Forget the rules
Yeah, imagine baselessly judging a whole group of people just because they were accidentally born into a different class (“Class Rules”, Perspective July ‘20). [Warning: contains sarcasm.] I’m a product of a Coventry state school too. Get over it. You don’t change society by dressing as an identikit “punk”, embracing identikit cry-baby anti-capitalism, and then sulking when the productive world dismisses you as an irrelevance. Switch to an engineering degree or something with an objective point. Then knuckle down and create tangible things that make their systems obsolete. Then you’ll be free to arrogantly exclude people you don’t like from your society too.
Ian Gruber,
Online
No “hasta la vista”
Goodbye Boris. As one circus leaves, another one arrives!
Allan Davis,
Fulham
Umbrella economics
So the UK jobs market is tight but wages are depressed (Hannah Fearn, Perspective, July 2022). The market for houses and for university degrees also defies supply and demand; as these two goods get more expensive, demand for them seems to rise. Perhaps we could invoke the “umbrella model” to explain all three odd markets. Suppose umbrellas become a status good. Maybe one year is very wet, there’s a shortage of them, and now only the wealthy can afford to look good in the rain. The umbrella price rises, and even those who have one buy more as their investment can only rise in price.
Those who can’t afford an umbrella must rent one to keep looking well groomed, boosting their price yet more. We might produce squillions of umbrellas (just as we build more houses, create more jobs) and they are simply snapped up by the wealthy; the price relentlessly rises, as does demand. Similarly, the housing market has been seen until now as a one-way bet, so house owners won’t lose by buying a second home, or maybe some buy-to-let homes, and no matter how many houses are built and how unaffordable they become the price still rises. Likewise, a degree is essential for more and more jobs that never needed one, so their price can rise and they are still in demand. Even jobs can behave this way.
Getting a degree and a home lands us in debt, so we must have a job, and no matter how low the wage (i.e. the job becomes more “expensive” to take) we still demand one. Like the housing market, where the entire sales system – from aggressive estate agents to acquisitive vendors to an opaque pricing system – is geared towards the seller, the jobs market is geared to make it more “costly” to take one. Decimated unions have left precarious workers in atomised service employment. Jobs, houses, degrees, and our hypothetical umbrellas, are like expensive Veblen Goods, or posh restaurants that have ultra-high prices because everyone wants to be seen there. But Veblen sellers should be wary; the economics textbooks tell us that if the price moves fractionally too high, demand and price comes crashing back to earth. In the case of jobs and houses, that could be very interesting indeed.
Dr Hillary J Shaw,
De Montfort University,
Leicester
