Book Review - 99% Mark E.Thomas
The Richmond Group of Independent Management Consultants (RG) had the pleasure in May of hosting a thought provoking and entertaining event, Malice in Plunderland by economist, mathematician and visiting professor at the IE Business school Mark Thomas. The event proved controversial for RG as some members considered it to have a political bias. Mark’s presentation was based on his book “99%” with the strap line: “How We’ve Been Screwed and How to Fight Back”. The book written in 2019 was one of the Financial Times’ books of the year.
I took up the challenge to read the book to determine whether there is an obvious political bias.
The book is around 300 A5 pages and easy to read, if you skim over the econometric stats and graphs which back up and provide substance and credibility to the prime messages. My takeaways from the book were that most, if not all the macro-economic models that drive the economic narrative are not backed-up by the data driven facts.
These economic narratives fall into the category of groupthink and myths. The policies that these economic myths have given birth to may have created growth but have also led to a significant concentration of wealth and increasing levels of mass impoverishment for the middle classes, and indeed the majority of the population. With wealth increasing for the country as a whole, increasing numbers of the working population are now being subsidised by taxpayer funded benefits as they do not have enough to make ends meet
The political focus on GDP growth, has been used as a success measure. The problem of unfair distribution, particularly in the USA and UK, is that most of the increases in GDP are being captured by the elites, making up less than 1% of the population. The elites are those who, for example have social opportunities and networks, wealth and make political donations, can influence economic policies for their benefit. In Mark’s analysis this has created a “Plunderland” State, that provides profit opportunities for those who are able to influence its policies.
The book is amazingly prescient in confronting the political and economic arguments that are currently being espoused by today’s politicians. I was particularly struck by the myth of unaffordability, which claims that there isn’t a bottomless pit of money to fund the ever-rising cost and demands of the NHS, state pensions and other benefits. If we followed this policy, as currently espoused, the argument is that we would become increasingly impoverished.
However, the UK Government has been borrowing for the past 300 years without catastrophe, and at times at much higher levels to GDP than we are currently experiencing. The NHS was created post WW2 when the level of borrowing to GDP was 200%, not the current level of c103%. The argument is that like a business or a household with a mortgage, the Government can borrow cheaply to invest in initiatives that provide a much higher rate of return, fix the roof while the sun is shining to avoid the costs of being flooded out and all home comforts being destroyed.
Mark’s message is however positive - it is not too late to avoid increasing levels of inequality, social immobility, and mass impoverishment. We just need to learn from the facts and change our political and economic policies!
99% by Mark E. Thomas available from your usual bookstore.
Jeff Herman