Economics of riots

Riots have major economic costs. It is not only police pay, insurance premiums, hospital bills, rebuilding costs, and extra prison places that go up as buildings fall down. What about the tourist trade and the huge profits to be made from the Olympics? The unintended consequences of Tory-Lib Dem policies have a real cost. Austerity is not a cheap option if (some) people don’t take it lying down.

Looting, narrowly defined, is redistribution carried out by poor people. Nobody ever heard of rich people looting. Why would they when they can buy it all? Their type of looting, such as asset stripping and tax avoidance, has been made entirely legal. Neither are ‘well paid’ workers likely to join in because a job and regular pay packet is a stake in the system.

Looting is a gamble and an opportunity to improve your lot at somebody else’s expense – the essence of entrepreneurship. A rational calculation would show the odds improve if you have nothing much to lose from a punt on the roulette wheel when law and order has broken down. An appeal to morality will not carry much weight in a capitalist society in which greed and avarice is the most important social value.

Cameron and co have hardly finished boasting that the Crown’s austerity measures have worked. Foreign investors’ confidence in the UK has been restored. The UK is not in a mess like Athens where people are demonstrating and rioting against the government. This has all blown up in their faces. All they can say is that England has ‘criminals’ whereas a Greece has ‘protesters’

Redundant youth

England’s young people are roughly divided into the student youth and the redundant youth. These are the hopeful and the no hopers. The hopeful think they have a future. All will be heavily in debt and some will be heavily disillusioned. The students have already had their protests and their riots against education policy which now seems moderate by comparison.

The redundant youth are having their say. The no hopers have given up on hope. They have no future. Now they seem to have gone ‘mad’ or have been made ‘mad’. The politicians responsible can make no sense of it than to say that criminal elements have taken over looting, fighting and burning things down.

The government plans to make sixteen thousand police redundant. Some have noticed the irony or the bizarre twist of fate in which redundant youth are fighting the redundant police. In a recession the Crown needs many more police to keep rioters, strikers and protesters under control. At the very least this was bad planning and negligence enough to call for the government to resign and Simon Hughes to be booted out. They were not even ready for the consequences of their own policies

Surely a better plan would be recruit the redundant youth (or at least those who are out rioting) to the police. Then they could be used to guard the shops instead of burning them down. It makes a lot of economic sense. But it would ruin the Cameron-Osborne-Clegg triple A credit rating with the international bankers. Interest rates would rise as the bankers demanded an even bigger pay out. Many more of us would then be made redundant. The cycle of lunacy continues. Perhaps it is not the youth that are mad but a mad bad world that must be changed before it is too late.

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