It is a perennial problem in the UK, and, I suppose in other countries too, as to what to do about accommodation. A house is very expensive, with typical prices in the UK at around £220,000 for a quite modest, indeed small, house or flat (apartment). Of course prices vary a lot: out in the countryside it could easily be £175,000, in London, £340,000 for the same thing. But whatever the price, is there a way of deciding whether it is better to buy or rent?

Well, the common argument is that it is better to buy, because you own an asset. However, most people don’t pay cash, they pay for a mortgage. I think that this alters the calculation a lot. In the long run it has to be a good idea to own an asset, but the cost of that asset can make a big difference. Is it better to pay rent while you save up so you can pay cash in the end, or is it better to pay for a mortgage and move in right away?

Let’s look at trying to buy a flat in London compared to renting a similar flat, also in London. Renting a small 2-bed flat in London is about £1,000 a month. The price, about £340,000. Calculations done using this calculator from the BBC, assuming the historical average interest rate of 7%, and comparing with 12% which happens from time-to-time (and worse). I will assume a repayment mortgage rather than an interest-only/endowment mortgage, because in the latter case you still have to set aside the extra money to pay off the capital in the end, even if you are hoping that some worthless insurance company can invest it for a profit for you (and as we have seen in the Credit Crunch, that is a vain hope: invest it yourself, carefully, or expect to lose some of it).

First of all, renting in London.

Ouch! Plus, you have to save something to build up the cash to buy, eventually.

Next, a mortgage for £300,000 at 7% interest (assuming £40,000 deposit and to make it equivalent to the cost of the rent).

So… at 7% you are in fact buying just over two houses for the price of one.

At 12%:

At 12% you are buying just over 3 houses for the price of one.

So… is renting better? Well, you could spend £300,000 on rent, and save up £300,000 to buy, and you would be no worse off than if you had taken out a *low interest* mortgage. At high interest, it would be much more expensive to buy.

On the other hand, this all assumes constant prices. We are used to seeing prices, and rents, rise. Indeed, over the last 30 years or so, it would have been nearly impossible to save fast enough to keep up with the rising house prices. With house prices typically rising at some 10% a year, where else will you get £30,000 of effective income for doing nothing? So, up until recent times, it was probably sensible to get the mortgage and pay, because over the course of a few years the increase in value of your home would have rendered the mortgage payments negligible in comparison. You could have bought a house for £60,000 and by the time you paid it off it could easily have been worth £250,000: more than the price plus interest, so a clear profit.

Now however, the calculation looks different. Prices are no longer rising, they are slowly drifting downwards, in an annoyingly hard to follow zig-zag pattern. It is, of course, impossible to be certain which way they are going to go over the next 25 years. Although we are used to prices going up, this is not the only direction and in economic depressions of the past, prices have trended downwards for longer than 25 years at a time. It could happen again. It could be happening now. We just don’t know. We do know that the politicians and economists don’t know what they’re talking about.

My bet? Rent and save, as long as interest rates are below 7% and house prices are increasing at less in cash terms each year than I can afford to save each year. If that formula changes, it will be time to look again at the figures. What do you think? Leave a comment and tell me if I’m wrong, or right!

What happens to these figures if we do this calculation in the countryside somewhere? In Bleanau Gwent in darkest Wales, the average house is only £80,000. Assuming you would need £20,000 deposit, the calculation looks like this.

Rent

Mortgage at 7%:

At 12%:

The calculation, in fact, looks the same: just over two, or three, houses for the price of one when you’re paying a mortgage. But saving is a *lot* easier here. Even on the National Minimum Wage of about £950 a month net, one person could afford the 7% mortgage, just about, and if they were really careful with their money, they could save a little too. If they were sensible and got married or rented out a spare room, they should be able to save quite rapidly.

However, looking online, the £200pcm places in Wales seem a bit… poor: flatshares and the like. The absolute minimum rental for some quality of life seems to be £300pcm (£90,000), or £644pm at 7% (£193,200), £956 at 12% (£286,800). At 12% this is beyond the minimum wage for one person, but a couple could easily rent and save some £1000 a month at those rent levels, it seems to me. A house could be purchased for cash there (or somewhere abroad with a nice climate) within 10 years.

Do you agree? What do you think about this calculation? Am I missing something?

My new e-book, How to Eliminate Massive Debts with Tiny Payments is online! I know a lot about this subject, as it happens, so I thought I would distil my experience into a quick guide to getting out of debt as fast as possible, even when you can’t afford it. Indeed, especially when you can’t afford it. So many people are, in effect, conned into taking on debts they can’t afford that now the whole world’s economy is busy choosing between a new Great Depression or massive inflation as the best way to eliminate the systemic financial toxicity.

If it sometimes seems to you that the whole world is conspiring to keep you poor, this video might help to explain it. It shows, using interviews with top fund managers and similar types, how the wealthy elite are exploiting the financial system to impoverish entire nations, just so they can make more and more money themselves in the short term. It shows how they are, effectively, destroying the world and warns it could end in world war once again.

It talks about globalisation, which of course from a capitalist point of view maximises efficiency since it keeps unnecessary costs low: resources are obtained where they are cheapest and goods are produced where they are cheapest. In purely financial terms, this is of course sensible. But it also impoverishes most people, over time.

One interviewee also comments that the Credit Crunch was the inevitable result of deregulation that the wealthy promoted in the 1980's (the 'Big Bang' in London), which was introduced in Britain because of the industrial crisis here. That in turn (he doesn't say) was probably caused by decades of over-taxation and bureauracracy... first things swing one way, then the other, and there's no escape for anybody, it seems, while political decisions are being made by dummies (as another interviewee commented).

You may need to set captions on this using the CC button or up-pointing triangle button on the lower right. It has French subtitles anyway, but you can choose other languages for subtitles with this button and the right-pointing triangle that comes up on it when you pop up the menu, or the middle icon on the popup menu (depending on the particular interface that comes up on your system).

This video looks at working conditions in China. I think most of us are aware that pirate capitalism is rampant in much of the world, as indeed it used to be in the West in the early days of the industrial revolution. For the most part, in the West, we have eliminated these practices from our local factories. However, many companies get around these rules by manufacturing their products where the labour is much, much cheaper, and where the rules to protect them are simply not enforced. 22 hour working day anyone?

In the film, the Disney corporation is singled out. However, many other companies are known to be doing the same thing. Apple, for example, is reported to have admitted to using child labour. Abercrombie & Fitch have been criticised for conditions in the Phillipines, and for lack of transparency about their practices. This document talks about many other companies including Gap, Banana Republic, Nike and others better known in the USA than in the UK.

You can find a lot of information from the IHS Child Slave Labour News website, if you’re interested.

But what can we do about it? If we don’t buy their goods, these people will be out of work… maybe. Or maybe boycotting such companies will gradually push them in the direction of improving their practices… and, unfortunately, increasing prices. Another problem is that it seems these days rather hard to find any products that are not made by third-world or Chinese slaves (I include very-low-paid workers with inhumane working conditions in this category). But we don’t need most of what we buy anyway, do we? We don’t need to change our wardrobe every season. We don’t need to buy crap that falls to pieces in next to no time at all, deliberately to encourage us to buy a replacement. We can buy reliable, durable goods in the first place. And we can distinguish between ‘need’ and ‘want’. Can’t we?

Santa’s Workshop [33m]

Is there anything else we can do about it, other than shopping more responsibly? I’m looking around online as I write this to see what I can find. AntiSlavery.org has a few suggestions (including signing up to give them some money, of course). Mainly they want people to join their campaigns or ‘like’ them in their social networks. They have a 2m30s video here:

I think for those of us who don’t have much money, donating is not very interesting; for those of us who don’t want to be campaigning, or don’t have the time, that’s not much use either… I know the idea is to build up a critical mass of people to force governments to do a bit more, but clearly they aren’t close to it just yet. On the other hand, there are petitions, and suggestions of how to annoy various retail chains by writing to them with awkward questions. This may be a bit easier. And maybe a bit of fun too…

The Products of Slavery site has a nice interactive map showing the variety of products made through forced labour around the world. You can click on it to get more details for each country.

They generally recommend purchasing “fairtrade” products preferentially. Well, OK, but such products are usually more expensive… and the drive to cheapness is part of what has led the world to produce in this way anyway.

Historically, slavery was abolished in much of the world as part of a complex series of events, discussed on the International Socialst Group’s website (naturally, they have a particular perspective on the issue… but who doesn’t?).

Short answer: the alternative is to be a kind of financial slave, basically. Why? Because you won’t know how you are being ripped off. The method is on the one hand very subtle, and on the other absolutely outrageous.

The problem with the financial system, if these two short videos are correct, and I rather think they are, is that it depends on perpetual economic growth to work. Unfortunately, we live in a world of finite resources. OK, we might sneak off into space, and get more from there having destroyed our homeworld, but it ought to be possible for us to run our finances without such destruction too.

The problem is that most of the world’s money is not really ‘money’ at all, but debt. The system by which it is created is through people and businesses taking out loans. So it all has to be paid back, with interest… and the interest hasn’t been created! So there is a constant game of catch-up being played, for which a small level of inflation is the continuing visible portion of the price. But it is worse than that. The system is ‘exponential’ in nature: that is, it is constantly accelerating. Sooner or later, it always must crash disastrously.

But don’t take my word for it, or even that of these two videos. Any standard economics text will tell you the same if you look up ‘creation of money’ in it. You can also check the Wikipedia entry, for example. Note though: not all economists actually agree as to how money is actually created! I find it amazing that economists, in effect, don’t actually know something that one would have thought would be really fundamental to economics!

Anyway, these two videos are called ‘Money as Debt.’ The first one introduces the mainstream economists’ theory, and criticises it, and the second one explains some of the history and implications of the system, and makes some suggestions as to what we might do about it. I think we may have to do something about it fairly soon.

Money as Debt I [37m]

Money as Debt II {77m]

I’ve written about debt and credit cards before, but this video, ‘Maxed Out’, is one of the best for explaining the predatory tactics of the bank and credit companies. Yes, people are at least partly to blame for getting into debt, but they are at the same time being tricked into taking on debts that are deliberately structured so as to be very hard if not impossible to pay off. Taking on credit card debts is like being a hapless dinosaur walking into the La Brea Tar Pits. I’ll summarise some of the tricks below, but first, here is the video.

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders [1h 30m]

OK. So, to the tricks. It would be posssible to write volumes on this subject, but a blog is not the place for it so I’ll try to be brief. Some of the tricks are blatant and obvious, and some are subtle and maybe even accidental to some degree.

First, a subtle one (not entirely accidental either: watch the videos on ‘The Century of the Self‘ to see why). The companies, the media and the government collude to promote the idea of a consumer-spending-based society: a fantasy lifestyle is promoted throughout the media and commercial worlds, to such an extent that citizens in the West typically end up feeling practically entitled to the ‘good life’. That feeling of entitlement runs deep and sits there in full form just beneath the surface in most people. And it causes massive overspending on endless junk and entertainment that people, in fact, do not actually need. Except in their heads. And that’s enough.

When the economic times are good, and regulation is going through one of its regular slack periods, people can take out large loans based on the ‘equity’ in their homes, and use that as they please. The debt gets added to what’s owed on the house, but when prices are rising rapidly this can be easily covered over a few years from the rising value of the property: the idea is if you get stuck, you can sell the house at a profit anyway. But when the market turns, as it always does eventually… houses get repossessed because the owners can’t or won’t sell them or they owe more on them than they are worth because the values have dropped.

This is a general pattern with lending, and not just on homes. It applies to bank loans, credit card loans and other so-called ‘unsecured’ lending (loans not based on your home or other large asset, generally). When interest rates are low, or inflation is high, it is usually possible to borrow easily. Then the screws tighten: maybe interest rates skyrocket from 2% to 20%. Maybe unemployment goes up massively. Whatever. The upshot is the banks get to seize a load of property from people who owe them money. This cycle happens 1-6 times over a normal human lifetime, roughly: once or twice massively, a few more times in a smaller wave.

The credit card companies and banks charge very high over-limit or overdraught fees, and high late payment fees. If you go over limit or are late paying, they often also exercise the right stated in their small print to increase your interest rates. They will also sometimes do this if you have been late or over limit to another lender. These companies make very big profits from delinquent customers as a result.

If they can’t get you with late/over-limit fees, the next best thing for them is for you to pay the minimum payment each month, forever, or for as long as possible. Customers who pay off their debts every month are worthless to them. So guess what? The poorest customers, that is, those most likely to be unable to pay everything off every month, are their most profitable customers (as a group). Big financial institutions finance these ‘payday loan’ shops you must have seen springing up like Japanese Knotweed all over the place in recent years. Why? Because those business specialise in lending to this customer group…

Bank staff are trained not in banking, but in sales.

When a customer starts struggling with their payments, the above charges and any others they companies can think of are quickly added to the debt. In the course of even just a few months a relatively small debt can be multiplied many times over by the charges. Finally the customer is driven over the edge and liquidates their assets, declares bankruptcy, or something similar. The bank gets the assets (approximately). They don’t care about the actual debt: the debt plus charges was the target all along. As soon as you show financial weakness they will pile on the charges and, in effect, take everything they can before you can stop them.

Big name banking institutions, pillars of the community, world famous names: these are among the worst, the most piratical. Don’t think that a famous high-street name will be honorable. They will not be, when the chips are falling in their favour as described above. They have all contributed to the way the laws are written; those laws allow their practices.

When customers try to re-finance loans, or consolidate loans, that is, trade-in their old loan with high payments for a new one with different terms and hopefully lower payments (the commonest type), it is not necessarily the case that those customers are given a good deal, or even a better deal. Maybe the payments will go down from £500 a month to £450 a month. Probably £250 would have been possible. Maybe the interest rate will go down from 25% to 20%. Sound good? But maybe the monthly payment will have gone down so much that over the long run of the loan, you’ll end up paying more interest overall. Whichever way you try it, there’s an angle for them… watch out. Do your own maths, carefully.

The banks target students in further education preferentially. Firstly, they are away from home for the first time and are easy prey for overspending. Secondly, those that evade that trap can become long-term ‘lifestyle’ customers who think that having some credit cards is normal and OK. And being future graduates, they could be high earners too. Good future customers for lifestyle loans for cars, houses, etc. Not many of them in the modern world will manage to keep enough of a surplus to save up instead of borrowing their way through life, unfortunately.

They keep offering more credit cards, more loans, more financial products… most if not all of which you can, in fact, do without.

They keep raising their customers’ credit limits, so they can borrow more, and more, and more… and have to keep working harder and harder and harder to keep up with it all.

Another subtle trick that is widespread in society: blame the debtor. But… isn’t it the debtor’s fault if they borrow all this money they can’t afford? Well, is it? Go back and look at some of those techniques described above, and see if they are fair. Is it fair to lend to students who’ve just left home? Is it fair to promote a high-spending lifestyle to people who know no better? Is it fair to cycle interest rates down and up, and to pile on charges the minute someone slips a little?

When someone gets into financial trouble, you don’t have to look far to hear or see someone using the ‘righteous indignation’ voice against them: “Just how do you propose to pay back this money that you owe?” Or, “How do you propose to take responsibility for your debt?” What is this? Are they reasonable, taking into account the sly tricks used to get people to borrow more than they can afford? I don’t think so. Debtors should not fall for this voice. It is the voice of sado-masochism, and it leaps out the minute such people think there is a possible victim in front of them. If you refuse to cringe, the sadist will look elsewhere for his meat. Read The Fear of Freedom (Routledge Classics) if you want a psychologist’s portrait of such people. For now, just be clear in your own mind that it is not your fault if the law allows these piratical financiers to rip you off. Sure, you made mistakes. Everyone does, many times throughout their lives, in different ways. But making mistakes doesn’t make it OK to trick you; to knowingly lend you more than you will realistically be able to repay in a reasonable time, at a reasonable rate. You have some responsibility. But don’t shoulder the entire blame. Two-thirds or more of the interest and charges are part of the scam and are nothing to do with you.

One last point. I mentioned that the laws allow this kind of rip-off. There was a case in point on the news recently. A company is sponsoring free travel on the London Underground on New Year’s Eve. That company is a loan company. In the attached picture, you will see that the “typical APR” (Annual Percentage Rate) is 2689%… yes, two thousand six hundred and eighty-nine percent per year.

When asked about it, the voice of the government authorities, on this occasion London Mayor Boris Johnson, said that they were a legitimate company regulated by the Financial Services Authority. So that’s all right then.

And it is. Officially. So look after yourself, because the government does not. And this applies just as much in other countries as in the UK.

This video was produced before the Credit Crunch, and was suitably subtitled, “America Before the Bubble Bursts.” It spoke of sub-prime lending before the general public knew it was a problem. The video is basically about debt, especially credit card debt, and the usurious interest rates and tricks the companies use to rope people in, with things like student loans, pay-day loans, interest-free periods, and so on. As a preacher near the beginning of the video says:

“Our society has been set up to keep us struggling and not give us relief. I believe that there’s going to be economic fallout and I’m telling my church to be prepared. What goes up, must come down.”

A housewife says this:

“I just feel like everyone is living above their means, or struggling to get what people could have years ago, like a house and a car.”

They were right; but the economic fallout seems to be to be only just beginning. Nowhere near enough debt has been liquidated to put the Western economies back on a sound footing yet.

Here is the video [1h 29m]

David Icke believes a lot of strange stuff, completely unverifiable for the most part, but his description of the way the current banking crisis came about is clear and worth listening to if you don’t quite get how it all happened. He also makes a prediction about the third phase of the process, i.e., that the international financial system will be (deliberately, he says) crashed so that a global banking system can be implemented…

In reality, I’m not convinced that it needs a conspiracy theory to see that things are going that way. It is the natural order of capitalist economics and power-brokers in general to tend towards monopoly in all areas anyway. Banking is no different, I am sure - and politics certainly isn’t. And, such people being stupid, we can be sure that the proposed system won’t work either, and will probably lead, as David Icke claims, to some sort of financial dictatorship or at least fiasco, in the not too distant future.

Here’s the interview [about 40 minutes long - the first couple of minutes are not in English].

The Reverend Billy is a self-styled evangelistic priest who is a bit of a comedian, but with a serious message. As Christmas approaches, he asks us to avoid the “Shopocalypse": we are shopping too much, and too irresponsibly.

Remember, the environment is being destroyed by destructive capitalism - by built-in obsolescence - by we, the consumers, buying junk we don’t really need. And people’s lives are being destroyed in what amounts to slave labour camps in countries like China, Sri Lanka, The Philipines and more, as children and teenagers work 19 hour days making this junk for pennies that are barely enough to live on even in their own countries.

Reverend Billy presents his message with songs and jokes, but he is so right.

‘Twas the night before Christmas
And all through the house,
Not a creature was stirring,
Not even a mouse!

The children were nestled,
All snug in their beds,
While ads for new doodads
Played out in their heads…

Let’s hear it for the Reverend Billy!

So: how does one shop sustainably? Well, the video explains it briefly, but it is worth repeating. Shop at small local shops getting locally produced items wherever possible, and avoid shopping at the big multi-nationals as much as is feasible, in part because they use sweatshop labour often, and in part because the money you spend there is not recycled through the local economy as much, and in part because they are driving local businesses out of the market altogether. You might think that driving uncompetitive business into bankruptcy is a good thing, but in reality it is not so simple. Firstly, it is being done by illegitimate means: a) the use of ultra-cheap sweatshop labour; b) with artificially low prices which will be raised once the competition is gone (the usual monopolist’s practice); and c) with mind-numbing brainwashing “lifestyle” advertising which is being insidiously infiltrated into our very culture so deeply that we pretty much fail to even recognize that we are being advertised to any more - but we are. Secondly, a diverse economy is a healthy economy. If the marketplace is dominated by just a few monolithic corporations, it is inherently less stable and more prone to crashes, and the government is more easily blackmailed by these vast, wealthy and amoral organizations.

Well, I don’t have the money to shop anyway, as it happens. And I have to buy cheaply. I’ve noticed that the local shops are in some cases much cheaper than the Tesco superstore, for example with eggs and milk. I’m not one for price-checking but I will start looking at one item every now and then (hence eggs first, then milk… I’ll go on like that). There is more diversity in the superstores, so I will certainly use them for the main grocery shopping, but not so much, it seems, for the everyday items.

As for luxury items; I can’t afford them anyway. And I’m not unhappy. Sure I want to be rich and so on… but shopping doesn’t make people happy, I believe. People think it will make them happy, but if it worked, they wouldn’t need to keep going back so often, I think. My suspicion is that it gives a quick thrill, which fades, and the shopper ends up just a little bit less happy than when they started once the thrill has worn off. They are less happy because they know a) they’ve wasted some money; b) they’ve bought some junk which didn’t live up to their expectations; c) they’re burdened with extra junk to dispose of or keep dragging around with them as they go through their lives; d) they don’t know what else to do to make themselves happy (live in the moment, try enlightenment, try spending less, try spending time with people and not things, try doing things that can make them feel proud of themselves or pleased with themselves, develop their self-esteem ).

In the meantime… there’s Reverend Billy’s website, or you could read about how a sustainable economy might work, or this 21-minute video about how our production system works - or doesn’t: The Story of Stuff.

Why has Britain been declining for the last century or so? Well, there are probably lots of reasons - competition from around the world for one, legacy issues (old-fashioned equipment and systems in businesses that newer rivals don’t need to deal with), and… too much taxation.

Much too much taxation, indeed. At least, that’s what Eamonn Butler the author of this video, “Britain’s Trillion Pound Horror Story” and Director of the Adam Smith Institute, believes. He makes the interesting point that it cannot be correct that government spending can stimulate an economy, because such spending comes, ultimately, from individuals and businesses in the form of taxation, preventing those people and businesses from spending on goods and services. In other words, although he doesn’t say it, Keynsian economics must be wrong. I don’t know what the counter-argument may be, but certainly this side of it sounds, well, sound.

Britain’s Trillion Pound Horror Story [playlist, 5 parts of up to 15 mins each, 1h 12m total]

In the video below, part two of three as it happens, Glen Beck talks about how the US Federal Reserve is ‘monetizing the debt’ - that is, trying to get the USA out of financial trouble by “quantitative easing,” or in old language, printing money. What’s wrong with this? If it goes wrong, it either doesn’t work much, or inflation goes out of control. The problem with inflation is that, while on the one hand it allows debts to be paid off, on the other, it destroys your savings and even wages, over time. And not much time, if the inflation rate is high enough. And it can get very high. In the video he mentions the Weimar Republic (democratic Germany between the wars), and fascist Argentina in the 1980’s. They printed money and the result was utter meltdown of their economies due to hyperinflation - the most destructive form of inflation, where prices rise at stupendous rates. Many countries have destroyed themselves with this method. Zimbabwe has done it recently under its (communist) dictator Robert Mugabe. There, the annual rate of inflation by December 2008 was estimated at 6.5 quindecillion novemdecillion percent (6.5 x 10¹⁰⁸%, the equivalent of 6 quinquatrigintillion 500 quattuortrigintillion percent, or 65 followed by 107 zeros – one googol 65 million percent). Not surprisingly, unemployment in Zimbabwe is currently running at around 95%. That is, for every person with a job, another 19 are out of work. How do they survive with no welfare state? Those with work where they can earn foreign currency (dollars and the South African rand) have to support them. It’s the only way.

Anyway, my point? The US Federal Reserve is taking a big risk. Any type of government can make this mistake. Glen thinks the US is being brought down deliberately. The part 2 video below introduces his ideas (I left out part 1 as it’s a bit dull - you can see it here and part 3 which is quite interesting, here. There’s more to follow, however, as these are just the introduction. In the three videos following part two, he reveals who he believes to be behind the conspiracy: George Soros. Is he right? Decide for yourself. I’ve read one of George Soros’ books, and he sounded like a reasonable guy to me… but…

Glen Beck Introduces the Puppet Master Part 2

The Puppet Master Part 1

The Puppet Master Part 2

The Puppet Master Part 3

So there you have it. The (or one) conspiracy revealed. Perhaps. Even if Glen Beck is right and George Soros is conspiring to bring down the USA, one then has to decide whether that’s a good thing or not, of course. It doesn’t look so good to me to be going against the democratic wishes of the US people, such as they are, and replacing them with, frankly, a global, undemocratic, corporate state, which is probably what would happen (given that George Soros is a) very rich and b) alleged to be a fan of Edward Bernays). In a previous post I have linked to the astounding videos of “The Century of the Self” which are all about how Edward Bernays’ legacy has changed society into an advertising-driven amoral sheepopolis.

Even if that doesn’t happen, and even if George Soros’s intentions are good (hypothetically assuming Glen Beck is right), it still doesn’t mean it is a good thing. Why? Because many human beings are psychopaths and see the rest of humanity as cattle to be used or abused for their own purposes. Any monolithic power structure, especially an undemocratic one, will sooner or later be taken over by such people as we do not yet have the technology or social barriers to stop them from doing so. A one-world government, until such time as we do, will be a disaster for humanity.

Furthermore, even without the psychopaths, humans are bad at government. While many governments are truly terrible, even the good ones are wasteful and incompetent much of the time - but at least we can to some extent vote with our feet and leave the bad ones behind by emigrating to what we hope may be a better-run country. But what do we do if they’re all more-or-less the same? How likely is a global revolt? Even in small, very badly run countries, revolts are rare events.

We all know, I suppose, that the world is getting over-populated; that we’re depleting the world’s resources and exterminating species at an alarming rate… and that there’s nothing much you and I can seem to do about it. Sure, I can recycle a piece of paper and a tin can, but when the local Council at at the same time leaves lamp-posts lit all night, heats council buildings day and night, summer and winter, when shops leave their lights on all night for security and advertising, the little bit I can do, frankly, looks stupid. Think global, act local: yes… but is this really getting to the root of the problem? I don’t think so. What exactly is the problem? Overpopulation?

Well, the conspiracy theorists would have us believe that the powers-that-be want to reduce the world’s population to below 500 million people, and maybe they do. But that, I think, is a negative solution, and only partial at best. Certainly, if we extinguish humanity entirely, our problems will indeed be solved. But partial/total extinction is the solution of the unimaginative.

Instead, I think we have to look at what is driving the problem in the first place - and it isn’t just humanity’s propensity to breed like crazy. After all, wealthy humans typically have far fewer children than those in poverty, since they can be sure their offspring stand a good chance of survival into adulthood. So we need to look at wealth and poverty. And, we need to go one step further than simply looking at abolishing poverty as such, because that is probably impossible with our current economic system. Instead, we need to look at the economic system itself.

The economic system of the world can be summed up under the name, ‘capitalism’. I know we’re all supposed to say that capitalism is good, and maybe it is indeed better than some of the dire systems that have been tried before, at least when it is coupled with democracy and personal freedom, but it is also extremely wasteful. Capitalist production, and the full-on ‘free-market’ system, in fact require massive overproduction in almost every area of production. We have a name for this: it is called, ‘built-in obsolescence’.

It is hard to think of exceptions to the rule of built-in obsolescence, actually. What the rule is, is that any product has to be made so that it wears out, deteriorates, or otherwise becomes obsolete, in as short a time as the market allows. Why? So that the producer can sell you another one. Think about it. If every light bulb lasted a lifetime, once every house had a dozen or so, what would the manufacturer do? Go out of business. This is why light bulbs these days are only guaranteed for 1,000 hours of use (it used to be 2,000). This is why people are encouraged to trade-in perfectly good cars every two or three years to get the latest whizz-bang model with nicer hubcaps or to show off how clever or rich they are. This is why people are encouraged to buy all-new clothes every season. Well-made clothes could last a decade. But it is hard to find well-made anything, in any area of production, in fact. Why? Because it is not profitable in the long run.

So, every person in capitalist society is busy purchasing, over and over again, products that could (in theory) have been made to last some 10 times longer (say). Instead of struggling to support some 7 billion people, the planet could be supporting 70 billion. Not that that is necessarily such a great idea either, of course, but it emphasises the wastefulness of our economic system.

I don’t know if there’s enough farmland to support 70 billion people. I have read that, well-managed, the Earth could probably support 20 billion. But we are not managing it well.

Capitalism is so-called because it is based on the notion of making a profit: of accumulating ‘capital’ (a large collection of spare dosh). The profit motive is, we are told, the best way we can think of for motivating people to work together productively. Well… is it? According to one study that I can’t locate at the moment, even in the ultra-capitalist USA, some 50% of the population in fact help out with some of their time on charity work at least occasionally. And being a parent is not exactly a capitalist enterprise either, is it? Yes, people have a profit motive; but they also have a community motive: a motivation to help one another to build a better society for ourselves and our children. This too is part of human nature. We are social animals. Even in the anonymous big cities, most people obey the rules most of the time to keep the system running as smoothly as it can. So other systems are a possibility. This may seem like a remote possibility at the moment, but we have grown up in a society brainwashed by aspirational advertising seeking to part us from our money and our common-sense. It is hard to peek beyond the boundaries; to see beyond the ‘matrix’.

How can the psychopathic plutocrats who control our world be persuaded to give up their seemingly endless thirst for money and power to save the planet? Well, I don’t know. Sorry. But being aware of the nature of the problem has to be the first step. And purchasing based on quality and necessity rather than fashion or the need to show-off may help a bit too.

One area where individuals can make a difference, perhaps, is in farming, strangely enough. The world’s farming system tends to transform land from fertile natural environment to exhausted monoculture to desert. According to Bill Mollison, one of the founders of ‘permaculture‘, this doesn’t have to be so. It is possible to farm sustainably, and even city dwellers can sometimes contribute to this. His book Permaculture One: A Perennial Agricultural System for Human Settlements started a bit of a movement on this subject, and in the video “In Grave Danger of Falling Food” below he shows how it can be done. I haven’t started growing tomatoes in my bedroom just yet… but it is not impossible that I might, either…

When the USA gets a cold, the rest of the world gets the ‘flu… so the saying goes. Well, it seems the USA is about to get the (economic) ‘flu… do we get a cold? I doubt it somehow. This documentary from 2008 shows firstly the terrifying state of the US government debts, and secondly, why it is important (they state it mildly - the US will be under the thumb of its bankers, mainly China. This effectively means that their ‘empire’ will end and by extension the Western empire will end; US citizens will be in hock for a generation or more; poverty will be commonplace).

Putting it more strongly, it means US citizens (and others) will end up effectively as slaves, working to pay off irredeemable debts all their lives. In short, freedom is good, but you cannot sustain freedom without financial responsibility. To me, that is just the way the Universe is constructed. Money represents freedom of action. Without the one, you can’t have the other. Debt equals slavery.

The West has a demographic time bomb as well: the average age of the population is increasing so much that not enough workers are available to pay for pensions, healthcare and so on. Clearly, governments in Britain and the US are dealing with it, secretly, by allowing huge numbers of young immigrants from Eastern Europe and Mexico respectively to enter the countries (while pretending to be tough on immigration). Well, fine, but it will alter the cultures of these nations. And anyway, the debts in the USA look too big for this to work too well. But… maybe they’ve done their sums. I’d like to see them. The video doesn’t address this possible solution, mind you.

We are semi-blissfully going about our daily business thinking that maybe the ‘Credit Crunch’ wasn’t so bad after all… a little hiccup maybe, but not so bad. But, actually, there are a lot of problems lurking, not least of which is the massive debt both governments and individuals around the world are contending with.

The problem with debt, basically, is that it needs to be paid back, or, it is necessary to default on it. Either solution messes up the economy. Either solution messes up your and my finances. If we divert funds to paying it back, that money isn’t being spent on productive capital, or even on goods. It is money down the drain. If we default, well, our creditors have money shortages instead. Either way, we all lose.

Economies historically deal with huge national debts in one of two main ways: economic recession (or its extreme version, depression/panic), or inflation (or its extreme version, hyperinflation). Recession sees prices falling, jobs getting lost as businesses can’t make a profit or jobless consumers can’t consume, and so on. Inflation sees prices rising rapidly and consumers not being able to keep up, and, after a time, jobs getting lost as businesses can’t make a profit because they can’t afford the raw materials or customers can’t afford the high prices… Depression and hyperinflation are extreme versions of these and can be quite terrible.

After the Credit Crunch (caused entirely by slack regulation of the financial markets by governments around the world, encouraged by free-market economic theories (not that the alternatives work so well either)), governments had basically two choices: stand back and watch the economies of the world slump into depression, or print money (sorry, euphemism of the day: “quantitative easing") to try and cancel out the collapsing money supply as shares and banks tumbled. Well, they chose the latter and printed money (or, really, sold treasury bills and reduced interest rates - effectively the same). In the UK they only did this enough to cancel out about half of the slump, however. That is one reason why our economy isn’t recovering much yet the recession hasn’t been so intense either (on the surface). Nevertheless, this amounts to a huge debt which is going to have to be paid or defaulted on. In the US they’ve gone further and the outcome is much the same so far. This video suggests the outcome is going to be hyperinflation. The video makers have their own political free-market axe to grind (and as I mentioned free-market theories led us into this mess in part), but the evidence that the economic ramifications of this mess are still working out seems pretty good. Oh, and if, unlike me unfortunately, you happen to have some spare cash, it might be worth investing in silver, apparently…

Well, I haven’t done any writing today… it is the weekend and I feel like a bit of a rest. For today, anyway. However, that doesn’t mean I have been doing nothing. I have been thinking that maybe I might add more links to my blog… links to things of interest to me, and maybe to you too… After all, I surf the Internet a lot, and I read a lot, so why not do something with all that ‘activity’ (for want of a better word)?

So… First up… how observant are you? Try watching the colour-changing card trick… (video) - tip: watch it to the end!

Next, I have been thinking about economics and all that lately. Currently I am reading Hernando De Soto’s “The Mystery of Capital” in which he reckons he may have hit upon the reason why capitalism works so well in the West and so badly for the other 80% of the world. His answer, in a nutshell, is property rights - people who can’t obtain proper legal title to their home can’t get loans or investment to start businesses. Plus, of course, bureaucracy in much of the world is ridiculously cumbersome, slow and expensive. He has set up the Institute of Liberty and Democracy to assist governments in implementing the political and legal reforms necessary to get things moving.

Finally for today - I have been thinking about how I might make my fitness regime a little more interesting. But I don’t think I’m going to try this: free running or parkour (video).