Geoffrey's Farrago

Take that evil Brit socialist medicine thang out of here!

geoffrey@geoffreysplace.com — 2009-08-15T14:41:24+01:00

I saw this cartoon in my newspaper today, the Guardian and dashed to see if I could find it online I thought it so funny...in a rather macabre way. Is that Rush Limbaugh on the left?

Please note that this cartoon is copyright and may not be reproduced for financial gain.

Copyright © Martin Rowson 2009
Copyright © Guardian News and Media Limited 2009

Come on America! It's time to face facts...The healthcare debate

geoffrey@geoffreysplace.com — 2009-08-15T12:52:35+01:00

We’ve had a lot of criticism of our state healthcare system flying across the Atlantic this week from the USA, the so-called “Land of the Free”. Much of it has been entirely false; some of it has simply been outrageous bigotry.

We’ve been hearing how the provision of socialised healthcare is the first step in the creation of the “Nanny socialist” state, how it threatens freedoms including the right to own guns.

There’s a point worth considering here: “Freedoms”, Carrying guns? Let’s look at some facts, some hard numbers here.

First, America is the biggest jailer in the world. It has more people in prison per 100,000 than any other nation on earth. Currently that number is about 700, almost one person in a hundred. When you start to look at specific age groups, it gets worse. In the 20 – 34 age group, one in thirty men are in jail. For black males that figure is one in nine.

America imprisons more people per 100,000 population than countries whose human rights records it criticises, including Iran and China. It spends almost 25% of what the UK spends on socialised healthcare on its prison system. How free is that?

The ultimate measure of whether healthcare is effective is the life expectancy of a nation’s population. Not only is the USA’s average life expectancy lower than the UK; it’s also lower than every country within the European Union.

The USA considers its private healthcare system to be more effective and efficient in financial terms. Really? That’s not what the numbers say:

Country	% of GDP spent on healthcare	% of Government revenues spent on healthcare
USA	17%	18.5%
UK	8%	15.8%
France	10.1%	14.2%
Japan	7.9%	16.8%

I’ve included Japan since it has an average life expectancy 82, four years greater than the USA.

So if USA spends more Government money than any other nation in the world, one might reasonably ask where that money goes. I’ll be looking at that question at another time.

Another claim we’ve heard this week is that if America socialises medicine it will suppress the investment in medical innovation made by the pharmaceutical companies. The commentator also stressed that the USA was responsible for the majority of major medical innovations in the world.

I’m not sure I need comment much here. Whose interests do the pharmaceutical companies serve? Do you want your medical care to be provided by drugs manufacturers?

The US claim about their record of medical innovation is also false. The UK has been responsible for about 40% of all major medical advances and innovations in recent years.

A stark statistic is that over 46 million Americans are without medical insurance cover. That’s more than 15% of the population. How many more millions have poor or inadequate insurance cover? A further 25 million is the figure I’ve seen quoted. So that would be 71 million or almost a quarter of the population without adequate insurance. The claim from the opponents of reform is that anyone can get care in an emergency room. The truth of the matter is that no end of studies have shown that people without insurance defer getting treatment for minor ailments until such time as they become worse, harming their health and incurring greater costs.

Let’s look at some more interesting numbers:

Country	% of healthcare costs met by Government	% of Government revenues spent on healthcare
USA	46%	18.5%
UK	85.7%	15.8%
France	76.3%	14.2%
Japan	81%	16.8%

Do you notice the anomaly here? The country with the greatest proportion of Government revenues spent on healthcare, USA, meets the lowest level of healthcare costs. What does this mean? Is it that the prices in private healthcare are higher and the money doesn’t go as far or does it mean the money goes elsewhere? I’ll find out.

Numbers of medical practitioners per 1,000 people

Country	Number of doctors	Number of nurses
USA	2.56	9.37
UK	2.3	12.12
France	3.37	7.24
Japan	1.98	7.79

On quality of care and other comparative studies, all show the USA in a bad light. In a study of the healthcare systems of 191 countries by the World Health Organisation nine years ago, France took first place, the UK didn’t fare that well at 18th but the USA came a dismal 37th.

In studies based on social equity, the United States is ranked last worldwide on all measures, since it has the greatest disparity in the quality of care given to richer and poorer citizens. The United States is also one of the worst performing nations in the world when it comes to infant mortality.

The American boast that it has the “best healthcare system in the world” is totally without foundation.

What about taxes and socialism?

The socialist debate is a nonsense promulgated by right-wing, often white, redneck, Americans without too much of a clue of what happens outside their own back-door. It’s simply a meaningless political distraction. Britain is no more socialist than the United States.

On the argument that socialised healthcare brings higher taxes, it’s true. It does. It also means that those not able to pay have access to the same standard of healthcare as everyone else. Taxation is not an argument. If you take the taxation paid by the average American family then add the costs of healthcare insurance, the overall burden of cost is similar. The figures I’ve seen suggest it might be as little as a percentage point or two different over an entire lifetime. The main difference might be that in socialised medicine all taxpayers’ funds go towards medical care and not towards the profits of insurance companies making it intrinsically more cost-efficient.

UK Healthcare – the National Health Service (NHS)

The NHS has been going for sixty years. It is by no means faultless though it has improved massively over the past ten years. The allegations that it promotes “rationing” of healthcare are never substantiated. Recent initiatives have fostered patient choice that promotes the idea of people getting the treatment they need wherever they wish to receive it. Choice entails responsibility. The responsibility of managing care ultimately falls to a patient and not a healthcare provider.

There is a lot wrong with the NHS. There is much room for improvement yet. The large caucus of management and bureaucracy that it maintains is unwieldy, unbalanced and I believe, unnecessary. As implied by a UK Government Audit Commission report published earlier this year, front-line health practitioners make a better job of managing healthcare than civil servants. They do better at managing financial resources too. The French system that works with a mix of state sponsorship and market economics tends to perform better than most other nations.

The guiding principle of the NHS is:

To provide whatever healthcare people need; based only on clinical need, without cost and without regard to a person’s social or economic status.

Those are principles I support wholeheartedly and I would fight for. I hope President Obama will fight for reform too. God knows, America needs it.

To my readers: Please will you “StumbleUpon” this piece using the ShareThis button below and encourage as many others as possible to join this important debate. Thank you.

A New Farrago!

geoffrey@geoffreysplace.com — 2009-08-14T12:13:17+01:00

There’s been a big change here. Geoffrey’s Farrago is now focussing on the world in which we live – on society and social issues. I’ll be looking at the world through philosophy, psychology, sociology, alternative economics, social and political change, radical thought, quantum mechanics and whatever other body of thought that captures my fancy. It will still be a farrago as I’ll mash up all these disciplines into a whole new melting pot of ideas.

My personal accounts about the life and times of this eccentric, nomadic Englishman will now appear in my new blog, Much Ado About Nothing (very much).

Coming up here in soon will be a follow up to the UK Big Brother post describing how a massive number of UK citizens are having their privacy violated by UK Government Agencies engaging in surveillance of their email and telephone accounts. I’ll also be answering some of the outrageous and false allegations being made against the UK State healthcare system by the opponents of healthcare reform in the United States.

Do come back soon. There’ll be a lot going on!

The next bail out - a child's view

geoffrey@geoffreysplace.com — 2009-01-19T14:50:21+00:00

Please help me with my sums.

The total UK personal, business and national debt is £4,000 billion. The size of the UK population is 60 million. So that’s an average debt for every living man, woman and child of £66,667 or let’s do that in US dollars - $100,000 each.

Mmm I do like nice round numbers!

That sounds like an awful lot of debt to me.

The UK banks have been given or guaranteed money of around £600 billion or USD $900 billion by government.

It’s taxpayer’s money so we’ve all given £15,000 or $22,500 to help those poor banks.

But our economy still has bellyache.

It’s not working. The government says the banks should be lending more money. So we, we being the UK taxpayers up to our eyeballs in debt, are going to give those banks more money we don’t have, so they can lend it to businesses and people, who have lots of debt too. Then they can spend it, so our economy gets better?

Mmm...sticks thumb in mouth.

So what is this “economy” and how will it make our lives better?

They’re big businessmen, son, and when they are happy, we all feel better because then our “economy” is well again.

But what about you, me and Mrs Smith down the road, Dad, will we feel better when the economy gets well again?

In a way we will, I might keep my job if I’m very lucky; we might keep our house too. Then we’ll have clothes to wear and food to eat at table as well.

And what about the happy businessman, what will he keep?

He keeps the rest, son. He always keeps the rest as that's what makes him happiest of all. And if he’s happy, we’re all happy so they say. Then the economy gets well again.

Is that fair, Dad?

There’s nothing in this life that’s fair, son. Life is life and it’s hard. They all say that. There ain’t nothing you can do to change it. They even write songs about it. Que sera, sera.

There are old English hymns they sing about it in Church too, so they must be right. You know that famous children’s hymn, “All things Bright and Beautiful”, it goes:

“The rich man in his castle,
The poor man at his gate,
God made them, high or lowly,
And ordered their estate.

All things bright and beautiful,
All creatures great and small,
All things wise and wonderful,
The Lord God made them all.”

That was a long time ago, they banned that song in our school...that verse about the rich man anyway.

They may have banned the song, son, but they haven’t changed the tune.

One last thing, Dad. There's you, Mum, me and my sister who owe all this money. That's nearly £270,000 between us. ($400,000) What happens when we have to pay all this money back?

Well, we don't owe it personally, son, but if we did we'd have to go bankrupt.

Maybe, in a way, we're all bankrupt already.

More news, less views

geoffrey@geoffreysplace.com — 2009-01-17T11:48:21+00:00

I came across the Glasgow University Media Group (GUMG) when I was at university the second time round in the late 1970’s. I’ve remained interested in their work since then. The group has written extensively about how the media present content and how their audiences receive and interpret the messages they transmit.

There’s no doubt that the media influences, informs and “conditions” our beliefs about the world we live in.

By the end of 2006, eight international corporations controlled the entirety of the US media industry. They have their own agendas and these are not about presenting critical news content. They are about serving their own business interests, making money as well as promoting the commercial objectives of their advertisers. Here’s a list of those eight media corporations:

* Disney (market value: $72.8 billion)
* AOL-Time Warner (market value: $90.7 billion)
* Viacom (market value: $53.9 billion)
* General Electric (owner of NBC, market value: $390.6 billion)
* News Corporation (market value: $56.7 billion)
* Yahoo! (market value: $40.1 billion)
* Microsoft (market value: $306.8 billion)
* Google (market value: $154.6 billion)

Yahoo!, Microsoft, and Google are newer media companies compared to the other “traditional” 5 players.

That’s the lot! This quotation says it all for me:

“We have no obligation to make history. We have no obligation to make art. We have no obligation to make a statement. To make money is our only objective.”

Michael Eisner, CEO, The Walt Disney Co.

Of course, in the UK, we have the state-owned BBC. The BBC is not necessarily the objective voice of reason either. It’s owned by the state, by government that has its own agendas that are largely upheld by the same business and political power interests that control media everywhere. The BBC may be better in supporting social democracy than most mainstream media but its links to government inevitably produces biased reporting in its favour, and of the uncritical support of the status quo.

What brought about this post was that I was trying to remember how I first engaged with GUMG way back when. I came across this piece on the GUMG web-site last night and I wanted to share it here today. In its own way it says it all and does it better than me:

From Greg Philo, Glasgow Media Group.

The article below was originally sent to the Guardian for its comments page. It shows how public debate on political issues is narrowed on the most influential media because of the absence of critical voices – whether the issue is the financial crisis or world conflicts such as in Israel/Palestine.

New polling evidence from YouGov and the GUMG, suggests that this is not at all what the public wants. The article was rejected by the Guardian on the grounds that ‘it would be read as a piece of old lefty whingeing about bias’.

But I think there is more at stake than this.

There is a deep crisis of legitimacy both for politicians and broadcasters, in that many people do not feel properly represented. There is also great public confusion over issues such as the reasons for world conflict and the nature of the present economic crisis.

Until recently there has been very little debate about the consequences of the free market policies which were promoted by political and economic elites. One consequence is that areas of public spending such as education and health are likely to be sacrificed in order to pay for the black holes in the banking system. As Naomi Klein has pointed out, the global budget crisis may be used as a rationale for deep cuts in social programmes. At present the Conservative Party is ahead in the polls. But do voters really understand what it would mean ‘to balance the government’s books’ and ‘reduce its debt’? There is little discussion of such issues in broadcast media or of possible alternatives. Re-structuring the ownership of the economy in favour of the mass of the population is apparently off the agenda. Nationalisation has come to mean the privatisation and selling off valuable assets, while losses are socialised. We are offered various forms of the free market discussed mostly by bankers, stockbrokers and the economic experts and politicians who have delivered the crisis. But the closure of debate will only increase public frustration and the sense that broadcasters have abandoned their duty to inform their audience.

More News, Less Views

News is a procession of the powerful.

Watch it on TV, listen to the Today programme and marvel at the orthodoxy of views and the lack of critical voices. When the credit crunch hit, we were given a succession of bankers, stockbrokers and even hedge-fund managers to explain and say what should be done. But these were the people who had caused the problem, thinking nothing of taking £20 billion a year in city bonuses. The solution these free market wizards agreed to, was that tax payers should stump up £50 billion (and rising) to fill up the black holes in the banking system. Where were the critical voices to say it would be a better idea to take the bonuses back? Mainstream news has sometimes a social-democratic edge. There are complaints aired about fuel poverty and the state of inner cities. But there are precious few voices making the point that the reason why there are so many poor people is because the rich have taken the bulk of the disposable wealth.

The notion that the people should own the nation’s resources is close to derided on orthodox news. When Northern Rock was nationalised, TV news showed us pictures of British Leyland and the old problem ridden car industry. Never mind that it was actually privately owned when most of the problems occurred and that company policy had been to distribute 95% of profits as dividends to shareholders, rather than to invest in new plant and machinery. This is all lost in the mists of history and what is conveyed is the vague sense that nationalisation is a “bad thing”. We showed how this affects public understanding by asking a sample of 244 young people in higher education (aged 18 –23) about the great spate of privatisations which had taken place in the 1980s. We asked whether the industries involved had in general been profitable or unprofitable. Actually, the major ones of gas, electricity, oil and telecommunications were both profitable and major sources of revenue to the state, but nearly 60% of the sample thought that the industries had been losing money. This is especially poignant now that energy prices are being jacked up and the foreign owners of many of these companies are not interested in passing on their windfall profits to the British people. Countries such as China, Venezuela and even Russia keep key industries very firmly in state hands, but where are the critical voices in broadcasting here, who are given space to raise these arguments? They can be heard in the outer reaches, occasionally on Question Time, Channel 4 News or Newsnight. But is this what the population want? At the start of the Iraq war we had the normal parade of generals and military experts, but in fact, a consistent body of opinion then and since has been completely opposed to it. We asked our sample whether people such as Noam Chomsky, John Pilger, Naomi Klein and Michael Moore should be featured routinely on the news as part of a normal range of opinion. Seventy three per cent opted for this rather than wanting them on just occasionally, as at present.

The Israeli/Palestinian conflict is another area of great imbalance in the views that are heard. Our study of the main TV news output showed that pro-Israeli speakers were featured about twice as much as Palestinians. This year BBC News covered Israel’s ‘birthday’ of 60 years since the setting up of the state. This was of course also the anniversary of what, from the Palestinian perspective, was the great disaster when they were forced from their homes and land. Israel’s superior public relations machine meant that they set the agenda on broadcast news. The Palestinians were featured, but rather less and as a sort of afterthought. As a presenter on BBC’s Today programme put it, “Today Israel is 60 years old, and all this week we have been hearing from Israelis about what it means to them”. Quite so.

We commissioned YouGov to ask a sample of 2086 UK adults whether they thought that more coverage should be given to the Israeli point of view, or more to the Palestinians, or equal for both. Nearly twice as many people thought that the Palestinians should have the most as compared with the Israelis, but the bulk of the replies (72%) were that both should have the same. Only 5% of the population supported what the broadcasters have actually been doing in the main news output. Politicians and broadcasters say they are worried about a growing lack of interest in politics especially amongst the young. Our work shows there is no lack of interest in lively critical debate. The problem is that a news which largely features the views of two political parties with very similar free market policies at home, and an international agenda which follows America, does not provide this.

Greg Philo
Glasgow University Media Group
September 2008

"Big Brother" by stealth - update

geoffrey@geoffreysplace.com — 2009-01-09T07:23:40+00:00

The title of this post is something of a misnoma. There's no stealth about it! As of 15 March this year, all e-mail information must be retained by UK ISP's and made available to any one of 600 UK Government agencies on request.

Want that? Did you hear anyone ask if you wanted it? No? Me neither. So that's how democracy works.

Under the new laws, ISPs will be required to keep e-mail information for a year. With the planned communications database, this information will be retained indefinitely. How long will it be before Government requires details of all our conversations on MSN Messenger or AOL to be monitored and recorded? It's probably in the next phase of their surveillance plans.

There's one solution, perhaps. Do as I have done and if you are British, move your ISP account offshore to a non-British company. That may work!

"Big Brother" by stealth

geoffrey@geoffreysplace.com — 2008-12-31T12:16:54+00:00

The “Big Brother” state is coming and the UK is leading the way.

There have been some trivial but worrying developments this year in the increase of UK legislative powers. Most of these are vexatious rather than sinister. There was a man given a criminal record and fine for overfilling his wheelie (trash) bin so that its hinged lid elevated by a full four inches. One council now fines residents up to £5,000 ($7,500) for putting out wheelie bins on the wrong day! It’s illegal to display a card in a car windscreen saying it’s for sale. This is petty-fogging bureaucracy compared to what is slowly creeping into being while the UK public sleepwalks its way towards the big brother state.

The UK is moving towards laws for compulsory identity cards holding biometric data on microchips. It already has one of the largest DNA databases in the world and it’s growing fast. An entry on the DNA database is an entry forever, and it’s not confined to those with criminal convictions either. Recently I saw a poster that appeared in UK bus stations claiming that they had their own DNA testing kids that would be used on any person suspected of spitting!

Also I noticed two news articles from the USA, the worst of which was talking about a city’s micro-chip implantation of its homeless in “its fight against crime”! Of course, it follows if one is homeless, one must be a criminal. I expect we’ll be seeing a lot of micro-chipped investment bankers soon! Also I suspect that micro-chipping will be marketed to us by stealth, much like everything else. We can track Fido and Pussy with chips so they don’t get lost. How long before we’re sold this same measure as a way of “keeping our children safe”? I notice that they are already tracking schoolchildren in one Rhode Island school district by implanting microchips in their school bags. How long before we implant chips in children’s bodies rather than their school bags? After all, it would be so much more reliable.

But that’s all pie in the sky, conspiracy theory sort of nonsense, isn’t it? Sadly not. It was an article in the UK's broadsheet newspaper, "The Guardian" that sent me down this track today.

It was about the UK’s imminent plans to contract out its GBP £12 billion (USD $18 billion) planned communications database to private industry. The purpose of the database is to monitor all electronic communications activity of every UK citizen that includes telephone and mobile (cell phone) calls, SMS text messages, e-mails and all Internet usage.

It’s causing a stir since the most outspoken protester is the former Director of Public Prosecutions, Sir Ken Macdonald, who said, "The tendency of the state to seek ever more powers of surveillance over its citizens may be driven by protective zeal. But the notion of total security is a paranoid fantasy which would destroy everything that makes living worthwhile. We must avoid surrendering our freedom as autonomous human beings to such an ugly future. We should make judgments that are compatible with our status as free people."

Maintaining the capacity to intercept suspicious communications was critical in an increasingly complex world, he said. "It is a process which can save lives and bring criminals to justice. But no other country is considering such a drastic step. This database would be an unimaginable hell-house of personal private information," he said. "It would be a complete readout of every citizen's life in the most intimate and demeaning detail. No government of any colour is to be trusted with such a roadmap to our souls."

The moment there was a security crisis the temptation for more commonplace access would be irresistible, he said.”

Sir Ken is an establishment figure, hardly a radical subversive. Governments and big business have proven how dishonest and corrupt they are in the pursuit of their own purposes. One need look no further than the Iraq war for evidence of government dishonesty in action.

I’ll vote with Sir Ken. I’m utterly opposed to such a measure. The risks are too great to contemplate. It was bad enough when Google gave up their records in support of a criminal prosecution. This plan is monstrous. So will anyone else have the courage to speak out about it?

Bon Année 2009! Happy new year!

Change we can believe in?

geoffrey@geoffreysplace.com — 2008-12-27T15:09:40+00:00

It’s almost the end of the year. It’s also the end of an era.

The USA and the UK are suffocating in a blanket of national, corporate and personal debt. The amount of money that has been poured into our failing banking systems is now of the order of $15,000,000,000,000 worldwide or one quarter of the value of everything the world produces in a year.

Homelessness and unemployment are rising.

I have resisted writing about our economic world of late, as I didn’t wish to enter the realm of “Grumpy Old Men.”

Well, happy New Year!

It won’t ever be the same again. BUT capitalism albeit that it’s in crisis is far from finished yet.

Forget the National Debt to GDP ratio. We’re in hock. Both in the USA and the UK, we owe through personal, business and government debts three times more than we make in a year. That’s right our overall debt to GDP ratio is 3:1.

So where did all the money come from? If we’re not making it, how can we owe so much? It’s simple. We borrowed it and now, some of our creditors are asking to be repaid.

The system is unable to produce enough real wealth (value) to maintain profitability (surplus value). It has hidden this difficulty by creating masses of “fictitious capital,” claims on wealth that do not correspond with any real wealth (actual commodities and services). These include mountains of debt, profits made on unproductive labour (such as making missiles and other armaments, which, unlike cars and steel production, do not re-enter the cycle of production, and various forms of speculation, as well as using up the environment without replenishing it (a form of “primitive accumulation” also called “looting the future” ). At some point the bill was sure to come due.

Money is a fictitious commodity. Banks create it. Let’s see how it works. I borrow $250,000 to buy an asset. I grant mortgage rights on my asset to the bank as collateral. Seller deposits my $250,000. Bank retains its 10% reserve as required by US law then lends the balance, $225,000. We’ve started creating money. Now we have $475,000 in circulation against my original asset value of $250,000. So it goes on. My $250,000 asset can create money by way of lending funds equal to more than nine times that amount.

It goes without saying if that money is invested in housing stock in a rapidly falling market, let’s say, house prices fall by 30% that seems reasonable right now and in line with bank predictions, then the loss generated by banks exceeds the value of the original asset deposit by well over 100%. The result, as Mr Micawber might have said, is unhappiness.

It’s going to get worse. The CEO of Barclays Bank, and a fellow economist who I know personally, Roger Bootle at Capital Economics, say house prices in the UK will fall by 30% to 35%. I believe their estimate is conservative and likely to be exceeded by at least 15% to 20% if one includes 2008 price drops. The USA is following the same pattern.

The house price boom was the pursuit of fool’s gold.

No additional value was being created by hiked-up house prices.

It was simply a false and untenable form of asset inflation that fuelled unrealistic levels of credit. The world was awash with property millionaires buoyed up by borrowings. No more, since to use another banking expression, they are all about to take a bath.

It’s a double bubble burst, personal assets and debt crashing at the same time means more and more people will struggle to repay their debts against devalued collateral, and end in foreclosure and homelessness.

It’s going to get a lot worse.

The car companies are only the tip of the iceberg. More big businesses, especially those with high levels of debt, will crash in 2009. Big companies have borrowed too much especially those taken off the market in private equity deals.

Rises in unemployment will further reduce consumer spending that in turn will have an effect on economic output, jobs and income.

There will be bigger gaps between rich and poor, and bigger economic contradictions.

There will be homelessness and unaffordable empty houses.

I noticed this week that in the UK, over 760,000 houses are now empty. So who owns them and what will happen? What happens to empty homes in foreclosures when no one can buy them? Worst still what happens to the people on the street?

That thought bugged me, so I rang the press office of the UK charity, Shelter, which works for the homeless. I gather there may be about 500,000 homeless in Britain. But it’s not official as Government statistics say 72,000.

It doesn’t matter which statistic is right there are enough resources to provide people with homes. That’s the point.

Papers recently leaked from the UK Home Office predict a growth in social unrest leading to higher crime, racism, political extremism and other acts of violence.

Britain is likely to borrow further hundreds of billions of pounds to shore up failing businesses and attempt to create jobs in the public sector.

Can Government really make a difference?

Some of the criticisms of the American Presidency make me laugh. So now George Bush is to blame for all manner of social ills.

Really?

I doubt if that guy has the brains to tie up his shoelaces without supervision! He signs things that are produced elsewhere. The power in American society exists outside the Oval Office. You’d better believe it; else go renew your subscription to Naïveté International!

What tools does government have at its disposal?

It has some influence over the base interest rate that has been lowered dramatically and is still failing to produce any real traction in a depressed economy. There is taxation and public spending. Finally, there is legislation and regulation.

The USA and the UK is investing about two trillion dollars of taxpayer funds in the banking sector. It’s a money sink. It may shore up the private equity interests of major shareholders in banking, however I do not believe it will have any further economic benefit.

“The creation of further credit in an already over indebted economy is like giving someone with liver disease their own supply of whisky to help them recover.”

All the bail-outs will do is compensate the banks for poor lending practice and help make good, bad debts and losses already incurred based on the creation of fictitious capital.

The bail out is also socially misdirected. More and more people will suffer as a result of economic failure.

Personal hardship will be rife.

I would prefer to see my taxpayer funds invested in the good of people in society as a whole rather than some wealthy, powerful minority of bank shareholders.

A new “New Deal”?

It seems we are now rejecting the conservative idea that “the market” should function without government supervision and regulation, not to mention intervention. Instead there is a new programme of state regulation and the subsidy of corporations.

Some people are calling for a new “New Deal,” meaning regulation and bail outs of corporations, plus government-sponsored projects and investment in public works.

Undoubtedly there are many ways in which public works would be beneficial. The national infrastructure could be replaced. Ecological projects are desperately needed. Expanding public services would otherwise help people with medical, educational, and employment needs. Life might become less painful for many.

This is not the same thing, however, as ending a deep recession, let alone another Great Depression. The last Great Depression was not cured by the New Deal. It lasted over a decade and only ended with the Second World War. This points to the limitations of a new “New Deal,” even if one was politically feasible.

In these respects, the same considerations apply to Britain as the USA.

Economists everywhere predict a demise in the US dominance of world economic power, and a transfer of that power to the likes of China and other developing economies. I’m not sure if it will be that simple.

Also I do not necessarily believe that Barack Obama and his newly elected government will make much real difference to our world.

His carefully constructed and hypnotic marketing rhetoric appears to have little substance behind it. I am open to be persuaded by well-reasoned, carefully researched, cogent arguments that demonstrate otherwise. I am not open to second hand oft-repeated media pap that, in my view, frequently insults the intelligence of a ten year old.

How I might feel about what’s on offer is perhaps best summed up in the words of Mark Twain:

“In religion and politics people's beliefs and convictions are in almost every case gotten at second-hand, and without examination, from authorities who have not themselves examined the questions at issue but have taken them at second-hand from other non-examiners, whose opinions about them were not worth a brass farthing.”

So what of “Change you can Believe in”, and Obama’s messages of “Hope”, “Change” and “Believe”?

What the hell do they mean? Change to what? Hope for what? Believe in what?

They are all potent messages, since anyone confronted by hardship and difficulty, in worrying about their future, their family and whether their home mortgage might be foreclosed, might wish for a change in their personal circumstances, might wish to hope for a better life, might wish to believe in their own future.

Is this what Obama is promising?

The power of his meaningless messages is that you can believe and hope for whatever you want them to mean.

We’ve been here before.

The people of the UK believed that their world would change, that they could hope for a better future, when they elected Tony Blair and his social democratic, centrist New Labour party. Did it change? Did it hell! Look where we are now and wake up!

Blair was bright, charismatic and apparently progressive too. He had a lot of “Obama” appeal. His appeal to the nation was one of reunification following the socially divisive and destructive years of Thatcherite Reaganomics, of years of the fall-out from greed and selfishness caused by the free market economy. He delivered nothing to little, which in its own way might go some way to demonstrate the impotence of governments that are not based on any mass social movement campaigning for change.

Instead Blair joined with Bush and America to go wage the “war against terror” in Iraq.

Both Bush and Blair lied grotesquely to their parliaments and the public in order to go wage war in the Middle East.

So who supplied the WMD to Iraq in the first place?

Here’s a piece from the UK Times newspaper, published on December 31 2002, approximately three months before the US / UK invasion of Iraq.

The Times is not known for taking subversive political positions. Historically, it has been the newspaper of the UK establishment:

“DONALD RUMSFELD, the US Defence Secretary and one of the most strident critics of Saddam Hussein, met the Iraqi President in 1983 to ease the way for US companies to sell Baghdad biological and chemical weapons components, including anthrax and bubonic plague cultures, according to newly declassified US Government documents.”

Got it! So the US sold WMD to Iraq then declared war against the country for owning what it supplied to them. Of course, that makes so much sense.

But by the time of the invasion, there were no WMD.

There were certainly no links between Saddam and Al Qaeda of any note.

Besides, Al Qaeda is a fluid, non-state, global organisation with cells throughout the world. No obvious connections have been established between Iraq and Al Qaeda. Saddam may have been a ruthless, unstable tyrant, but that was not the justification for this invasion, nor is it commensurate with or justified by the enormous loss of life caused by the conflict.

Our governments ruthlessly exploited our fears and paranoia based on the attacks of September 11th, 2001. There is no apparent connection between this reprehensible incident and Iraq.

America and the world grieved for the 3,000 lives lost at 911.

Who grieves for the hundreds of thousands of civilian casualties, of mothers, children and babies too who have lost their lives in the Iraq war?

No exact casualty figure is known for those Iraqis who have lost their lives in this conflict. There are documented deaths of some 100,000 Iraqi civilians. Others estimate that the total number of Iraqi casualties of war is closer to 1 million with 4 million having been displaced from their homes.

There’s a point here, but before we go on to consider it further, let’s look at a thesis put forward by the former US State Department official, William Blum, who observes that between 1945 and 1999, the US has conducted serious military interventions in over 70 nations to secure the following basic imperatives:

- Making the world safe for American corporations
- Enhancing the financial statements of defence contractors at home…
- Preventing the rise of any successful society that might serve as a successful example of an alternative to the capitalist model
- Extending political and economic dominance over as wide an area as possible, as befits “a great power”

Are there any more?

You can make up your own mind where the war against Iraq fits, as it doesn’t fulfil any objectives that were stated by our governments as the basis for engaging in this conflict.

By the way, I am simply reporting Blum’s view, I readily acknowledge that other imperatives might exist, but nevertheless I believe that broadly his view reflects an uncomfortable reality.

I have so many concerns about the so-called “war against terror” not least of which is that the threat of so-called Islamic terrorism is indefinite in its reach and its defeat is indeterminable.

As such it provides a spectre of imminent doom that presents a highly convenient rationale for extending operations worldwide as a basis for extending Anglo-American political and economic dominance and control.

The levels of racism and hatred excited by the “war against terror” against our own Muslim communities, and Islamic nations and communities in general, are such that it would be no surprise to me if they struck back at us.

I do not condone violence; all I would advocate is that we find a way of transforming this latent risk of further conflict before it is too late.

We may have to resolve defence double standards too. If we don’t want other nations to possess nuclear weapons, then we may have to forego them ourselves.

Those who really own the most powerful Weapons of Mass Destruction are frequently those who complain the loudest about others having them too. The combined USA / UK arsenal of WMD is greater than any other one country in the world including Russia that has a massive holding in its nuclear inventory. It doesn’t bring me any peace of mind knowing that fact.

I know so many Americans pin their hopes on Obama to bring peace in our world.

I doubt if any one man can do that. It requires the social masses to bring peace, and frankly most are too complacent, too lazy and too dumbed out by mind-pap media to do that.

I know also that gun sales to white American right-wing rednecks seeking to defend themselves against the onslaught of Obama’s “socialist army” have risen to an uncomfortable level.

Obama is no socialist.

I fear that too many have swallowed the vacuous messages of his massive $0.6 billion marketing campaign too.

Also I fear, and it’s a very uncomfortable thing to say, for attempts on his life. A political assassination might have social consequences too terrible to contemplate, and may be the excuse that the political right wants and needs to seize power and control again, to exploit the same mass hysteria they so ruthlessly exploited in the devastating sadness and aftermath of 911.

We’ve got used to the process of “threat, reaction, solution” that so often equates to little more than mass murder in the pursuit of goals that power groups in our societies pass off as a vehicle for their own interests.

Think about Iraq. Think about the gains and losses there. What gain? Could it be oil and a strategic presence in the Middle East? What loss? Hundreds of thousands of innocent civilian Iraqi lives.

It makes me weep sometimes. I feel very concerned for our future.

How do we get out of this mess?

geoffrey@geoffreysplace.com — 2008-10-24T13:17:01+01:00

I find all the numbers about the economy that are being banded around now to be mind-boggling. There are two big numbers that stick in my mind and that is the size of the bank bailouts in the UK and the USA. In the UK, the cost of the bailout plan is estimated to be around $1 trillion and in the USA, $700 billion.

The USA is the largest economy in the world with an annual Gross Domestic Product of $13.8 trillion, that represents about 25% of the world’s total economic output. The UK is the fifth largest economy with a GDP of $2.8 trillion. Ranking at positions of 2, 3, and 4 are Japan, Germany and China. China’s economic importance is growing fast but the size of its economic output is a little over 25% of that of the USA.

These are a lot of numbers I know. I wanted to write them down so I got some perspective on what it is we are talking about.

The size of the UK bank-bail out if it was looked at on the scale of national economies would rank at 13th in the international GDP table. The amount of money that the UK is making available to its banks is greater than the GDP of some 166 other countries.

With the cost of the bailout, the size of the national debt of USA and UK has soared during 2008. Under the Bush administration, the size of the national debt as a proportion of GDP has risen from 60% to around 115%. In the UK, the national debt may reach 100% of GDP or more this year.

Another alarming statistic (Source: BBC Business news 24 October 24, 2008) is that the UK aggregate of national debt, corporate and personal borrowing is three times that of the country’s annual economic output.

So what’s happening now? We’ve had runs on banks and international markets. Now there’s a new game on the streets. We’re having runs on national economies. Banks, hedge funds and mutual funds are demanding repayment from economies that they perceive to be at risk, either because of their reliance on foreign borrowings or because they are net importers of goods and services or both.

The UK pound has fallen 20% against the dollar in the past three months. South Korea’s currency, the won, has fallen by 29%. There are some obvious candidates like Hungary, Ukraine and Iceland lining up in the financial emergency room too.

The South Korean problem is complex and again, whilst the issues are in the banking systems, they have nothing to do with mortgages, housing or sub-prime loans but wholesale capital withdrawals resulting from imprudent deals struck by banks in currency hedges (Currency hedges are intended to offset risk through the simultaneous sale and purchase of forward currency contracts).

South Korea is a strong exporter. Its trading performance and its balance of trade is healthier than UK’s and probably the USA’s too albeit on a smaller scale. It ranks thirteenth in the world in terms of economic output.

Other countries suffering substantial capital withdrawals are South Africa and Argentina.

It’s expected that the UK will announce economic contraction today or “negative economic growth” as the city boys like to call it. It will get worse, possibly much worse as the UK has moved out of manufacturing industries to an economy where its mainstay is the fast contracting financial services sector. The financial services sector in the UK while it only accounts for 4% of total employment represents 30% of the UK’s GDP.

As Mr. Bush Sr. said, “It looks like we’re in deep doo doo now.”

It’s not only about the sub-prime issue anymore. When markets start dealing in national economies, it affects us all. Historically, national instability on a wide scale has tended to result in conflict and wars. Let’s hope we’ve learned some lessons from the past.

I’ve heard lots of arguments about reducing taxation and the bailout bringing benefits from the “trickle down” effect. Trick or treat more like! The treat is that the wealthy benefit, and the trick is that the poor suffer. Trickle down has been argued since Hoover in the twenties. It didn’t work then, it doesn’t work now. There is nothing to support the argument that it has ever worked.

In principle, I am strongly opposed to the bail out now. I have changed my mind about it. I am opposed to it since it is fundamentally undemocratic. To use, Chomsky’s words, “private corporations are tyrannies who account to no one other than themselves.” They are run for their own profit, not the benefit of the world or the public. In short, they are in it for themselves and no one else. If banks want to play Russian roulette with national economies, they’ll do it if they see profit for themselves.

I don’t believe either that the rot in the banking systems is solely to blame for our current economic difficulties. I have never believed that particular story. The turmoil in our financial systems is, I believe, a symptom of underlying economic instability rather than its cause. Banks may play a big part in that system and be central to its functioning but they do not exercise any overall control of the economy itself, but supply a service to it. The service is debt, more normally called credit. The realisation or appreciation of assets, or the prospect of future earnings offsets the credit risk. Credit is at risk, when economies contract, assets depreciate and earnings do not grow or diminish. When credit goes bad, banks make losses.

The so-called sub-prime crisis may not have happened unless the value of homes, of mortgage collateral, was called into question. The asset value of homes fell which meant that banks were unable to realise the security they had taken in return for the credit that they had extended.

My real concern is for the average person on the street. I don’t know a massive number of people, but I have talked to so many who are suffering or have suffered major economic hardship now. They have lost their jobs, their homes and in one case, I know someone who will be facing bankruptcy in the next couple of weeks. He was formerly a capable and successful businessman. I don’t need government to say, “We’re in recession. It’s official!” I know that to be the case as financial difficulties are multiplying around me all the time. I can see them with my own eyes. Everyone I know, every single person knows someone who is suffering real hardship now.

So what’s the answer? There are possibly two answers, but both amount to the same thing. It’s not that difficult. The answer is about democracy. In the dictionary definition, democracy "is government by the people in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system." In the phrase of Abraham Lincoln, democracy is a government "of the people, by the people, and for the people."

We need to decide whether democracy is what we want and be prepared to do something about it. We have to decide what we want in this world, if it’s public welfare or not. The wellbeing of banks does not and will not necessarily bring about public welfare or alleviate personal financial hardship. They will willingly take taxpayers’ money then spend it in achieving their own ends whether that’s mergers, acquisitions or anything else, so long as it feeds their own self-interest.

The free market ideology was upheld until big businesses started to flounder. Now everyone is talking about increased regulation and control of big business by government. I might ask, in order to achieve what end and for whose benefit?

The political process has become divorced from the people both in the UK and the USA. I do not know anyone who believes they have any real influence over the democratic process. Government is, therefore, no longer democratic or to use Chomsky’s words “there is a democratic deficit”. Whether it’s Republican or Democrat, New Labour or Conservative, nothing will change until we recover the essence of Lincoln’s dictum and we assume and take responsibility for public well-being.

Obama will not make a difference unless he works within some overall social organisation that restores democratically representative government. The real power structures within our society have little to do with government, but are capable of being transformed by government if it has the political will to do so. These power structures that are founded on economic self-interest will resist change by using every means at their disposal. It’s no small challenge.

I believe in democracy. I also believe in freedom, personal and social responsibility and self-determination. That’s about all.

I mentioned two options: First. we can pull out of free market economics to an extent and endeavour to restore economic equilibrium through increased government control and regulation. I am not sure it will work. Democratic government represents the will of the people. Business corporations represent their own interests. They are neither the same nor are they necessarily compatible. Our economic systems are failing. It may be that government intervention keeps the market, which is fundamentally unstable and inherently inefficient, on “life support”, but I wonder if the patient will ever recover. This is the first option. It’s about big government and government control. Nevertheless, it requires a fundamental re-alignment of the conduct of government with overall public interest and wider democratic participation.

I’ve had a number of personal crises in my life. They have all been about change and the need to change. I’ve never had a benevolent philanthropist throw money at me so I could carry on living as before. I have had to change. There is a lot of nonsense talked about the Chinese etymology of the word crisis saying that it signifies two words, “danger” and “opportunity”. This is incorrect. In fact the Chinese word crisis is derived from the something closer in meaning to “an incipient moment”, a moment in which something is in the process of becoming. I believe that a crisis is closely connected, not with catastrophe but, with the process of change itself.

My second option is also my preferred one and it involves turning the bailout on its head. It goes like this: We leave the markets and businesses alone to find their own solutions. They may or may not. It matters little. Government provides a safety net to the people and directs its resources entirely for the benefit of the people affected by any systemic economic failure. $700 billion should do it easily, and it would not be a bottomless pit either. In practical terms, this means that it would need to guarantee not the wellbeing of banks, but the safety of people’s money in those banks. It means that it would not legislate massive state initiatives to create jobs like the “new deal”, but support economic initiatives by the people themselves for the benefit and wellbeing of themselves and their own communities. It might even go further and promote work in environmental, health, education and ‘care for the elderly’ initiatives.

The key difference would be one of focus and of catering for people directing their efforts and resources for their own wellbeing, rather than for the benefit of the small minority who control large corporations. Large corporations may or may not survive in such a world. Their survival would be influenced by different factors, not by how much profit they made, but by how well they served a social need or purpose. I would vote for such a world.

It may be that the right solution is a hybrid of these two options. I would not rule out the direct intervention by government in a bank's administration or in facilitating a take-over in order to act in the public interest. My problem is in government using taxpayer's money to buy banks out of a problem that achieves little by way of improving corporate responsibility, and offers no obvious social benefit.

Sadly, I doubt if the answer will come with Barrack Obama, but he does offer the best chance of change. I hope he's not just different icing on the same old cake. There isn’t a hope in hell of getting out of this mess with McCain and Palin.

In conclusion, here’s today’s economic update from Europe. Shares in Europe’s main markets are down between 7% and 8% this morning.

The Bank of England deputy governor, Charles Bean said, "This is a once in a lifetime crisis, and possibly the largest financial crisis of its kind in human history."

The price of gold, typically, the place people put money in times of crisis has fallen by five per cent.

Chomsky on the economy

geoffrey@geoffreysplace.com — 2008-10-23T10:25:49+01:00

This is an interview with Noam Chomsky that was published in the last two days. It is by no means a comprehensive reflection of his views that I find to be both intelligent and refreshing.

Chomsky comes in for a lot of criticism. From the raving right, he's called a loony leftie, and from the loony left, he's called an establishment reactionary! He has something positive to say about participatory democracy and that in my view makes him someone worth listening to:

Financial crisis humour

geoffrey@geoffreysplace.com — 2008-10-10T13:41:32+01:00

It's the weekend! The news is dire and I need to laugh. I found this excellent satirical sketch from award-winning British comedians, John Bird and John Fortune. It is extremely funny! Forget the news, watch this instead!

Bail-out latest!

geoffrey@geoffreysplace.com — 2008-10-08T17:05:01+01:00

This afternoon, the UK government has announced a bank bail-out plan of £500 billion or US $880 billion. Funds are to be made available to banks by way of capital, loans and loan guarantees in return for interest bearing preference share holdings.

The FTSE 100 UK stock exchange index fell by 5% today. The French and German stock exchanges fell by approximately 6%.

Banks throughout the world have co-ordinated a reduction in interest rates to try to stave off the crisis.

Those are the facts. This time, I'm speechless. I predicted a crisis in the financial sector this time last year. This is far beyond anything I had envisaged.

Since writing this short post, that is based on news reports from the state-owned BBC, differing estimates on the size of the UK bail-out have been published. These vary between £400 billion and £500 billion or $692 billion and $880 billion. Whichever it is, it's a very sizeable amount from an economy that is significantly smaller than that of the USA.

UK GDP = $1.93 trillion
USA GDP = $13.13 trillion
(2006 estimates)

Update - Thursday 9th October 2008

There is still some confusion about how big the UK bail-out is. According to my reckoning, it is the higher figure of £500 billion or $880 billion. Here's how it stacks up:

- Up to £50bn of taxpayer money to buy preference shares - £25 billion will be released initially with a further £25 billion at a later date

- An extension of the Special Liquidity Scheme introduced after the collapse of Bear Stearns to allow £200 billion of funds to be made available to banks

- A guarantee of the debt issued by banks of up to £250 billion

As conventional economics goes, it looks like a more intelligent plan than the US bail-out that focused simply on buying "toxic" assets at undermined prices. It seems to address the three main issues of the banks that are capital, funding and liquidity that the US plan fails to do (in my opinion).

I like to get some perspective on these amounts as they are simply fairy tale numbers to me. Here's the bail-out deal compared with UK spending on health and education:

European stock markets in UK, France and Germany fell again today.

Teetering on the edge...

geoffrey@geoffreysplace.com — 2008-10-06T12:41:27+01:00

Good morning, America.

Today, the principal European stock markets have fallen by between 7% and 9%. The economy of Iceland looks to be teetering on the edge of collapse. Governments throughout Europe are seeking to bolster up the fortunes of failing financial institutions.

My heart wasn’t in that piece I wrote about the big bank bail out last week. I simply didn’t believe that the US sub-prime mortgage issue was at the root of the problem. I still don’t.

Governments can scramble to bring market turmoil back into some sort of balance. I believe they will fail. And you don’t need a crash course in economics and politics to work out why.

Markets arose from a basic acknowledgement that humans are an interdependent species. They fulfilled the need of intermediating in an exchange of human value. They had their roots in the requirements of humans to live in mutually supportive relations. Notionally, at least, we swapped value via markets that were simply a medium of exchange as was money.

Something else happened, and markets took on the guise, not of exchanging social needs, but accumulating wealth. Their principal function was to generate profit for the few by the many. Markets now create wealth but they fail to distribute that wealth effectively. Markets have become dislocated from our social world.

People are frightened. They fear for their livelihoods, their wellbeing, their jobs and their savings. That is no surprise at all. I share those fears too.

Free market capitalism takes no account of that which it cannot commodify. Basic human needs of respect, safety, love and affection, wellbeing, security and protection have no place in a market economy. Market economics must return to some very basic questions of use value and exchange value. We have to take into account the real value of human effort and work, and that is very different from its market value. Market economics does not value affective or social relationships, the family, the community, the environment or the world we live in, all of which are vital to human wellbeing and survival.

Free market economics has given birth to a monster, one that has no regard for human wellbeing. As hard as governments may try to bring it under control, they will fail. The free market has no social purpose or social conscience.

I will say something that is perhaps deeply unpopular. I believe that the post 9/11 paranoia has been based on something that Jungians call “shadow projection” - seeking an object of blame outside ourselves for that which we cannot deal or cope with in our own reality. Don’t get me wrong, 9/11 was an appalling act of terrorism. I oppose it wholeheartedly. But I believe that the notion of a “Muslim threat of terrorism that undermines our western civilization” (whatever that is) is an ideological distraction from those things going badly wrong closer to home…right under our noses in the free market economy. There may be more terrorism yet. Economic instability in the west is likely to be seen as a terrorist opportunity. Market economics is destabilizing the Middle East too. So is the cause sub-prime mortgages? I would doubt that too, wouldn’t you?

That’s it for now. This blog has no economic value and I must go off and work out how to earn a few pennies. Till the next time… À Bientôt.

The big banking bail-out

geoffrey@geoffreysplace.com — 2008-10-02T14:04:15+01:00

Here you are – a comprehensible background to the big banking bail-out in one blog post!

What’s the problem?

Apparently the main problem from a market and banker’s viewpoint is the accumulation of potential bad debt based largely on the USA mortgage market.

Major banks and other financial institutions around the world have reported losses of approximately US$435 billion as at 17 July 2008.

The U.S. mortgage market is estimated at $12 trillion with approximately 9.2% of loans either delinquent or in foreclosure in August 2008.

Exposure to the bad debt risk means that a bank’s available liquid funds are reduced. This in turn has a negative impact on business that relies on bank credit to support its trading activities. In short, prospective bad debt has a negative impact on the bank’s ability to trade and lend.

The initial response of banks to the liquidity crisis was to attempt to generate more funds by increased share and stock issues. These were not fully subscribed and given their exposure to bad debt risk, their share prices fell.

In the UK, the stock market value of Halifax Bank of Scotland (HBOS) who were not known for reckless or sub-prime high risk lending, but who had heavy exposure to the UK mortgage market, looked as though it was heading for failure when its share price fell to 88 pence ($1.65) from a year high of approximately £7.78 ($15). The failure might be attributed to the bank’s lack of success in attempting to raise additional cash to support its liquidity via a rights share issue and a rumoured abortive attempt to gain funding from other sources (including the Bank of England). It was taken down more by negative market speculation rather than any actual deterioration in its trading position, although that is an unqualified personal opinion. Its lending policies were thought to constitute a higher risk than some other more conservative UK banking institutions. It made conventional home mortgage loans to what might be described as “average families.”

So what’s the real problem?

The boom and bust housing market

A very significant part of the problem has been the “boom and bust” housing markets both in the USA and the UK. In the USA, house prices rose by 124% between 1997 and 2006.

As a result of booming house prices, there was excessive speculation in the market. In 2006, 36% of all USA house purchases were for investment purposes or vacation homes. (Source: National association of realtors) People moved into the housing markets and treated homes like stocks and shares.

In 2006, the US housing bubble burst. There had been massive overbuilding of homes to satisfy speculation in the market that caused an excess of supply which led to a fall in house prices.

Suddenly there were people everywhere who had made a mint of money based on the value of their home. In the UK, there was a glut of property millionaires. Many decided to cash in on their speculative gains taking out second mortgages that funded increased consumer spending. This was economic growth based on fool’s gold as no real new economic value had been created. Most increased consumer demand was based on increased borrowing and more consumer debt.

In the UK, it was a housing shortage that drove up prices. But prices surpassed affordability. They grew at rates far in excess of inflation and salary and wage increases. The continuing boom was unsustainable. Prices are now falling and their rate of decline is accelerating.

House prices in early 2008 were considered to be overvalued by 40% in the USA and 25% in the UK.

The decline of house prices is hitting borrowers hard. In the US, an estimated 8.8 million homeowners — nearly 10.8% of total homeowners — have zero or negative equity as of March 2008, meaning their homes are worth less than their mortgage. This provides an incentive to "walk away" from the home, despite the negative credit rating impact.

The house price boom was a fool’s paradise.

Now for the bankers

Bankers cashed in on a growth market, but with little forethought or cautious consideration other than a regard for profit.

The sub-prime mortgage came into being for those who were unable to qualify for conventional home loans (for reasons of status, credit standing, low income etc.) and willing to pay the premium price by way of higher interest rates. Sub-prime mortgages are high-risk loans.

Bankers also sought to defray their exposure to risks via a process known as securitisation (credit default swaps – CDS) whereby they aimed to retain profit and sell parts of their security-backed debt to an insurer or another financial institution. Often this involved whole chains of transactions with companies passing on risk one to another, each believing that they had retained some element of profit.

The risk business is complex. Risk has several dimensions: in default (the credit risk), in the diminution of the asset value (the falling house price), and the counterparty risk (the risk of failure of the party under-writing the debt), and a risk in liquidity where companies have been able to gain access to short-term funding because of their perceived exposure to, or reducing market attractiveness within, the mortgage market.

So when the house boom went flat, banks found themselves holding securities that no one wanted to buy. This is a key fact. It’s not that homes became worthless or that massive numbers of people faced foreclosure. It’s about the way our financial and trading system works and no one is proposing to change that.

Here’s a big clue. I understand that Merrill Lynch was sitting on about $30 billion of sub-prime mortgage securities. No one wished to buy them. “Mark to market” accounting meant that they were required to value this asset at what the market was willing to pay for it. The value that the market gave to these securities was 78% below their face value. According to accounting conventions, Merrill Lynch had to mark their value down to 22% of their estimated original worth. Neither the quality of the homes nor the status of the debt determined whether that valuation was appropriate. It was what the market was willing to pay and suddenly Merrill Lynch was sitting on one enormous book loss. It did not reflect reality. I suspect any fool might have realised more than that market valuation of those securities in homes and mortgages in real terms. Consider HBOS. Markets are like casinos that value profit, mainly short-term profits. Reality has little to do with it.

No one knows if the bail-out fund of $700 billion is going to be big enough yet. Freddie, Fannie and AIG have already had the benefit of $300 billion of taxpayer funds taking the total bail-out cost to $1 trillion. This crisis and the sums of money involved get worse and larger by the day.

Here’s the big bail-out plan…

The bail-out plan appears to be simple. The US Government will buy distressed securities (mortgaged assets i.e. homes) in credit default from the mortgage provider or underwriter at a discounted value.

So home loan X is in default, government buys home that is the security at substantially less than its face value in the hope it may subsequently sell it back to market investors.

The bank’s take a loss on disposal of their security, but it’s a relatively small loss. Their balance sheet is cleared of the liability that represents a bigger exposure or loss to the bank. Their liquidity improves and as a result, trading confidence is restored.

I’ll just hold that thought one moment. In order for government’s intervention to be worth anything, it must pay a price for the troubled security above market valuation otherwise there would be no point in buying it. Hang on! Doesn’t that mean that the difference between the market price and the government price is profit? Correct. So might the bank’s share prices be increased for the benefit of its stock-holders as a result of this…what should I call it…liability alleviation or profit on market price? Yes. Will taxpayers get a chance to enjoy shareholder gains without participating in further risk therefore? No. Are there any legal instruments that would permit such participation in shareholder profits? Yes…but sssch…better keep quiet about those, else we’ll demoralise and disincentivise the shareholders.

The act says:

Its purpose is to:

“immediately provide authority and facilities that the Secretary of the Treasury can use to restore liquidity and stability to the financial system of the United States; and to ensure that such authority and such facilities are used in a manner that:

(A) protects home values, college funds, retirement accounts, and life savings;
(B) preserves homeownership and promotes jobs and economic growth;
(C) maximizes overall returns to the taxpayers of the United States; and
(D) provides public accountability for the exercise of such authority.”

It all sounds laudable enough. Remember Merrill Lynch? So is government going to pay above the market valuation to stem the turmoil? Probably. I’m not sure how good government is at playing banker either. I have no confidence in it fulfilling that role. What if the house market doesn’t recover in the short term? Will government defy corporate convention and take a longer-term view? I doubt that too. US governments are in office for 4 years and that’s not long-term. Sadly I suspect what might happen is that the government sells back its securities to the market at a loss in which case the banks may make a further profit on their intervention. That sounds more likely. The market has no social conscience, nor does it have any regard for the taxpayer or their welfare. Whatever government sets out in its objectives, it is entering a market-driven game now.

Here’s another idea. I’m not in favour of the bail-out bill at all. But if USA must do it, then why not have government guarantee “distressed securities” rather than buy them. It serves the same purpose but forces banks to work with their problems and solve them, like grown-ups, rather than relieving them of their difficulties, like an errant child.

I have one big nagging doubt about the bail-out bill. It isn't only banks that are suffering economic hardship at present. The bill does nothing for the underlying economy or the collapsing housing market. It may be a very expensive remedy that achieves very little. I suspect that lack of market confidence may return in a relatively short time.

This is my view today. The world may have changed by tomorrow.

Till the next time…au revoir.

Economic crisis - a reality check

geoffrey@geoffreysplace.com — 2008-10-15T09:21:00+01:00

I can’t remember voting for a mixed state / private economy. Can you? One where the state invests taxpayer’s funds in the wellbeing of the banking system…Should I take comfort in the USA’s and UK’s governments desire to protect my money and savings or might I suspect they are protecting someone else’s interests?

I don’t believe there’s any simple way out of this mess. I don't believe that the bank bail-outs that are taking place around the globe will resolve the economic problems of recession. Sadly, I don't believe that there will be any real lessons learned from the current financial meltdown until it's too late.

Our economic systems are wrecking the world we live in. We ignore the damage they inflict on our environment for the sake of expedient profits. Ultimately the damage we are causing to our natural world threatens human survival. In denial like ostriches, we bury our heads in the sand while working towards our own extinction for the sake of making a fast buck.

The American biologist E. O. Wilson estimates that if the entire world consumes at the same rate as the USA, then we would need FOUR PLANET EARTHS to sustain humankind NOW.

We invest our efforts for the profits of the few at the expense of well-being for the world as a whole. We prop up our flagging economies through investment in a massive military murdering machine.

The numbers that we talk about to bail out our banks are astronomical when compared to the sums needed to provide all of humanity with basic needs like water, sanitation, education and health care.

We can forgive the debts of greedy errant bankers, but we are unable to forgive the debts of developing countries. It's time to change!

Let's put these numbers into perspective. The current USA/UK combined bank bail-out exceeds $1.5 trillion. These are the additional costs to achieve universal access to basic social services in all developing countries:

Global Priority

$U.S. Billions

Basic education for all

Water and sanitation for all

Reproductive health for all women

Basic health and nutrition

Total

That’s 40 billion dollars. How does that look against a $1.5 trillion bail out the bankers plan in the UK and USA?

I feel it’s time for a reality check as these amounts don’t make too much sense to me.

Here are some other numbers, a stark and daunting contrast (statistics mainly from UNICEF and the World Bank). They are shocking:

Almost half the world — over three billion people — lives on less than $2.50 a day.

At least 80% of humanity lives on less than $10 a day.

More than 80 percent of the world’s population lives in countries where income differentials are widening.

The poorest 40 percent of the world’s population accounts for 5 percent of global income. The richest 20 percent accounts for three-quarters of world

According to UNICEF, 26,500-30,000 children die each day due to poverty. And they “die quietly in some of the poorest villages on earth, far removed from the scrutiny and the conscience of the world. Being meek and weak in life makes these dying multitudes even more invisible in death.”

Around 27-28 percent of all children in developing countries are estimated to be underweight or stunted. The two regions that account for the bulk of the deficit are South Asia and sub-Saharan Africa.

If current trends continue, the Millennium Development Goals target of halving the proportion of underweight children will be missed by 30 million children, largely because of slow progress in Southern Asia and sub-Saharan Africa.

Based on enrolment data, about 72 million children of primary school age in the developing world were not in school in 2005; 57 per cent of them were girls.

Nearly a billion people entered the 21st century unable to read a book or sign their names.

Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

Infectious diseases continue to blight the lives of the poor across the world. An estimated 40 million people are living with HIV/AIDS, with 3 million deaths in 2004. Every year there are 350–500 million cases of malaria, with 1 million fatalities: Africa accounts for 90 percent of malarial deaths and African children account for over 80 percent of malaria victims worldwide.

Water problems affect half of humanity:

• Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation.

• Almost two in three people lacking access to clean water survive on less than $2 a day, with one in three living on less than $1 a day.

• More than 660 million people without sanitation live on less than $2 a day, and more than 385 million on less than $1 a day.

• Access to piped water into the household averages about 85% for the wealthiest 20% of the population, compared with 25% for the poorest 20%.

• 1.8 billion people who have access to a water source within 1 kilometre, but not in their house or yard, consume around 20 litres per day. In the United Kingdom the average person uses more than 50 litres of water a day flushing toilets (where average daily water usage is about 150 litres a day. The highest average water use in the world is in the US, at 600 litres day.)

• Some 1.8 million child deaths each year as a result of diarrhoea.

• The loss of 443 million school days each year from water-related illness.

• Close to half of all people in developing countries suffering at any given time from a health problem caused by water and sanitation deficits.

• To these human costs can be added the massive economic waste associated with the water and sanitation deficit. The costs associated with health spending, productivity losses and labour diversions are greatest in some of the poorest countries. Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceeds total aid flows and debt relief to the region in 2003.

Number of children in the world - 2.2 billion
Number in poverty - 1 billion (every second child)

Shelter, safe water and health

For the 1.9 billion children from the developing world, there are:

• 640 million without adequate shelter (1 in 3)

• 400 million with no access to safe water (1 in 5)

• 270 million with no access to health services (1 in 7)

Children out of education worldwide - 121 million

Survival for children

Worldwide:

• 10.6 million died in 2003 before they reached the age of 5 (same as children population in France, Germany, Greece and Italy)

• 1.4 million die each year from lack of access to safe drinking water and adequate sanitation

Health of children

Worldwide:

• 2.2 million children die each year because they are not immunized

• 15 million children orphaned due to HIV/AIDS (similar to the total children population in Germany or United Kingdom)

Rural areas account for three in every four people living on less than US$1 a day and a similar share of the world population suffering from malnutrition. However, urbanization is not synonymous with human progress. Urban slum growth is outpacing urban growth by a wide margin.

Approximately half the world’s population now live in cities and towns. In 2005, one out of three urban dwellers (approximately 1 billion people) was living in slum conditions.

In developing countries some 2.5 billion people are forced to rely on biomass—fuel wood, charcoal and animal dung—to meet their energy needs for cooking. In sub-Saharan Africa, over 80 percent of the population depends on traditional biomass for cooking, as do over half of the populations of India and China.

Indoor air pollution resulting from the use of solid fuels [by poorer segments of society] is a major killer. It claims the lives of 1.5 million people each year, more than half of them below the age of five: that is 4,000 deaths a day. To put this number in context, it exceeds total deaths from malaria and rivals the number of deaths from tuberculosis.

In 2005, the wealthiest 20% of the world accounted for 76.6% of total private consumption. The poorest fifth just 1.5%.

The poorest 10% accounted for just 0.5% and the wealthiest 10% accounted for 59% of all the consumption.

1.6 billion people — a quarter of humanity — live without electricity.

The GDP (Gross Domestic Product) of the 41 Heavily Indebted Poor Countries (567 million people) is less than the wealth of the world’s 7 richest people combined.

World gross domestic product (world population approximately 6.5 billion) in 2006 was $48.2 trillion in 2006.

• The world’s wealthiest countries (approximately 1 billion people) accounted for $36.6 trillion dollars (76%).

• The world’s billionaires — just 497 people (approximately 0.000008% of the world’s population) — were worth $3.5 trillion (over 7% of world GDP).

• Low income countries (2.4 billion people) accounted for just $1.6 trillion of GDP (3.3%)

• Middle income countries (3 billion people) made up the rest of GDP at just over $10 trillion (20.7%).

The world’s low income countries (2.4 billion people) account for just 2.4% of world exports.

The total wealth of the top 8.3 million people around the world “rose 8.2 percent to $30.8 trillion in 2004, giving them control of nearly a quarter of the world’s financial assets.”

In other words, about 0.13% of the world’s population controlled 25% of the world’s financial assets in 2004.

For every $1 in aid a developing country receives, over $25 is spent on debt repayment.

51 percent of the world’s 100 hundred wealthiest bodies are corporations.

The wealthiest nation on Earth has the widest gap between rich and poor of any industrialized nation. The poorer the country, the more likely it is that debt repayments are being extracted directly from people who neither contracted the loans nor received any of the money. An analysis of long-term trends shows the distance between the richest and poorest countries was about:

* 3 to 1 in 1820
* 11 to 1 in 1913
* 35 to 1 in 1950
* 44 to 1 in 1973
* 72 to 1 in 1992

“Approximately 790 million people in the developing world are still chronically undernourished, almost two-thirds of whom reside in Asia and the Pacific.”

For economic growth and almost all of the other indicators, the last 20 years [of the current form of globalization, from 1980 - 2000] have shown a very clear decline in progress as compared with the previous two decades [1960 - 1980]. For each indicator, countries were divided into five roughly equal groups, according to what level the countries had achieved by the start of the period (1960 or 1980). Among the findings:

• Growth: The fall in economic growth rates was most pronounced and across the board for all groups or countries.

• Life Expectancy: Progress in life expectancy was also reduced for 4 out of the 5 groups of countries, with the exception of the highest group (life expectancy 69-76 years).

• Infant and Child Mortality: Progress in reducing infant mortality was also considerably slower during the period of globalization (1980-1998) than over the previous two decades.

• Education and literacy: Progress in education also slowed during the period of globalisation.

200 multi-national corporations now dominate one quarter of the world’s economic activity.

Here's a quote I found last night that I liked in this context. In 1941, the editor Edward Dowling wrote: "The two greatest obstacles to democracy in the United States are, first, the widespread delusion among the poor that we have a democracy, and second, the chronic terror among the rich, lest we get it."

À la prochaine...till next time...

Freedom of speech on the Internet?

geoffrey@geoffreysplace.com — 2008-09-15T16:06:55+01:00

Every day here in France, my news comes from mainly the BBC website or BBC radio. Sometimes I supplement it with the electronic versions of daily British newspapers like “The Guardian” or “The Independent.”

Today, a news piece on the BBC caught my eye. It was by Sir Tim Berners-Lee who is credited with the creation of the World Wide Web. He expressed concern about whether the Internet could be relied upon to promulgate scientific truth. He cited the large amounts of false scientific information that has been put out here about the Large Hadron Collider (LHC) and the connections between the MMR vaccine and autism as examples of disinformation. He was advocating a branding or grading policy for websites based on their being trustworthy or reliable sources of information.

It seems he was advocating a role for his own new organisation, The Web Foundation.

The one thing I love about the web is its permission of freedom of speech. I respect that as a basic human freedom too. I can make up my own mind about what I believe to be true. I don’t need “Sir Tim” or some government agency to tell me what is true. I am capable of deciding for myself.

It does seem like Sir Tim is different, however. He comes here not only to buy his shoes but he says, “It's where I go to decide who I'm going to trust to vote…

"It's where I go maybe to decide what sort of religion I'm going to belong to or not belong to.”

How naive is that? The Internet is not the new "Ministry of Truth", neither is it the thought police.

Tim Berners-Lee is a distinguished physicist and computer scientist who just happens to work for, inter alia, CERN, the developers of the LHC. I may or may not respect his scientific judgment. I would be happy to listen to him as I would to people who argue against him.

But I’m deeply unhappy about scientists deciding about what they serve me up here as their version of truth as I am with anyone else telling me what to think.

So what did we do before the Internet, Tim? Maybe we read newspapers and watched television. Would you attach your trust and reliability labels to “Fox News” and the UK newspaper, “Daily Sport”? I love the fun and stupidity of Daily Sport headlines like, “Woman pregnant for 65 years gives birth to pensioner”… But fun apart, what Tim is proposing amounts to censorship to which I’m vehemently opposed.

Tim also works for a state-backed organisation that invests in innovation as did I (the same one). He’s picking on some of the right issues in my view. The BBC article goes on:

“The Foundation will also look at concerns that the web has become less democratic, and its use influenced too much by large corporations and vested interests.

"I think that question is very important and may be settled in the next few years," said Sir Tim.”

My message to him is not to suppress freedom of speech, but to allow it.

If he needs a cause celebre, then how about focussing on the 12% of the internet that is dedicated to pornography and the denigration of human relationships and women. How about promoting democracy and freedom of speech rather than suppressing it in favour of “large corporations” and “vested interests”?

Now I must go and look out his email address…

Human survival or the survival of capitalism?

geoffrey@geoffreysplace.com — 2008-09-12T22:04:07+01:00

We may have to choose.

To those of you who might be afraid of economics and economic systems, don’t be! They are very simple. All that an economic system does is to make things, consume things and distribute things according to an allocation. That’s all!

Capitalism is equally simple...

“The decadent international but individualistic capitalism ... is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods. In short, we dislike it and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed.” — John Maynard Keynes

In a way, that’s a remarkable quotation. Keynes was no revolutionary, but a very conservative and influential economist whose work inspired Western governments in their economic policy for decades, especially in the UK.

But going back to the nature of capitalism: Capitalism’s main characteristics are the accumulation of value, private ownership (of the means of production), production for profit, and hierarchical organisation of the workplace.

I feel much the same about capitalism as did Maynard Keynes. I’m equally perplexed.

I’ve been reading a lot of late about new and emerging theories about economics, politics and social organisation and came across an interesting set of criteria in some material about “participatory economics”. I’m not sure if I could accept all participatory economics’ (parecon for short) theory and ideas but I did like the six values against which these theorists evaluated the effectiveness of various economic systems.

Here they are:

1. Equity, or fair and just outcomes;
2. Caring and mutual respect among all people;
3. Diversity of outcomes which would benefit everyone;
4. Participatory self-management, or having a say in decisions to the extent that one is affected by their outcomes;
5. Efficiency, or not wasting resources;
6. Environmental sustainability.

For me, that is the most sensible and desirable list of criteria for an economic system I have ever seen. But looking at this list, capitalism doesn’t do very well. Let’s see:

• Capitalism generates atomised, self-interested behaviour, not caring and mutual respect among people.

• Capitalism generates inefficiency, since it’s based on individual behaviours.

• Capitalism’s environmental record speaks for itself; it destroys biodiversity.

• Capitalism does not promote self-management, but instead generates a situation where a few make decisions for the many.

• Capitalism does not generate diversity.

• Capitalism’s consumption is characterised by the total neglect of others. Consumers think of only themselves and can ignore the effects of the goods they buy on the environment and on the workers who produced the goods.

I’m not swinging in any political direction here either, since most of the same criticisms can be applied to socialist economic models too.

I’m not so sure about capitalism at all. It’s based on the infinite expansion of consumption. Does that work for you? Try eating more and more, year on year and see where that gets you. It’s an absurd idea I know. Capitalism is as absurd.

The American biologist E. O. Wilson estimates that if the entire world consumes at the same rate as the USA, then we would need four planet earths to sustain mankind now.

Hysterical or common sense? Better believe it’s common sense, since if we don’t address this issue in the twenty first century, there may not be a twenty second.

O Brave New World!

geoffrey@geoffreysplace.com — 2008-09-09T12:34:47+01:00

Where to from here? My answer is that I’m as unsure as the rest of us.

I do believe in freedom, autonomy and voluntary association as human values in which to aspire.

It surprises me how many people I talk to about freedom who appear terrified of it. I know many people are frightened of freedom, perhaps in the same way that they are frightened of responsibility. I’m not altogether sure where that fear comes from. In psychological terms, it may be from anxiety about maturation, from the desire not to leave the succour and the emotional sustenance of the providing parent. I’m not sure that is right entirely. We live in a world where we do as we’re told, and where we often conform to an infantilised state of mind. Psychologically, I wonder too what this fear of responsibility is about. Is conformity and responsibility an antithesis? It may be. Conformity is the easy way out too. It means copying someone else because another says it’s the right thing to do, rather than feeling or thinking for oneself. It is easier not to think.

There are two aspects of freedom, I believe, and they are “freedom from” that is a negative connotation and “freedom to be” which is its positive opposite. This is a little like the infant growing up. The “freedom from” is a freedom from oppressive and overbearing institutional way of life where we are told how to act, think or feel, rather than do it for ourselves. The “freedom to” part is to experience ourselves as loving, creative, constructive, responsible, actualised, and sometimes fulfilled, human beings. Resisting freedom in social terms may be the same as resisting growing up in human development.

And what of autonomy, how does that differ from freedom? Autonomy is simple. It’s the exercise of responsibility for oneself. It means taking responsibility for one’s own actions and moral decisions.

Perhaps there is a little more than that in our economic world to consider: There is the difference between “having” and “being” and how we define ourselves as human beings. If we define ourselves in economic terms, by what we have, then we lose our identity, our autonomy, if we lose our possessions. We become nothing if we have nothing.

As the psychologist and philosopher, Erich Fromm wrote: Being is about nothing more than the productive use of our human powers. “(Being means)…to give expression to one’s faculties, talents, to the wealth of human gifts with which every human is endowed. It means to renew oneself, to grow, to flow out, to love, to transcend the prison of one’s isolated ego, to be interested…to give.”

Freedom does present problems to humankind that have been overlooked by many individualist liberal philosophers. The major problem with freedom is that it requires individuals to exercise a high degree of personal, social and moral responsibility, rather than have someone else tell them what to do and take decisions for them.

There’s a favourite quote of mine by Nobel Prize winning American economist, James Buchanan, that I have mentioned elsewhere. He is talking about the “parental” role of government and the state:

“With parentalism…we refer to the attitudes of persons who seek to have values imposed upon them by other persons, by the state, or by transcendental forces. This source of support for expanded collectivization has been relatively neglected by both socialist and liberal philosophers, perhaps because philosophers, in both camps, remain methodological individualists.

Almost subconsciously, those scientists-scholars-academics who have tried to look at the “big picture” have assumed that, other things being equal, persons want to be at liberty to make their own choices, to be free from coercion by others, including indirect coercion through means of persuasion. They have failed to emphasize sufficiently, and to examine the implications of, the fact that liberty carries with it responsibility. And it seems evident that many persons do not want to shoulder the final responsibility for their own actions. Many persons are, indeed, afraid to be free.”

Without either freedom or responsibility, one cannot have existence by voluntary association, since voluntary association requires that humans collaborate and cooperate freely and responsibly to achieve their common goals. An intelligent observer of my writing suggested that we might need leaders since we are not necessarily capable of acting consensually, collaboratively and cooperatively. She makes a very good point.

It’s true that our present social systems are based on an authoritarian hierarchy that purports to be democratic. It is far from being truly democratic since other than deciding on the election of the “haves” or the “have mores” there is no general participation in decision-making. I have no influence over issues around health, poverty, education, social welfare and defence, other than those prescribed by alternative candidates. It’s token democracy where strong government is synonymous with state authoritarianism. The combination of the authoritarian state and multi-national capitalism means that I am told how to act, behave, think, work and consume. It erodes my humanity, since I am no longer free, but a thing, a means to someone else’s end. I am homo consumens, the consumer man.

My friend also makes an important point too indirectly about knowledge and belief. We have only very limited knowledge and experience of freedom and the exercise of personal and social responsibility since all aspects of our society are organised around leadership hierarchies where leaders take responsibility for telling others how to act. We might believe that we need leaders, since we have no experience of being without them.

I have two experiences of leadership experiments, both where, at least notionally, I was the leader.

The first was a quirky accident of fate. I was invited to join the board of a large mental health project based in London. They had a problem. They had too much money and were at risk of losing some very large government grants unless they got rid of a lot of cash quickly. Rather unflatteringly, at least so I thought at the time, I was asked to go there since their treasurer (a CPA known to me from university) felt I would know how to spend money "creatively"!

I joined the board of trustees, and within about six months, I was asked to stand to be chairman of the board. It was a trustee's voting nomination that I accepted. I accepted and was appointed.

It was an executive chairman's post and part of my job was supporting its management and staff. Within the trust, there was a deeply democratic ethos. Any employee, could attend a board meeting, and exercise voting rights in common with a board member. The only rights I had as chairman were the exercise of a casting vote in a deadlock, or a veto vote that deferred a decision to the next board meeting (that could be exercised only once).

My commercial training, and by day I worked as a chief executive of a computer software company, might have told me that this was a recipe for disaster. On the board, we had legal, financial and medical advisers, experts whose views and advice might theoretically be overturned by a junior employee.

It never worked that way, since there was a deeply respectful management style. Management’s role was not perceived to be one necessarily of leadership, control or authority, but of support, and access to the resources (including human resources) that enabled staff to undertake their work.

In theory, the employees through access and contribution to the board decision process might have caused a manager to be discharged or appointed. It never worked that way, because the role of management was to support and facilitate, rather than control.

What was even more rewarding was that not only did this odd management style that was properly democratic work, but it was enormously successful! It was so successful, in fact, that the Trust was appointed by the UK National Health Service to be its principal adviser and consultant on projects of its type. On a personal note, it was also the most alive and enjoyable place I have worked in my entire life. One of the things that distinguished this special project was the enlightened and involved attitude of its entire staff who cared deeply for what happened in their organization and jointly took responsibility for its wellbeing and its purpose.

In the nineties, I also had the experience of attempting to turn over a technology business to employee ownership and broader management participation. It could not have been more different. Some managers and employees had such profound difficulties in taking on responsibility that they teetered on the edge of sanity. Destructive sub-cultures formed who tried to usurp, seize or break off parts of the business that they could steal for themselves. In the end, I put a stop to it and returned it to its previous paternalistic management style that was, at least, largely benevolent and benign.

Of course, there was a major difference between these environments. The staff of both organizations were well paid, that much they had in common. The mental health organization had growth in its sights, but it was not its main purpose. The mental health project functioned as a trust for the benefit of those in its care; the company was a capitalist enterprise run for the benefit of its shareholders.

Despite a massive investment in culture change programmes, the underlying culture of the company was difficult to change. All that extended ownership achieved was to make manifest the unhealthy, political, opportunistic and often dishonest dynamics that existed in the workplace at almost every level. The ethos was that people worked in order to make its shareholders rich. People were a means to an end. When it was proposed to change ownership, it was seen as an opportunity by some to do to others, what had been done to them.

I’ll continue to think about this dilemma. I am unsure as to whether freedom and capitalism are contradictory forces. In my past, I had thought that, in a way, capitalism might embody freedom, but now I’m undecided. I’ll go away and think about the human values that underpin our capitalist societies. By the way, I’m opposed to socialism in all its previous manifestations too. Capitalism may be the lesser of two evils, where socialism represents authoritarian, and often totalitarian, state control.

More soon…

About human goodness...

geoffrey@geoffreysplace.com — 2008-09-08T12:57:50+01:00

When I started to write about human nature, a major theme was whether humans either had the capacity or desire to make positive changes in their social, political, economic and physical worlds. I got badly tripped up on that one and there followed an endless debate about whether human nature is either good or bad. I take responsibility for that since I should have foreseen the interpretation that might have been placed on some of my words!

The arguments are meaningless since human behaviour might be perceived as good, bad, or millions of shades in-between, but that was not the point.

It was about whether humans wished for good in their world, but more than that, whether they had a desire, either individually or collectively, for better lives and consequently a better world. I concede in advance that “better” may mean different things to different people and social groups. To want other than better, or to want worse, would be pathological, if not psychopathic, and I don’t believe that the majority of humankind are pathological or psychopaths either.

Even those who are psychopaths frequently will offer altruistic and positive rationales for their psychopathic behaviour. Hitler started his invasion of other countries and his genocide of the Jews, and persecution of other social groups, such as homosexuals (the rationale for which came from psychiatrists among others) saying that he was acting in the cause of social good.

I believe that people do have an underlying desire for a better life. To suggest that people might desire worse lives, more killing, more wars, environmental damage that may threaten their survival, and the chance that their families, friends or children might die as a result of such eventualities would be completely pathological.

For any who say that there might be no worse or better, that things may remain the same; nothing ever remains in the same state, it will be better or worse.

The mighty military machine, political groups, trans- and multi-national corporations, the greedy and coercive may tell us that they too are acting in our best interests. They might deploy the media as a mass force for our conditioning; for stupefying and stultifying our powers of perception, feeling and thought; dumbing us down and numbing our ability to recognise that a naked emperor does not, in fact, wear any clothes!

But we too have the power to discriminate, to differentiate between truth and lies, to know that our happiness may not lie in more and more consumption to keep the rich, powerful and rich…to know that killing people is as undesirable as being killed, that wars risk the lives of our children and young people, that caring for our environment is as fundamentally important as caring for ourselves.

So I will write on about positive social change, as I believe that most people want and desire it. I do recognise that we may be told by the mass media, politicians, power groups and business elites that it is neither in our best interests to want it, and that we are impotent in a world that is best left to them to manage and control. I believe otherwise. I doubt if any mass media will be inviting me to express my views. So I’ll keep writing here…

On human nature - Part 2

geoffrey@geoffreysplace.com — 2008-09-04T16:48:16+01:00

There’s been a healthy debate raging down in the comments section of my earlier posts that has been getting fiery and passionate. All sorts of things have been rearing their heads down there from behavioural genetics to biopsychology, philosophical dualism, moral dichotomies, nihilism, post-modernism and debates about the nature of the question itself.

We’ve been going all over the place!

One argument went that the manifestation, complexity and multiplicity of human differences suggests that there can be no basis for suggesting any universal, underlying trait of goodness within human nature.

The word “goodness” has been a very emotive term! The word did not have to be “goodness”. It could have been several words like a “desire for a better life”. I preferred those words, since it’s easier to describe what underlying traits might represent “a better life” (for us all) than it is to say what goodness is.

The problem I had with this idea was that if I accepted it, I would slide into some black hole of moral nihilism, and I don’t want to go there, nor does anyone else I have ever known.

What is even more frightening to me is that it’s exactly this nihilistic view of humankind that supports religions everywhere…that we are all "sinners" who need to be "saved" from ourselves.

I strongly identify with the view of life that Chomsky expounds: one where I might feel autonomy, freedom, and work with others in voluntary association and without oppression, which means without economic repression too.

How do you feel? Do you not want that? Would anyone who understood what it meant not want it too?

On the point of religions, I believe that humans at a certain stage of their development took parables of wisdom and turned them into religions. Why? Because they didn’t have TV and stories by word-of-mouth were the way they communicated wisdom. Why? Because they desired and craved the goodness or the better life these stories talked about. The stories are totally unbelievable, yet men and women wanted what they promised so badly they reified them as objects of worship. They still do.

Religions of one sort or another have covered our entire planet, even in the most primitive societies, where they have worshipped totems or the elements. I don’t want to get into religious debate here. But the underlying attraction of religion, I would argue, is humankind’s overwhelming desire for a better life. Thus, I believe that desire to be an innate trait of human nature common to many throughout the world, and not simply part of western culture.

More soon...

On human nature...

geoffrey@geoffreysplace.com — 2008-09-03T20:02:57+01:00

I'm going to give my words a rest now. What follows are some extracts from an interview with Noam Chomsky on human nature, many of whose views I respect.

I like it, since it engages the debate on my last post, and provides a bridge between my ideas and those of Melinda whose views I also respect.

In the meantime, I'm going to put my thinking cap on and try and work out where I go from here! :)

This interview is Copyright © 2006 Noam Chomsky

QUESTION: You have argued that any stance one takes on political, economic, social or even personal issues is ultimately based on some conception of human nature. Why is this?

CHOMSKY: Any stance we take is based on some conception of what is good for people. This conception will tacitly presuppose a certain belief as to the constitution of human nature -- human needs and human potential. You might as well bring them out as clearly as possible so that they can be discussed.

QUESTION: According to your view of human nature, all human beings possess certain biological functions endowing them with common mental capacities. How do you defend this position against postmodernist critics who argue that there is no such thing as human nature, and that all attempts to define it are guilty of reading other cultures in the light of Western perceptions and values?

CHOMSKY: Not even the most extreme postmodernist can seriously argue that there is no such thing as human nature. They may argue that the exact properties of human nature are difficult to substantiate -- this is certainly correct. However, it is impossible to coherently argue that an intrinsic, universal human nature does not exist. This amounts to the belief that the next human zygote conceived might just as well develop into a worm or a crab as a human being. Postmodernists might limit their assertion to denying any effect of human nature on our mental make-up -- our values, our knowledge, our wants, etc. This also makes no sense. The postmodernist will argue that a child growing up in New York will develop a certain way of thinking, and if that child had grown up amongst Amazon tribespeople she would have developed a completely different way of thinking. This is true. But we must then ask how a child could develop these different consciousnesses. In whatever environment it finds itself, the child will mentally construct a rich and complex culture on the basis of the extremely scattered and limited phenomena it is exposed to. That consideration tells us (in advance of any detailed knowledge) that there must be an extraordinary directive and organisational component to the mind that is internal. We can begin to see human nature in terms of certain capacities to develop certain mental traits. I think we can go further than this and begin to discover universal aspects of these mental traits which are determined by human nature. I think we can find this in the area of morality. For example, not long ago I talked to people in Amazon tribes and I took it for granted that they have the same conception of vice and virtue as I do. It is only through sharing these values that we were able to interact -- talking about real problems such as being forced out of the jungle by the state authorities. I believe I was correct to assume this: we had no problem communicating although we were as remote as is possible culturally.

QUESTION: Are you suggesting everyone agrees about the nature of vice and virtue?

CHOMSKY: In fact I think they probably have a very high measure of agreement. One strong bit of evidence for this is that everyone -- a Genghis Khan, Himmler, Bill Gates -- creates stories of themselves where they interpret their actions as working for the benefit of human beings. Even at the extreme levels of depravity, the Nazis did not boast that they wanted to kill Jews, but gave crazed justifications -- even that they were acting in 'self-defence'. It is very rare for people to justify their actions by saying 'I'm doing this to maximise my own benefit and I don't care what happens to anybody else'. That would be pathological.

QUESTION: Most people certainly try to offer moral justifications for what they do. But there is also enormous diversity in what they do, and defend as right to do.

CHOMSKY: And there is a lot of variation in people's size. Take a walk through a museum where they have the armour from medieval knights and just look at the size of them: you could barely put a child into that armour. We have the same genes today as people did then, but we are very different because there have been radical changes in diet. This is characteristic of every aspect of organic development. Hence we should not be in the least surprised to discover that it is also characteristic of our social nature, our moral positions and so on. We are biological creatures.

QUESTION: But I think you would agree that not all cultures are equally viable from the standpoint of promoting human fulfilment and wellbeing? Are you wanting to argue that your understanding of human nature can give us a kind of objective understanding of the conditions of human flourishing?

CHOMSKY: Now we're taking an essentialist position which the relativist would contradict. I'm not willing to go that far. We can develop a stronger conception of human nature through drawing on Enlightenment thinking on the issue. This has support from some of the sciences, but is mainly founded on a philosophical investigation into our hopes, intuition and experience, and an examination of history and cultural variety. There are needs for conditions which allow the flourishing of human capacities. Insights from the Enlightenment show us that people need to exist in free association with others -- not in isolation, and not in relations of domination. There is a need to replace social fetters with social bonds. Therefore any social structure that involves relations of domination -- whether it's the family, a trans-national corporation, gender relations -- has a very heavy burden of proof to bear. It must demonstrate that the benefits it provides outweigh the restrictions it imposes on human capacities. If it can't demonstrate its legitimacy, it should be dismantled.

QUESTION: Right. Can I ask you about your position on the possibility of ecological constraints on the realisation of human needs? Do you think -- even if there were the political will to achieve it -- that it might be impossible, for ecological reasons, to provide the necessary conditions for continued human flourishing?

CHOMSKY: Humans may well be a non-viable organism.

QUESTION: Do you think they are?

CHOMSKY: It's very likely. From an evolutionary point of view, higher intelligence seems to be maladaptive rather than adaptive. Biologically successful organisms have a rigid character and are well adapted to a certain environmental niche. If higher intelligence helped adaptation you would expect it to have arisen over and over again. However, it didn't. It arose in a single, not particularly successful organism, Homo Sapiens. And while the human population exploded, human societies developed in a way that has caused enormous damage to the environment. The human race could destroy itself and much organic life as a result.

QUESTION: Do you think that different social and economic circumstances either block or reinforce certain dispositions -- that, for example, whatever there might be in the way of a natural tendency towards selfish and aggressive behaviour is reinforced by the capitalist market society?

CHOMSKY: There's no doubt about it. Let's take Germany, for example. In the early 20th century Germany was the most advanced area of Western culture -- in music, the arts, science. In the passage of a few years, it entered the absolute depths of human history. Small changes in German society allowed people like Joseph Mengele to flourish rather than people like Einstein and Freud. The market is a radical experiment which violated fundamental human needs and capacities. You can see this in the violent struggles that were required to impose market conditions on people. In the United States, for example, about one sixth of the gross national product, over a trillion dollars per year, is devoted to marketing. Marketing is manipulation and deceit. It tries to turn people into something they aren't -- individuals focused solely on themselves, maximising their consumption of goods that they don't need.

QUESTION: Granted the truth of what you say about our distinctively human capacities for freedom and co-operative action, how come we are so open to that kind of manipulation and deceit? How come we remain both globally and locally so caught up in oppression?

CHOMSKY: It's a serious question. Why are we born free and end up enslaved?

QUESTION: Is there a case here for viewing social factors as more determinant than biological factors?

CHOMSKY: You can't say which factor is more decisive. They interact. Take the example of puberty: small changes in nutrition can modify the onset of puberty by a factor of two, or even terminate it altogether. Or the visual system: in a kitten you can destroy the neural basis for vision simply by not presenting pattern stimulation in the first couple of weeks of its life. However, does this mean that the environment is the decisive force? No. Puberty is a process which human beings undergo at a particular stage of maturation because that's the way they've been designed. You don't undergo puberty because of peer pressure. Likewise, human limbs will not develop into wings rather than arms or legs. The genetic component determines strict limits within which variation is possible. I believe the same is true of our social and mental development.

QUESTION: Your ultimate political goal is anarchistic, the erosion of state institutions and any form of authoritarian control. But you have also recognised the need to defend some forms of state regulation as protection against a wholly unregulated market. Can you say more on how you view this two-edged process of possible political transformation?

CHOMSKY: I'm not in favour of people being in cages. On the other hand I think people ought to be in cages if there's a sabre-toothed tiger wandering around outside and if they go out of the cage the sabre-toothed tiger will kill them. So sometimes there's a justification for cages. That doesn't mean cages are good things. State power is a good example of a necessary cage. There are sabre-toothed tigers outside; they are called trans-national corporations which are among the most tyrannical totalitarian institutions that human society has devised. And there is a cage, namely the state, which to some extent is under popular control. The cage is protecting people from predatory tyrannies so there is a temporary need to maintain the cage, and even to extend the cage.

QUESTION: How do you see the relationship between work and free time in a more liberated society?

CHOMSKY: Polls in the US, Germany and elsewhere have shown that people value free time over material goods. Therefore, there are major propaganda efforts to reverse this. One reason over a trillion dollars a year is spent on marketing in the USA is to try to undermine our natural tendency to want free, liberated time.

Does human nature exist?

geoffrey@geoffreysplace.com — 2008-09-01T19:35:52+01:00

I’m through with writing social critiques right now. I’m done with determinism too, saying that we are all such weak injured souls because this or that power elite causes us to be so.

I’ve been thinking about change: What we would need to do in order to make the world a better place to live in.

In looking at social and political philosophy there is one question on which all this stuff seems to hinge. I’m not entirely sure that I believe the question in a way, but it’s about the state of human nature itself and what of us is innately human.

So what is human nature? Do humans seek autonomy, freedom and is their nature predisposed towards moral good, an innate desire for a better world or is that some philosopher’s intellectual desire? There are many theories of human nature that appear so ethnocentrically and culturally biased that I would dismiss them out of hand.

Inevitably theories of human nature tend to be predicated on individualist ideas coming from a liberal tradition. I’m not sure if they go anywhere, nor do right or left political views. The left takes us towards the authoritarian state more often than not and these days, the right veers towards laissez faire capitalism that is laissez faire so long as they control it. Free market competition produces winners and losers, and often the winners are the same and there are an awful lot of losers out there. The further left or right one seems to go, the more likely one is to end up with totalitarianism.

But my question is about people. Is there really such a thing as human nature, OR do we live within a consciousness that contains moral values that change and shift as our collective consciousness develops? Development can be disjointed, fractured by revolution and not conform to any Darwinist evolutionary notion. Consciousness may sustain badness as well as good, but I believe that the underlying desire of consciousness is towards social improvement fuelled by humankind’s desire to survive and little more. Survival, like hunger, is a strong natural instinct.

The marketing guys, the media, advertising, and the world of politics know all about consciousness. Their aim is frequently to manipulate it to their own ends or those of their controlling shareholders.

The question of human nature has dogged philosophical, social and political thought forever, but what do you believe? Does it really exist?

Where in the world do you belong?

geoffrey@geoffreysplace.com — 2008-08-28T18:31:16+01:00

Frequently, I sit down to write a blog posting then end up writing something other than which I intended originally. Today might be one of those days!

The other day, I received an email message off the bottom of the page here, from someone who had been reading my blogs.

It made me crease up with laughter and may have something to do with why many other nations in the world think of the English as pompous or arrogant. He was English. He wrote, “You write well for an American…” I decided to play him along for a while, for the sheer sport and fun of doing so. But it made me think about what I feel and think about the world I inhabit, and whether I feel a strong sense of belonging to somewhere other than the world in general.

For the avoidance of doubt, I am British, English to be precise. That is how my passport defines me. I also hold a green card and have US rights of residency. I love many things English. I have family and friends there too. But going back to my blog commentator, I have very strong attachments to the USA and to France where I live presently.

My attachment to the USA runs deep, since there live two young people, three now, one of whom, Meagan, shares my beliefs and my values about the world, uses my vocabulary, has an American accent and sometimes calls me Dad! There is also a very new young citizen of the world called Eva who calls me Grandpa. Goodness, does that make me feel old! (You can see them here. )Those bonds of love mean far more than any sense of national identity to me. Those young people, their world, their wellbeing and their future cause me to feel passionately about what happens in the USA as well as Europe.

If I reflect fully on my own background, it makes nonsense of any form of nationalism. I have more living family relatives in Canada than I do in the UK. I have other family relatives scattered throughout Europe and beyond.

So what's this about? It’s a prologue to my next post.

I've been thinking about a question I often ask myself when I’m being critical. It goes, “Okay, so now you’ve told us what you're against, but what are you for?”

I’ve written many blog posts that are critical of the economic and social systems that exist in our world right now. I have a very incomplete, maybe badly thought through, patchy idea of some better way of doing things. It’s so half-baked that any social and political philosopher might drill holes through it at a distance of a hundred miles. In the comments on my last post, we talked about a minimal state and a new role for communities. But it made me think. What would my community look like when it crosses so many national boundaries? What do national boundaries mean other than being a line in the earth? What real purpose do they serve? Might the world be better without them?

What do you say?

Economics may be bad for your health! - Part 2

geoffrey@geoffreysplace.com — 2008-08-11T12:51:01+01:00

Benefits of economic growth

Economic growth has long been the goal of conventional economics and politics. It is both the prize and the credo that governs our daily lives. I am unsure as to whether infinite growth is either achievable, sustainable, or for that matter desirable or beneficial to society as a whole.

The arguments in its favour go something like this:

1. Increased consumption is good for you! Greater consumption equals greater prosperity. The economic assumption is that consumption is related to utility, where utility is a measure of the relative satisfaction from or desirability of the consumption of goods. Put very crudely, greater consumption is a measure of success, wealth and good fortune.

2. Increased earnings means increased taxation that in turn creates better healthcare, education and welfare services (or some cynics might say, more money to spend on wars!).

3. Economic growth creates jobs. Higher employment means less poverty. This is something of a fallacy. In some parts of Europe, including where I live in France, there is something called “structural unemployment” that is brought about by structural changes in the underlying needs of the local economy and the geographical distribution and concentrations of the population. In short, there is a mismatch between people living in a place and the employment opportunities available to them there, that is only capable of remedy over time, usually long periods of time.

That’s the theory, at least!

So what’s the problem?

1. Is infinite economic growth sustainable or desirable?

I read a report last year by an economist who predicted that very soon the world's manufacturing capacity will outstrip its ability of consumption. Simply put that means soon we will be able to make more than we need or can ever hope to use. So what happens then?

If you have a house, two cars and all the other things you need, why would you want to own more houses, or three cars, or even two washing machines? Infinite growth in consumption makes no sense. Does increased ownership lead to greater utility or satisfaction? Of course, it does not and there is a law of diminishing returns when people have more money than things to spend it on. That is to say, the utility of ownership diminishes, and when that happens so does the value of goods, which in turn creates more economic pressures.

For sections of the population who experience dire poverty and unemployment, economic growth may provide a remedy, but the evidence is that high economic growth can cause greater inequality and a real increase in relative poverty (Brookings Institution 2007), since it is the better educated and already wealthy that tend to benefit from economic growth rather than the less well off.

2. Damage to the environment through increased pollution that is a consequence of economic growth is becoming a real problem for the entire world. Of course, a benefit of growth might be the investment in technologies that create less pollution. To-date this appears to have been viewed as a lower priority than the pursuit of wealth for its own sake.

3. Increased inequality gives rise to more crimes and social problems. Between 1960 and 1990 the US crime rate went up by some 300%. While crime rates in the USA may have peaked out now, there is nevertheless a strong correlation between economic growth and increasing crime rates.

4. High economic growth is a slave-driver and has led to longer hours worked with a commensurate increase in personal and social anxiety. An economist might argue that this reflects the fact that people value money more than leisure or quality of life. How would they know when they have no leisure? That takes me to my next point…

5. The American Medical Association maintains that stress is a significant determinant in 80% of all our illnesses (that is not to say it’s the only cause). It could be argued that heart disease, obesity and stress related illnesses are a direct consequence of economic growth.

So what of increased prosperity? What of economic growth?

They have created as many new problems as they have solved.

It may be time to look for a better way.

I do not believe that politics holds all the answers either. Left-wing, right-wing or centrist mass politics have all shown themselves to be deeply flawed.

It is not something that the cult of the presidential individual can possibly apprehend. Barrack Obama or John McCain will make no difference, nor will Gordon Brown or Nicholas Sarkozy. I am unsure as to how well the ideology of nation states will serve the world in the long-term either.

One thing is for sure, if we want a better world, then we will all have to take responsibility for its wellbeing, all of us, without exception. That is the underlying principal of true democracy that we claim to hold so dear. It is not enough, as we have in the past, to argue for political freedom alone; there is social, personal and psychological freedom to consider too.

Economic growth is not the Holy Grail.

So what next?

Economics may be bad for your health! - Part 1

geoffrey@geoffreysplace.com — 2008-08-11T10:45:49+01:00

Recession! What recession?

So what is this new economic crisis? Are we moving towards the Armageddon of western economics? What does and will recession mean?

Economists define recession as a decline in the production of gross domestic product for six-months based on measures taken in two three month periods.

Neither the USA nor the UK are experiencing what is described as “negative growth” currently, although there is a widely held belief that we may be heading towards recession.

A lot of factors are being cited as the cause of our current economic difficulties, among which are:

1. The crash in the housing market.

The boom in the housing market was an absurd phenomenon.

House prices in the UK were rising at rates of more than six times the rate of inflation in some years.

Suddenly the world was awash with property millionaires. Someone who had bought a London house for £72,000 ($144,000) in 1983 and stayed put, woke up to find their property is worth £1.6 million in 2007! ($3.2 million). A new two bedroom apartment on the outskirts of Oxford, close to a railway line came onto the market last year at around £500,000 ($1 million). Think about it, one million dollars for a small apartment in a small city outside London!

The average age of a first time house buyer is currently somewhere in the mid-thirties age range. So where do the rest live? How do teachers, nurses, doctors, police and essential service staff ever afford these prices? The answer is they don’t.

It had to stop, and stop it did. House prices are going down in the UK. Economic reports from the USA say that house prices there are over-valued by at least 40%, although by UK standards house prices in the USA look dirt-cheap! Prices have fallen by up to 25% in the past year in (some parts of) the USA.

House price equity in an overblown, pumped-up market is fool’s gold. It is wealth created by a market without any corresponding new value. It has provided a mirage of prosperity by fuelling consumer spending and debt.

To put all this in perspective, the average house price in the UK (across all regions) is about £220k ($440k), the average salary is somewhere in the region of £22k - £26k ($44k - $52$k).

So people have taken risks with borrowing, sometimes taking out loans of between 8 and 10 times their annual salaries in order to own a home. It should come as no surprise therefore that the housing market is in deep trouble.

2. So-called high-risk lending, the “sub-prime” market is collapsing. Sub-prime lending involves lending money for greater returns to poorer people who would not otherwise be able to afford conventional home loans. It’s an economic contradiction that sustains poverty. If one is poor access to money comes at a higher price than if one is rich.

Falling house prices in the USA and to some extent, the UK, means a risk of negative home equity at a very high price. Home repossessions are increasing fast. There is an increasing rate of defaults that means that banks lose money and so do the mortgage companies.

3. So we have:

• Shortage of mortgage funding and banks teetering on the edge of solvency

• Decline in market confidence that affects all sectors of the economy

• Property prices that became vastly overvalued

• Increase in supply accompanying falling demand, with housing costs still running at levels in the UK that are inaccessible to average wage earners, young people and essential service providers

4. Next! There’s the ever-increasing oil price pushing up costs. There is the rising cost of food too that is not necessarily all tied to the cost of oil.

5. One more…the booming house price mirage fuelled consumer borrowing. A falling house market and lowered confidence in the rest of the economy means that people are taking on less debt and looking to save. This in turn means lower consumer spending. Lower consumer spending means lower production that increases the chance of a recession. It is interesting to me that that financial prudence, as I might see it, and a move away from consumption for consumption’s sake has an adverse economic consequence. I’ll come back to that in part 2.

Summary

There are a number of factors involved in our current economic difficulties, but the two main issues as I see them are the decline of an over-heated housing market and a decrease in consumer spending.

Part 2 will be about whether economic growth is beneficial to us all. My feelings are that it is not such a good thing after all. We may need to change the way we view our economic lives.

Isn't it about time we asked...?

geoffrey@geoffreysplace.com — 2008-08-09T20:06:04+01:00

Isn’t it about time we asked:

1. Why religions which teach acceptance, tolerance and love, achieve little more than racial and social divisiveness and hatred?

2. Why there is still poverty, famine and starvation in a world that is capable of producing all that it needs for everyone?

3. Why over a million people have been killed in a war in Iraq that was allegedly about that country producing Weapons of Mass Destruction when there were none?

4. Why war is waged against Iraq in the cause of the war against terror when the Bin Ladens were an enemy of Saddam Hussein, but one-time friends of the Bush family?

5. Why in the war against Iraq, the allied forces went in and protected the Ministry of Oil and its oil wells and left that country’s cultural and historical heritage to looters?

6. Why we support infinite economic expansion that is impossible to sustain and makes us into economic slaves fraught with anxiety in its service?

7. Why we support authoritarian social and political structures that have failed us time and time again, rather than choosing social, personal and psychological freedom, and exercising responsibility for the world we live in?

8. Why ownership, being successful and making money is preferable to loving, personal relationships, being creative and building real quality of life?

9. Why Britons and Americans on average now spend around a working day or month or more, making friends on MySpace and Facebook rather than making friends in real life? (How many of your friends on social networks would give up a day to help you with a real problem in your life?)

10. Why we support commodity capitalism that turns everyone into “things” in support of its values of selfishness and greed and undermines the spirit of trust and cooperative human development?

11. What lasting benefit America has achieved for the world in any war it has waged since 1945? (Which wars have been won and for what?)

12. What the hell we are doing?

So what are we doing and thinking? It feels like time for change. Now who is going to be the first to tell me that I’m naïve and idealistic? :)

Bloggers Unite for Human Rights!

geoffrey@geoffreysplace.com — 2008-05-15T17:52:19+01:00

Lost, forgotten, disenfranchised, homeless, ignored, feared and abused…My appeal for human rights is not about Guantanamo Bay, the fate of innocent children damaged by war and famine, the stoning to death of women in Iran but something much closer to home, the rights of the mentally ill.

This is not about stuff that is happening in faraway places, but in the United Kingdom and the USA now.

It is reported that in 2008 in the UK, people are dying almost every day, sometimes in difficult or unusual circumstances, while being detained in secure mental hospitals, but that their deaths are not being investigated. In that respect, they have fewer rights than a criminal or prisoner who dies in custody. Unlike prisoners, the families of dead patients are not automatically entitled to an inquest. The chief executive of the UK mental health charity MIND Paul Farmer said, “We are talking about the ultimate injustice; people go into hospital for a mental illness and are coming out dead.”

The problem doesn’t stop here. Jane Harris from the mental health charity Rethink has it about right, “This situation is indicative of how few rights mental health patients have. They have done nothing wrong; their only crime is to suffer from an illness, yet they have fewer rights than criminals.”

Over a third of the homeless on the streets of Britain are mentally ill. Frequently they experience difficulties in obtaining care in a system set up to address the health needs of the articulate middle class. Everyone has a right to a home. They also have a right to appropriate medical care too.

The abuse of the mentally ill and vulnerable is well-documented: Sexual assault and rape, the over-use or misuse of electro-convulsive therapy, the misuse of powerful psychotropic drugs to pacify and contain the elderly, widespread discrimination by the police and the health services...The list goes on and on.

A person who is compulsorily detained in hospital under the mental health act in the UK may appeal against their detention. But who allows that person access to an appeal? Who will hear them? Who will act for them?

People are afraid of the mentally ill. The media promulgates the view that they are dangerous or violent. Let’s squash that myth now. People who are mentally ill are no more violent than any other section of society. There are notable exceptions, madmen slaughterers like Harold Shipman and Peter Sutcliffe, the Yorkshire Ripper. But Harold Shipman was not thought to be mentally ill when he systematically slaughtered more than 200 of his patients as a practising medical doctor. It’s the exception like the “Ripper” we always hear about. But exceptions never prove the rule. I have met hundreds of people who have been diagnosed as mentally ill and have witnessed violence perhaps once or twice.

Sanity is a finely balanced state of mind. Almost everyone, every family in Britain and America, knows of someone who has suffered mental illness. At least one person in every four families in the UK and USA will suffer from a mental illness or disorder. It is very commonplace even though we might not like to look at it or think that it may happen to us.

It is way past time that we conferred the same human rights on the mentally ill as are offered to the rest of society. This includes holding carers and the health services to account for those in their care, especially if they die during the provision of that care.

Back to the future, part 4 - Afterthoughts - about the mind

geoffrey@geoffreysplace.com — 2008-05-07T06:53:16+01:00

In my earlier blogs on "Back to the future", I talked a little about mind. Theories about the mind abound. I see the mind as a distinct human capability that facilitates our rational (or irrational) understanding of the world. It's our biological survival mechanism, no more than that. The mind is simply a tool, one tool through which we seek to understand the world. It works by detecting similarities and differences in the world around us, of associations and dissociations too. It's like a pattern recognition engine and as such it operates at a relatively slow speed. I see our world of feelings, emotions and intuition existing separately and outside this concept of mind. Intuition, our sense of knowing without any rational basis for understanding, is something that operates at far higher speed than our minds and is capable of even changing our rational perception of time.

The mind functions with stress. There is healthy and unhealthy stress. Certain levels of stress are necessary for our survival. Without stress we would do nothing and accomplish nothing. We need stress to create and to work, we even need levels of stress to cause us to get out of bed in the morning! Stress is the first resort of the mind beyond its rational powers of pattern recognition. It can be healthy.

We live in a world now where there are billions of decisions being taken each second, where stress levels are increasing to almost universally intolerable levels. The American Medical Association wrote that stress is a major determinant in 80% of our illnesses. Note that stress is not a cause although it can be. But 80% of our illnesses are brought about by stress, stress running at high and unendurable levels. That is completely mind-boggling.

It's no surprise then that the people who survive best in our corporate cultures are those who can cope with higher levels of stress than others. The people who inhabit the mahogany or glass corridors of power within our corporate worlds are those who can endure potentially unhealthy levels of stress.

They also tend to be those who, in my view, have the most highly developed and well-articulated powers of intuition. Intuition is of great benefit in overcoming stress. Intuition coupled with an actualised and aware emotional self produces the charisma we look up to in our leaders. It is their sense of awareness, self-esteem and confidence that gives them the ability to lead and attracts our admiration of them. My notion of a psychologically well-developed and stable individual is one where they have an integrated and actualised mind (intellect), intuition and advanced state of emotional development, somewhere near self-actualisation.

I'll come back to that point but want to stay on track in developing this idea of mind. Beyond stress, our human defence mechanisms start clocking in. The first of these is our tendency towards "fight or flight". I learned recently from a friend that there are companies now that teach methods of understanding and working with our flight or fight responses to situations. I have experience of other organisations that use biofeedback mechanisms to help control the panic that this state evokes.

I'll share one very evocative example of what this fight and flight stuff feels like. A long while ago, I gave an hour-long talk on the future of computer architectures. 130 people had paid £200 each to hear me speak.

The first nasty little demon that went to work on me, firing up my stress levels to fight and flight proportions was that wicked little demon that I call my inner critic, sometimes it's my conscience but generally this small monster is less helpful than that. I see conscience as part of my emotional affective make-up but the "inner critic" is part of my mind and that's an important distinction.

So off it went, this demon talked to me and said things like, "So these guys have paid £26,000 to hear you talk for an hour? What do you think of that? Do you feel hearing you is worth that sort of money? Who are you trying to kid? No way is what you have to say in an hour is worth £26,000 ($52,000). So this had better be bloody good! Are you sure you are up to this?" It went on and on, this little monster fired up my anxiety to almost terror levels. I wanted to run away!

Fortunately I had been trained in giving presentations and I knew what I had to do. To make matters worse, my pre-booked taxi to take me to the conference venue failed to show. After remonstrating with the taxi firm, one did finally arrive, but got stuck in traffic close to the venue. I needed to be on time, not to let my audience down and ended up running the last few hundred yards to the venue. I drank water and got myself in good order for the presentation. But I was still in fight or flight mode.

I walked onto the podium and the conference organiser put on one of those radio microphones, the sort that hangs round your neck. It fell to my left and suddenly what I could hear being amplified around the room was my heart beat running at about 140 beats per minute or so. Boom-boom, boom-boom, boom-boom through every loud speaker in the hall. I could hear it and so could my audience. I grabbed the mike and shoved it over to the right side of my chest. This rapid heartbeat is typical of fight and flight. It was beating so fast and my mind had sent messages to my body to pump out the adrenalin needed to run and run very fast.

But I knew this one very well. I had learned the first few minutes of that presentation off by heart. No notes were needed; I could have given the presentation in complete darkness. I started speaking, going for the high-impact opening of the sort that grabs the audience's attention. I knew after two minutes that I had them hooked, I could see them listening and being engaged by what I had to say. It was at this point that I felt my heartbeat slow, my body relax, my intuition take over and that I switched over to working in a way that I instinctively knew would carry me through this performance. My talk was very well-received. So it is possible to get through fight and flight but only by reversion to our intuitive, emotional or feeling selves.

Going one step further down this process, one on from fight or flight, is the reaction to walk away. This really is a biological response. We have all seen it work in cats and dogs, for example. When dogs and cats sense a bad smell or someone they don't like, what they do is get up and walk away. It is often the very best way of dealing with danger, just getting up and walking away from it and moving into some safer space.

Finally, the last resort of the mind is the unconscious. The unconscious is the place where we often stuff fears, anxieties, anger and feelings about ourselves and others that are too difficult for us to cope with. I wrote about this in my blog "Back to the Future part 2". There I wrote, "The unconscious is the last resort of the mind. I don't trust mind. I recognise it serves my sense of survival well but that is as far as it goes. The unconscious is that place where we push down all the muck, slime, hurt, pain, anger, anxieties and all those other things that are too difficult for us to face and to look at about ourselves. It's the stuff that we repress in our unconscious that frequently comes back to bite us. We project these "shadow" parts of ourselves onto others often to justify doing hurt and violence towards them. It's these dark parts of our unconscious that we turn outwards to do hate, violence, racism and prejudice, or else we turn it inwards to do addictions, depression, suicides and other crippling behaviour."

I'll stick with this view. The unconscious is a very powerful defence mechanism. The trouble with it is that it leaks!

It leaks through projections, its outward turning manifestation or those crippling behaviours I talk about here. It also leaks into our conscious mind through dreams and comes out in our behaviour towards others, often our very worst behaviour.

We all have unconscious selves, none of us have mastered the art of remaining fully conscious, although I am trying in all that I do every day to become more and more conscious but I do not believe that I will ever reach a state of enlightened full and actualised consciousness. I have lots of fears and anxieties too that I know exist in things that I have pushed down into my unconscious mind. Frequently, I try to call these fears and anxieties to account, to try and understand them. I know that simply by taking a good long look at them often, by holding them in my hand, allowing myself to experience what I need to feel I can work to understand what is happening in my unconscious mind, by drawing out and admitting what I feared into the open.

It's not always easy to do this. I know that in facing some of my anger and fears that I have had to allow myself to feel rage, deep sadness and to weep. It's hard to do that often especially in a world that encourages us to disregard aspects of our feeling selves or that encourages us to believe that sadness and weeping is a form of weakness, and that anger is basically wrong. But it is what we need to allow to happen in ourselves in order to recover our wholeness, our ability to function as properly feeling and balanced human beings.

Finally, I'll repeat some words from Ian Lungold that have been haunting me lately. He said, "Remember your mind is not your friend!" He talks about the hostility of the unconscious parts of our selves of the sort that would have us kill others or ourselves. He is so right. So remember your intellect is not your friend! If you take nothing else from this, take this message home.

Back to the future, part 3

geoffrey@geoffreysplace.com — 2008-05-07T06:50:08+01:00

On reading parts 1 and 2 of this blog, a friend said to me, "Do you think the world can be changed by a minority of conscious people, when so many are content to remain blinkered?"

I'm going to answer this but I will try and do it as factually as I can. This is straight off the top of my head without the aid of textbooks.

Big changes in our world are on their way. You can either believe that or bury your head in the sand, but big changes will happen anyway. There is nothing we as individuals can do to prevent those. Here I'm going to focus on the economic and political outlook. I know a little about economics and I'll just give you the benefit of my limited education.

Let's say it's correct that soon world production capacity outstrips consumer demand. What happens then? That's simple enough to answer: Prices will fall as companies are forced to compete to protect their market share. As prices fall, profits are put under pressure. As profits come under pressure, markets fall. If markets fall long and hard enough, it's called a recession, or a slump or a crash. When that happens, unemployment increases. As unemployment increases, so does social unrest. So that's one hypothesis that may underpin social change.

Also at present the USA is the dominant political and economic power in the world. It is dominant, not because Americans are nice people or that they make good movies. It is dominant because it is one of the wealthiest nations in the world. It is sheer economic power that underpins the USA's power and influence, nothing else. This may change in the near future.

Despite what some people might say, George Bush is no fool. He has bolstered the American economy by allowing the dollar to devalue against other currencies by approximately 33% over the past five years. What that means effectively is that American goods are a third cheaper than they were five years ago in world markets, if the selling prices have remained the same. There has been some inflation in the USA too but nevertheless, this devaluation is very significant. A country cannot continue to devalue its currency indefinitely. In effect, it's reducing the price of the dollar and ultimately that has the same result as reducing the price of goods.

Let's go another way for a moment. I understand that the price of electrical, leisure and clothing goods have fallen in the UK over the past couple of years. I seem to remember that the price drops have been dramatic, like in double figure percentages. Two factors may be in play here: One is that supply may be outstripping demand in these areas already. The other might be the influence of China and its developing economy with its lower costs coming into play in the new global economy. Certainly we have benefited economically from the exploitation of lower cost labour from countries in Eastern Europe that have recently joined the European Union.

Now let's go to China. China's economy is in a very early stage of capitalist development. Its economic capacity is huge. It's vast and it's many times greater than that of the USA. So what happens if China becomes the new economic super-power of the 21st century? What will happen if China, not the USA, is pulling the strings on the world stage? There's another factor, the costs structures in China are perhaps below 10% of what they are here in the west. What happens to our markets if we reduce the cost of goods by 90%? Could you manage on 10% of your wages? These are rhetorical questions.

We could try and keep the Chinese at bay through tariff barriers and other means of market exclusion, but we left that kind of stuff behind twenty or so years ago. We're living in a global free capitalist economy now. No-one wants to get back high degrees of state regulation again, economically or otherwise. If anything they want the degree of State control reduced still further. That after all is what George Bush is actually doing at present!

There's the other factor too. Our western businesses need access to the Chinese markets to bolster their flagging profits and to realise growth. There is not too much more dramatic economic growth that can be achieved here in the west anymore. We have full supply already.

One last thing: Most of our economic development and most of our technology development in the west over the last sixty years have been caused by wars. It's no wonder that the Germans and the Japanese economies have grown to be so strong. Their countries had the opportunities to rebuild and modernise their economic infrastructures as a result of being completely devastated in the second world war. In the UK, we tried to keep doing the same old thing but then everything changed as international competition in world markets intensified, particularly during the last twenty years of the 20th century.

But think about all that new technology we have now, miniaturised electronics and the like. Most of our brave new world of electronics has been developed as a result of, or at least the pace of its development has been supported by, war. By going out and killing people! There was the cold war too, there were not too many people killed in that one, but it did have that certain feeling that if the cold war had gone hot, then we might reasonably have contemplated the end of the world in a nuclear holocaust.

I'll leave you with that thought again. What happens when and if China displaces the USA as the world's new economic and political superpower? Who becomes the third world then? If you know the answer, then let me know. I'll end with a quote from Napoleon Bonaparte who said, "Let China sleep, for when she awakes the whole world will know."

Well, it's wakey-wakey time in more ways than one!

Footnote: This was written originally in October 2007 before the collapse of the “sub-prime” mortgage market, the banking crisis – the extent of which is not yet known (and may not be known until after the US presidential elections), and the recent surge in oil prices.

Back to the future, part 2 - On consciousness, unconsciousness and intuition

geoffrey@geoffreysplace.com — 2008-05-07T06:47:21+01:00

Time varies according to one's perception of it and how one is perceiving it.

It bends, warps, slows down and speeds up.

I remember being involved in a motorcycle accident a long time ago. A car pulled out in front of me when I was travelling at about 40 miles per hour. It was just feet away, I had no time to think, no time to apply the brakes. My motorcycle struck the car square on between the front and rear doors, and I was sent flying through the air. My body continued to travel at the same speed as the bike through the air. Perhaps it was two or three seconds in time, perhaps it was less than that before I came crashing to the ground. In whatever brief time it was, I saw whole passages of my life – it felt like minutes of film footage. I was totally conscious of what was happening too, and seemed to have time to prepare myself to land in a way that caused me the least physical damage. My mind would have just shut down and probably done denial of the event had it been in control. But it wasn't anymore. I believe that what happened is that my intuition had taken over completely, it created my time, and its perceptions saved my life. Hitting the ground at 40 mph is not something I would recommend. It really hurts! But intuitively I landed in a way that did me the least physical damage.

I was very fortunate. I had some very bad bruises, grazed knees, and I had chipped a tiny piece of bone from one of my knees. After the shock, I stood up much to the amazement of two policemen whose car had been travelling too close behind me and had collided with a lamp-post at the roadside to avoid hitting the car that blocked their way.

So here in my flight through the air was a sense of not only time slowing down, but also of time almost stopping; of my intuition showing me that my life was valuable in its moments of my life's reflections and having "time" to prepare myself to land.

Some sportsmen, I have heard said and Lungold also makes this point, see their games whether soccer or basketball in slow motion as they fly over the ground at high speed. This is also how intuition works. Our mind has its cycling time a little like a camera operating slowly. Our intuition varies perceptions of time to suit our consciousness and intent.

On the mind: It's said to operate at approximately twenty four frames per second. It is worth noting that one twenty fourth of a second is too slow to take a photograph with a camera without some artificial support, like a tripod. Handholding a camera using that speed would usually cause camera shake and distort the image. That is how slow it is and how slow our mind works at its fastest.

In part 1 of this piece, I felt that I was not really clear about the importance of consciousness, that it is consciousness, both individually and collectively that upholds our social worlds.

It is shifts in consciousness, not technology, consumption, money markets or any aspect of our physical environment or social, political and economic systems that causes change. Back in 1962, when Kuhn wrote about "paradigm shifts", he talked about scientific revolutions occurring when a body of beliefs, what we are calling consciousness, could no longer uphold the reality they created.

There are conflicting realities in science too that co-exist, and one may embrace one or the other or synthesise or combine them in a new form of consciousness.

It is consciousness that governs our perceptions of the world that in turn creates our realities. How and what we perceive is our reality, to that extent a philosopher might say that truth is relative. I am not that sure that discussions of absolute or relative truth are that helpful in a world that is governed by consciousness and our perceptions of that world.

Consciousness also produces ideologies that uphold the status quo. Ideo is from the Greek word meaning ideas and logos to the systematic organisation of ideas and doctrines. What is really fascinating are the many different ways we have chosen to translate logos to suit the context. Logos is translated in the bible to mean the 'word of god'; it also gives us the word logic meaning rational or scientific reasoning, so even an ideology has different realities. They are man-made and upheld by our consciousness. They are often contradictory and conflicting.

Being conscious of consciousness frees us to perceive and feel deeper within ourselves and within our world. It gives us the power to question our knowing and where it comes from.

Consciousness is very powerful and empowering. There are many in the world who would wish us to be neither conscious or intuitive, since both states of being liberate us into the freedom by which we might see their realities for what they are. Turn on your TV and tune into Fox. They have a reality in which I would rather not believe. But the media bombards us with ideas about reality, the urge to consume and to uphold repugnant values. Perhaps it's the reason I don't enjoy much TV. It is mental and feelings blancmange; bland tasteless food for the mind that keeps us in a state of unconsciousness where we exist and survive and do not live at all.

But I want to talk about the unconscious here too for a moment. The unconscious is the last resort of the mind. I don't trust mind. I recognise it serves my sense of survival well and I would not be without it, but that is as far as it goes. The unconscious is that place where we push down all the muck, slime, hurt, pain, anger and all those other things that are too difficult for us to face and to look at about ourselves. It's the stuff that we repress in our unconscious that frequently comes back to bite us. We project these "shadow" parts of ourselves onto others often to justify doing hurt and violence towards them. It's these dark parts of our unconscious that we turn outwards to do hate, violence, racism and prejudice, or else we turn it inwards to do addictions, depression, suicides and other crippling behaviour.

One last point about consciousness, unconsciousness and control: Here's a question. How much media coverage have you seen of ordinary Iraqi families doing the things that ordinary people do – of laughing, crying, kissing, hugging, caressing, mourning, feeling sad or frightened, sometimes happy, enjoying meals together, going about their normal daily work, joking and having fun? Have you seen any? Anything at all?

I have every cause to believe that Iraqis are normal people too, just like the rest of us. So what do they show us then? Images of violence and hatred, our dark shadow projection onto them. Keeping us in a state of unconsciousness is what justifies our going and bombing the shit out of them. So where were the weapons of mass destruction (WMD)? Where are the national ties to terrorist groups like Al Qaeda? There may be terrorists there, at least US Marine General Conway tells me they are there. But how many terrorists are living in the USA? How many mindless murders take place there each and every week? How many Columbine High School massacres will it take before we learn? And Oh! I forgot that naughty man, Saddam, spirited the WMD away by magic. He waved his wand and abracadabra, alacazam, they were gone. Oh yeah! As I might say to Marine General Conway, "Tell that one to the marines!"

Enough of that. Just a final word on intuition: Intuition might be thought so powerful that over the centuries, people holding power have discouraged us from, even killed us, for believing in it. I don't think it's that scary myself and it's never done me any harm, only the opposite. David Beckham, the footballer, does it very well too.

Powerful people know about intuition very well; after all it is their own intuition that keeps them in power. But intuition contradicts our rational scientific thinking, it is knowing without proof and it's not the same as religion either. Lungold talks about women, witchcraft, intuition and the inquisition. During the inquisition and beyond, hundreds of thousands, maybe millions of women were put to death for so-called witchcraft. To be a witch was to have a "heretical" belief either good or bad that could not be substantiated by rational proof. That's intuition. I'm not sure about the heresy either. The Catholic Church was probably the biggest murderer of women in the inquisition. Of course, the only heretical belief one was allowed to hold was that proselytised by the Catholic Church itself. I have every reason to believe that the Church has rewritten its particular story to suit its own purposes too. A knowledge of basic Greek and the bible shows how much we have distorted that story.

There are many things I have written about here that might inflame anger amongst some people. I don't believe that being conscious or intuitive is harmful. I do believe that it might carry with it the choice of profound emotions that I talk about elsewhere here: Emotions like forgiveness, understanding, forbearance and compassion.

Consciousness and intuition have nothing to do with hate. Hate has everything to do with remaining in the dark place of unconsciousness.

Back to the Future, part 1 - Where is it?

geoffrey@geoffreysplace.com — 2008-05-07T06:44:36+01:00

Two things recently inspired me to write this blog. The first was a work project that I had undertaken recently; the second was a video by the late Ian Xel Lungold on the Mayan calendar that I watched recently with great fascination.

The Mayan calendar, that can be interpreted in hindsight to have portended many of the great events and changes in our history, runs out in 2012. Many have interpreted this to be something of a watershed, a turning point for mankind; a time of some massive and fundamental changes in the world. Not the end of the world by any means, but perhaps the beginning of some different sort of world. I can believe that and feel some optimism about it too. I hope…

Economists predict that very soon the world's manufacturing capacity will outstrip its ability of consumption. Simply put that means soon we will be able to make more than we need or can ever hope to use. So what happens then? What happens to our economic, social and political systems that are already beginning to creak under the strain of change? What happens to stock exchanges and money? If you have a career in the financial services industry and are looking to change, now might be a good time to consider that move.

The speed of technology change has accelerated beyond belief. I started my career in computing long ago. What took years at the outset of my career can now happen in minutes, even seconds. At the beginning of this piece I talked about a recent work project of mine. Without wishing to mention my client's name, it was one of the world's largest mobile phone manufacturers. This company now launches a new mobile phone handset at the rate of one a month. Yes, one new mobile phone each and every month. What this means is that they have decided that the life of an average mobile phone to be just a year; from product launch to obsolescence in a year! They don't even call some of them mobile phones anymore; they are "multi-media communications computers!" Even my own phone takes photographs, keeps a calendar, has an MP3 player…what else…? Oh yes! Then there's an FM radio in it as well. But predominantly I use it to make phone calls and send text messages. It's well-made, well-designed and reliable so why would I wish to change it in a year? I have kept my last couple of mobile phones for a good few years and see no reason to consume more for consumption's sake.

But speed of change has accelerated beyond our conception of what was possible just a few years back, and it is accelerating exponentially all the time. Our knowledge, belief, economic and manufacturing systems are moving at a speed far faster than our social and political systems can keep pace. It's no small wonder that our social structures are beginning to creak and that our political systems seem to be holding on by a thread. It's no romantic illusion either. If you don't believe it then go make yourself a very strong cup of coffee and wake up!

What implications does this have for us ordinary mortals? Do you remember that idea about having a career? I am reminded of a couple of conversations recently one with a law and psychology graduate friend turned farmer, now turned national training expert, and the guy who moved me into my home, the removal guy was an Oxford-educated, ex stockbroker. Then there's me, I call myself a management consultant to cover a variety of sins! So what am I? Well, I'm a change, transformation and transition specialist, a programme director, a turnaround person, an expert in information technology and telecommunications, a venture capital appraiser, a psychologist, an ex-chairman of a large mental health project, an ex-chief executive of a software company, a general manager, a communications specialist, a facilitator, a strategic planner and a strategic marketing expert…and sometimes a writer…done a bit of broadcasting, some futures consulting…Okay so how many was that? More than ten for sure! Get the picture?

There are no single careers anymore. Every single knowledge-based discipline with which mankind is involved is moving at the speed of light or else it's moving fast towards obsolescence, like my mobile phone and that's just six months old now!

Take another example…a safe profession; let's be a doctor, a physician. That's an interesting trade, one that I might suggest controversially is more regulated and controlled by the economic interests of the pharmaceutical industry than the social needs of mankind. It's those guys who currently dictate the speed of medical developments and progress, but even that world is about to be busted apart. We have the genome now, a map of our physical bodily universe – a means of understanding our physical condition and potentially the knowledge to be able to cure its ills, we have the means to manufacture chromosomes, and last year it was announced that a scientist had manufactured a living organism synthetically in a laboratory (Guardian newspaper, 6 September 2007). So what will a doctor's profession be in future? If a doctor is to keep pace with developments in medicine and our world of physical knowledge then it is conceivable that she might have to undergo continuous training and education for her entire working life. Or else she might choose to just carry on writing those prescriptions that keep the pharmaceutical industry plump and happy. Somehow I doubt that will happen.

Our world is changing. It's getting better too. As Lungold points out we are transcending an age of ethics in corporate responsibility: one where the bad guys are being weeded out and held to account. I'll just run a quick internet search on recent corporate scandals and see who we can come up with. The list on Wikipedia, mainly for those qualifying as prize-winners in "imaginary arithmetic", include Enron, Barings Bank, Merrill Lynch, AIG, WorldCom, Kmart and there's even a couple of very big pharmaceutical companies in there too. It's a long list now. But I simply want to make the point that businesses who dishonestly exploit their customers or their shareholders for their own financial benefit or power interests are going to fail in a world where ethics, social and personal responsibility are coming to be recognised as universal values. It's not before time and I'll say more about time itself here too.

Some people may find this speed of change frightening; certainly it is awe-inspiring. It's no wonder that we feel that change is running past us; that we feel we can't keep up with it any more.

Lungold talks about this very well, about the limitations of mind. He says rightly that the mind is man's survival equipment. It works slowly and it's like a pattern recognition engine detecting similarities and differences to build a picture of our world. It does construct knowledge as pictures too, pictures taking the form of all our senses: sight, sound, taste, smell and physical experience. It works at about the speed of twenty-four frames per second, that means we can take twenty-four decisions a second in a world where billions of decisions are being taken each and every second. Lungold cleverly points out that the mind is limited in speed and easily deceived, that the guys who do special effects in the movies already know this well. I believe Lungold was on the right track.

So what do we use instead? Lungold and I believe the same thing here and it's called intuition. Intuition is our own sense of the world, and repository of inner personal knowledge, it's our ability to sense and know immediately without reasoning. It's what the very best sportsmen know and use all the time. Just think of David Beckham playing soccer, do you think that he's using his mind like "click-decide, click-decide, click-decide"? No, he has very high speed intuition and that combined with his enormous and well coordinated physical abilities makes him one of the greatest footballers there is; the same goes for great, basketball players and lots of other sportsmen too. I'll write more later about intuition and my current sense of it later. Important questions for me are how one gets in touch and stays in touch with intuition. I'm working on it and I am already very intuitive!

So what's going to happen and why 2012? Frankly, I don't know. I'm not a futurist or a soothsayer. I'm not that sure about 2012 either, but big change will happen and happen soon enough. It will be to coin that overused phrase and now hackneyed cliché, first used by Thomas Kuhn to describe the revolutions that occurred in the world of science, a massive paradigm shift in our entire world. (Brother, can you spare me a paradigm?) It will be an entire shift, not an evolution, but a revolution in our consciousness. It may be a whole series of shifts, who can tell? But one thing is for sure, this post-industrial world we inhabit will go through some big changes and it will be soon and it will be fast.

Finally a few words about time itself: Those Mayans were very clever, that's for sure, their concept of time was driven by personal intent and social purpose. Whilst man has always had some concept of time since the ancient Greeks and Egyptians and probably before that, the ubiquity of timepieces and of clocks did not really happen until the industrial revolution. It's no surprise that the cuckoo clock was invented at sometime around 1730 at the beginning of that revolution. Cuckoo!

Time as a universal accurate concept itself took hold then because it was what was used to control and regulate the workforce. Perhaps in a post-industrial age, our concept of time may change. The best I would hope for is that time will be used no longer to oppress our daily existence, but perhaps it might embrace those Mayan concepts too in a new and better world.

NB The video "The Mayan Calendar comes North parts 1 and 2" presented by the late Ian Xel Lungold is available to view for free on Google.