Just over a year ago we wrote about the possibility of a long term social backlash away from fame and celebrity (see article). A couple of events this week have caused us to revisit and update our thinking. The week started with a strike amongst drivers of fuel tankers, who take petrol from wholesale storage to the retail outlets. All in all, about 10% of the UK petrol retail outlets were affected, with a disproportionately high number of Shell service stations being affected. Just as the first wave of the strike had come to an end, the dispute was ended with a 14% settlement (see article).
At the same time, it was Royal Ascot this week. For our overseas readers, this is a bit more than a Racing Meeting – it is one of the key social events in the UK of the year. If you ever have the chance to attend the Royal Enclosure, then you will have to adhere to the strict dress code of the event (see article). In modern times, Royal Ascot has become synonymous with an excessive and ostentatious display of wealth. Indeed, some commentators see it as a parade of the “rich and pointless”. For those who would like to see what I mean, a set of photos can be followed from here.
It is interesting to put these two stories together in a future context. The justification of the fuel tanker drivers for a settlement that is four to five times the rate of inflation was that, as the price of oil has been rising, oil company profits has been rising too, along with managerial salaries and directors bonuses. They felt that they were justified in sharing that bonanza because it was ‘fair’. Equally, despite being told that the economy faces great difficulties at the moment, we also see a display of wealth at Ascot that indicates that some people aren’t short of money.
It then becomes particularly difficult to urge wage restraint when not everyone is seen to be accepting their fair share (see story). In many ways, the current situation is similar to the position we were in just before the great inflation of the 1970s. During the 1960s, middle class disposable incomes had risen sharply in England. This rising prosperity had not been shared widely, creating a view amongst the working class that they had not received their fair share of the increasing prosperity. A fairer share could be gained through collective action to secure higher wage demands.
Of course, employers, when meeting those demands, simply passed on the increased costs to their customers, who then used these rising prices as a justification for their higher wage demands, and so the wage-price inflation spiral gained momentum. This expectation of ever higher wage settlements is what we now know as inflationary expectations. The inflationary expectations of the 1970s were halted in the 1980s through the intervention of the Thatcher Government at great social and economic cost to the UK.
One might fear that if we are right that inflationary expectations are starting to rise again, a future period of social dislocation will come about. There is time to forestall this by defusing those expectations, but not by exhortation from the Governor of the Bank of England or the Chancellor of the Exchequer. What is needed is a period of leadership, particularly from the private sector. There needs to be examples of restraint on pay provided by company bosses. So far, these have not been too forthcoming.
If our leaders don’t take their own advice, then why should the ordinary people? If ordinary people don’t take this advice, how can we avoid another bout of inflation?
At the same time, it was Royal Ascot this week. For our overseas readers, this is a bit more than a Racing Meeting – it is one of the key social events in the UK of the year. If you ever have the chance to attend the Royal Enclosure, then you will have to adhere to the strict dress code of the event (see article). In modern times, Royal Ascot has become synonymous with an excessive and ostentatious display of wealth. Indeed, some commentators see it as a parade of the “rich and pointless”. For those who would like to see what I mean, a set of photos can be followed from here.
It is interesting to put these two stories together in a future context. The justification of the fuel tanker drivers for a settlement that is four to five times the rate of inflation was that, as the price of oil has been rising, oil company profits has been rising too, along with managerial salaries and directors bonuses. They felt that they were justified in sharing that bonanza because it was ‘fair’. Equally, despite being told that the economy faces great difficulties at the moment, we also see a display of wealth at Ascot that indicates that some people aren’t short of money.
It then becomes particularly difficult to urge wage restraint when not everyone is seen to be accepting their fair share (see story). In many ways, the current situation is similar to the position we were in just before the great inflation of the 1970s. During the 1960s, middle class disposable incomes had risen sharply in England. This rising prosperity had not been shared widely, creating a view amongst the working class that they had not received their fair share of the increasing prosperity. A fairer share could be gained through collective action to secure higher wage demands.
Of course, employers, when meeting those demands, simply passed on the increased costs to their customers, who then used these rising prices as a justification for their higher wage demands, and so the wage-price inflation spiral gained momentum. This expectation of ever higher wage settlements is what we now know as inflationary expectations. The inflationary expectations of the 1970s were halted in the 1980s through the intervention of the Thatcher Government at great social and economic cost to the UK.
One might fear that if we are right that inflationary expectations are starting to rise again, a future period of social dislocation will come about. There is time to forestall this by defusing those expectations, but not by exhortation from the Governor of the Bank of England or the Chancellor of the Exchequer. What is needed is a period of leadership, particularly from the private sector. There needs to be examples of restraint on pay provided by company bosses. So far, these have not been too forthcoming.
If our leaders don’t take their own advice, then why should the ordinary people? If ordinary people don’t take this advice, how can we avoid another bout of inflation?
© The European Futures Observatory 2008
We are presenting a paper on how a futurist can add value to the work of econometricians at the Professional Members Forum of the World Future Society in Washington in July this year. Click here for more details of the event.
We are presenting a paper on how a futurist can add value to the work of econometricians at the Professional Members Forum of the World Future Society in Washington in July this year. Click here for more details of the event.
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