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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

UK- Resurgent self-employment soars to 75-year high

Posted by WARREN MOSLER on December 27th, 2011

That includes selling trinkents and services to the higher income foreign tourists and residents. I used to call it Sultan fanning.

It is not a sign of prosperty…

Resurgent self-employment soars to 75-year high

By Richard Tyler

Dec 26 (Telegraph) — Britain is witnessing a renaissance in self-employment on a scale not seen since the 1930s, the latest business figures show.

Barclays estimates that nearly 480,000 new businesses were created over the past year a record and said official statistics revealed that self-employment now stood at the highest level relative to the total working population for 75 years.

The UK is in the middle of a boom for start-ups. Our best guess is that in England and Wales we are up 4pc to 5pc in the year to November and thats on the back of two strong years, said Richard Roberts, small and medium enterprise analyst at Barclays.

He said more people were setting up their own ventures because being self-employed had become more socially accepted.

The enduring nature of the economic downturn was also a factor. Few people will voluntarily risk their savings during short, sharp recessions, Dr Roberts said, with any increase in entrepreneurial activity coming from people shifting from unemployment into self-employment.

As the economy has shown little sign of recovering for the past two years, people were taking the plunge, he said. Most new business owners would have spotted an opportunity to make money, but some will have been made redundant and had no choice.

27 Responses to “UK- Resurgent self-employment soars to 75-year high”

  1. Walter Says:

    I agree with you Warren. It is more a sign of desperate struggle for survival.
    On the other hand I wonder. This phenomenon is very present in the construction sector. Employers lay off people and hire them back for less. It saves the employer all kind of soc premiums and converts fixed overhead into variable costs. Workers, as independents, have less obligations to pay all kind of premiums, have more freedom to build up their pension the way they consider necessary. In short they get more nett in hands now.
    Isn’t this a way to get rid of all those demand leakages?

    Reply

  2. Kristjan Says:

    “Britain is witnessing a renaissance in self-employment on a scale not seen since the 1930s”

    The apple sellers were self-employed also

    Reply

    pebird Reply:

    @Kristjan, Beat me to it, I was going to say “on a scale not seen since the last Great Depression”

    Reply

  3. Neil Wilson Says:

    It’s also the favourite way of avoiding employment rights and the minimum wage.

    Self employment includes:

    - party plans.
    - multi-level marketing operations.
    - taxi drivers.
    - doorstep lenders.
    - most intermediary agents (Avon ladies, et al).

    The majority of these would vanish if there was a Job Guarantee in place.

    And it reflects badly on those that genuinely want to be self-employed, since there is no real way to differentiate themselves from those forced into self-employment by the structural issues in the economy.

    Reply

    ESM Reply:

    @Neil Wilson,

    “And it reflects badly on those that genuinely want to be self-employed, …”

    Huh? Can’t speak for the UK, but I don’t think there’s any stigma in the US.

    And I don’t agree with the negative spin around here. I think it’s a genuinely good trend, and I’m sure that the internet has a lot to do with it. Self-employed people have better aligned incentives and a lot more flexibility.

    I’m self-employed, and not only does my commute consist of walking 30 feet across my driveway to my garage office, but I even have the freedom to read and post in the darkest corners of the blogosphere during the day.

    Reply

    Neil Wilson Reply:

    @ESM,

    You perhaps need to read the battle against IR35, which I was closely involved with.

    ‘Disguised employment’ was used as an excuse to ratchet up the taxation rates on the genuinely self-employed.

    Self-employment should be a choice made upon reflection, not forced upon an individual as a way of scratching a living because of structural issues in the economy.

    Reply

    WARREN MOSLER Reply:

    my last paycheck was in 1978 when I was offered a job at William Blair and Co. on a commission basis.

  4. Dave Begotka Says:

    Who is more likly to pay there randsom (Taxes)

    They need to RFID Chip those losers

    Reply

  5. El Viejo Says:

    The Ronald Reagan Self Employment tax killed the cradle of new jobs in this country as Reagan complied with every demand of corporate America.

    Reply

  6. Robert Kelly Says:

    Warren,
    Do you need any fanners in St. Croix? ;-)

    Reply

    WARREN MOSLER Reply:

    lots to do for anyone who doesn’t need to get paid!

    Reply

  7. roger erickson Says:

    Not to worry. Exxon-Mobile says they could have paid off the US deficit

    (if only they were granted even more corporate exemptions)
    http://www.exxonmobilperspectives.com/2010/12/06/a-trillion-dollar-missed-opportunity-enough-to-pay-u-s-deficit/

    to pay off the fiat, we have to dig SOMETHING out of the ground?

    suggestions are obviously needed :)

    and we wonder why this electorate is confused …

    to “put this into perspective” is just dripping with irony

    Reply

  8. Sergei Says:

    “If we end fascism then anyone can compete with a large corporation simply by providing the same product at a lower cost or with better customer service”

    Lol. You made my day!

    Reply

  9. Curious Says:

    “I used to call it Sultan fanning.”

    With gov’t job guarantee, that you propose Warren, what (not Sultan fanning) jobs would the state provide?

    Reply

    WARREN MOSLER Reply:

    first, it’s a ‘tansition job’

    second, I’d offer all govt agents/agencies the option of hiring additional help at the $8/hr transition wage that wouldn’t count as part of their budget

    then extend that to state and local govs.

    (didn’t i already write this somewhere on this website?)

    Reply

    Djp Reply:

    @WARREN MOSLER,

    ” first, it’s a ‘tansition job’ ”
    Amusing typo. Bureaucrats on the beach?

    @Curious,
    I think this is a recurring question that never quite gets answered. How is it that JG jobs are “better” or more “productive” than some other “sultan fanning” jobs? Or better than hiring people to dig for gold — I am not advocating digging for gold, but it’s arguably more productive than many gov jobs. I’d rather pay a bunch of people to go sort through grains of sand in the Sahara looking for a gold coin than to pay them to think up more ways to increase unneeded bureaucracy.

    Somehow JG solves the hard problem of how to get people to do productive things, because it’s the benevolent, loving government employers that are assigning the duties. But, why are the gov employers any better than private employers at figuring out how to maximize real production? MMT is right about how fiat currency operates and Carney was right in his earlier post about trying to separate this from JG. The Gov is the Sultan, and they already employ plenty of fanners.

    As for the self-employed in the story — that sounds promising. When you are self-employed it’s hard to ignore that you are rewarded for pleasing others, and that ultimately that’s what will determine the success of your business. It’s also hard to ignore that someone needs to be cleaning the toilets and taking out the trash. And, if your business fails, perhaps you will be more understanding of the difficulties in creating and running a business.

    Reply

    WARREN MOSLER Reply:

    the key take away is that an employed labor buffer stock is more liquid and effective a price anchor than today’s unemployed labor buffer stock

    so in any case that means, vs today’s policy of sustaining an unemployed labor buffer stock for price stability, the jg pool will be smaller and therefore there will be higher employment in ‘regular jobs’

    Djp Reply:

    @Djp,

    @Warren

    I absolutely agree with the general idea that unemployment is far worse than the jg as you envision it — sort of like DuPont’s workfare. It’s the details that get a bit tricky.

    Also, it was confusing to me why people were opposed to larger numbers of self-employed. It implies they have a belief that they know better how to employ them, and if that’s really true, then perhaps they should start a business employing them.

    WARREN MOSLER Reply:

    the opposition was to policy that caused people to lose their jobs with no choice but to have a go at self employment while the shortage of agg demand remains

    Neil Wilson Reply:

    @Djp,

    Job Guarantee requires that the sovereign state pays the wages. It doesn’t require that it does anything else.

    An individual with their wage paid is a volunteer. Voluntary organisations are very used to dealing with people coming and going while still getting things done.

    JG is how you do Big Society. When the private sector has a wobble you get more society, and that then backs off when the private sector is booming.

  10. wanderer Says:

    Self employment, copied from http://ranprieur.com/


    December 27. Three years ago when I used Craigslist rideshare to get down the west coast, I noticed that drivers in the northwest asked for an equal share of gas money, while drivers in California asked for a flat fee that was much greater than a share of gas. This behavior has now crept into the northwest. Everyone driving from Seattle to Portland seems to be running an unlicensed bus service, charging enough to buy gas and make a profit. This is troubling. As Fredy Perlman wrote, trade is something you do with your enemies. Nobody would give their friend a ride and charge enough to make a profit. But as the economy collapses and people get desperate, they are shrinking the sphere of people they think of as friends, and applying the cold logic of the market to everyone outside a tiny circle.

    I don’t like to be half-assed corporate. I’d rather pay money to an actual corporation that’s already selfish by design, than pay to reward humans for choosing selfishness.

    Reply

    ESM Reply:

    @wanderer,

    “As Fredy Perlman wrote, trade is something you do with your enemies.”

    I submit that Fredy Perlman is an idiot.

    Reply

    Djp Reply:

    @ESM,
    Bingo.

    Perhaps people in CA understood depreciation before people in OR. Or maybe they wanted to charge some insurance premium for the risk of having to listen to tales about “anti-civilisation perspectives in contemporary anarchism” (http://en.wikipedia.org/wiki/Fredy_Perlman).

    Reply

    roger erickson Reply:

    @Djp,

    Perhaps people in CA just lost their sense of generosity & eager curiosity about return-on-coordination.

    When you’re flush, you view people as amusing, educational company. When you’re desperate, you reduce them to only a financial asset. That’s very constraining when it comes to accelerating exploration of group options.

    There’s a simple rule of multi-cellular species & multi-person cultures. Don’t squeeze the components below tolerance limits! Keep ‘em flush enough to scale aggregates faster. Otherwise you degrade the inter-dependencies faster than you build up the isolated components.

    Djp Reply:

    @Djp,

    Full disclosure. Every year I either receive or give long distance rides (+200 miles round-trip), and every time the riders (whether I am the rider or the driver) are eager to pay more than than just the apportioned price of the fuel for the ride. It only makes sense – most of us agree that the driver is more burdened, and is eating some extra hidden costs (insurance, wear and tear, burden of driving).

    I’ll also go so far as to say that not only is Fredy Perlman and idiot, but that I would never “host” ran prieur either. Anyone who puts that many stipulations on their “host” is not a gracious guest — I made the mistake of wasting 5 minutes reading his blog… Wish I could get could compensated for it.

    Trade makes the world a far better places. Trading is the only place I’ve found where there’s really a free lunch – the buyer and seller both benefit, otherwise they wouldn’t do the trade.

    wanderer Reply:

    @ESM,

    Excellent, well reasoned response.

    Ride share was originally a cooperative idea, I’m going somewhere, you might be, I’ll post an ad and we can share the expense, and company.

    What this says to me is that-
    a) less people are traveling, and/or traveling for “fun”
    b) The people who are posting now are doing it not because they were planning on driving, but because they need money.
    c) It puts pressure on real businesses. This is a gypsy cab service, they don’t worry about depreciation, or insurance, or customer service….

    I offered this as anectodatal evidence. You picked one quote, that was at best ancillary to the content, and start name calling. Bravo.

    Need a ride to gofu&*yourself? That’ll be $50.

    Reply

    ESM Reply:

    @wanderer,

    “Excellent, well reasoned response.”

    It wasn’t a response to the anecdote, which actually I find interesting. I was merely highlighting an obvious absurdity. The best way to do this in my opinion is with a pithy rebuke, but if you would like me to explain in detail why it is mind-bogglingly stupid to claim that “trade is [only] something you do with your enemies” I am willing to do it.

    I agree with your other conclusions, by the way, although I think it is on net a good thing, not a bad thing. I doubt it is really overlapping much with real businesses, except maybe private buses. Even then, though, I’d point out that purely altruistic ride-share hurts real transportation businesses even more. Also, if the actual driving is shared, then the uptick in ride-sharing (due to more profit-seeking) has another ancillary benefit, which is that you’ll have fewer miles driven by fatigued drivers.

    “Need a ride to gofu&*yourself?”

    Nice. I didn’t even attack you personally, but rather the author of a quote within a quote. I’ll admit that the fact that you posted it without qualification reflects poorly on you, but not all that much.

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