24 December 2007
Firstly, the foolishness of 'economic development' within a capitalist mindset was made manifest. Take the town of Tewkesbury. Lying at the confluence of the Avon and Severn Rivers it is always going to be at serious risk of flooding. The Abbey there has stood and remained dry for 700 years, but this year it flooded. The reason was unwise building further up the river, removing the possibility of the water moving onto its natural floodplain. Something those who lived in the Dark Ages were surprising enlightened about.
When new housing developments are put in the flood-plain the supermarkets that enable the profiteering are given a superior position on a concrete plinth. Like the cathedrals of old they are now the most revered constructions. Unfortunately, in Tewkesbury this meant that when the flood came people in Morrisons were stranded on an island and had to spend the night in the cafeteria.
Tewkesbury has another flood-plain development planned. This July it was called The Watermeadows but its name has miraculously changed to The Meadows during the summer.
Surviving the floods was a salutory experience, and a very uplifting one after the initial panic had subsided. We amazed ourselves with our resourcefulness, as we found Heath-Robinsonesque ways to channel rainwater into our toilets and wash five heads of hair with half a bucket of water. We found out who our neighbours were (and look after the vulnerable ones) and we found out where our electricity and water came from (amazed that we had never known!)
We were instructed not to flush our toilets with drinking water - some of us realised that this is in fact what we do everyday and thought about ways to make our water use and distribution system less wasteful in future. The most important thing we learned from the flood was that the greatest resource we have is each other, and that in a crisis we do look after each other.
Looking further afield, I was interested to see how attitudes to economic development have changed in Thailand, partly as a result of the tsunami. The country has turned its economy in the direction of sufficienty rather than export-led growth. They are building self-reliance and reinforcing their local communities, as well as finding inspiration from the workings of nature.
2007 has been the year when many people - sadly not many politicians - have started to think seriously about the economics of climate change: about how it will affect their ways of finding daily necessities and the way they interact with their environment and each other. Tweet
18 December 2007
Of all the infuriations that arose in my troubled breast during the tortuous days of the Bali discussions the most poignant was the coincidence of the signing of the 'Lisbon' EU treaty, a day before all the HoGs had to be in Brussels, meaning that they had to fly specially to Lisbon only for the tacky signing ceremony, accompanied by lift music. A vast outpouring of C02 just to inflate some Portuguese egos.
I know there are some good people involved in these talks, and I truly wish them well, but the angrier and baser part of me just wishes they would all just fucking shut up. The sight of their hypocritical staged concern while they destroy my planet is more destructive to my soul than can be soothed by the minuscule progress that may have been achieved. How many of those participating are unaware that they can never get anywhere because the negotiators are in hock to the economic interests that cannot tackle climate change without voluntartily giving away their wealth and power?
The pictures show the signatories in Lisbon and the negotiators at Bretton Woods, where this whole crazy system started in 1944. We will never solve the one without addressing the other. A money system based on debt and enforcing geometric economic growth can enver be compatible with sustainability. (I couldn't find a photo of the actual negotiators in Bali - please help if you can). How much has power shifted in the past 60 years: one female out of 27 is an infinite improvement, mathematically, over the no women at all around the table in 1944.
Perhaps the most dangerous thing about negotiations such as those at Bali is the temptation to be sucked into all that displacement activity while what we should be doing is taking the power back into our own hands and sorting out our own economic and social realities. Planet-saving begins at home, not on some paradise island. Tweet
13 December 2007
It is not clear how this money was 'created' but it was probably by the selling of government bonds, in other words increasing the value of the public debt that we will have to pay off through taxation. Since there is no asset to balance this debt the central banks are guilty of just the sort of monetary inflation that the government says is impossible when policemen want a pay rise. Such action is defensible, it seems, when it is financial investors who want a pay rise.
Is it the fact that the word 'inject' is always used about the creation of debt-money by central banks in this way that leads journalists to use the metaphor of a drug pusher, encouraging debt-addicted banks to go back for another fix? To me the more appropriate metaphor is that of the weak parent.
The role of the central bank is to ensure what the jargon calls 'fiscal probity', which means not lending in an irresponsible way. But how could banks judge what is responsible or not when lending to people to gamble on the future value of unplanted cocoa crops is acceptable? No clear boundaries here. And when the unruly children see their playfully created 'financial instruments' blow up in their faces they are not punished or even reprimanded but simply payed off and allowed to continue. No tough love in the world of banking.
Since the reserve ratio (the proportion between bank lending and assets of real value held in the banks) was abandoned, central banks have only required that commercial banks act with prudence. The purchase of junk assets, such as mortgages held by people with no incomes to pay them back, is a clear example of imprudent behaviour. But do the central banks punish banks for this? Of course not, they just enable this sort of lending to continue.
Central banks, and the governments they answer to, are in an uneviable situation of their own making. Following the ending of credit and exchange controls, the deregulation of financial markets, and the ceding of control of monetary policy to banks by governments, political control over money has been abnegated. The role of politicians was to ensure a money system that served the real economy and our interests as citizens. The role of banks was to maximise profits for shareholders. If things are as bad as they currently seem, and the whole monetary system fails, this will be a disaster for us all.
To see what happened when Argentina experienced a 'credit crunch' see my article.
For more on the creation of money see Richard Douthwaite's excellent (and short!) book The Ecology of Money.
Or you could buy Market, Schmarket where this is covered in Chapter 6. Tweet
10 December 2007
First there was PFI, in order support which you would have to believe that corporations would cheerfully pay for us to have hospitals and schools now, on the cheap, out of the goodness of their hearts. Then there was the International Finance Facility, which funded 'development' in poorer countries along similar lines. The latest is the vaccination scam, that not only leaves debts for future generations but also lines the pockets of the big pharma corporations.
Unison Scotland have produced a report (http://www.unison.org.uk/acrobat/atwhatcostoct07.pdf) detailing the costs of some of these projects and making it clear how horrendously we have been ripped off by a policy that never amounted to more than jam today at the cost of horrendous debts tomorrow.
According to the report, Scottish PFI/PPP contracts could be costing around £2.1 billion more than conventional funding. The NHS in Scotland is now having to pay rent to the companies that built the hospitals of some £2.4bn. ‘UNISON Scotland’s analysis of official figures from 35 schemes found that estimated public sector comparators (PSCs) were 6.4% (median) cheaper than the contractors’ bids. For just these 35 schemes, that means almost £720m is being wasted - nearly enough to pay the whole of the PFI bill for Wishaw General Hospital.’
In 2006 a report by the Centre for International Public Health Policy at Edinburgh Unversity, found that the debt for the NHS will be far greater than the investment provided by PFI schemes: £2.4bn. compared with £602m. No prized for guessing where the difference has gone.
What is the cost of this to the private sector? They usually argue that the vast sums we pay are to underwrite their risks (there’s that word again), although the risk involved in building a hospital for an ageing population for which you have no shortage of demand and a single captive customer can never have been that great can it?
But in fact we are paying for the risk involved in these contracts – to the tune of £3.5bn. for an insurance policy in case anything goes wrong. And of course if anything does go wrong, as in the case of the tube and the nukes, we know who will really end up carrying the can.
The dubious scheme is being expanded countrywide. Mark Hellowell and Alyson Pollock, authors of the report, estimate that the annual cost to the NHS will rise from £107.1 million in 2005/06 to almost £500 million within the next five years. The mystery about how so much extra spending on health has achieved so little appears a mystery no more. Tweet
4 December 2007
So, since the purpose of this blog was to draw attention to my book, I'll include a picture of the cover here, with some extracts from reviews at the end of this post. You can order if from a bookshop or from me (email@example.com)--best to avoid Amazon! You may also be interested in the internet showcase I share with other green economists of like mind: http://gaianeconomics.org/
The blog is a new form of writing, somewhere between a haiku and an essay. I have really enjoyed learning to thrive in this new medium and nothing beats the thrill of finding comments, particularly those from regular readers. Many thanks to you. Another high point of the year was being targeted by Tory bluggers: a hurtful but confirmatory experience.
So, thanks for your votes. Please keep reading and consider giving me that little thrill! We all have a right to comment on the economic issues of the day.
'Just occasionally, you read a book that gives you an Archimedes-in-the-bath moment. Market, Schmarket is one of those.'--Mark Anslow in The Ecologist
'This is an ambitious vision building book which provides analysis, a historical review of other economic structures and directions for solutions all packed into a readable 180 page paperback. Overall, this is an energetic and stimulating addition to any co-operator’s resource box but Cato intends the book not only for reflection but also for action. So perhaps we should say: buy it, read it, get it in your library, form a book group, act on it!'--Mike Aiken in Journal of Co-operative Studies
'Her critique of capitalism extends to its intellectual lap dog neo-classical economics. She describes conventional economic theory as a ‘catechism’ and demolishes its fetishised concepts such as perfect competition and rational economic man. . . this book is a radical green analysis that provides hope and inspiration by linking a critique of capitalism with new analyses and possible alternatives'--Mary Mellor in Capitalism, Nature, Socialism
'Full of practical examples and suggestions, this is a courageous book which draws on history and the many current strands of critical economic thinking, and attempts to weave all into a coherent whole.'--Nadia Johanisova on the FEASTA website
'Cato’s book challenges us to look afresh at our economic system and to recognise that regulation and reform will not solve the problems it presents. Instead, the values upon which economic activity is based require fundamental re-evaluation. She provides abundant thought-provoking historical and contemporary material that demonstrates the principles upon which a post-capitalist society could be founded.'-- Brian Westbrooke in TeAwa, magazine of the New Zealand Green Party Tweet
2 December 2007
[really nice cartoon removed due to copyright conflict: hope to resolve this soon!]
What is the cost of such ardent prophylaxis? The 14.6m doses already purchased on our behalf have cost us £200m., so we will soon be sending another sum of the same size to Roche. Doubts have been raised about whether the drug is effective and the proposed solution is--to also buy another similar drug, Relenza, just in case. Back in 1999 then Health Secretary Frank Dobson respected the opinion of Nice that this drug was so ineffective as to be a waste of money. Threats of legal action from Glaxo soon reversed this decision.
I can't help wondering how much of Johnson's enthusiasm is related to his support for big pharma rather than a realistic assessment of how much Tamiflu we are likely to need. His scientific back-up is not of the most credible variety, coming from chief medical officer Liam Donaldson, he who told us all we were risking blindness by daring to watch the eclipse.
According to its manufacturer, Tamiflu lasts only four years, so this could represent a fairly constant stream of cash for Roche so long as our fears are kept topped up by stories of dead swans, a new marker that winter is finally here. There are big profits in our fears. Perhaps we should all get more of a grip on ourselves. This may be a more likely way to reduce our taxes than another round of civil service job cuts. Tweet
27 November 2007
I have long cherished a vision of how a caring, sustainable economy will replace corporate capitalism. I imagine a hacienda set deep in the South American jungle. It is covered with graffiti and has broken windows--markers of previous violent attacks which failed. But the jungle is more persistent and powerful than the colonial power and green tendrils creep around the building and through the windows until it is completely overwhelmed by nature.
I was reminded of this vision when I first heard Rob Hopkins talking about bringing productive trees and plants into the city. Why shouldn't our verges and parks throng with whortleberries and wild strawberries? Here in Stroud the town council has agreed that in future trees planted in the town should be fruit-bearing. We already have one of our main cycleways planted as a linear orchard, preserving local apple species and providing fruit and conviviality in the autumn
Shortly after I read about Havana's organiponicos, or urban gardens, often roof gardens, I gave a talk in Birmingham called 'Who Will Feed the Cities?'. Walking back to the station through the urban moonscape that is central Brum I began to imagine the car parks filled with productive raised beds, and vines and fruit trees trained along the brick facades.
It has cheered me no end to see a similar vision being shared by advertising creatives. I first noticed the Baxters Farmers' Market soup advert, where the urban cat is replaced by a piglet and a bride's bouquet is made of carrots. This was followed by an advert for E-On where giraffes invade the office and a beaver is found in the water-cooler.
It seems to me that this is the opposite impulse to that which continues to drive well-paid executives into the countryside, which they immediately neutralise and suffocate with their 'city ways'. How welcome to see an invasion of the city by revolting peasants and their filth. Tweet
24 November 2007
22 November 2007
19 November 2007
In his excellent book Money and Liberation, Pete North describes the struggle to maintain democratic control of the issue of currency in the post-Civil War US. Farmers organised against the 'tyranny of organised capital' and called for democratic paper money rather than the gold-backed money which allowed elites to dominate the economy. Their struggle culminated in the presidential race of William Jennings Bryan as Democratic candidate in 1896. He lost to McKinley, whose campaign had been supported by the plutocrats who reordered US capitalism and tied the dollar back to gold.
In the 1930s, following the collapse of this phase of capitalism, farmers in the South and West of the US again responded by producing their own currencies, known as 'scrip issue'. Nobel Prize-winning economist Irving Fisher supported this development, as did Upton Sinclair in California. His End Poverty in California movement promoted scrip issue as a means of exchange between co-operatives.
In the US today complementary currencies are more about ecological imperatives than poverty, but from Berkshares to Ithaca hours they are providing inspiration and underwriting alternatives livelihoods.
Given this history we should perhaps not be surprised that last week FBI agents raided the offices of the Liberty Dollar in Evansville, Indiana and confiscated the precious metals used to back this local currency. The activists who created it are reacting against the link between the dollar and global hegemony and war, as well as sharing the general loss of confidence in the dollar as reserve currency. Confidence in the dollar is falling globally and several of the nations who are bankrolling the US by buying government bonds could pull the plug on the whole US economy at the time of their choosing.
Aside from control there are sound financial reasons why bankers wish to keep control of the issue of the money we need to function in a complex economy. Conall Boyal has calculated that, if the Chancellor took the seignorage on money created by private banks there would be an extra £80bn. in the UK kitty. At present this money stays as bank profits. See more here: http://www.conallboyle.com/housing/SeigniorageBromsgroveoct07v2.ppt#22Tweet
17 November 2007
31 October 2007
30 October 2007
In an attempt to increase the 'efficiency' of this process some of the animals' fat will apparently be rendered into biofuel. It is a wonder to me that anybody has the machinery standing idle to perform such a grisly task. Surely the recyclers of used chip fat cannot turn their skills to rapidly towards the unwanted carcases of animals formerly destined for dinner tables?
The anguish over the 'cull' (aka kill) of animals during the first round of foot-and-mouth was always a mystery to me. Why such an outcry over the deaths of animals bred to be killed and eaten? Where did this mawkish sentimentality come from when those who displayed it were not concerned about tucking into to roast lamb and all the trimmings of a Sunday lunchtime?
Aside from this parade of phoney morality there are some genuine ethical issues raised by this whole debate. First, whether it is ever acceptable to eat the flesh of an animal. I am happy to do that when I know the animals have enjoyed respected during their lives; in the case of my own meat I have known the animals by name and been able to interact with them. Counter-intuitively this makes it easier to eat them rather than harder.
Other difficult questions--as yet unresolved to my satisfaction--revolve around the question of whether a wholly vegetarian lifestyle is more ecologically sustainable. I have not yet seen convincing evidence that the UK could be self-sufficient in food grown without animal or oil-based fertiliser. Too many vegans in the UK today are forced to eat a large range of imported foods, especially beans and pulses.
Then there are the double standards of those who are vegetarian and continue to eat dairy, when the dairy industry is closely tied to the meat industry, since male calves can only be put into the food chain or destroyed (http://www.vegaresearch.org/foodnut_vegani_going.asp).
It seems to me that the central economic problem we face here is the setting of all these questions within an intellectual framework dominated by market and profit. The 'wasteful' slaughter of cattle and sheep during a foot-and-mouth outbreak is entirely market-driven. Vaccinated animals are not acceptable for the export trade, while animals that have survived foot-and-mouth (as most do) will weigh less and therefore generate less profit for the cost of raising them. Since they offer no threat to human health, they could otherwise pass into the food chain as they do in other countries.
In a similar way the Welsh and Scottish hill-farmers are involved in production on an industrial scale that cannot allow for flexibility in terms of the quality of product (slightly older sheep) or when it reaches the market. No doubt the lamb that will be produced over the next few weeks would be welcome to many hungry mouths in this country and abroad. But this would be to 'distort the market'. Similar arguments were made during the Irish potato famine when oats were being exported to feed horses in the UK while Irish people starved.
The story offers yet more reasons why we should explore the ethical underpinnings of the market within which food is produced, which was always a social construct and therefore open to a different system of values and to a radical reconstruction in line with the general welfare, rather than the profit margins of the large-scale businesses who have created the dubious and far-from-free market we operate within today. Tweet
25 October 2007
22 October 2007
Let's start with the easy stuff. The number in itself is meaningless unless I know how many green blogs I am contending with. Last year it was 100; this year only 20. Has Jim eliminated the rabble to allow more glory for those of us who remain? Or have the serious people found something better to do, so that even being 7 out of 20 only proves I have been left behind in the rush to the next great media revolution?
Perhaps Jim didn't even rank the list, allowing the citizenry to do that via the People's Vote. And if he did how does 7 compare with 1: is it seven times less good? Are we dealing with logarithmic scales here? Incidentally, while I'm on the subject of numbers, have you ever noticed how, when media people get into discussions like this one, they start referring to rocket scientists. As though finding ways to travel to other distant planets to colonise and mess them up were somehow cleverer than finding a way to survive on our own beautiful planet, which already has life on it.
What is distressing me most about this process is that I actually care about it. I am a sad competitive person masquerading as a co-operative green who isn't interested in status. Can I blame it on capitalism, the need to compete to survive, or is it just my personal karma? This is summed up by the fact that my deepest regret in life is never having been on University Challenge, although this may now have been surpassed by the regret that I didn't write the book called Starter for Ten.
Oh, shit, there it is again: a number. Why ten points for a correct answer, rather than 1 or 20 or 200? That is such a University Challenge thing isn't it? You know what: I've depressed myself. This strange relationship with the numerical is what being an economist does to you. . . I would still like your votes, though. You'll have to go to Jim Jepps's site at: http://www.jimjay.blogspot.com/ to help me out of my misery. Or will it just make it worse? Tweet
18 October 2007
16 October 2007
10 October 2007
It is a curious fact of life that the staple starchy foods of the most developed societies are grains. And an increasingly important one, as many of these grains are now being used to produce biofuels. As Rob Hopkins, founder of the Transition Towns movement in the UK said recently at a conference I was at, biofuels offer us the unattractive future of starving to death in a traffic jam. This future may be closer than we thought.
The first nation to experience a threat to their national staple have been the Italians, facing 30 per cent increases in the price of pasta as a result of an international shortage of the durum wheat used to make it, 40 per cent of which is imported. Italians have relied on imports from overseas, especially Canada, but the Canadians are putting their own needs first, or selling grain to the North American biofuels industry instead.
Last year the price of our national staple, bread, rose as a result of drought in Australia. This year's bizarre weather patterns have also affected wheat harvests. The National Association of British and Irish Millers (yes there is such a thing!) documents increases in wheat prices and predicts further increases this autumn. An all-time high of £190 per tonne was reached in August, with increases to £192 predicted for next month, some £90 per tonne higher than the equivalent period last year.
I'd like to feel smug about this and say that relying on my local community-supported agriculture farm, which is a short walk away, has insulated me against the vagaries of the global capitalist food distribution system. The problem is that while the theory of that is fine--closed loops, self-provisioning, minimal foods miles and so on--virtue is no insurance against climate change. First we had drought, then we had floods and all year we have had a plague of slugs. The potato blight has been something biblical.
In terms of national policy I would still feel considerably more confident if we were not so reliant on one foreign breadbasket or another to dispatch laden trucks over increasingly long distances to provide us with the staff of life. I wonder how long we will be waiting for a national Food Czar to be appointed. Tweet
5 October 2007
26 September 2007
20 September 2007
The ashen hero, brought low by his hubris, enacted a classic moment from Greek tragedy. He had overestimated his power and faced humiliation. His efforts to prove that the British government was in control of the British currency in fact proved the reverse: since financial deregulation and the globlisation of currency trading the large players in the markets are more powerful than governments.
So what can we expect to happen to Mervyn King today? He appears to have become a victim of his own economic theories, failing to see that phrases such as 'moral hazard' have always been merely fig-leaves to cover the political manoeuvrings of the dominant forces of capitalism. It is the owners of capital who really control the economy not the espoused objective and neutral forces of the market. When King refused to allow the banks the extra money they demanded surely his fate was sealed.
The agent provacateur of this drama appears to be another former Chancellor, Kenneth Clarke, who has been sharing his avuncular opinions across the range of media outlets. Views on why him, and what his game is, would be welcome.
Meanwhile focus on the need to change the 'tripartite' regulatory system is misplaced. Rather we need a system where politicians have the courage to take back political control over the monetary system, and to replace money creation by banks, as debt, with a system where government spends money into circulation for the public benefit. A truly creative solution would link this to carbon rationing and both a business and individual carbon trading system. Tweet
18 September 2007
14 September 2007
The key objective of spokespeople from the financial casinos is to reassure us. If we really thought about how unstable our financial system is, we would instantly take fright and the system would fail. This is why we have Angela Knight, Chief Exec. of the British banking industry, explaining in calm and measured tones on the Today programme that we have nothing to fear.
Ms. Knight, former Tory politician and Economic Secretary to the Treasury in the last years of the previous Tory administration, exemplifies the way politicians and bankers collude to back up a financial system that enshrines inequity and instability. For more on her activities check out this profile by the Independent: http://news.independent.co.uk/business/analysis_and_features/article2300459.ece
Nowhere are the metaphors of economics as myth and catechism so beloved of green critics more apt than in the arena of finance and banking. While we might imagine that the cited value of banks and building societies relates in some way to their holdings of property or real assets, in fact the only support they have is our faith. Without confidence, investors will recall their money and the financial institution will be unable to pay. Risky lending may have enabled the banks to create cash and boost their profits, but if debtors begin to default the gap between the banks' assets and their ethereal value will become clear and bank failures will occur.
The problem for Northern Rock is that those with more inside knowledge than we are privy to, in this case other banks, are refusing to lend it money to conduct its business. Presumably they feel that the building society's recent huge expansion of mortgage lending has not been prudent. If too much of its asset base is made up of grossly over-valued houses, a small fall in the housing market could lead to insolvency. The intervention by the Bank of England as 'lender of last resort' to plug this liquidity gap has not happened since the oil price shocks of the early 1970s.
So we should listen carefully and watch the manoeuvrings of the high priests as they intone their incantations and weave the myth of security and stability, a myth encapsulated in the name of the very institituion that is wavering: the Northern Rock. What we have seen this morning is the government and the banking industry working together to convince us of the solidity of the system. The black knight and the Scottish darling clinging together as they glimpse the potential disaster of the whole financial system, and then the whole unstable economy they believe in, hitting the rocks. Tweet
12 September 2007
6 September 2007
It has been an interesting few months of talks, rest, reading and festivals. I know that most of the original and creative work I do happens during what is officially labelled as 'holiday' and that most of my good ideas come when I'm sitting on a bus or lying in bed. Strange, then, that I value the hours spent here, staring into a luminscent screen, giving myself RSI so much more.
Of the many things I've learned over the summer the most exciting is about Country Markets. As part of a commitment to encouraging local trading we developed a concept of 'fayre trade'. This takes as read the principles of fair trade, but supplements them by a commitment to reducing consumption and substituting local production and exchange for involvement in the globalised market wherever possible. However, having learned about Country Markets I am beginning to think we may have been reinventing the wheel.
My own product is face cream, based on my own need for something to deal with my arid skin which splits and re-splits throughout the winter. Producing it to a standard I'm happy with is surprisingly easy. I'm using organic ingredients and recycled jars collected from friends, and trying to keep inputs as simple and local as possible. The energy embodied in conventional, petroleum based skincare products is shocking, not to mention the unpleasantness of smearing paraffin on your skin.
Creating a market for such products is more of a problem. Legislation is widespread and intimidating and probably devised by the corporate-dominated EU mandarins to deter the small trader. But Country Markets, formerly part of the WI but now hived off, has found ways around this, including fighting the notorious Jam Law through the House of Commons in the early 1980s. Their local markets offer the opportunity for the small, local producer or enthusiast to trade at minimal cost. Despite the traditional jam and cakes image of the WI market, produce is not limited to food. It costs only five pence to join and is genuinely co-operative. For more see http://www.country-markets.co.uk/content.php Tweet
8 August 2007
I spent a small but significant amount of time yesterday searching for a cost code to justify the spending of 60 pence. I mention this partly, I confess, to get the frustration and rage that caused me to scream in my office and cause consternation to my colleagues out of my system. But also to offer it as an example of how, in an era where the accountant is an unlikely king and accountability is espoused on all fronts, the petty is rigorously enforced whereas fraud on a grandiose scale is routinely ignored.
I am thinking, you will have guessed, of corporate fraud, of the type practised by Enron executives. Inflating the value of your stock by counting money you haven't received or even invoiced for yet. That particular techniques, known as counting 'unbilled receivables' was invested by the leading accountancy firm then called Arthur Anderson. Oil companies also engage in this creative accounting when, as Shell recently admitted it had done, they overestimate the value of their reserves, which, in oil companies terms, is the value of your companies and hence your stock.
It appears that the rule is, the more preposterous the fraud the more unlikely it is that we will notice. As Kierkegaard famously pointed out about Christianity, if you want to get a whole mass of believers you need to create a really big lie. Which brings me to the money system: the biggest example of fraud that it is virtually impossible for us all to avoid. Galbraith pointed out that the gap between one financial collapse and the last is roughly equal to the length of time it takes those who suffered to forget about it. You can find it detailed in economics books, but who is daft enough to wade through those?
So, here is a brief quotation from Galbraith about how the last crash came about:
Speculation begins when a price is going up and the presumptively wise expect a further increase. They buy and thus produced the increase. More buy, and more and yet more are attracted. Each price increase affirms the good sense of those who have bought before. Those who doubt are reviled as creatures of defective imagination. The buying and the supporting mood continue until the available supply of mentally vulnerable, economically viable buyers is exhausted. Then come the changed views of the prospect, the rush to get out, the pressure now of creditors demanding repayment of the loans that financed purchase, thus forcing sale. In short, the crash.
Sound familiar? I wouldn't be taking on too much debt if I were you. If you own bricks and mortar it is still yours after the crash. But if you own debt it will not be very much use to you. Tweet
25 July 2007
16 July 2007
Lydia has created utopia in a small patch of the South-East. Thrift Cottage is named after Anne Thrift, who left to Lydia the right to inhabit a small patch of Welwyn which she had enjoyed since before the passing of the Town & Country Planning Act in 1948. It so aptly describes the approach Lydia, and more recently her husband Robert, have taken to building the home they share with Scarlett.
Regular readers will wonder about my scatological tendencies, but I none the less need to share my excitement with Lydia's bathroom. Her toilet is a long-drop compost loo. You sit on a beautiful piece of retrieved hardwood which is always warm to the touch. You sprinkle a small quantity of fragrant sawdust, rather than flushing away your shit. All this takes places in an environment of tranquility, with wooden bookshelves and built-in wooden cupboards.
The whole eco-house exemplifies the attitude towards life that we need to foster to live in balance with nature. Opportunism is a key feature, with bricks, slate and wood scavenged from local skips and building sites. This is the Robinson Crusoe approach to building—making use of what your local environment provides—rather than driving to a builders’ merchant to buy building materials made elsewhere in the world—who knows where? I recently saw building stone wrapped in cling-film. It seems superfluous to mention the embodied energy both in the manufacture of bricks and blocks, and in their transport.
Other highlights included an outside bath: fill first and then heat by lighting a fire underneath, a summer pudding made with fruit picked in the local fruit patch, and a relaxing time spent on the turf roof.
Due to inept maintenance of the tracks and unfriendly timetabling I was forced to spend three hours of my homeward journey in Stroud. It was like a journey from the heights of the human spirit to their miserable depths. While I confess it is hard to imagine what the vernacular building style of Swindon might be, I cannot believe that it could be worse than the uniform blockwork, steel and glass, interrupted by mislaid tent-like structures, that is the landscape of Swindon today.
I made one of my increasingly infrequent visits to Tesco to buy an apple and noticed that the local media story was of a local murder by a young man of his mother and father. It felt possible to understand how somebody living in that degraded environment could be driven to such a level of cruelty and despair. Tweet
11 July 2007
5 July 2007
1 July 2007
John Smith, Blair's predecessor as Labour leader, was also a fervent member of the Church of Scotland. In 1993 he edited a collection of essays entitled Reclaiming The Ground: Christianity And Socialism. The book was produced by the Christian Socialist movement, which numbers many leading Labour ideologues amongst its members, most prominently Tony Blair. In his foreword to Smith's collection Blair wrote:
"Christianity is a very tough religion... It is judgemental. There is right and wrong. There is good and bad. We all know this, of course, but it has become fashionable to be uncomfortable about such language. But when we look at our world today and how much needs to be done, we should not hesitate to make such judgements. And then follow them with determined action. That would be Christian Socialism." Yes, Tony, and that would also be the explanation for the horrendous misjudgement to invade Iraq.
In terms of their denomination, most of the contributors to this short but telling book are Methodists. Paul Boateng begins his essay with the statement that "The Labour Party owes more to Methodism than to Marxism". So it is worth noting that doctrines of Methodism were taken by EP Thompson in his classic study The Making of The English Working Class as the prototype of the disciplined worker. The creation of the punctual and punctilious workforce required by capitalist production systems was far from straightforward, as our ancestors were understandably loath to give up the many "holy days" they enjoyed each year.
This problem was solved by the invention of the ideology of work. It was the Methodists who invented the concept of the "calling": one's work-role in life, as assigned by God in some lottery that was both random and unavailable for inspection. The role of the good Christian was to work hard within whatever calling "God" had assigned, hence the following lines, typical of many Methodist hymns: A servant with this clause, Makes drudgery divine; Who sweeps a room as for thy laws, Makes that and the action fine The "clause", of course, is to perform the act in God's name.
Perhaps the line about making drudgery divine is most telling in terms of Labour's attitude to work policy. It is particularly sickening to learn that the author of this simple hymn, George Herbert, was himself a wealthy aristocrat and MP for Montgomery.
According to the 17th Century theologians, to question one's position in life, particularly one's work-station, was to question God's plan, and hence blasphemous. This was the ideological justification for the creation of disciplined workers, but the weapon that was used to achieve it was fear. Success in one's allotted station was taken as a sign of being favoured by God, and so increased one's likelihood of finding a place in heaven after death. People's energy and time was to be stolen here on earth in return for a promise of eternal life. No wonder Thomas Paine wrote that: "Of all the tyrannies that affect mankind, tyranny in religion is the worst; every other tyranny is limited to the world we live in; but this attempts to stride beyond the grave and seeks to pursue us into eternity." Tweet