What will it all cost?

What will it all cost?

Wrong question.

You should be asking does the way we measure 'cost' in the modern world have any meaning anymore.

Cost should be related to value. Those two concepts seem to now be entirely divorced from each other.

The current economic system takes no account of the basic impossibility of eternal growth or the rather obvious fact that you cant have meanigful full time employment for all at the same time as ever increasing effciency and advances in technology.

I do wish you journalists would learn to ask the right questions.

Try lobbygroup.org for some alternatives on what is really going on out there

Stephanie,
Clearly the UK Treasury is somewhat lost when it comes to being able to manage its accounts. Not a very comforting thought.
Meanwhile in the US, the Associated Press reports that special inspector general Neil Barofsky is due to report to Congress tomorrow that the Treasury Department is guilty of "repeatedly failing to adopt recommendations aimed at making one component of the government financial rescue effort more accountable and transparent." Apparently, Barofsky suggests that the Treasury's lack of response means taxpayers are being kept in the dark as to what the financial institutions which have received funds are doing with the money. This tends to fly in the face of Barack Obama's pledge to increase accountability and transparency from this quarter.
I can't help feeling that in both the UK and US the general public are being subjected to the largest and most scandalous levels of economic cover up in our history. The changes in accounting rules, the constant harping on about "green shoots" by politicians and certain talking heads and financial journalists simply seems too contrived for belief.
When the UK Treasury can admit to being a mere £25Bn adrift give or take a few tens of billions, you know you are living in a banana republic.
Isn't it time that our opposition politicians forced a vote of no confidence in this government and insisted that the Treasury be made fully accountable to the people of this country, who not only pay their salaries and pensions, but have a right to know what levels of our taxes are being paid out and how they are being used by our newly nationalised banks?
I know this sounds a naive plea, but frankly I am sick of being presented with numbers whose scale and fluidity have made them meaningless. How can any democracy work when there is such a scale of abuse in public reporting of our public finances? But then maybe that's the idea!

Hear Hear, Straightalk,
I have the same impression of a massive cover up by the banks as well.
No financial journalists that I have read have ever explained where the 37 billion pounds spent last year went to. What did the banks do with the taxpayers money?
Frankly with the MP expenses scandal, the BBC expenses scandal, I would not be surprised if there is not a banking scandal behind all this as well.
No Opposition questions either.
We're all doomed, doomed I tell you!

#1 Jericoa

Spot on! "What will it cost?" - irrelevant to the problem, wrong question - it's about the definition of cost in the first place.

By the way, am I the only one thinking that the following is what the earthquake is to tectonic stresses? https://news.yahoo.com/s/ap/20090721/ap_on_re_as/as_japan_politics

Am I the only one thinking that this heralds a collapse in USD? The Democratic Party in Japan no longer wish to hold dollar denominated debt, am I right?

It's now clear to most ordinary people that they are working harder and harder but struggling more and more.
40 years ago there was the very firm belief that each generation would be better off.
Now we believe our children will be worse off.

Why?

Because of the downward pressure on the rate of profit people are forced to:
1. Work longer hours
2. Work harder
3. Work for less (e.g. final salary pensions all but extinct)
4. Work longer (e.g. retire age up)

In the 60's a typical family survived quite happily on a single income. Under the guise of sexual equality today's family struggles on two incomes.

The cost continues to increase and ordinary people continue to suffer.

#5

Actually I think we work longer hours but not harder, in general. What I see is that people work on pointless inefficiencies. Most people's jobs are largely pointless. Half the time they are struggling for deadlines that are arbitrary or vanish away for no reason. They are usually working around deficiencies in orchestration, doing things that software could do, or other meaningless tasks.

It comes back to the earlier point - what's the value in the labour? What's the real cost? We are all running on a pointless treadmill of debt funded consumerist boredom.

Dear Stephanie,

Some figures here do not add up. You speak about costs to the Treasury.
But what about the costs in lost tax income? What about the costs of benefits paid for the unemployed? What about the human costs?
What about the destruction of value in pension funds and private portfolios? What about the costs caused by a decrease in public and private spending?

Let's look at the US:

According to today's BBC article 'US 'exposure to crisis $23.7tn'
( https://news.bbc.co.uk/1/hi/business/8160282.stm ) the exposure
of the US government could reach potentially $23.7 trillion.
Neil Barofsky, who overseas the Troubled Asset Relief Program (Tarp), is quoted in this article as saying:

"As massive and important as Tarp is on its own, it is just one part of a much broader federal government effort to stabilise and support the financial system."

"The total potential federal government support could reach $23.7tn," he added."

A potential cost of 23.7 Trillion US Dollars to the US Government, but only 25 Billion British Pound cost of the credit crunch to the UK government? Hmmmm. Maybe both estimates are far off the mark.
Which estimate comes closer to the real costs we will only know in a few years.
However, your figure of 25 Billion British Pounds is measuring only a small part of the direct and indirect costs to the Treasury and the UK economy.

#4 "Am I the only one thinking that this heralds a collapse in USD? The Democratic Party in Japan no longer wish to hold dollar denominated debt, am I right?"

Smart chaps, these Japanese !! They see the governor of China's central bank making loud noises about the need for a "new" international reserve currency and he is "backed" by Prince Vlad in the SCO meetings recently and they know that the writing in on the wall !!

All these noises from across the pond about inflating their way out of their debts have the (un)desired effects on the trust placed on the greenback !! Those who think that the creditor nations have to "like it or lump it" have forgotten how easily it is for those same nations to "do unto others before they do unto you" !!

If the three largest creditor countries decide to yank (pun intended) their reserves from USD, ol' Uncle Sam is going to need more than trust in God to save them and the portraits of presidents past !!

And if anyone thinks that this is a purely American disease, just watch Crash Gordon try to quantitatively ease our way out of *HIS* mess !!

Zimbabwe may soon look like the Paragon of Prudence !!

#6 "They are usually working around deficiencies in orchestration, doing things that software could do, or other meaningless tasks."

Isn't that Good Keynesian economics ?? One man digs a hole and another man immediately fills it up and both are fully employed !! Keynes never asked where the wealth was going to come from to pay for this meaningless exercise !! Presumable he expects that to be robbed from some poor "damn natives" elsewhere !!

The only reason that we are becoming palpably worse off so quickly is that the real economy (producing goods and services (including public services)) had become catastrophically depleted and the nation was effectively in a seemingly never ending party. Cold turkey unto death is our and our decendants prospects.

The truth is that finance capitalism has always sucked the life blood of the manufacturing and personal services sectors. Labour's slavish fascination with the 'City' will cost them power for up to a generation.

#5, #6, #9 The unanswered questions of modern economics (i.e. Chrematistics)

The lessons of the past have not been learned. Joseph Tainter cites the economic and social innefficencies created by the Roman Empire as the major contribution to its collapse:

https://dieoff.org/page134.htm

"Diminishing returns to complexity in problem solving limited the abilities of earlier societies to respond sustainably to challenges"

Why do we not ask each other whether what we are doing is truly creating economic value (not for ourselves) but for our society as a whole?

As Tainter says "It is essential to know where we are in history". Are we in constant growth, are we peaking, are we staring at a major downward spiral? Yet no modern economist dare suggest that we ain't on a continuous upswing. Perhaps because (for the moment) we are still at the top of the pyramid?

https://hnn.us/articles/47330.html

Is Industrial Civilization a Pyramid Scheme? By Eric Zencey

#8

Yes things are moving pretty quick! We have Asean free trade agreements with Japan and China, international settlement IT infrastructure for Yuan trades deployed, China to start settling internationally within Asean in Yuan, and already some trial international settlements with firms based in Shanghai. We now have Japan's party who have dominated there for 50 years (!!!) about to get booted out, while the opposition are saying they want US T-bonds in Yen.

I reckon we are looking at 1 to 2 years and we will have a Yuan dominated Asean equivalent of the EC, probably ultimately with their own local central bank and parallels to things like the IMF.

It's really dramatic.

No.12. FrankSz

The USA, EC and Britain will eventually all share the same currency.

(By the way, if Britain had joined the euro at the start, it would have been called the "eurin").

#6 happy to discuss labour and value - Marx's labour theory of value is not understood by economists (and definitely not by the Austrian School)

#11 Marx provided a lot of answers (if people not only read him but took the time to understand what they are reading; a lot of effort required)

I agree with all of the remarks about the definition of costs.

However, consider that as there is no from of transnational limitation of costs and that there is no practical limitation of currency movements isn't this picking over the bones of the slump rather academic and also is it not possible to argue that the counter party liabilities of the 600 tn dollar CDO CDS market will land at the door of those organisations that 'cannot go bust' (i.e. Government, if they, as they have, guarantee the private banks? RBS etc..)

Thus, I do not believe that there can be any absolute definition of cost. So the Treasury's what will it cost us each month, each year is rational if dubious. The answer will be that it will cost us a terrifying eye watering sum, but the Treasury will only tell us what it is years, if not decades, afterwards! What about the pfi nonsense!!!

The likely losses from the GBP585bn insurance scheme for the toxic assets of HBOS + RBS will be in the region of GBP100bn to GBP200bn.

So, has the government paid an insurance premium of GBP25bn to pass the GBP200bn loss on to an insurance underwriter? Has the government paid GBP25bn to save itself GBP175bn? Not a bad deal if it has......

There is so much insight in all the comments above that will affect us all, our children and our children's children ... and there are already too many to mention as they all arguably tell the story of what's happening now, and what lies ahead ... which begs the question "So why are current 'leaders' in positions of 'Power' not 'seeing' it, or 'doing anything' about it ? ... is it mostly 'Ignoromics' or more 'Poweromics' ?


* Ignoromics = People are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better.

* Poweromics = People using position and Power for their own personal gain, based on poor moral values, self interest and greed.


As I personally don't see much Leanomics* from them, which is what we really need from our 'leaders' right now ... and IMHO " Leanomics v Poweromics & Ingoromics " is arguably the 'battle of the future' - which will define the nations that will prosper in the future ... e.g. take a look at https://poweromics.blogspot.com/2009/06/leanomics-v-poweromics-ignoromics_01.html too ...

Such a 'battle' is arguably just beginning, but it will predictably grow (powered by the internet) as things continue to slide and get much worse ... (I personally believe this is partly why we are seeing so much 'spin' right now ... as those in 'power' try to 'hold back the winds of change' ... but as has also been pointed out above, they are going to blow whether they like it or not, and in places like Japan they're likely to embrace them yet again ... I'm afraid 'history tells a story ... and it will continue to do so too').



David Clift, a Future 500 Leader


* Leanomics = People taking responsibility for adding value and continuously improving the situation for others (e.g. customers, communities, overall environment), based upon fundamental values such as trust, honor, responsibility and respect.

#15 John

A country can go bust when it fails to sell its debt:

https://bbc.kongjiang.org/www.bbc.co.uk/blogs/thereporters/robertpeston/2009/07/recovery_risk_for_government_b.html

Are we getting ever closer to this happening? If so, which will fall first, USD, Euro, Sterling? Given that more than 2,000 currencies have failed in the past, what makes us think that the current ones are invincible?

If a bank overstretches and gets bailed out by a Gvt, then society takes on the risk. If we continue to ensure that banks can't collapse, then our economy as a whole is then put at much higher risk of collapse (i.e. we are underwriting the risk).

In passing this risk to us (the taxpayer) then they will occupy the unique position of being the only type of company that can bring down the whole economy.

If this happens then they nigh on conducted treason to our country.

#6

''It comes back to the earlier point - what's the value in the labour? What's the real cost? We are all running on a pointless treadmill of debt funded consumerist boredom''

I think that sums it up quite nicely, and it will carry on that way until some kind of alternative is offered up.

Speaking of treadmills these blog spaces seem to be resembling that now.

We all seem good at analysing what is wrong with the current system, certain individuals whom are obviously insiders in some way are able to dive into the economic details of them.

What we seem to be rubbish at is coming up with..well ..something better!

If we cant come up with something better we should well..stop complaining as it serves no useful purpose!

If you fancy turning away from the critical and into the creative a few of us have developed an entirely independent unfunded webspace to do that aligned to no political party or any other institution or ideology. The effort put into that site by volunteers will also be a waste of time if nobody contributes to it!


It is in the form of a 'live' manifesto within which individuals can debate and contribute to it / edit and re-edit it until it (hopefully) becomes something coherent that is outside of the incumbent and leveraged political economic and intellectual elite's influence. They seem to have a stranglehold on all debate and keep public debate confined within a narrow framework to the extent that journalists only ask questions from within the confines of that framework.

Stephanie's post is a great example of that...'what will it cost'...hang on a minute do you understand what cost means and what its associated value is / should be ?

Unless you answer that first question coherently all subsequent debate is founded on 'the sand'.

The trouble is journalists, who are not supposed to have their own opinions, only to report the opinions of others don't have anyone else credible to ask that question of whom are not leveraged in some way by the current system, so round and round the treadmill goes and nobody is any the wiser despite democracy and a so called free press!


The people who post on here are idealy placed to step out of critical mode and into creative mode and contribute to well..something worth while..who knows.

You can find it at lobbygroup.org , the few of us from these pages who have set it up can not do it on our own, we need to draw on unleveraged (anonymous if needs be) expertise from a broad spectrum of life.

I am sure stephanie and other journalists would be interested in what an independent unleveraged alternative way of doing things would look like once it is developed by people who clearly have lot of knowledge and, more importantly in most cases clearly have no other interest other than to improve things for the better. Who knows she may even report on it.

What are you all waiting for?

Or do you prefer the look of just another few steps on that treadmill?


Jericoa

Q: How much is it all going to cost?

A: The future we thought we had. Instead we will have an alternative future. I feel we should focus more on this alternative whilst we still have some control on the outcome.

Reproduction schema, as used by Marx & Luxemburg

c + v + sv = total production

c = constant capital, i.e. cost (hours worked) of replacing used up means of production and new capital investment (from previous periods SV)

v = variable capital, i.e. wages paid to productive workers (hours worked to reproduce the means of subsistence)

SV = surplus value, i.e. cost of luxury goods (capitalist consumption), wages to unproductive workers (e.g. economists) and capital reinvested in the next period for enlarged reproduction

Note that the recorded profit rate gets out of line with the 'true' underlying rate of profit (rate of SV), because of credit and the 'income' from rising asset prices (the fixed capital).
This ficticous capital has been hiding the fall in the real rate of profit at least since the US dollar freed itself from gold.

I suspect that there is still an awful lot of ficticous capital out there.
Inflating it away is just another way of reducing real wages (v).
In otherwords, there's still much more cost to be passed onto struggling workers.

No.19. Jericoa

What is required is, on the whole, unpalatable to the majority of voters.

The irony is, the majority are currently happy to let a minority of badly behaved individuals make their lives more difficult.

Real change will not occur until some big calamity provides the impetus - such as the Black Death, or costly world wars faught closely one after another, a civil war, or global environmental crisis, or a mega financial meltdown.

Large scale change only occurs when there is no other option.

#22

..you omit the advent of a hitherto unknown revolutionary technology in your list of calamities.

#21 Duvinrouge

A couple of quick questions for you, as I want to check whether we are on the same track. I'm currently reading Georgescu-Roegen's The Entropy Law and the Economic Process which covers Marx's reproduction formula. Have you read any G-R? I'm still in the early days on this at the moment. Also, do you concurr with this statement of mine:

https://bbc.kongjiang.org/www.bbc.co.uk/blogs/thereporters/stephanieflanders/2009/06/a_note_of_caution.html

And even Zencey's question: Is Industrial Civilization a Pyramid Scheme? (see post #11 above).

If so, then what would suffice as compelling evidence of your claim that "ficticous capital has been hiding the fall in the real rate of profit at least since the US dollar freed itself from gold."

(This would need to counter the temptation of most people who have seen their general quality of life and income rise over recent years. How can this be shown to be a sham now? The answer must lie in the debt bubble, but do we have to wait until it collapses before the masses wake up to the fact?).

My instincts tell me this claim is true, but how can it be "proved" scientifically (and not by rhetoric!)?

#23

I fear you may be right but I hope you are wrong.

For the first time in our history we have the technology and knowledge available to us to largely shape our own destiny and aleviate a great deal of unecesarry human suffering.

If a group of people bought themselves some land and built up from scratch a modern sustainable, diverse and interactive 'mini' society based around modern technology which made them happy, I reckon there would be a big queue to join from the ranks of those currently running like mad within a treadmill that powers the material desires of others and whose bearings are now looking a bit worn to say the least.

#9 ishkandar wrote:

Isn't that Good Keynesian economics ?? One man digs a hole and another man immediately fills it up and both are fully employed !!

--------------------------

...but Gordon's still digging!

...and will the IMF have enough to fill it up with?

#25 Jericoa wrote:

If a group of people bought themselves some land and built up from scratch a modern sustainable, diverse and interactive 'mini' society based around modern technology which made them happy, I reckon there would be a big queue to join from the ranks of those currently running like mad within a treadmill that powers the material desires of others and whose bearings are now looking a bit worn to say the least.

------------------------------------------

Yeah!...I know a place just like that...it's called Sweden!
(...and the women ain't arf bad either!!!)

I echo post 19, 22 and 25 - another 'thread of reality', and the 'winds of change' are on the way (e.g. unfiltered information thanks to the internet, as well as more disasters)!
And I agree with lots of the other posts too (e.g. Post 26)!

#24

https://www.complexity.org.au/ci/vol06/keen/keen.html

https://www.debtdeflation.com/blogs/2008/12/31/ponzi-maths-part-1/
https://www.debtdeflation.com/blogs/2009/01/02/ponzi-maths-part-2/
https://www.debtdeflation.com/blogs/2009/01/02/ponzi-maths-part-3/
https://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

I agree with many of the comments above. Too many of us are working longer hours, getting into debt, worrying about losing our jobs and about the lack of value of our pensions. And now we're told that we'll all be worse off still, paying the costs for the bank bailout for years to come. And yet technological advances over the past few years should have made us better off not worse.

The system is badly broken. It can be fixed, but fixing it will mean dramatic changes to how we run the economy. There are some suggestions below - but I imagine they would be disliked by a lot of people.

- Introduce a more redistributive tax system. Spread the money more evenly so all consumers can afford to buy the things they need without getting deeper and deeper in debt. Even consider some kind of wealth tax to correct the cumulative effect of growing inequality over the past couple of decades.

- Replace all benefits and tax allowances by a single Citizen's Income payable to all, thus greatly improving the incremental benefit of part-time labour etc, pricing people back into work.

- Relax planning regulations for housing development so any potential future housing bubbles can be burst immediately by making more land available. House prices should be determined by building costs plus agricultural value of land, not just by the maximum possible amount that people can afford to borrow.

- Break up the banks. Not just splitting the retail and investnment parts, but also splitting off the current accounts, ATM machines etc and treating them as a national utility. Only provide Government guarantees for money in these current accounts which would have strict controls over what it could be invested in (limited to Gilts etc). If house prices are more affordable, and a more egalitarian society means far fewer people borrow to pay for current expenditure then the whole banking sector can be much smaller than it is now.

- Move away from privately funded pensions towards pay-as you go pensions funded from taxation. Remove all tax benefits enjoyed by pension funds and use the increased tax revenue along with transferring a proportion of benefits from public sector schemes in order to greatly increase the basic state pension.

- Keep currencies at approximately purchasing power parity with each other (at least as regards other developed countries). Don't put up with countries like China providing huge subsidies to their exporters and distorting the market. If a country does this then introduce an equal and opposite import tariff until they stop.

- Stop trying to use interest rates as the one and only lever for managing the economy. Where possible keep interest rates fairly constant relative to inflation and use direct intervention in bank's capital ratios, fiscal policy etc to manage the economy.

20. stanilic

''Instead we will have an alternative future. I feel we should focus more on this alternative whilst we still have some control on the outcome.''

Stan you have no control, you are still living the illusion. Sorry.

22 MrTweedy

''Large scale change only occurs when there is no other option.''

Fairly soon then

Tide coming in.

Approaching 10 percent economic collapse in the private wealth generating sector likely from the peak. Revenues to HMG due to drop. Public expenditure still running at the bubble max. Large numbers of the young generation made idle. Every process you care to look at in polarisation, ie black and white, no greyscale.

The projected growth in the private sector, ha ha, cannot plug the gap in the drop in public finance revenues. Less than one percent growth for a number of years. The whole structure is like the circus strongman carrying a pyramid of people, trouble is he has caught the flu. Give it five years to halve the deficit - thats the message, more like give it five years and the crisis in the public sector will be apparent.

''We have a system that increasingly taxes work and subsidizes nonwork.''
Milton Friedman. It has just got a whole lot worse. Particularly if you regard work as wealth creation.

26 BankSlickerminustheR

''Gordon's still digging!''

Gordon's more like a China Crisis than a spade handler. : )

The World Banking crisis last Autumn was much too urgent for any Government to take time either to make cost estimates or to optimise the best possible ways of overcoming the national calamity of falling final demand for goods and services. And stopping Banks collapsing in a pile of debts. Urgent and sufficient action was required last October and that's what we got here, at any rate.
Other National Governments were either delayed in taking action - the USA for instance - or just mesmerised by the scale and suddenness of this unpredicted crisis. Like Germany & France.
By next Spring we'll know whether the 'wait & see' and modest stimulus route that much of Europe has adopted are as effective as the 'big spender' & Bank re-capitalisation routes adopted by the Anglo-Saxons. That will also enable us to better judge whether the 'Emergency Brown' policy really has saved our world? Or not ....

#27
I have thought that for many years myself....sigh. They seem to have this air of benevolent superiority about them as if they look upon the rest of us poor sods and say 'perhaps they too will be lucky enough to be Swedish also in their next life'. At least it shows it can be done if you keep your head down, ignore the rest of the world and go about the business of living both sensibly and creatively with no high ambition.

#30

Some good suggestions there, do you mind if we use some of them for our ever evolving manifesto to put up for debate on the lobbygroup.org?

It's worth noting a 'journalist' is supposed to have a responsibility to investigate (and the BBC have a moral duty and civic responsibility to do so - given we as taxpayers fund them at the moment) ... and report in an objective and unbiased way ...

There are lots of people they could (and should talk to) and the comments we have all made regularly point them out ... the problem is many are either 'creative outsiders' and/or not from the 'traditional establishment' ...

And therein lies the problem (or one of them at least) ... as most of the current 'leaders' came from such 'establishments', and they are unlikely to challenge / undermine the authorities that gave them their 'authority' ... however clear the evidence for such 'pyramid schemes' becomes ...

Establishments/nations that fail to learn will 'only learn to fail', and only those that are curious (to new ideas and possibilities - e.g. from 'creative outsiders') will succeed ... history again tells this story ... and it will continue to do so too ...


David Clift, A Future 500 Leader

How depressing. This does explain how we got into the mess because the people responsible for banking oversight have no ideas about money. Apparently the banks may have had and still have substantial assets to cover much of the losses but instead of taking the losses for their corrupt financial schemes they went to the governments and asked the taxpayers to obsurb their losses. Wouldn't every business like to have such a relationship...bankrupt proof. For those who think the governments now own the banks, this should clarify that the banks own the governments. Makes one yearn for the good old days of the guillotine and mob justice. The complete lack of honesty by the banking industry and the willingness of elected and appointed officials to hand over billions in taxpayers money puts the citizens in a situation that must cause reflection of very core concepts of representative government. The bailout is merely the second scheme of the bankers. They have no integrity, old fashion I guess, and decided to follow up the unsecured loan bubble with a governmental bailout that makes the governments look like willing fools. Put your money in your mattress where it will be safe from bankers and politicans.
Simple rule: if the process is too complex to be understood, the process is too complex.
Could some of the money be used to establish an embeselers hall of fame so that we could at least put some faces and names together.

#18. Hawkeye_Pierce wrote:

I don't think I was arguing that a country could not go bust.

However, as a Nation, as on our behalf we have been lumbered with bailing out every bank that "is too big to fail" then as the market will ensure that if there is a progressive failure the last guarantor (i.e. us) will be lumbered with the lot. In which circumstances you may be right to be concerned - but just how concerned?

Let us put some probabilities to things: (That should illicit some interesting responses!)

1. Will the country fail to meets its debts in the next 5 years?
(My guess is 2 percent - 50:1 against)

2. Will any more banks be bailed out by the British Nation?
(my guess is 50 percent - mainly smaller banks - 2:1 against)

3. Will the PFI true cost ever be taken into the national accounts?
(my guess is 0.1 percent - 1000:1 against)

4. Will the Bank bail outs ever be taken into the national accounts?
(my guess is 0.5 percent - 200:1 against)

4. Do the Treasury's numbers matter at all?
(my guess is 10 percent - 10:1 against)

etc.

#35

Here's a good one for your lobbygroup.org - Have Iraq and Iran make a reciprocal agreement with China exclusively trading oil in Yuan, in exchange for favourable trade agreements. Ha. Should be funny, if nothing else.

31 glanafon

But you have no idea as to the different futures I can see. Some are frightening; we need to find a way now to make them less so. We might not succeed but at least we will have tried.

#35 Jericoa

Please do.

#12 "I reckon we are looking at 1 to 2 years and we will have a Yuan dominated Asean equivalent of the EC, probably ultimately with their own local central bank and parallels to things like the IMF."

The Yuan and the Yen are written the same way, whether in Japanese (Kanji) or Mandarin !! Therefore, it is the "same" thing as far as the East Asians are concerned !! However, I think they might have so mechanism in place already via the ADB (Asian Development Bank) !! With ASEAN + 3 in one bloc, it will be the biggest trading bloc in the world (China and Japan being two of the three biggest trading economies in the world) !! I think that, within the next ten years, the Pacific will become an East Asian Pond !! India already have "observer" status and Pakistan and Bangladesh are very keen to join up too !! The Kiwis are already making gooey eyes at the ASEAN nations, hoping to flog more sheep and other Agro-products and if the Aussies don't join up, it will be 10,000 miles to their nearest major non-ASEAN trading partner !!

Add to that China's and Japan's (already) rather successful efforts at wooing the Latin American trading Bloc and the fact that NAFTA is becoming more and more a useless piece of paper and the future looks very polarised indeed !!

Post 19, 22, 25 and 28 - Threads of reality and something (lobbygroup.org) well worth following up and getting involved with ... just take a look at post 36 for a few more reasons why - thanks Jericoa - and I hope more of the great/insightful bloggers here tune in and get involved too.

#13 "(By the way, if Britain had joined the euro at the start, it would have been called the "eurin")."

Or should that be "Eeeeeuuw" !! :-)

#14 "Marx provided a lot of answers (if people not only read him but took the time to understand what they are reading; a lot of effort required)"

Where he resides, right now, is very quiet and calming and very conducive to reading, if you don't mind his neighbours !! :-)

#16 "So, has the government paid an insurance premium of GBP25bn to pass the GBP200bn loss on to an insurance underwriter? Has the government paid GBP25bn to save itself GBP175bn? Not a bad deal if it has......"

Unfortunately, this government is acting as the insurer of last resort !! Lloyds of London must be laughing themselves sick over this !!

John_from_Hendon (#38) "Let us put some probabilities to things: (That should illicit some interesting responses!)"

OK, as you asked, my contribution is to point out that writing like that is just gibberish, as odds reflect how many people actually place bets. You have just tried to make some wild speculative nonsense look better by appropriating the language of probability, which is cosmetic, and characteristic of the pseudo-scientific nonsense which is peddled today as 'economics' and 'reason' in the popular press.

How's that?

#24

I haven't read Georgescu-Roegen's The Entropy Law and the Economic Process.
I can see an argument that life on planet Earth has a general tendency to order and that now fossil fuels are being used at a rate greater than their creation planet Earth is now experiencing overall a tendency to disorder (like the rest of the universe).
Perhaps you can summarise the argument for me.

I have a lot of sympathy with the Austrian school's argument about the fiat monetary regime in effect being a vain attempt to outrun the tidal wave of necessary capital destruction.
But only necessary within the context of a capitalist system.
Without the rate of profit determining production (and so society's reproduction) there is no need to destroy capital, have unemployment, people losing their house and struggling to feed their children.

Capitalism is the enemy of nature because humanity enslaves itself to the rate of profit and therefore unending capital accumulation (if interupted by crises).
Humanity becomes free by gaining collective control over the reproduction process.
Hence the need for direct democracy.

I have been looking at ways to actually measure the size of fictious capital.
It's not easy but I'll share them if I get anywhere.

I do remember seeing evidence that showed that much of the reported profits made by multinationals (before the crisis) came not from what they actually produced, but from their financial investments.
Assets being sold at an ever increasing higher price - a Ponzi scheme.

#23 "#22..you omit the advent of a hitherto unknown revolutionary technology in your list of calamities."

...or a 40 days and 40 nights long rain storm of epic proportion !! I believe the prescribed dimensions for the escape craft is - 50 cubits long, 40 cubits wide, 30 cubits high !! Such a vessel will probably wallow like a pig is all but the fairest of weather, unless, of course, it's a trimaran !! :-)

#26 "...and will the IMF have enough to fill it up with? "

Well, the Chinese are always happy to lend the IMF more money in the form of USD denominated debts in return for more SDRs !! What a flood of those debts in the open market will do will be Uncle Sam's problem !! The Chinese will grab their SDRs and run !!

#27 "Yeah!...I know a place just like that...it's called Sweden!
(...and the women ain't arf bad either!!!)"

Somehow, I prefer their more Westerly neighbour !! They tend to have rather more of a , shall we say, "Viking" spirit in then !! :-)

#30 "And yet technological advances over the past few years should have made us better off not worse. "

Technology proposes but man disposes !!

#38 In answer to your points 3, 4 and 5 - Does it really matter in the greater scheme of things since the international money market will factor all those into their calculations and discount Britain accordingly ??

Therefore, a more pertinent question may be - Will Britain have to go cap-in-hand to the IMF for a loan *YET AGAIN* ?? I would put the odds at 50-50 !!

Meanwhile, back to the topic "What will it all cost?" - shouldn't the more pertinent question be - "How can this be prevented from happening again ??" What ever it will cost is what it will all cost and there is nothing we can do to avoid that !! Dreaming of ways to weasel out of this cost will not save us !! However, we can do something to prevent it for occurring again !!

#39 "Here's a good one for your lobbygroup.org - Have Iraq and Iran make a reciprocal agreement with China exclusively trading oil in Yuan, in exchange for favourable trade agreements. Ha. Should be funny, if nothing else."

Iran and Venezuela already trade oil in Euros, thanks to the good graces of "Dubya" Bush !!

#42

I think that is highly likely to happen, and who can blame them?

They have been working towards a position of no longer needing the west for a long time already, but there are quite a few hatchets still to be buried between them, not least of which the Japan / China Hatchet. Wealth and opportunity do however provide good burial ground for hatchets I hear. The USA's will also live to regret the alienation of the developing nations in its own back door also through its rather less than humble attitude to those nations in the past.

#35

I dont think the Americans are laughing! China figured out its easier to copy the British Empire industrial influence model, ring fence the bulk of manufacturing then use the wealth and influence created to 'buy' and secure, one way or another, the commodities supply line from weaker nations while keeping a bit of military clout in reserve...just in case...but try to be nice..most of the time.

There is no need for all this skulduggery and backroom manipulation anymore, we have enough technology to banish it if it were used fairly and creatively instead of clinging to the old doctrines created from a time when we had to spend 60% of our time in the fields just to feed ourselves and starved if the rains did not come or locusts did. We dont need to maintain the mindset from that historical struggle anymore.

Try telling that to the ruling elite though!

I guess the homosapien is not so smart after all.

#47. JadedJean wrote:

"How's that?" an "F", up to your usual standard of not answering the question... Your really should try harder.

About odds and questions. People gamble. From the Tote to IG index. Just because you don't understand this - is your problem. The point underlying the questions I asked is that the Treasury's numbers don't actually matter much. Other numbers matter much more. Roughly how much, I was endeavouring to point out!

Just because you don't give a damn about reality it does not mean that others do not! Please try addressing the real economic issues not some mostly out of date theoretical possibilities that have been mostly rejected, even by economists and other academics!

It is perfectly understandable that Economists do not have a handle on what all this will cost.

The Government spokesperson has not yet issued the handout, to tell all the Economists what to think, what to say and what to print.

Who in their right mind could expect an Economist to do a bit of research and work it out, when it is easier to copy any old guff issued by a Government and then issue it as 'objective research'

Not Economists but Dimonomists.

I shouldn't be surprised, but I am, that no Economist has had a stab at the likely inflationary effect of QE.
On the last blog we had some Dimonomist stating that is all excusable because Economists do not work things out to the n'th degree.

Ok then try within a 5% or even a 10% latitude - or somewhere within a couple of miles of a ballpark.
(weak kneeded collection of posturing jelly-babies)

Just found this 2006-2007 video: https://www.youtube.com/watch?v=2I0QN-FYkpw where Peter Schiff predicts the recession, while others laugh and claim that the US is wealthier than ever before.

Unsurprisingly, he supports the Austrian school and the Mises institute, and is a libertarian.

John_from_Hendon (#56) "Just because you don't give a damn about reality it does not mean that others do not!"

I'm not the one pulling bogus figures out of the air whilst pretending to be serious.

Do you teach in one of those bogus colleges? ;-)

"The government must restrict the term 'college', to prevent any premises above a fish and chip shop from being able to claim it is a reputed educational institution"

Keith Vaz MP
Chair of Home Affairs committee

Anarchists eh? Most probably don't even know that they're being deployed as 'useful idiots'.

#48

Hard to sum up the 1971 book in one paragraph, but be prepared for a substantial (but neccessary) treatise on logic, maths, physics, philosophy and much more. All this in preparation before even touching on Thermodynamics let alone economics!

The following gives a good overview, and nicely weaves in the work of Soddy & Herman Daly too:

https://www.roconsulboston.com/Pages/InfoPages/Businesspages/GeorgescuRoegen.html

My current interpretation of our ecomomic & financial predicament could be summarised as follows:

1) Most productivity improvements came about as a result of energy substituting labour (muscle>wood>coal>oil - see any of my recent posts on Kondratieff waves, or Kenneth Sayre Unearthed)

2) This energy was converted into either capital (i.e. machinery for enhancing production efficiency i.e. goods out as proportion of labour / land etc. in) or consumables vital for supporting life (see Soddy / Georgescu-Roegen / Daly etc.). Capital facilitates life giving processes, but does not replace them (it is the "trigger action", not the "prime mover").

3) Most elements of capital or consumable wealth now require increasing amounts of energy to produce (e.g. compare the energy needed to make a modern car, or produce food: fertilisers, pesticides, genetic modifications, air freight etc.). Increased complexity (technology & society) are a consequence of surplus consumption, not a cause. This is actually in decline (see Tainter Collapse of complex societies).

4) Declining rates of Energy Return on Energy Investment mean that in holistic terms energy itself is actually less efficient (so even if the prior point is not true, absolute energy is costing us more to obtain). (see www.eroei.com)

5) The saturation of energy as the primary production factor is leading to off-shoring as the only viable means of lowering factor costs (in reality a wage discrepancy issue China suppressing its currency rather than a REAL productivity advantage).

6) The only viable mass-scale energy source is from natural (organic matter), and more importantly that which is locked up in the earth, formed over billions of years. The amount of natural capital IS finite, and probably only viable for a few hundred years - not only is capitalism a speed junky (in that it is rapidly depleting this stock), but worse still is actually an acceleration junky! Science is entrusted to find a replacement, but currently this is us placing blind faith that science will be our saviour. Sorry to disappoint.

7) Given this increase in real cost (i.e. amount of energy in to yield constructive output), how the heck can we be having increased monetary wealth? (Ever since the Late 1960s: Vietnam War, Space race, computers all we have had is energy and resource intensive consumption, yet no sign of a viable replacement energy source - as judged by Energy Return on Energy Investment)

#34 @leftilkley

Closest comment I've seen to appreciating what has actually happened. We haven't yet seen the unwinding of much of the debt (not even 12 months since Oct08) and in particular banks are concerned about private debt (credit cards, retail credit etc back) let alone government debt - to mitigate the worst effects of the end of the wholesale markets, the government had to step in and spend/quease/guarantee liabilities. The debate (and policy discussion) should be how this overhang of government debt is unwound in the long term. There is no doubt cuts will eventually have to be made and taxes rise, but bank equity owned by the government will be sold. I would like to see Stephanie's proposal of a grand plan with broad parameters - no need to quantify the cost, meaningless to a certain extent, as discussed above - just put in context of real world choices. We have choices -
a)fully funded health service; or
b)partialy funded state pensions; or
c)maintain social security safety net as currently; or
d)fully funded military establishment in support of a world role; or
e)don't sell stake held in banks until profit made; or
f)properly fund climate change measures; or
g)fund the interest on the debt; or
h)maintain 50% level of participation in higher education; or
i)maintain tax take at a given level; or
j)public sector pensions maintained
Some of these impact on the others (e.g. a fully funded health service would likely increase overall pension costs as we all live even longer, deprivation if the safety net is reduced would likely impact on health costs)
We have other options to take and none seem very palatable for the public as referred to by Stanilic #40 and all mapped onto a potential stagflationary real economic background where financial services no longer provides as much contribution to GDP.

#59. JadedJean wrote:

I don't know what you are on, but go and get your medication changed...

If you answer a question - do so! And not go off at a pointless tangent into some gibberish. This blog is about economics and this particular blob is about the Treasury figures. Nothing you have written relates to any of this.

On the use of probabilities: Nothing is a 100 per cent sure thing in the real World (the one you do not inhabit!) everything is risky to a greater or lesser extent. No financial aggregate is 100 percent accurate - the trouble is that they are often presented as being so. People leave off the uncertainty or numerical probably or possible range. I am sure you have come across this idea, but try to take it on board! There is substantial uncertainly in actual figures published let alone in future estimates, so it is reasonable to examine the speculations - particularly when they leave out many important and numerically significant aspects.

Come back down to ground and address the issues!

#57 "The Government spokesperson has not yet issued the handout, to tell all the Economists what to think, what to say and what to print."

Correction, Ministry of Truth !! What they tell you is the truth and the only truth !! It may change tomorrow but it will be the "new" truth !!

See 1984, George Orwell :-)

#60 One aspect that you may not have considered is that much of the energy consumed currently are for non-productive purposes; advertising is just one of the many !! Another, to my mind, more wasteful activity is our fashion-obsessed throwaway society !!

My ten year old mobile phone still makes and receives calls and send text messages. It has a monochrome screen and will *NOT* send or receive pictures or videos and will *NOT* play music !! Mobile phone companies *HATE* me !! :-)

John_from_Hendon (#62) "On the use of probabilities: Nothing is a 100 per cent sure thing in the real World (the one you do not inhabit!) everything is risky to a greater or lesser extent. No financial aggregate is 100 percent accurate - the trouble is that they are often presented as being so. People leave off the uncertainty or numerical probably or possible range. I am sure you have come across this idea, but try to take it on board! There is substantial uncertainly in actual figures published let alone in future estimates, so it is reasonable to examine the speculations - particularly when they leave out many important and numerically significant aspects."

But you aren't referring to reality at all, ever, and you need to appreciate this. In fact, you are just making stuff up all the time and calling it 'reality' because you think that looks/sounds good. We have a pandemic of this odd behaviour these days. People appropriate language from specialist areas of science and use terms as literary devices as if they know what they are doing. But you clearly didn't when you started giving bogus probability estimates to events in that post, and that's what I am picking you up on. I'm being serious. In science (and you are clearly not a scientist as it shows up in how you write), probabilities are essentially frequency distributions, and one has to be able to tabulate events to get those. That isn't a matter of just sticking a number on something as a pseudo-value/label as you have done, one has to collect observations under controlled conditions so others know what one is talking about. Without those data, one can't even establish measures of association never mind correlation or better.

You should stop being abusive and try to learn from instruction here. Your posts are presently examples of precisely why economics in the media is such nonsense, and you don't see what I am saying, essentially because you have no training in scientific research. That's just a fact, so don't respond with more abuse for my pointing that out. I'm being critical because you expect to be taken seriously when in fact, you are not behaving responsibly (there are no references to outside data or even links), and this sets a bad example for others who may be naively impressed by authoritative rhetoric.

64. At 6:10pm on 21 Jul 2009, ishkandar wrote:

My ten year old mobile phone still makes and receives calls and send text messages. It has a monochrome screen and will *NOT* send or receive pictures or videos and will *NOT* play music !! Mobile phone companies *HATE* me !! :-)

Not as much as they hate me, I have never owned one and dont intend to start any time soon. No credit/store cards. I can't drive either. I have 2 legs, why would I want a car?

The more of us who step off the "pointless treadmill of debt funded consumerist boredom" (thanks #6 Franksz) by finding more convivial ways to live our lives closer to nature, the better it will be for the world and all who sail in her.

https://news.bbc.co.uk/2/hi/technology/8161650.stm

-Quote-: "He said that older institutions founded after the Second World War, such as the United Nations or the International Monetary Fund, were now "out of date".

"You can't deal with environmental problems through the existing institutions," he told the conference.

-Unquote-

Profound stuff.

I nearly jumped for joy when I read #6 "We are all running on a pointless treadmill of debt funded consumerist boredom." Someone, I thought, with views that ally with mine. Then again in #64: "My ten year old mobile phone still makes and receives calls and send text messages. It has a monochrome screen and will *NOT* send or receive pictures or videos and will *NOT* play music !!" I cannot comment on mobile 'phone companies hating me, but if they knew, they probably would. In any event, another like - minded soul.

But hang on a minute; surely there is heavy reliance in the Treasury on this sort of gross unnecessary spending for the VAT receipts that it generates and the "economic growth" that can be measured. Go to any shopping centre and see the dead, glazed eyes of most of those present; they are under a compulsion to spend on things they might want but do not need, and the Treasury likes it that way. If that behaviour were to stop then we really would be in trouble!

Having said that, I still would like to be the person who found a way to *make* it stop, even if it meant the whole ethos of 21st Century living had to be rewritten as a result. What have we come to when "growth" is no more than a measure of rampant and unnecessary consumerism?

Oh and I'm still not an economist, but from the above you probably guessed as much.

#66 "Not as much as they hate me, I have never owned one and dont intend to start any time soon."

Unfortunately, when I worked abroad, I needed one !! There are still places in this world where getting a land line involves a 6 year wait !! Not particularly useful when communications are needed for the job !! Since I hate throwing away still functional equipment, I just swapped the SIM card and kept on using it !!

40 stanilic

''But you have no idea as to the different futures I can see. Some are frightening; we need to find a way now to make them less so. We might not succeed but at least we will have tried.''

I do not need to see your futures. I have live one of your unpleasant futures. It was the downside of the 90 recession. What is here all around is not new, it is just new to some. The some will be more in number than previously. It has not finished it has only just started. What we do here where we are is based the downside we experienced in the 90's and is structured for this environment. It works. In the UK you are now looking at new economic caste system developing. HMG have put substantial money in to try and combat the process and they have failed. You are looking at the destruction of reward for work or ability for many. Some will not be affected much, but most will. The future is a hi tech digital medieval landscape with medieveal problems. The central problem is the erosion of wealth creation due to the low wage zones and the government has no answer. You can only influence the understanding of the problem by communication. You are not in control, nobody is. Sorry.

ThorntonHeathen (#66) "The more of us who step off the "pointless treadmill of debt funded consumerist boredom" (thanks #6 Franksz) by finding more convivial ways to live our lives closer to nature, the better it will be for the world and all who sail in her."

Agreed, but people who do that are close to being classed as 'terrorists'. Islam endorses what you are recomending, and I suspect efforts to secularise Muslims and vilify those who resist was what the past 'war on terror' was largely all about, as such behaviour is bad for some people's economy, as are females who are traditional rather than 'liberated'.

#65. JadedJean wrote:

"probabilities are essentially frequency distributions, and one has to be able to tabulate events to get those"

You have the cart before the horse, which in your case I am sad to say is not unusual!

A probability is an expression of the likelihood of an event occurring or indeed that has occurred. Frequency distributions may be a tabulation of events that occurred or might occur. Probabilities are separate from Frequency distributions. Please do not try to write about something so obviously beyond your knowledge. (which appears to be very limited - and you were begging for that repost!)

YOU CAN LEAD A HORSE TO WATER...(BUT NOT MAKE IT LIVE IN THE REAL WORLD)?

"America's Perfect Storm

Our nation is in the midst of a perfect storm, according to ETS researchers and the forecast is grim unless we invest in policies that will change our perilous course.

A report from ETS's Policy Information Center, America's Perfect Storm: Three Forces Changing Our Nation's Future , looks at the convergence of powerful socioeconomic forces that are changing our nation's future:

substantial disparities in skill levels (reading and math)

seismic economic changes (widening wage gaps)

sweeping demographic shifts (less education, lower skills)

There is little chance that economic opportunities will improve among key segments of our population if we follow our current path. To date, educational reform has not been sufficient to solve the problem. National test results show no evidence of improvement over the last 20 years. Scores are flat and achievement gaps persist. Hope for a better life with decent jobs and livable wages will vanish unless we act now.

We must raise our learning levels, increase our reading and math skills and narrow the existing achievement gaps, or these forces will turn the American Dream into an American Tragedy putting our nation at risk."

[Unsuitable/Broken URL removed by Moderator]

#71 JJ wrote

"Agreed, but people who do that are close to being classed as 'terrorists'. Islam endorses what you are recomending, and I suspect efforts to secularise Muslims and vilify those who resist was what the past 'war on terror' was largely all about, as such behaviour is bad for some people's economy, as are females who are traditional rather than 'liberated'."

It is absurd of you to class "who step off the "pointless treadmill of debt funded consumerist boredom" as terrorists. You are clearly unsuited to a civilised World. You draw offensive and patently ridiculous analogies.

TH's #66 is not an unreasonable view. However your response is entirely unreasonable. What is wrong with making the personal choice to "step off the "pointless treadmill of debt funded consumerist boredom""?

68. Radiowonk

'I nearly jumped for joy when I read #6 "We are all running on a pointless treadmill of debt funded consumerist boredom'.

Therein lies the problem, refuse-niks may be growing, there is some evidence of this, however this blog appears to have a disproportionate number of posters of this disposition and therefore is not a reflection of the general consumer based publics views. And the future is held in the hands of the general publics consumer tastes and actions, not a minority of refuse-niks.

BTW My kids took a hammer to my early mobile phone, which they referred to as 'the brick', to destroy it with glee, and gave me a 'improved' model. It appeared it had to be destroyed because it offended their consumerism as it still functioned perfectly well. I was then seen as a reformed character participating in their value structured world. : )

John_from_Hendon (#72) "Please do not try to write about something so obviously beyond your knowledge."

Don't be too sure of that.

74 John_from_Hendon

''What is wrong with making the personal choice to "step off the "pointless treadmill of debt funded consumerist boredom""?''

Nothing, unless you are a recipient of tax revenues, or sales of consumer products, in which case your income may drop. So just draw up a list of intersted parties. tells you the size of the problem.

#75

There will be 2 types of refuse niks, those by choice and those whom have no choice aka the rapidly growing massed ranks of the educated unemployed who will feel rather cheated one thinks!

The government can't pump money into 'training courses' fast enough to maintain the illusion that there is actualy work for them to do in the current economic set up in conjunction with a highly mechanised society.

I think you mis-calculate.

When the government can no longer afford to keep the unemployed 'distracted' the enforced 'refuse niks' with 10 year old mobile phones may well turn into a rather upset very large number of people with nothing to lose and a lot of time on their hands. History tells us things tend to happen at that point.

As a very rough guess if the government keep spending until the election to keep a lid on it, the next lot will have to engage the 'choke chain' on public expenditure, it will take about a year to work through thoroughly which puts the flash point in the summer of 2011 maybe... possibly up to a year later if there is some kind of 'blip' recovery in the meantime..


It would be better if someone had a positive plan for the angry mob to focus on before that time.

I know!

Why dont you all (especially JJ and John from hendon) stop weaving intellectual webs around each other and put all your insight and knowledge to good use and try to come up with a system that may actually work in preparation for that time.

I even went to the trouble of setting up a completely independent site for that purpose at lobbygroup.org. for all you guys.

Alternatively carry on as you are, the blogging equivalent of the string quartet on the deck of the Titanic.

Shall we play the '' quantitative easing inflationary backlash serenade for insomniac armchair economists again'' How does that one go again... I know lets try it in e flat this time to see how that sounds...

And on and on and on we go to the background noise of icy waves creeping up the deck in the darkness.

74 John_from_Hendon

'What is wrong with making the personal choice to "step off the "pointless treadmill of debt funded consumerist boredom""?'

Agreed, stepping off the pointless treadmill of consumerist boredom is certainly a personal choice and there's really nothing wrong with it. I'd go a step further regarding the "debt-funded" bit though. Debt-funded consumerism is pretty much by definition completely unsustainable, so it is in all our interests to persuade the world as a whole to get off that particular treadmill. There are alternatives, mostly involving making the world a more equal place so that consumers can consume without getting ever more into debt.

John_from_Hendon (#74) "What is wrong with making the personal choice to "step off the "pointless treadmill of debt funded consumerist boredom""?"

Liberal-Democratic, capitalist/consumer societies run on debt/usury as you may have noticed. Islam proscribes this, as do socialist economies (e.g. Germany in the 1930s, the USSR etc). People who threaten the capitalist economic system are classed as 'terrorists'. On the other hand, capitalist nations like the USA and UK are regarded as imperialist by socialist/Islamist states, because they try to subvert non capitalist economies by spreading human-rights (consumerism). Those on the receiving end also tend to see agents of capitalists as 'terrorists'. The language of diplomacy and geopolitics is opaque.

Jerioca (#78) "Why dont you all (especially JJ and John from hendon) stop weaving intellectual webs around each other and put all your insight and knowledge to good use and try to come up with a system that may actually work in preparation for that time."

I have done, some just aren't taking in in, probably because they have not been following up the links and grasping what has been spelled out. One or two have grasped it, John_from_Hendon is not one of them.

John_from_Hendon (#74) "You are clearly unsuited to a civilised World"

I don't regard our Liberal-Democratic system as civilized. I regard it as predatory. The Webb's wrote a good book on what a civilized society was like. The USA and it's allies toppled it. Britain tried to develop a civilized society in 1945. It was undermined by the USA and its friends until they got what was acceptable to them in 1979. Nothing has changed since.

#80 Jadedjean. Where are all these "Liberal-Democratic, capitalist/consumer" societies?

I see no Liberalism, no democracy and no capitalism. Where should I look?

#70 Glanafon. You appear to be moving toward an understanding that the position is hopeless.

John_from_Hendon (#72) If you'd followed past links, you'd have graped why I'm not a Bayesian. You'd also know why immigration, and fear of eugenics has been extremely bad for the economy, i.e. why it is costing this country and the USA dearly.

#79 Random_thought. No-one with their hands on the levers of power have any intention of doing anything at all to make the world a more equal place (or fairer place).

If they have what you want then you will need to fight, just as they are willing to fight in order to maintain their power/control.

The Chinese have just announced the way out. They are to spend their trillions of Forex on foreign assets :

https://www.ft.com/cms/s/0/b576ec86-761e-11de-9e59-00144feabdc0.html

All we need to do now is find something attractive to sell them - they are looking for underdeveloped opportunities preferably rich in energy resourses - Scotland perhaps ?

superiorsnapshot (#87) Buy out the running-dogs' Means of Production (and the rest of their infrastructure)? That's one way to estabish socialism. The Webbs would have been proud.

#87 "All we need to do now is find something attractive to sell them - they are looking for underdeveloped opportunities preferably rich in energy resourses - Scotland perhaps ?"

The Southern Chinese, perhaps. The Northern Chinese are more finicky about what they eat !! The Southern Chinese are known to eat anything that moves and much that don't, so they'll have no problems with Haggis !! :-)

That said, the Northern Chinese are known to consume vast quantities of "near paint strippers", so they may target those makers of "the water of life" !! Many of them are underfunded and, therefore, are ripe for the picking !!

On the third hand, Rio Tinto just jilted the groom at the alter, so they may be more wary of British companies/assets !!

#88 "Buy out the running-dogs' Means of Production (and the rest of their infrastructure)? "

Unfortunately, it's these very "running dogs" that are in control of China's engines of growth. There are numerous books, papers and learned publications, etc. on the effect of the Overseas Chinese on China's economy !!

Ridiculous isn't it?

In the real business world no self respecting finance director would sanction expenditure without a clear idea what the cost was likely to be.

So much for risk appraisal and risk management.

Its strange that the treasury seems to have escaped much of the blame for the fiasco that the public finances have become.

Unfortunately the treasury, often seen as the creme de la creme of the civil service, think they know more than they actually do.

Its long past time public sector finances and accounts were subject to the same standards if not higher ones than most businesses.
Public sector accounting has long been seen as a joke, willing staff, but lead by people without any real clue.

ishkandar (#90) "Unfortunately, it's these very "running dogs" that are in control of China's engines of growth. There are numerous books, papers and learned publications, etc. on the effect of the Overseas Chinese on China's economy !!"

I'm sure there are, but what are rthey worth. The PRC is socialist, essentially Stalinist, and if that is anything to go by, their buying up the capitalists' Means of Production is a very good, humane, long-term strategy to change their enemy's political-economic system without bloodshed, I suggest. They appear to be using he West's weakness against itself. China now produces more graduates in physics than the UK does graduates altogether. China has a mean IQ of 108 or so to our 100 (which is probably falling like the USA's - see PISA performance).

Note, some of the views expressed in thse blogs (by ill informed, opinionated others) amount to little more than:

"I think that 7+2 = 13, I'm entitled to my opinion so, no, I won't look up any corrective links that you provide" ;-)

That's the cost of expanding Higher Education from 5% tp 50% of the annual cohort without haing expanded the number with ability to benefit from it. Most graduates today don't know their place anymore ;-)

Hahaha. I am happy to see that I have coined a new phrase - "the pointless treadmill of debt funded consumerist boredom" - and that it has been quoted so much. If one day in the future it becomes popular, please remember where you heard it first :-)

JadedJean

Because we don't like what you say, you must be wrong.
It's a bit like eating your greens. Why eat greens when you can eat junk food? Junk food is better for you.............

#92 "their buying up the capitalists' Means of Production is a very good, humane, long-term strategy to change their enemy's political-economic system without bloodshed, I suggest"

Exactly so but not in the manner you think !! It is the "capitalists" who are owning the communists' means of production !! It is the "socialists with a Chinese face" who are falling over themselves to emulate or even become capitalists !! And it is foolish Westerners who look at the political colour of the government and tar everything with a broad brush without examining the underlying structures !!

In pure economic terms, China is far more capitalist than Britain, which is very socialist and is edging closer to Stalinist communism every day. The commissars of central government are out there spinning any and every thing and trying to silence the opposition with smear campaigns and gestapo-style raids !!

Those that China once labeled as "Capitalist running dogs" are now called "valued foreign brothers" and are begged to "return to the homeland" and, hopefully, bringing with them their wealth, abilities and knowledge !! It is these "valued foreign brothers" that are driving its engines of growth.

After the Sino-Vietnam war, there was a long period of mutual hate and distrust. about 15 years ago, the Vietnamese looked North and saw the neighbouring Chinese provinces booming like crazy !! Suddenly the Chinese changed from being "Northern Aggressors" to "Northern Comrades" and the Vietnamese began a wholesale programme to emulate the Chinese success !! They, too, called for their "valued foreign brothers" to return to their homeland !! Now, Vietnam has a growth rate that Crash Gordon will sell his first born for !! They are even grabbing industries from the Chinese !! The world's largest Canon printer factory is near Hanoi, surrounded by quaint little lakes/ponds courtesy of the US bombing of Hanoi in the 70s !! Being pragmatic little Orientals, they turned these US-sent bomb craters into very profitable prawn farms !! :-)

#60

I think I can see where you are coming from.

1. Capitalism requires unending economic growth
2. Resources are finite
3. Growing evidence that we are hitting the limits (e.g. global warming, disappearing forests, peak-oil, etc)

In a way the ecological argument for socialism is stronger than the equality argument...we need to survive so we need to take control rather than let the rate of profit determine how we live (or die).

But the equality argument is a misconception/over-simplification of Marxism anyhow - workers will rise up out of their need to survive not out of some middle-class, intellectual desire for fairness (or because they feel sorry for the polar bears becoming extinct for that matter).

Lots of good points made here again but will any of them change to anything? .... IMHO not until Ignoromics* reduces and more people challenge Poweromics** ...


I believe Post 79 and 86 put together sum things up well:

#79 Random_thought ... "No-one with their hands on the levers of power have any intention of doing anything at all to make the world a more equal place (or fairer place)"

# 86 armagediontimes ... "If they have what you want then you will need to fight, just as they are willing to fight in order to maintain their power/control."


And I believe this crisis has got much further to go before we reach this point (in the UK at least - due to a large dose of apathy) I'm afraid ... and will things will be far more desperate when it does happen ... however history says it 'happen it will', but I believe (and hope) it will happen in different ways to the past ... (i.e. not wars - as it's a 'battle of values' that transcends nations - which will be powered by the internet ... as the internet will eventually change everything, including politics and power - we just don't now exactly how, or when) ...


David Clift, A Future 500 Leader


* Ignoromics = People are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better.

** Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed. Take a look at https://poweromics.blogspot.com for more information/examples of Poweromics.

*** See a good quote from Ishkandar/MrTweedy in previous blogs 'For evil to flourish, all it need is for good men to do nothing' [Edmund Burke] ... and take a look at https://poweromics.blogspot.com/2009/06/for-evil-to-flourish.html for instance too.

Loans and borrowing need economic expansion to pay the interest.

Capitalism does not necessarily need constant ecomomic expansion.

Communism is just capitalism but ownership of the land and means of production is supposedly "in the hands of the people". However, the communist model lacks risk, responsibility, innovation and the profit motive, which means the communist economy tends towards bankruptcy.

Post 98 Well put.

NB ... and as you can see from the definition below*, Leanomics is a description of neither communism nor capitalism, it just 'values' the 'creation of value' (and 'success/reward' should follow this - i.e. an entrepreneur like Dyson should not be rewarded the same as everyone else, due to the risks he took and value/jobs he has created. NB ... most current CEOs, bankers and politicians do not fall into this category - as many of them are 'destroying value').



* Leanomics = People taking responsibility for adding value and continuously improving the situation for others (e.g. customers, communities, overall environment), based upon fundamental values such as trust, honor, responsibility and respect.

#99

Careful how we judge an entrepreneur. It is not value or jobs created that is innovative, but labour / resource saving efficiences.

The only true innovations of this sort were the ones that were the very foundation of the Industrial Innovation and moved the effort of work from man and animals to natural resources. The names of Savery, Newcomen, Watt and Carnot are far greater innovators than society gives them credit.

Current "innovations" in finance or computing are just a sham. Only an innovation that reduces labour or resource dependency to generate physical work should be labled "entrepreneurial". All else is spurious. The real engine of capitalism has been the heat engine:

https://en.wikipedia.org/wiki/Heat_engine