So, a common theme that links all of the posts and discussions on this blog is that our economic system is failing us. Climate change and all that goes with it, including the political inability to respond to it can be argued to be the most extreme example of market failure. Politicians wax lyrically about the power of the free market, when we couldn’t be further from that in reality. Fossil fuel is heavily subsidised, as is industrial agriculture and first world countries block the export of finished or processed goods from the majority world. Whilst investment capital is free to move around the world at the touch of a computer button first world governments work ever harder to restrict the corresponding movement of people. Again this point has risen in the fallout of the COP Lima summit that has just finished with another toothless and none binding agreement.
Speaker after speaker at the Global Forum on the Social Economy in Seoul – including the UN and the OECD, not traditionally seen as radicals – told us that our current economic system no longer works. In every country in the world, inequality is increasing, environmental damage is picking up speed, social problems multiply. Here in east London, the combination of a return to ‘business as usual’ following the crash of 2008 with a severe austerity programme from government has increased inequality and multiplied the challenges faced by the poorest communities. – See more at: http://locality.org.uk/blog/learning-local-economic-model/#sthash.47mCfgV5.dpuf
Its time to explore the world of economics and to formulate our own ideas and responses to the challenges thrown up by this reality
Economics lesson: Here is a series of videos and thoughts on the subject of the financial crisis. No single one tells the whole story and together make powerful watching. And of course, this is not over.. the massive reflation of the global economy has only gone to create even bigger asset bubbles and seems to have set up up for another crash, on a much great scale. Maybe crash is to stronger term, but it seems highly likely to me that we are certainly heading for a significant economic contraction, on the scale of Japan in the 80’s where asset prices prices contracted by 70% and have pretty much remained at those levels for getting on for 30 years. So we here we go this is a roller coaster ride and takes us past Max Keiser, the ex Wall street broker turned financial journalist who accuses Morgan Stanley and Goldman Sachs, the lead culprits in a global fraud of epic proportions, leading up to Dimity Orlov who offers fascinating insights into the notion of collapse.
The award winning documentary ‘Inside Job’ [2011 | US] by Charles Ferguson and narrated by Mat Damon is the most insightful and illuminating amongst a number of such attempts that deal with the global financial crisis, which is wrecking lives and economies across the world to this day. This documentary The Biggest Bank Heist ever contains clips and extended interviews from the film, with even more expose on the nefarious dealings that led up to the financial crisis. A good starting point to think these issues through.
The roots of the economic crisis. Here is a BBC documentary that sets out the core economic problem we are facing.. an unpayable mountain of debt. Globalisation has not been a success. The lack of sustainability of the economy mirrors the lack of ecological sustainability of the way behave. Economic turmoil, or a state of near permanent crisis could easily be our best possible future.Part 2 is very glib abd light on solutions and should be much angrier.. we were sold a lie in terms of the Monetarist policies of the 80’s, they created a false consumer boom that lets be honest,a great many of use could see at the time was ultimately leading nowhere. Perhaps the failure of the programme to really grasp the importance of that is its undoing.. still it is an informed overview the sets the scene for much deeper debate we should all be participating in about the future of economic goals in the light of this flawed system, the failure of globalisation, consumerism and the climate change and ecological crisis it has also caused.
Here is part two of the BBC docu…. exploring solutions.. of which there are tellingly precious few… notably the RBS manager who still wants to defend bonus wages bonanza in the city. A key point is the lack of opportunity for the next gener\tion and our failure to invest in education.
If you want another version of this, from perhaps a more alarmist perspective here is the Money Week Magazine advertorial, explaining the approaching debt crisis… alarmist in that they are a magazine trying to sell their ideas.. but they are not wrong in their core analysis of the numbers. They don’t offer up a solution though, just an investment strategy to those who already have money.. which again a is big part of the problem. the current system always favours those who already have money and only exacerbates the differences between those who have capital and those that don’t.
And here is the 2012 documentary..Overdose, the next financial Crisis. We haven’t fixed the problem, but have set ourselves for a bigger crash.
I have to say it is really interesting to see that the house of commons has finally had a debate about the creation of money. The current economic system allows banks to create money at will by giving out new loans. This is still something that the vast majority of people fail to understand. 90% or more of money is created at the stroke of a pen, or rather touch of a key. So here in the first video of this series is Tory MP Steve Baker being interviewed on RT, as the proposer of the bill. This is doubly interesting to see a recently schooled insider who is prepared to blow the whistle on the financial malpractice that is at the heart of our economy as he can clearly see how absurd and unfair the system actually is.
Obviously this deregulation of the banking system is what has set the seeds of this problem so this debate in attempt to start to think our way out of this problem. Taking control out of the hands of the banks – these most undemocratic of institutions has to be a key start point in a joined up responses to solving our economic problems.
Here is Steven Baker at the debate making his proposal
The response from Michael Meacher is also really worth watching and is really informative. I am including the parliamentary debate on this to illustrate that these ideas are not fringe ideas, but are even being discussed at the heart of the system.
Anyone with a developing interest in economics and the fraud and mismanagement at the heart of the financial markets needs to follow Max Keiser and his RT show The Keiser Report. Max and partner Stacy Herbert host one of the liveliest and most informative chat shows out there.. they analyse the financial news, expose the hypocrisy and lies at the heart of the system as well as bringing on leading luminaries to explore their points of view. I have listed two recent episodes that highlight what they are all about, but really it is hard to just jump into their dialogue and get all of what they are saying, it is well worth being a regular subscriber, I never miss an episode!
Max is a former Wall Street trader turned financial journalist and his inside perspective, phenomenal contacts and experience open up a world that was previously hidden from people on the outside. He is a harsh critic of the current system and a proponent of crypto currencies, crowd funding and all sorts of new, more democratic and powerful economic tools that are becoming increasingly at our disposal.
We talk about mass civil action being required to bring about the degree of change required and economic systems are actually that.. the sum total of of how we all interact with each other, yet the system is skewed to favour the owners of capital, regardless of the consequences of that fact. A better understanding of how economics and money work has to be at the heart of a powerful and unified global response to the issued raised through this blog post and the rest of the Sector39 blog.
Finally: I know this is a marathon but I think that understanding all of this is essential to realising how it is that all the possible low carbon, energy efficient renewable technologies out there are not getting invested in as they should be. How politicians cannot allow climate change legislation to pass when it comes to it because the economic forces that surround them wont allow them to. I think we all have to realise that regulation in all is form will never be effective in bringing about seismic change, it jsut manages us into collapse and catastrophe. Change only comes about when every one starts to behave differently. As soon as we act differently, collectively disengage from the current paradigm in whatever ways that we can, we will increasingly send out a massive economic signal that really does have the power to transform teh world. We need to drag the politicians and their corporate sponsors kicking and screaming in the direction we as spopulation require, and not expect the market to lead us to a fair an susainable world, especially not as currently configured.
Orlov on Economics is really insightful into the nature of what we almost completely take for granted here in the West. This is really worth watching, it is slow paced, but consequently gives you time to digest the real meaning and wider consequences of what he is saying. The importance of local economy as the only sustainable system is spelled out with great clarity. Really interesting what he has to say about gifts, largesse and charity.
On rebuilding local economies i stil this is the best book out there.. Richard Douthwaite’s Short Circuit. It is free to read on line and is a great resource as well as a good read. Between what Orlov talks about and this book i think we are looking at whole different kind of approach to how we proceed.
Merry Christmas and Solstice every one, here’s to an abundant New Year!