Economic Growth – humanconditioned

Why Life Really Is Like A Twisted Monopoly Game: Part 1

June 16, 2017June 16, 2017RobertLeave a comment

What’s the link between Brexit and the price of a tin of Baked Beans? The short answer is money. That seemingly simple thing that the rich have lots of and the poor not so much, which actually turns out to be kinda confusing. For starters, take the Brexit vote. It happens and then the pound sterling loses value. Suddenly Britain’s currency is worth less in the world and it gets pricier to import goods, so businesses put their prices up to recoup the loss and the consumers end up having to pay more on everyday goods. Meanwhile, the Bank of England recently edged a little closer to raising interest rates, which would make it more expensive to borrow money, again making it harder for everyday folk to take out loans. But what does all this financial malark mean? Well, here’s an over-extended metaphor involving Monopoly to try to explain it.

You’ve got your typical game of monopoly with plenty of players, lots of streets to buy and a bank dishing out money. So far, so simple, but now imagine that the board gets bigger. As the game progresses so new streets are built and one player, Mr Top Hat, wants to build an epic new street full of shops, houses and hotels. Mr Top Hat doesn’t have enough cash under his mattress so he approaches the bank to take out a loan. Mr Bank is pretty excited by this new development and decides to issue the loan. Hurrah, Mr T-H has the money (the credit) but is also in debt to the bank because he’ll have to pay it back with interest. Mr T-H builds the street and it’s epic. Other players buy houses and hotels on the street and Mr T-H makes a bunch of money. He pays the bank back with interest and pockets a tidy profit. Now, the other players are so impressed by Mr T-H’s success that they start doing it too and take out loans to build streets with cool amenities on them. Mr Bank sets a favourable interest rate (i.e. making it easy to take out money) and things start booming. However, because the board is growing the money supply needs to grow as well and Mr Bank creates some more cash (just like that!). More money in the economy gets Mrs Supermarket excited and she puts her prices up meaning goods become more expensive. So Mx Average Jo suddenly has to spend more money on a tin of baked beans. This whole process of rising prices and falling purchasing power is called inflation.

The players keep nipping around the board and the board keeps growing in size, as does the amount of money in the game, so inflation keeps going up too. However, too much inflation is not a good thing so Mr Bank decides to increase interest rates to make it harder to borrow money. The point of doing this is to keep inflation rising at a steady and manageable rate. Of course, it’s alright for Mr Top Hot, who is very rich, but not so good for Mx Average Jo who will have to wait for another burst of growth to inspire a drop in interest rates. But the irony of this all is that whatever Mr Bank does inflation is always increasing and whether Mrs Supermarket puts her prices up if there’s more money in the economy or Mr Bank puts interest rates up because there’s too much money in the economy, the one who loses out is always Mx Average Jo. Economic growth and inflation are two sides of the same coin. Now, what about Brexit, fluctuating currencies and economic recessions? That’s Part 2 and involves an important new player, Mr Speculator.

The Dildo Dilemma

July 12, 2016Robert1 Comment

My friend has a problem: her favourite vibrator broke. She absolutely loves that hunk of reverberating rubber and it has brought her great comfort for many years. Like a top teddy or a preferred mug, she’s very fond of her dildo – it’s more than just an object, more than just a piece of consumerism, it is something with which she is intimately acquainted. Naturally, my friend looked to get it repaired but soon discovered the cost of repair was more than buying a replacement. Thus, the dildo dilemma.

But is that really a dilemma, you might well ask. Why not just buy the new one and save some cash? Indeed, this does seem like the obvious option as Ann Summers has reduced the Rampant Rabbit in their summer sale and now it’s only £25.90. Meanwhile, after all the faff of finding someone who doesn’t discriminate on ‘small item’ repairs it turns out their starting cost is £30 per item. Quids in, right? Unfortunately, it’s not so simple because my friend is also an avid environmentalist. She likes nature, y’know, trees, rivers and the like. She also hates pollution and waste but our consumer culture tends to produce a lot of that. Things aren’t built to last anymore instead they’re designed with ‘built-in-obsolescence’ which basically means their shelf life is shorter. And the weird thing is that this actually makes business sense because you’re more likely to fork out more cash to buy more stuff so the economy can keep churning.

This premise, that the economy must keep growing, is right at the heart of our economic theory. It’s got a long history but the combindation of 19th century industrialisation, mass production and a couple of world wars ensured the US became an economic powerhouse. However, when the wars stopped and there was less money to be made from producing tanks and bombs the US switched to mass producing consumer goods like cars and ironing boards. Yet the premise of the economy was the same: produce, consume, produce, consume, ad infinitum. It’s a system riddled with paradoxes and my friend doesn’t want to add to the mess by throwing yet another dildo on the rubbish pile. Our seas are already full of plastic rubbish, our air teeming with pollution and our earth riddled with land-fill sites.

But we can’t put all the blame on my vibrator-loving friend. The environment is all of our responsibilities but whilst we shouldn’t waste stuff it would be great if our governments and corporations could actually initiate some planet-friendly economic policies that aren’t dependent on unsustainable levels of consumption. If my friend does end up buying a new dildo it won’t spell the end of the planet but what a better world we would live on if we perfected making things that lasted rather than churning out yet more unreliable iPods and bombs. And for those of you yet to get your hands on one of those Rampant Rabbits here’s a link to the Ann Summers sale.

Britain Is Not A Fart

March 30, 2016March 30, 2016Robert1 Comment

Better In than Out I say. And there are many reasons for it. Human rights, for example, we like those don’t we? And we get a lot more of them when we’re in the EU. Easy holidays abroad. We love them too and we’ll get lots more if we stay in. Greater security from, for example, terrorist attacks as we share intel with other European countries. Greater diversity, more interesting people coming to Britain more of the time to make our lives more interesting (of course, this one might not convince you if you’re a xenophobe). More stability in the West, something that Obama (leader of the Free World) really wants whilst the likes of Putin and ISIS leaders don’t. More jobs, stronger economy, reduced risk of armed conflict…but we know all these things already (and if you don’t check out the Stronger In website), so I’ve got another reason we should stay in the EU: my grandparents would have wanted it.

All my grandparents fought in the Second World War. One grandfather stormed the beaches at Normandy, the other was based at the caves of Malta, one grandmother drove lorries and fire engines around Britain (imagine that, a woman driving a truck, that was a big deal back in the day), whilst the other helped crack the Enigma code at Bletchley Park (but no, she wasn’t mentioned in that film with Benedict Cumberbatch, hmmm). They all contributed to the war effort for the sake of peace – they believed the Nazi threat had to be challenged, and so they did what they thought was right and put their lives on the line.

Now, I’m not using this blog to condone war, indeed nothing’s black and white (save zebras and old photographs) and much history has shed complicating lights on the geopolitics of WW2. Secret plots, subterfuge and much anti-Semitism within British politics. So I’m still a big ‘no’ to war but I do think that my grandparents believed they were doing the right thing and I have an awful lot to thank them for. After the war ended the establishment of the European Coal and Steel Community in 1952 was the first step in the federation of Europe, an effort to curb the rise of extreme nationalism on the continent that had led to fighting. Unsurprisingly, my grandparents and many others never wanted to see Europe go to war again. The EU was created to maintain peace.

Of course, there were other motives at play. The Coal and Steel Community is hardly the Culture and Peace Community, it was about business, specifically capitalist business. Opening markets and freeing trade were seen as key ways of ensuring countries stayed on amicable terms. There’s much logic in the idea but when making money takes precedence over making lasting friendships it’s easy to forget why some random village in the south of England is twinned with an equally random village in the north of Germany. Furthermore, when recessions hit and economies get rocky countries all too quickly revert to nationalistic policies (may I refer you to what happened in Europe before WW2 and what’s happening right now).

In many ways the EU has failed us – the bullying tactics that the likes of Germany and France impose on countries like Greece and Spain; the fact that it’s predicated on capitalist growth-based consumer economics (see many previous posts on why that’s a disaster); the undemocratic nature of the Council and Commission; the giant gravy train that is EU bureaucracy (I once met an EU bureaucrat…but that’s another story); the relative ease with which individuals (especially extremist ones) can get into the Parliament solely with an aim to disrupt negotiations, remember Nigel Farage’s shenanigans. The list goes on. But these are not reasons to leave. At a time of huge global problems – looming world war 3, climate change, nuclear threats, terrorism, recession – we need huge global solutions and political transnational bodies like the UN and EU are part of that. They might not be fit enough for purpose but it’s our job to make them better and in doing so make the larger system better rather than blame the likes of the EU for the failings of said system. And it’s what my grandparents risked their lives for and who am I to trash their legacy?

Now, perhaps for the only time, I will give the last word to Margaret Thatcher (full Evening Standard article here): “To come out [of Europe] now, with nowhere else to go, would jeopardise our own and our children’s future … In politics we always have to consider ‘What is the alternative?’ The European Community or what? If we came out now we should be…cold-shouldering our friends…The reasons for staying in…are concerned with the ideal and vision of what we could do together…and with the consequences that would arise for Britain if instead of solving our problems as part of a partnership we withdrew into the unknown…At a time of uncertainty in world affairs, Europe gives us a far better chance of peace and security, and if we want our children to continue to enjoy the benefits of peace our best course of action is to stay in Europe.”

Corbyn: In The Box To The Left

August 8, 2015RobertLeave a comment

Corbynmania is exciting stuff. It seems there’s actually debate to be had when it comes to politics. People are discussing things rather than just accepting the Tories’ line of austerity, tax breaks for the rich and cuts, as if these are immutable truths. Jeremy Corbyn, front-runner for the leadership of the Labour Party, is leading the debate and offering an alternative politics – one of hope. But it was Beyoncé who told her ex to put everything he owns in the box to the left and my concern is that Jeremy Corbyn is being resigned to that very same box.

One thing Corbynmania proves is that the Conservative victory at the last general election does not spell the end of politics. We are not consigned to a future of corporate giants crushing communities, endlessly bailing out big banks and the poor getting poorer until climate change melts us all, no, it seems politics could still shift leftwards – back to a bigger state that dares to close tax loopholes, challenge corporatocracy and reduce inequality.

But this isn’t enough (even if it happens). If we really want to change society for the best then we must recognise that some of the big issues we face are so much bigger than left and right-wing politics. For example, to address climate change we cannot just cut carbon emissions and green consumer capitalism because woven into the fabric of our political-economic system is an inherent flaw: it depends on endless economic growth on a planet that offers finite resources. As the name suggests a growth based economy has to keep growing to function but, as we saw with the banks, when things do get too big they can fail, except rather than just a financial system collapsing, rampant globalised capitalism threatens the very earth itself (imagine an impossible hamster getting bigger and bigger until it eats the whole world).

Whether you go rightwards to a smaller state and bigger corporations, or leftwards to a bigger state and smaller corporations, neither approach will tackle this underlying threat because both take capitalism at face value – they just have different ways of dealing with its problems (Labour tend to be nicer to the poor whilst the Tories like to ignore them). Corbyn hints at transcending party politics when he talks of distributing power beyond the state to include communities as well and certainly a push towards peace over arms proliferation could recognise that one of the many reasons we go to war is to ensure our economies can keep growing (the arms industry being a great example of the illogics of growth based economics because so much of the stuff it makes gets destroyed but this is a good thing for the economy because it means more stuff can be built to replace the old).

Corbynmania is exciting stuff. He’s diversifying and opening the debate, putting the demos back in democracy, but that doesn’t mean he’s answering all the questions which is why we’ve still got to keep asking them. We can’t let him get trapped in the box to the left because questioning our tired, destructive political-economic system in its entirety means transcending the left and right debate. Having enjoyed Beyoncé I’ll now leave you with a nice video of that impossible hamster I mentioned earlier…