well, I ask you to look to the illustration to your right in this article and skim through it. It is a vast simplification of the process, but nonetheless, it is still incredibly accurate. In this article, we will be picking through the picture, as well as examining a few politicians as examples.

But first, like I started this article: what is the 'Revolving door'? Basically, the theory of it is that business men who decide they are not making enough money go into politics. You will notice step one; 'Take a bunch of corporate cash. Buy a seat in congress!' This step is accurate because, time and time again, it has been shown that the campaigns that spend tons of money tend to win elections. Think of how Mitt Romney won the Republican Nomination. Not because he was better policy-wise than anyone else, but he was better-funded. But why? Politicians may be paid an OK amount if you were an average citizen, but it comes with the extra cost of having to maintain two residences: one in the nation's capital, and one somewhere in their constituency.

It's quite obvious, when you apply some logic to it. They enter into politics and they don't serve the people like they swear to; they represent the corporations they worked at. They write laws and bills in favour of those corporations, and receive huge payout by them that are labelled as 'Campaign Donations' as step two of the illustration shows. As an example, the illustration mentions 'Big Pharma'. 'Big Pharma' is a nickname given to the pharmaceutical industry. Basically, they benefited greatly from Obamacare being passed in the USA, because one of the acts of Obamacare was that the USA would stop importing pharmaceuticals from Canada that would undercut the prices of American drug companies. In other words, they are basically handing them millions upon millions of dollars by giving the major drug companies a monopoly over the market in the US, giving the average consumer nowhere else to go to get what they need to keep themselves healthy and basically forcing them to buy from these large corporations, who can set the price as high as they want, because after all, who's going to be competing with them?

And then, the third step: 'Leave seat in congress for seat on corporate board. Make millions!' This illustrates the fact that, after many of these 'Corporate Kiss-ups' are done in government, they leave the revolving door and join a corporate board to lobby for whatever industry they were helping in their time in government.

And why does this work so well for the corporations? Well, the new lobbyists, who are former politicians, go to their former colleagues and say 'Hey, dude! Don't you remember me? I used to work just two offices down the hall! Come on man, don't regulate my company.' And most of the time, they don't. But more importantly, they also serve as an example. They are basically living proof to the politicians that if you do what the corporations say and 'play ball', they'll make you very rich.

This is increasingly obvious in the US. I keep going back to them because it's easy to understand and everybody hears about the news in america quite often. For instance Linda Fisher, congresswoman, moved from congress to become rich lobbying for Pesticides and Biotech. Phillip Perry, former member of Homeland Security, became a lobbyist. Congressman Dick Gephardt left his congressional seat to start his own lobbying firm, and in just one year made anywhere from 7-10 million dollars lobbying for defense contractors.

But, to be fair, it's not just the US. The revolving door has been seen spinning in a number of different countries, including the UK. Awareness of this started when a popular British television drama had aired episodes which involved sitting members of parliament and ministers offering their services to corporations. .

Nonetheless, this system has been going on forever, and as long as the money keeps flowing, the revolving door will keep spinning.

Osborne to Re-set Banking System

2013-02-04T19:54:00.000Z

by Karina Shooter

Photo courtesy of www.guardian.co.uk and Andy Rain/EPA

Today at JP Morgan, George Osborne announced that 2013 would be “the year we re-set our banking system”. He is forcing big banks to ring-fence their riskier investment banking operations from their retail operations, threatening that those banks which fail to comply will be separated completely.

But what does ‘ring-fencing’ mean? At the moment the investment banking division of big banks uses money from their high street operations (i.e. the money that we put into our current accounts) to fund their riskier investments. This is what happened during the financial crisis of 2007, which meant that the government was forced to bail out banks with tens of billions of the tax payers’ money, otherwise the money which people had saved in high street banks would have been lost. In the new system, investment divisions will have to have enough money in their own accounts to fund riskier investment strategies, therefore they will put the taxpayer and the economy in a much less dangerous position.

As George Osborne said “Irresponsible behaviour was rewarded, failure was bailed out, and the innocent - people who have nothing whatsoever to do with the banks – suffered.” Under the new system there will be “no more rewards for failure. No more too big to fail. No more taxpayers forking out for the mistakes of others” he said.

But it is not only the accounts which will be separated, Osborne has called for separate people to oversee the investment operations and retail operations, rather than one CEO for the whole bank, as we have at the moment.

Following the LIBOR scandal (see my earlier article) the government set up the Parliamentary Commission on Banking Standards, which suggested that in order to avoid a repetition of the financial crisis, the government should have the power to break banks up if they did not put the ring-fencing reforms into action.

However the British Bankers’ Association is not happy with the reform. They have said that it will create uncertainty and will mean that bankers will find it harder to raise capital, therefore they will not have as much money to lend to small businesses, which will damage the economy. In addition, the projected costs of putting the reform into place are very high – these costs will undoubtedly be passed onto consumers in form of higher costs of high street banking, in particular higher costs of lending. However scandal after scandal has led to the public’s lack of faith in the banking sector, therefore the public are unlikely to sympathise with the worries of the British Bankers’ Association.

Hopefully banks will comply with the new reforms, otherwise Osborne will electrify the ring-fence with legalisation and separate big banks completely.

Just Google It...

2013-01-24T16:52:00.000Z

by Karina Shooter

How Google searches can predict economic indicators and give us an accurate picture of today’s economy

Up until recently, Central banks have only used official data when calculating and predicting economic indicators such as unemployment, housing starts and consumer confidence. However official data is published a significant time after it has been collected (usually at least a month) which means that bankers found it difficult to calculate up-to-date predictions. How could bankers determine the present and future state of the economy, using figures that were only a reflection of the past? As Brynjolfsson, a professor at MIT, said “When central bankers were looking at traditional data, they were essentially looking out the rear-view mirror.”

However research has emerged which suggests that by analysing Google searches, we can obtain a clear picture of today’s economy as well as being able to accurately predict future cycles. For example, when trying to estimate unemployment figures, researchers found that by calculating the proportion of Google searches which contained key words such as “JSA” (short for jobseeker’s allowance), “jobs” and even “solitaire”, they could accurately calculate figures that almost exactly matched the official data when it was published weeks later.

Google searches can also be used to determine demand and the willingness to consume in an economy, which is useful if you want to predict GDP or whether our economy will dip back into recession. When you Google search for “blue jeans, Topshop”, analysts can infer that you have the demand to buy a pair of jeans from Topshop.

Over 60% of the adult population use the internet every day, so Google searches cover a large sample. In addition the information obtained is extremely up to date – Google pass on the records of their searches to central banks within three days. This helps governments react quickly to economic concerns and crises. Could the global recession have been avoided, if central banks had an accurate picture of the economy? Would they have been able to use the weeks in which information was delayed, to formulate a crisis aversion plan?

However there are downsides to using Google searches to predict economic factors. Only people of a certain wealth are able to access the internet and younger generations are much more likely to use Google than their older counterparts. Unfortunately this makes the sample of data unrepresentative of the population. However researchers have assured critics that this is a minor issue that will only get smaller because the internet is quickly becoming more accessible to everyone. Another downside is that people may search Google purely for curiosity, for example if someone looks for a new job opening who is already employed, or if you look at jeans on the Topshop website, even though you know you can’t afford a pair this month. ‘Curiosity searches’ such as these distort analysts picture of the economy and increase the chance of inaccuracies in future predictions.

Although using Google searches for this purpose is a relatively new initiative, as you can see from the graphs, the results are astonishingly accurate. From summer 2012 Central Banks have had access to all Google search records – which just shows how much potential banks think this method of economic analysis has. If you still aren’t convinced, why not try it out for yourself? You can do your own analysis using Google search data via this link: http://www.google.com/trends/

The Big Questions: Book Review

2013-01-20T16:29:00.001Z

by Viva Avasthi

I don’t know how many of the readers of this blog are familiar with the writings of Steven E. Landsburg, a professor of economics at the University of Rochester in Rochester, New York. For me, this was the first time I’d read any of his books despite the fact that another of his books, entitled ‘The Armchair Economist’, is far more popular.

The book has been written to fulfil the purpose of “tackling the problems of philosophy with ideas from mathematics, economics and physics”, which sounds brilliant, but it’s arguable as to whether the author actually manages to achieve this purpose as well as could be expected from a best-selling author.

In his introduction to the book, Landsburg writes:

“In this book, I’ll tell you what I believe about the nature of reality, the basis of knowledge, and the foundations of ethics. I’m not sure any of my beliefs are right, but I’ll explain why I think they’re plausible – and more likely to be right than any other beliefs. (Though of course I might eventually be convinced otherwise by new arguments.)”

That extract manages, in fact, to provide a brilliant reflection of the nature of this book. It’s mainly a collection of fairly random ideas discussed from a slightly biased outlook, but which does provide an entertaining and thought-provoking read. Some aspects of Landsburg’s logic seem sound, if a little too quickly explained, but others don’t make too much sense at all and left me questioning how the author could have such a solid opinion on the correctness of something when it seemed completely wrong to me.

For example, at one point, Landsburg writes about his opinions on The Headache Problem, which is a scenario posed by a distinguished philosopher (whom Landsburg doesn’t mention by name). The scenario is as follows:

“A billion people are experiencing fairly minor headaches, which will continue for another hour unless an innocent person is killed, in which case they will cease immediately. Is it okay to kill that person?”

Take a moment to think about how you would answer that question.

Landsburg doesn't hesitate to state that he can’t “actually understand why this was a dilemma; the answer is yes, for reasons that would be immediately obvious to any economist.”

Although I haven’t formally started learning economics yet and so don’t know if there’s some sort of logic that all economists must follow which is “obvious to any economist”, the idea that a person should be killed to cure the “fairly minor” headaches of a billion people which will last only for “another hour” seems completely absurd! How can it be justified to kill a person to cure the minor discomforts of a billion others? Granted, a billion people overpower just one person if we look at this from the utilitarian view, but it’s not like a minor headache lasting for a short period of time would bring the global economy to a standstill (which might just justify sacrificing one person).

Landsburg proceeds to justify this opinion by writing that people will pay one dollar to buy medicine to relieve their headache, but not to insure themselves against a one-in-a-billion chance of death. Therefore, he claims, “[…]if I can replace your headache with a one-in-a-billion chance of death, I’ve done you a favour. And I can do precisely this by killing a headache sufferer at random[…]People have died so that other people can drive to the opera. Why shouldn’t they die to cure other peoples’ headaches?”

It’s all pretty interesting and highly debatable stuff. I’m sure some of you will have opinions one way and some the other. You might actually know why supposedly any economist would say “yes” to killing that random person! If you do, why not write your own article on the matter to provide the people who have read this book and will read it in the near future with a better answer than the one Landsburg provides.

All in all, despite its shortcomings, I would highly recommend this book to anyone who enjoys a good argument. The last chapter on “What to Study” provides a narrative of how the young Frank Plumpton Ramsey “[made] the most of his youth” to “let [his] mind run free”. It is particularly inspirational and definitely worth a look for those of you who haven’t yet decided which university degree to pursue.

2012 in the City

2012-12-30T19:49:00.000Z

by Viva Avasthi

Now that we've (successfully) come to the end of another year (because the world hasn't ended), here's a useful overview of the major political and economic occurrences this year from The Week magazine.

Note that if you open the images in new tabs, you'll be able to read the text far more clearly.

Demand and Supply Analysis to solve Parking Problems?

2012-12-12T20:40:00.000Z

by Karina Shooter

In many crowded cities across the world it is common for frustrated drivers to be unable to find a parking space. In fact, it has been estimated that about one third of congestion in cites is caused because drivers circle the streets in order to find an empty parking spot. This not only inconveniences the drivers themselves, but also has a big social cost - cars circling the streets produce extra fumes and pollution (which otherwise would not have been produced had a parking space been available) and it also increases the risk of accidents - a driver looking for a parking space is much less likely to notice an oncoming pedestrian or cyclist.

In order to combat this problem, San Francisco has introduced a high-tech parking system called SFpark. The aim is to keep one parking space free per block at any one time, by using supply and demand analysis.

Since sensors have been installed into parking bays around the city, which register when the parking bay is being used, drivers now pay flexible parking rates in accordance to how busy the parking spaces on that block are. The rates are reviewed every two months. If a block of parking spaces is particularly popular and rarely has a free parking space, rates for that block can be increased by 25 cents, whereas if a block frequently has free parking spaces, prices can be decreased by up to 50 cents in order to increase demand and reduce the number of available parking spaces until only one per block remains.

SFpark has also made it easier for people to pay for parking, by introducing credit card machines in parking meters. In addition, people are able to check online, via text or on their smartphones whether the area which they would like to park has any available parking spaces - this may encourage people travelling to busy areas to use public transport.

Although it is too early to conclude whether the new parking system has been effective, preliminary data suggests that three-quarters of the blocks have either hit their targets or moved closer to the overall goal of one available parking space per block. In addition, the scheme seems to be more successful on weekdays than weekends.

Cuts cost Growth

2012-12-08T13:32:00.001Z

by James Wand

This week's Autumn Statement was possibly the bleakest outlook on the economy for more than sixty years. The economy is in an appalling state of stagnation and collapse, the foundations are failing and plans to secure its recovery are faltering at every turn. George Osborne has failed to heed the warnings from the IMF and the World Bank, and is placing ideology and addiction to public sector cuts before the necessity of supporting the weakest and most vulnerable in our society. This Urgent Statement addresses the horrifying Autumn Statement.

As we further move towards winter we must face the reality that what lies immediately ahead will be the twenty-first century version of the winter of discontent. Osborne, addicted to cuts, deeper cuts, and even deeper cuts admitted today that Plan A had failed and austerity would last until 2018 at the earliest. Average growth forecasts from the Office for Budget Responsibility, the IMF, EU Commission and Credit rating agencies have even suggested that such claims are unrealistic; with comparisons to the March Budget suggesting that confidence even within the inner circle of the Treasury has all but disappeared. We face a decade of decay and austerity – this is no less than a national disaster and one that we must address quickly.

As the roof of the economy is ripped off by Mr Osborne to make way for the torrent of benefit cuts and pay freezes, it is time he realized that growth does not come from pay constraint. The policy and notion of such constraint and limitations caused pain and misery for Barbara Castle and Michael Foot when they were ministers more than thirty years ago – and it still viewed by many, including former Chancellor Alistair Darling, as nothing more than “the last card in the pack that can be played”. If we intend for there to be growth, for more people to spend more money buying more items, something that we must consider the biggest factor: where is such money going to come from? It is a factor that has been overlooked by Mr Osborne who yet again announced pay cuts for public sector employees. With inflation expected to stay above the Bank of England’s target of 2% until 2014, then not only will family necessities have to be cut – but essential too. Benefit cuts symbolize that Osborne has moved away from the notion of ‘all in this together’ and more towards ‘every man for himself’. Mr Osborne is withdrawing support for those in need, rejecting key proposals and instead turning his head towards the belief that tax cuts, and only tax cuts, will be the saviour of the our troubled financial situation. History has proved that when times get tough tax cuts and public sector cuts don’t work, and when times get even tougher repeating the same old cycle of tax and public sector cuts still doesn't work. Osborne isn't listening, and is denying the clear facts that attempts of such ‘fiscal restraint’ fail every – single – time.

Lead by the ideology and the belief in a smaller state – Osborne has added tax cuts to his Christmas list. The cuts to Corporation Tax are intended to indicate that Britain is ‘open for business’. Nevertheless, Mr Osborne has failed to address the problems regarding that Corporation Tax simply isn't being paid. If big businesses are evading tax then the only message being sent out is that our tax system is ‘open for abuse’. With such a bleak economic picture, we also have to face the big concerns. If no money is being made, profit created or services provided – how is any rate of tax expected to work. The public sector sets the bar high in everything does – providing key services at good prices. Every part of the public sector is required from the ‘backroom’ form fillers, who without them would leave a back-log of work to the front line Bobbies and paramedics. Ideology comes first as the sector that has punched well above its weight, provided more than its fair share to the economy and is the bastion of quality and care is destroyed by a Chancellor whose home he would rather be in the pocket of big business than Number 11 Downing Street.

It is time for Britain to get to work. There is nothing stopping us from reaching our full potential – from producing more, inventing more and being more. Osborne is not a fighter – he is not fighting for Britain. Keeping pay low only goes to keep the power of the public sector and the productivity of its employees equally as low. We are constantly reminded that this is the worst economic situation for sixty years – then perhaps it is time to take lessons from history. To promote growth you invest more, spend more and think bigger. You do not pull back, you go further, reform further and push for more. To get more produced you empower people with increased spending to create a cycle of employment and increased tax receipts; never giving up. You never give up on the belief that opposed to cuts, growth in the public sector can lead to growth in the economy - and you never give up on anyone in society. Because we do have, and Britain has, so much more to give.

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Stem Cell Research: Life-Saving or Cold-Blooded Murder?

2012-12-07T21:40:00.002Z

by Sparshita Dey

^Embryonic stem cells

Stem cell research may be the next scientific breakthrough. Scientists think that if we can discover how specialised cells turn off/on certain genes to give them particular functions and characteristics, we can start "growing" specific cells using stem cells from a person's body. These can be used to cure genetic diseases (which cannot be cured at the moment and can result in a lifetime of pain and discomfort, including early deaths) as well as other diseases that are not yet curable e.g. diabetes and paralysis. So surely using stem cells should get the go-ahead straight away? Then why do so many people oppose it?

What is Stem Cell Research and what are Stem Cells?

Stem cell research is to do with the research of undifferentiated cells (i.e. cells with the ability to differentiate/specialise into any type of cell with any type of function in the body depending on where it is needed/ used). In plants, specialised cells can become unspecialised again (like stem cells) and then re-differentiate if needed. However, in animals, like humans, the stem cells differentiate very early on in the development of the organism (from just after a zygote is formed – i.e. in the embryonic stage) and this change is permanent.

Theory behind the importance of Stem Cell research. The advantages, if you like:

^Religious opposition is quite common

Many people believe that stem cells could be able to help people in curing things like Alzheimer’s disease and helping cure paralysed people. Stem cells from their body could be used to create new organs or cells to help “fix” or replace the problematic ones in the person’s body to cure them. For example, to aid a paralysed person, new nerve cells could be grown from their own stem cells and then used to reconnect the nerves in their bodies. This means that the genetic information will be exactly the same and the person will not face problems like their body’s immune system rejecting the transplanted organ if it is from someone else’ who isn't genetically related/identical to the person.

Types of Stem Cells

The two main types of stem cells are embryonic stem cells and adult stem cells. Embryonic stem cells are the main focus of stem cell research. These are the cells found in the inner embryo, just after fertilisation, when the cells have not differentiated to form the various cells and organs of a new baby. Adult stem cells can be found in the bone marrow. These stem cells are not so much the focus of stem cell research as embryonic stem cells are much “newer” and are therefore capable of differentiating into a greater variety of cell types with a greater variety of functions.

Statistic Verification

Source: Charlton Research Company

Date Verified: 6.20.2012

Stem Cell Research Public Opinion	Percent
Do you favour or oppose expanding federal funding for research using embryonic stem cells?
Strongly favour	39 %
Somewhat favour	34 %
Somewhat oppose	12 %
Strongly oppose	15 %
Do you favour or oppose expanding federal funding for research using embryonic stem cells?
Favour	73 %
Oppose	27 %
Would you favour or oppose a law that bans using embryonic stem cells to clone a human being but allows them to be used for the pursuit of cures for diabetes, paralysis, Parkinson’s and other diseases?
Favour	67 %
Oppose	33 %
Of those opposed: Would you say your opposition to embryonic stem cell research is based on religious objections, or is your opposition based on other grounds?
Religious objections	57 %
Other grounds	39 %
Not sure	4 %
Reproductive cloning is the use of cloning technology to create a child. Do you think research into reproductive cloning should be allowed to go forward?
Yes	30 %
No	70 %

^This secondary source shows that most people do not object against stem cell research, but of those who do, the majority oppose due to religious reasons

The possible ethical issues with stem cell research:

The main issue that people have with stem cell research is following the thought process that each embryo is a potential life. It is true that the embryo, which is just a ball of cells could make a new person and even though research using these tiny ball of cells could save many people in the future, some people believe that it is wrong to take one life to save another. This problem or view is supported by religions as it is believed by most religions, like in Judaism and Christianity, that taking a life (even though it is only a potential life, not an existing life yet) is wrong, because it is “precious to God”. This explains how a large proportion of the people in the sample above who opposed stem cell research had reasons that were mostly religious oppositions. Apart from this however, there doesn't seem to be any other big issue with stem cell research… but perceptions of whether an early embryo can count as a human being (with human rights) is very controversial as well.

^There are lots of ethical issues with stem cell research

Personal views - Whether there is anything unethical about Stem Cell Research:

Finally, in order to decide whether stem cell research using embryonic stem cells is right or wrong, it very much depends on individual views on the value of an embryo. I personally think that although embryos are a potential life and following that mind-set, research which could lead to the destruction of these “lives” sounds a lot like murder, we must also judge and relate to what we mean by a living being or thing. If we say that living is defined as an object that is able to reproduce and grow, then an embryo would be living (cells of the embryo reproduce asexually, the embryo itself does not!). But often that is not all we mean when we talk about humans in particular.

If we were to call an embryo a human, it would be expected to breathe, communicate, have emotions or a nervous system to start with; but the embryo is none of these things, it is just a cluster of cells capable of just reproducing and thus growing, and then differentiating into something else over a longer period of time. Therefore, it is not a human yet and so human rights do not apply as it cannot even make judgements for itself.

Using this logic, you can argue that this is still not a very good reason to destroy or experiment with a non-living ball of cells which could one day become a human being. And again, this is a very valid point. However, most of the time the embryos being used are from abortion or unused IVF treatment (in vitro fertilisation - when fertilisation occurs outside of the woman's body and in laboratory controlled conditions before being implanted back into the mother). This means that they would be destroyed anyway if they weren't used for stem cell research. Isn't it better to use the embryos for research than to waste them by destroying them if they could be of better use for something else? Also, if using these embryos which would have been otherwise destroyed is unethical, then is every sperm and egg cell (a potential life) being killed unethical too?

For these reasons, I think that at the moment, stem cell research is justified and not like some cases like animal testing where the ethical issues are as significant as or perhaps even more of a concern than the benefits from animal testing. I do not think that there is any problem at the moment with the research continuing and although at a glance at the situation, it could seem like the destruction of potential lives, looking into the situation and the types of embryos used makes it seem less so. I also do not think that embryonic stem cell research can be judged as a negative development even in the future. Unless, of course, the embryos are taken from parents who wanted the embryo, or not given to those who want children but can’t have any of their own – in which case these unwanted or spare embryos are much more valuable as they actually have a way of becoming a new human being.

What do you think? Do you agree with this point of view or do you think that stem cell research is unjustified?

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Academies: The Dangerous Schools

2012-12-04T20:37:00.001Z

by James Wand

Michael Gove, the UK's Secretary of State for Education
Image courtesy of The Times

After disappointing results for thousands of students in their GCSE exams this summer, those entering secondary schools for the first time this week will be going in with more trepidation than ever before. It’s hard not to feel that the class of 2012 have been hard done by as they bear the brunt of Michael Gove’s radical reforms. Radical reforms that have resulted in schools changing from local education authority lead establishments to academies and free schools, moving away from the safety net that is local government and towards the dangerous and volatile world that is the educational free-market.

Michael Gove isn’t a stupid man. Studying English at Oxford, he was president of the Oxford Union, writer for The Times and The Spectator, has a wealth of over £1 million and wrote a critical study of the Northern Ireland Peace process. He understands the full affects of radical changes. Radical changes like plans to destroy the Key Stage 4 Curriculum, radical changes like forcing academy status upon ‘failing’ and ‘underachieving’ schools and radical changes that involve a 25 year step back in the exam system.

But to see how far Mr Gove has to go, we need to assess the damage he has already done. Entering office in May 2010, Mr Gove has seen the appointment of a generally unpopular chair of Ofsted Sir Michael Wilshaw (yes, the same man who banned students from hugging), sparked outrage by suggesting Academies could employ staff with no teaching qualifications and has even been mentioned in rumours regarding the withdrawal of all non-statutory payments to schools by Oxfordshire County Council to force schools to become academies. And to him, this is just breakfast. Overseeing the largest expansion of free schools and academies- it has emerged that the majority (50.3% according to BBC/DofE) of schools have broken the link with their local authority.

Academies are dangerous organizations. By withdrawing themselves from Local Education Authority (LEA) control, a process that is designed to give them “fiscal and education independence” according to the Department for Education, they are stepping in to the unknown. Giving schools financial independence is wrong. Yes, schools know where the money should be directed, but do not have the oversight and the ability to foreshadow like local authorities do. A large scale local authority can address building concerns more accurately when it can see the bigger picture. It can pump money in to where it’s really needed and ensure all schools reach a certain quality. By giving schools financial independence the chances of modernisation are likely to fall and problems rise. With a significantly enlarged budget it becomes too easy to forget about the services the local authority previously provided and spend money too quickly. This would leave many schools in a bad situation if ever a rainy day comes. As before they could turn to their Local Authority who would lift the problems out of the schools hands and address any financial problems quickly by looking at the wider budget, each school would be left alone. Furthermore each school now lies at the hand of the private sector. From cleaning costs to schools buses and maintenance, where previously the local authority would have had ultimate control of all of these services and would have worked in the best interest of the school, now schools can contract out work. Yes, in the short term this may be cheaper but let’s look at the bigger picture – private companies only care about profit not people. This is a free market that is ultimately going to scare off any improvements to schools.

The pain certainly doesn’t end there. Mr Gove has given the go ahead for academies to employ staff (including teachers) who have “no teaching qualifications”. A cheap alternative these ‘teachers’ will drive down results and not raise them – as Michael Gove has very much hoped for. It just indicates how times change. It was only 2 years ago David Cameron was suggesting all teachers should have a 1^st or a 2:1 degree and all applicants with a 2:2 or 3^rd would be rejected; now it a profession that someone with no knowledge on the curriculum or children can get into. With the power to sack and amend the contracts of teachers, the workforce at academies becomes undervalued. Unions have a point when they point out the “disposable attitude” academies are now adopting. The new academies seem fraught on keeping costs down- at the costs of standards. At these time when we here that standards in schools are falling, shouldn’t we ensure that pupils get the best and the cream of the crop, not the bottom of the barrel.

Academies symbolise how Gove ideology is seeping into our education system. Their management schemes indicate a switch from a board of governors to companies with vetted financial interests having real control to the application process and the independence of schools to pick and choose pupils. Agreed, it is unlikely Academies will suddenly reject all applications from a certain area but what is there to stop them? Unfair, unequal and bias – the academy scheme only goes to remove the hope and dim the light on the dreams on many thousands of pupils. What does any of this matter, surely the content is the same from Academy to Academy, school to school? Well not exactly. Anyone who watched Faith School Menace with Richard Dawkins will have noted the fact that many religious based academies are beginning to swerve away even from the basic curriculum they have to teach on things like Biology and the Sciences to Religious Studies. If it wasn’t bad enough that Academies don’t have to stick to the curriculum non-Academy schools have to, it seems that they can’t even do that well.

What is even more worrying is that his plans to cripple young people don’t end there. With his announcements to scrap GCSE’s and replace them with old style O-Levels, I wonder whether we should start playing ABBA and David Bowie again and go back to 1980. I do not think exams have got any easier. It is far easier, though, for a generation who have passed their exams, gained their qualifications and received their university education (I suspect at a well reduced price) to criticise the system as it stands. GCSE’s create a consistency around vocational and academic studies and allow students to ‘play’ to the best of their abilities. Dividing people up in to separate groups at an early age doesn’t solve a problem of rising standards. It is only keeping a close check on exam questions and syllabus that mean we will help us conquer our own futures.

In an new era when we are likely to need to train again to keep up the moving times, we must ensure that we have high standards in the basic of areas. We need assertive, thoughtful leadership from someone who realises now more than ever the importance of filling an empty mind with an open, enquiring one.

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Can footballers’ wages be justified?

2012-11-18T22:20:00.000Z

by Daniel Hearn

With top footballers’ wages rising massively over the last decade or so, football is the subject of debate as to whether footballers are worth the extravagant salaries they are paid. Many argue that it is not fair that footballers get paid such huge salaries for 'chasing a ball around a pitch for 90 minutes' while nurses, who are of great social value, average a measly (in comparison) £18000-£35000 a year. Initially, it appears that there is cause for debate because footballers like Samuel Eto’o who appear to offer little, if any, social benefit, make more than £35000 in a week! A breakdown of Eto’o’s wages is shown in the image below:

His wages do indeed appear excessive, but surely there must be a reason for this. In actual fact, there are a number of reasons that soon shed light on why footballers’ wages so extortionate.

Supply and demand

A key concept in economics is that prices in a free market are determined by the market forces of demand and supply. Due to the scarcity of naturally talented footballers, there is a lack of supply to meet the demand (shortage). This allows the suppliers (the footballers/their agents) to have great power to demand high wages.

On the other hand, nurses whilst highly trained do not necessarily rely on having a natural talent which is in short supply. This means that there is potentially significant elasticity in the supply and they are unable to demand high wages based on scarcity of supply.

Private vs. public sector

Another factor differentiating footballers’ wages from nurses is that footballers belong to the private sector. This means that the employers are able to pay whatever they see fit to a player. Talented footballers can earn millions for the parent club through ticket sales and merchandising, and this will be reflected in their salary. The big names, such as Ronaldo, Beckham and Rooney can return their transfer costs and salary many times over in merchandising alone.

However nurses mainly work in the public sector, meaning their pay will depend on the allocation of spending to that sector by the government. Due to this, nurses’ wages tend to be fairly low as the government simply cannot afford to pay nurses what might be considered their true social worth.

Difference in quality

It also should be noted that only the top footballers are normally taken into account when this debate is discussed. Outside of the top leagues many footballers find themselves on wages much lower than the average nurse and have to work two jobs just to support themselves. So in proportion, very few footballers actually do hit the top salaries. On that basis it can be argued that this is just like any other profession; lawyers for instance – the best barristers will be paid very well, while those lower down the pecking order may only just get by.

Length of career

Another big factor in determining the wages of footballers is that their careers are normally fairly short, only being at the peak for around 15 years. Few manage to remain at the top level in football as they approach their forties and so they must be paid to make up for the income that will cease when their career ends.

Meanwhile, nurses are able follow their careers for the majority of their life. Nurses tend to work for many years before retiring at around their sixties. So, despite the difference in wages, nurses tend to have a much longer career than footballers and so are able to earn a salary for a longer portion of their lives.

Social cost

An argument that some footballers use to justify their wages is that at the most talented and successful players live a life under the microscope, just like many other celebrities. This comes as a great cost to their social life as they will often be followed by photographers, so that even the most innocent actions can be exposed and frowned upon. As for nurses, they are able to go out when they are off hours and do whatever they want (within reason), while footballers private lives become public property.

So, should footballers really be singled out for their “unfair” wages? It may be a rather prejudiced view that footballers are deemed to have wages beyond their real worth. Wages are not a sign of social worth; they are a result of demand and supply and how much the perceived value of a person is to their employer. This logic dismantles the debate and does indeed rationalize the salaries of footballers. If anybody wants to apportion blame for footballers’ wages, it is the capitalist system that allows this extravagant compensation to be paid in the first place!

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The Rise of Brazil

2012-10-30T21:25:00.000Z

by Viva Avasthi

1. Why has Brazil experienced such rapid economic growth?

The graph below (despite its confusing title) shows the real GDP growth of Brazil compared to the US and UK.

To see how Brazil compares to other countries, click the words 'Explore data' on the bottom right of the graph.

Through its combination of a young population, plenty of natural resources and a fairly robust political system, Brazil has managed to create and sustain a boost in its economic state. The rise of China (which will be explored later in the series, but has been already been explained by our author Chris Pearson here) contributed to Brazil's economic development as China had, and still has, a massive demand for commodities due to its sudden surge in manufacturing. (For a simple and effective explanation of what commodities are, click here.) Brazil's massive levels of exports of commodities to China leaves it slightly vulnerable as China's economic condition has a direct impact on Brazil's economy.

During the first decade after the Cold War, America's relations with Brazil drastically declined, which marked the beginning of the end of the US' influence over Latin America. This resulted in Brazil having more independence in its political and economic actions, which allowed it to expand without the somewhat oppressive and exploitative US hindering its progress.

Aside from its commodities exports, Brazil has a fairly well developed high-tech industry. Brazil has clearly made use of the resources it has, but it could be argued that it is overly dependent on exporting commodities. However, notable examples of other areas where Brazil does very well globally are ethanol production and the aviation industry.

Ethanol production

Brazil is the second largest producer of ethanol in the world after the United States. In 2010, Brazil produced 486,000 bbl/d of ethanol, up from 450,000bbl/d in 2009. A combination of high world sugar prices, a poor sugar cane harvest, and underinvestment caused a precipitous decline in ethanol production in 2011.

Source: http://www.eia.gov/cabs/brazil/Full.html, Last Updated: Feb. 28, 2012

Aviation industry

Embraer is one of the world's main aircraft manufacturers.

As Embraer's headquarters, [São José dos Campos] designs, manufactures, and provides after sales support to the commercial, executive, and defense aircraft market.

Source: http://www.embraer.com/

For interactive graphs, visit:
http://www.embraer.com/en-US/ConhecaEmbraer/EmbraerNumeros/Pages/Home.aspx

The pie chart entitled 'Revenue Per Region' shows that only 17% of revenue for Embraer comes from within Brazil. Clearly, the largest market share is held by Europe and then by Asia Pacific, which indicates that the Brazil-based Embraer is a globally active business.

The Problems Facing Brazil

The obvious problem with Brazil's economy is that its growth has been largely based on its exports of commodities. However, as has already been mentioned, Brazil has also become a world leader in other industries, particularly the aviation and ethanol production industries. The question is whether Brazil has done enough to tackle its over-dependence on commodities...

Brazil’s economy, the 6th largest in the world, grew 2.7% in 2011. Growth slowed due to reduced demand for Brazilian exports in Europe and Asia, despite solid domestic demand and a growing middle class.

Source: http://export.gov/brazil/doingbusinessinbrazil/index.asp

Some of the problems that Brazil currently faces were highlighted by one of the speakers from the lecture at Cambridge. It was mentioned by them that Brazil is having to tackle many problems similar to those the west is encountering. For example, the Brazilian Social Democratic Party allowed the construction of an arguably premature welfare system which lead to high wages having to be paid to workers. This, alongside the recent decline in Brazil's growth rate, has lead to the industries in Brazil becoming less competitive.

Another problem is that Brazil's education system is fairly poor, which means that its growth may not be completely sustainable. To allow industries to continue to flourish, they must be constantly provided with fresh talent. If a country's education system is poor, it can be difficult for it to continue to grow in the future as a result of its poorly educated population. On the other hand, if a country grows too quickly for the next generation to be trained effectively, this is also a form of unsustainable growth.

In the last edition of the International Program for Student Assessment (PISA), Brazil ranked 53rd among 65 countries...Eight percent of high school students have a technical-level degree in Brazil, compared to 42% in China and 37% in Chile...

Source: http://infosurhoy.com/cocoon/saii/xhtml/en_GB/features/saii/features/main/2011/02/03/feature-01

"2. How has this affected us?" and "3. How will this affect us?" will be answered as part of the final article of the series of six articles on the BRICS.

The second article of this series will be on the growth (or, more accurately, re-emergence) of Russia.

How Will The Rise of the BRICS Affect Us?

2012-10-30T19:22:00.000Z

by Viva Avasthi

On Saturday 27th October I attended a lecture on the rise of the BRICS (Brazil, Russia, India, China, South Africa) as part of the University of Cambridge's Festival of Ideas.

The speakers were:

Jaideep Prabhu
University of Cambridge
Judge Business School

Isabel Hilton

Journalist

Martin Jacques
Author
'When China Rules The World'

Michael Keith
University of Oxford

In this series of six articles...

I will be presenting the economic development of each country from the BRICS in detail by addressing the three questions posed below. In order to do this, I will use my research as well as the opinions of the aforementioned speakers.

Why have the BRICS experienced such rapid economic growth?
How has this affected us?
How will this affect us?

The first article in the series is on Brazil, since it is the 'B' in 'BRICS'.

The final article will be an overview of how the BRICS have affected us and will affect us as a group of countries.

The graph below highlights the fact that there has most definitely been a rise of the BRICS.

This graph measures the GDP based on the PPP (Purchasing Power Parity, which accounts for differences in spending power available through different currencies) of each country rather (than the more common) GDP based on current prices.

I have included the data on the US, UK and Germany so that the BRICS can be compared to other non-BRICS countries. Please move your cursor over the graph to see the various statistics.

Thought for the Week (29/10/12)

2012-10-29T10:00:00.000Z

by Shireen Avasthi

Life is like a sewer. What you get out of it depends on what you put into it. --Tom Lehrer

What Lehrer means by this is that the more you put into something, the more you get out of it.

For example, the more you revise for an upcoming test, the higher you will score on it. Or the harder you work on an essay or article, the better it will turn out.

You shouldn't expect to do well at anything you don't put hard work into, because no one gets anything they don't deserve. You should also never stop working for what you want, because even if it may not seem like it at the time, you will eventually get everything you've earned.

Think of it as an equation; everything on the left of the equals sign is worth the same as everything on the right. When you change the value of the things on the left, you have to change the value of the right, and vice versa.

Put more into everything you do this week, and you'll find you're getting more out of it too :)

The Legend of Apple

2012-10-27T20:30:00.000+01:00

by Shireen Avasthi

Why is Apple so popular? There are so many companies out there that sell products many people consider to be better than Apple's, not to mention much more affordable. What is it that attracts people so much that they end up buying such ridiculously priced merchandise? In this article I will be exploring what makes Apple popular and what makes them currently the most valued company in the world.
There are 5 main qualities that have made Apple as successful as it is.
The first one is dedicated employees: Apple employees are enthusiastic about the products, and genuinely think that they're great and worth every penny. They are highly empathetic and offer great customer service.They want to help customers with any problems they might have, and do their best to give customers a fantastic in-store experience.

The second quality that has made Apple so successful is that Apple's engineers were creating the products more for themselves than for the customers. Apple's products are guaranteed to be good because the engineers creating them are creating something they would love to use and wouldn't be able to live without. Many engineers may just create products because they have the capability to, and could just get carried away with the amazing technology around them. This is where Apple's engineers differ; they understand that the products they make need to be accessible to everyone. When Steve Jobs was alive, he was Apple's engineers' target market. They designed the products so that they would suit him as well as be easy and fun for him to use: he was their target market (he represented the vast majority of Apple's customers).

Smart yet simple. That is the third quality that helped Apple in it's rise to the top and helped it stay there. All of Apple's products have a large variety of gadgets and gizmos, but at the same time they are simple and easy to use. As well as this, Apple makes taking decisions very easy for it's customers. Admittedly, Apple products are expensive, and this may be part of the reason that Apple only sell the latest generation of each of their products; it makes customers feel that they are paying for the absolute latest technology. All of Apple's customers know that every member of staff in an apple store knows almost everything there is to know about the four main products sold in-store; the iPod, iPad, iPhone and Mac. Without multiple models of each product, it makes the decision making process so much easier! While other companies give such a large variety of models for what is basically the same phone (and at first, the range of choices can seem great), so many options often become confusing for the average customer, and the reality of the situation is that most people want their choice to be simple and easy to make; the only real decisions needed before buying an Apple product are how much storage space you need and what colour you like the most.

The fourth quality that helps keep Apple on top is that it only creates what it can improve. Apple didn't create the MP3/4 player, the smartphone or the tablet. They did, however, take these things and put their own twist on them. In fact, you could say that Apple recreated them. Apple takes the products it already has and improves them; makes their customers want the latest thing. Although, it is important to keep in mind that when it does this, Apple always makes sure it doesn't make improvements it won't be able to top at a later date.

The fifth and final quality that keeps Apple ahead of the game is that Apple lives in the future. The main reason Apple's competitors are scared of it is that Apple is at least two years ahead of them. E.g., the iPhone 5th Generation that just been released was designed and signed off two years ago. What Apple is working on now is due for release in Autumn 2014. Just like this, the iPad and iPods were designed and signed off two years before their release. If Apple were to release their products as soon as they were completed, it could completely humiliate their competitors.

What I don't understand is why Apple hasn't used this explosive advantage they hold.

Made In Britain: Book Review (Part 2)

2012-10-24T11:26:00.000+01:00

by Viva Avasthi

Last time, we left 'Made in Britain' halfway through, with a detailed analysis of the first and second parts of the book. In this article, Part 3: Intellectual Property will be explored. Part 4: Services will be reviewed in the final of this series of three articles.

To allow this review to make better sense, I think it is best to mention what intellectual property is. Intellectual property is a term categorising the ideas that are created by our minds and have some commercial value. Examples of intellectual property include films and music as well novels, architectural designs and scientific inventions. Developed countries tend to have a 'Harry Potter economy' which means that the creativity and originality of the comparatively well-educated public is used to create intellectual property, which helps the nation generate its income (as opposed to manufacturing which can be done by fairly basic economies). That's not to say that manufacturing ceases to remain important, of course. In this section, Davis mentions that some forms of intellectual property effectively combine with manufacturing in the UK.

Part 3: Intellectual Property

Chapter 7: The Science Bit

The Industrial Revolution has led to
the success of companies such as GSK

Davies opens this chapter with an explanation of how British innovation allowed the country to become a world-leader in the glass industry. Although he later mentions that Pilkington Brothers, the company which invented the technique used by around 90% of flat-glass producers today, has been taken over by NSG of Japan, his narration is powerful. It really highlights the idea that the Industrial Revolution and the period of Enlightenment in Britain provided a massive boost for the country in terms of its global standing. The Industrial Revolution and Enlightenment allowed Britain to become rich enough to start educating the masses effectively and investing in research. Today, of the many things that this has resulted in the success of, one is the British pharmaceutical industry. GlaxoSmithKline, for example, is currently ranked 5th globally in the list of biggest pharmaceutical companies. British universities, particularly the 'golden triangle' of Oxford, Cambridge and London, are also among the best in the world due to the fact that they have been so well maintained and utilised over hundreds of years, attracting the best students to carry on the work of many of the best academicians the west has produced.

However, the main idea here is that Britain needs "to ensure [it] uses its historic privileges well" because although "Britain boasts more winners of the Nobel Prize than any other country apart from the US" and it is difficult for countries like China to copy academics and the ability to create intellectual property as it did methods of manufacturing, "there is no reason why a country such as China could not achieve a dominant position in such industries in the long term." Britain clearly still has a great advantage in its academic and scientific industries over the Newly Industrialised Countries, but it needs to concentrate on how it will be able to sustain its advantage. Any opinions on how it could do this?

Chapter 8: Branding and Advertising

Cadbury's gorilla advertisement is an example of Britain's
advertising and branding prowess

This chapter analyses the development of Britain's success at branding and advertising, focusing on 'Sunlight Soap' (now known as 'Lux'), the Kit Kat brand, and the various unique advertising techniques created by the British. One of the most recent is the advertising scheme used by GoCompare, which has been explored in another article on this site entitled Go Compare: Major Hate or Clever Scheme?

One argument that Davis makes in this chapter is that we should be proud of our ability to sell products through creating successful brands even if this means that customers are charged more for a product when it is not necessarily superior to the unbranded version. Although lots of moral arguments could be raised about this, I really like how he dismisses them:

...where the label and design associated with [a product] are an integral part of the appeal...our consumption of a brand...allows us the luxury of enjoying a connection to a world that we like to identify with, or to express an aspiration that moves us. I see nothing pernicious about this and no reason to think someone is a victim of it any more than they are a victim when they watch television or read a book.

It is an intriguing thought that perhaps the profits made through creating brands and then advertising them are not actually 'wrong' because customers choose to buy the branded products over unbranded ones. But do branded products mean that it becomes harder for newcomers into various industries to do well and grow as companies, or does the idea that many people like branded products make it easier to grow? I think it would depend on how easy or difficult it is to develop and promote a successful brand. The answer to this question could mean many contrasting things for Britain's economy. Please share your thoughts below!

Chapter 9: The Drawbacks of Being Clever

Many think stealing this book from a
shop would be worse than stealing it
through a file-sharing website

This chapter looks at the obvious risks related with developing intellectual property: the ease with which it can be copied or stolen. Davies mentions how it is hard to strike a deal with a company about your idea without telling them the idea in the first place, after which they can easily steal it without paying any further attention to you. Copyright and trademarks laws, as well as patents, have been created to protect ideas, but it is still relatively difficult to claim intellectual property. Davies gives the example of how the comedian Tim Vine faced problems when a viral email with some of his one-liners was circulated. The jokes had been falsely attributed to the late Tommy Cooper which meant that Tim Vine found himself being unjustly accused of plagiarism! When a joke is repeated, the joke's creator gets no financial reward or attribution and "economists worry about this kind of thing" because people might not want to come up with ideas themselves when they could easily copy them from someone else.

Other things he mentions are that sometimes, people do not see it as stealing when ideas rather than physical goods are stolen. It seems far more serious to most people if a physical DVD is stolen from a store than if a pirated version of the film is watched. Both, however, are forms of stealing. Thus there are clear problems with an economy becoming too dependent on developing its intellectual property, especially as a completely foolproof solution to these problems has not been developed.

Davies mentions how physical objects compare to ideas in terms of how they are available to customers and how they function in the market. When there is demand for physical objects, the market ensures there is usually a wide range on sale due to the high-quality expensive products competing with the low-quality cheap products and there being a wide range of customers with different budgets and needs. However, when there is a market of competing ideas, the best idea (for a novel, for example) comes out as the winner, taking 100% of the market. This happens because there is a very low cost for reproducing ideas and there are only marginal differences in 'quality' as such, especially not with things like novels and music.

A related thought is that of the unequal distribution of wealth that might be being created through the fact that a lot of intellectual property has been created through the efforts of a single person. The person or small team of people gain all of the financial rewards, which means that a large amount of wealth becomes concentrated in the hands of very few people rather than being distributed throughout the economy. For example, J.K. Rowling alone has accumulated about half a billion pounds of wealth from the Harry Potter franchise (according to the 2010 Sunday Times Rich List).

Unlike manufactured items, which have to be painfully manufactured one at a time, a single Harry Potter can satisfy a very large number of people almost simultaneously.[...] In the case of the small factory, the thousand employees had a claim to the income created. In the Harry Potter example, however, the money accrues to J.K. Rowling.

Davies argues that J.K. Rowling's income is still distributed in the economy because she spends her money on various things such as a gardener, for example, who spends the money with a baker, who spends the money with a hairdresser and so on. He also mentions that when, being a charitable person, she donates some of her money, it can then be used by many different people. However, I feel that the multiplier effect in that case would not be as large as if the money had been split between thousands of people, because the money would not be used in thousands of different ways at the same time if it were just used by Rowling and the few people she spends the money with. Please comment below to share your thoughts on whether you think it would be better if the money could somehow be split, or if you think it does not make much difference either way.

What are your opinions on the ideas explored in this part of the book?
The publishing date for the final part of this series of articles will be posted on the 'Future Articles' page.

If you enjoyed this article, why not subscribe?

Clever Scheme or Immoral Scam?

2012-10-23T18:41:00.000+01:00

by Karina Shooter

Ironic? Jimmy Carr has already been in the media spotlight for his UK tax avoidance schemes, now Starbucks is following in his footsteps… Photo courtesy of London 24

Amazon, Facebook, Google, Starbucks, Ikea and eBay – just some of the major corporations who have been in the news recently because of their UK tax avoidance schemes. Although their clever tricks and cover-ups are absolutely legal, we are left wondering whether their actions are morally questionable.

The Facts and Figures

Over the past three years Amazon has generated more than £7.6bn of sales in the UK but has paid no corporation tax on the profits of these sales.
Facebook paid only £238,000 in tax last year in the UK despite making an estimated £175m in sales.
It has been revealed that, despite earnings of £3bn in sales since 1998, Starbucks has only paid £8.6m in UK tax in the last 12 years. Last year it generated £398m in UK sales but paid no corporation tax.
EBay’s UK division has paid just over £1 million of corporation tax, despite generating sales of almost £800 million in the UK.

How did they do it?

Surprisingly, there are many legal accounting techniques that companies can use to lower the amount of corporation tax they have to pay to the UK.

One such technique is to pay royalties for using the company’s brand name and logo to a foreign country. By paying a royalty of 3% to a separate company based in Holland, allowing the company to use Ikea’s furniture designs and its trademark, Ikea managed to lower their profits in Britain. This led to a significant fall in the amount of UK corporation tax which Ikea needed to pay.

eBay followed a different approach. eBay UK directed its sellers to step up the fees in Britain, and then handed them over to a related company in Luxembourg called PayPal (Europe) Sarl. This means that most sales are channelled through a tax haven.

Starbucks used a combination of techniques. Through paying royalties to its own subsidiary for using the Starbucks brand name and funding its British division through high-interest loans, Starbucks was able report a loss of £33 million on sales of £398 million in the UK. This meant it did not have to pay any corporation tax, although it had to pay VAT on in-store hot drinks.

Is this morally right?

"We have paid and will continue to pay our fair share of taxes in full compliance with all UK tax laws, as we always have," Starbucks said.

"There has been no suggestion by any authority that we are anything but compliant and good tax payers.
"We do this in a way that is consistent with the values that have guided us since we were founded more than 40 years ago: balancing our need to operate a profitable business with a social conscience."

Some people are of the opinion that it is unfair for small companies to pay their full share of corporation tax, whereas large companies are able to hire experienced accountants to find loopholes in the system.

On the other hand, Tax expert John Whiting from the Chartered Institute of Taxation says:
"In many ways the biggest contribution it [large profitable companies, such as Starbucks] makes is in creating employment - [which generates] PAYE, National Insurance, paying business rates, VAT."

"The company may not be paying much corporation tax but the country will still be making a good profit out of them."

What is your opinion? Should we boycott companies who are avoiding UK corporation tax or do you think that the actions of these major corporations are perfectly justifiable?

New 'Future Articles' Feature

2012-10-22T21:41:00.000+01:00

Thought for the Week (22/10/12)

2012-10-22T11:42:00.000+01:00

by Shireen Avasthi

I'm a great believer in luck, and I find the harder I work, the more I have of it.

What Jefferson means by this is that 'luck' comes to those who work for it.

People who sit around not working for anything, just hoping they'll get 'lucky' and things will go well for them aren't 'lucky'; they're lazy. People who are truly lucky are those who create their own luck.

'Lucky' people work hard. This is why they are better off than many other people. To the rest of the world it may seem that people like this are insanely 'lucky', but in fact, they have just worked hard enough to create an amazing life that is full of great opportunities.

If 'luck' does in fact exist, it is most definitely attracted to those who work for it and earn it. Have you noticed that the 'luckiest' people you know are those that work for what they want? Maybe you are extremely 'lucky'. If so, this is only because you work hard, and the moment you stop working, your so-called 'luck' will vanish into thin air. The least 'lucky' people in your social circle are the ones who never put effort into the things they do. If you take some time to think this through, I'm sure you'll find that this is all true.

So work a bit harder this week. Put more effort into everything you do. You'll soon find that 'luck' is flying your way ;)