Titanic Economic Failures Will Lead to Titanic Catastrophe

One of the most tragic aspects of the infamous Titanic disaster is that it was totally avoidable. It was ultimately due to arrogance, hubris and flawed decision-making. And it seems that history is repeating itself. This time, however, the consequences are likely to be far more catastrophic.

titanic1Last week, like the captain of the Titanic, the Chancellor of the Exchequer issued his “Autumn Statement”: a mini-budget outlining the UK government’s plans for administering the national finances. A semi-annual event, this is a legal requirement intended to improve government efficiency and make it more accountable for how it manages the economy. As with most things, however, frequency brings diminishing returns. All too often it can be a bit of a non-event. But not this year!

This most recent statement was considerably more significant than usual. For, while government refuses to admit an about-face, they effectively reversed fiscal policy of the past 8 years. The post financial crisis “austerity” programme, aimed at reducing expenditure and reducing or repaying borrowing, has been binned. Instead government is planning to borrow £122 billion, justified – at least in part – by Brexit. Yet, Brexit or not, such back-tracking now effectively invalidates all earlier efforts. It begs the question, “Why did government adopt that course to begin with?”

There is a natural limit to borrowing. The time comes when you have to repay loans. And repayment comes out of income, meaning there is less to spend on your day-to-day expenses. It happens in all walks of life and is never convenient or nice. Thinking people understood this and were prepared to go along with it, uncomfortable though it was.

Similarly, everyone knows that less money means you have fewer purchasing options and, consequently, fewer resources. For any government department, fewer resources inevitably means a declining standard of service. So you have to ask, “Have services declined to the extent that this change in policy is merited?” And, if the answer is yes, then, “Why did the government ever adopt such a policy in the first place?”

As any housewife will tell you, balancing income and expenditure is not easy. They will also tell you that trying to make up lost ground is extremely difficult, if not impossible. So is trying to maintain or restore fallen standards. You would therefore expect any government to avoid such a state of affairs. Thus, you have to question whether the results of the UK government’s action have not resulted in the worst of both worlds. This makes it a failure of Titanic proportions.    

Titanic sinkingWhat you have here is a classic example of the kind of situation Einstein was describing when he said, “You cannot solve a problem from the same level of consciousness that created it.” The fact is the system that got us into this mess in the first place has failed. And repairing a failed system is pointless: you have to change it or create a new one. Unfortunately there is no evidence of that happening. Instead we simply shift the deck chairs on the Titanic, resorting to old ideological frameworks that will see us bagatelle back and forth between fiscal and economic policies that continue to fail.  It is a disaster of epic proportions that will leave us all considerably worse off than we need to be.

Never before has there been such a pressing need for change. Now is the time to act. It is up to us.  

_____________________________________________________________________________ 

I urge you, please, to get hold of my book, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped, and promote discussion and debate around the solutions it offers so that action is taken to address these problems, restore meaningful democracy and safeguard a better environment for future generations.  

Campaign for Real Change and a New Beginning

The call for change! First Brexit and now Trump. If you doubted it before, you have to believe it now: people are fed up and demanding change! Both results, however, illustrate the problem with protest votes. They also highlight a significant structural flaw with democracy: the rigidity of the process and inability to change.

Both results reflect a yearning for the past. For Brexit this was represented by the desire to “regain sovereignty”, while Trump prevailed with the rallying cry of, “Making America great again.” Whether these represent an idealised perception of the past or not is beside the point: they are calls for real change. The attractiveness of the past is nearly always a sign of dissatisfaction with the present and, all too often, identified as resistance to change. But perhaps too much is made of people being reluctant to move out of their “comfort zone”, and “change resistance” is nothing more than a management term used to justify the inability to “sell” the need for its own vision of change.

13584418 - ploughing on a cloudy spring afternoon

Arguably both results prove that people are willing to change. And, as a species, humankind is naturally curious and thus progressive and up for change.  The desire to go back to old ways is simply the natural choice to return to something familiar in the face of either, or both, unpleasant current circumstances and the failure to envisage a new, viable alternative. This means the current situation is, more than anything, a failure of leadership. And that is the paradox of democracy, because it makes little provision for leadership.

After all, if government (those elected) are doing the will of the people, it means the people are leaders. This is implicit in the ideal that their representatives are accountable to them and can be removed from office whenever the people are dissatisfied. This makes innovation a challenge, as any attempt to introduce new ideas requires popular support beforehand; something that most developed nations have failed to build into their democratic processes.   

As a result the world moves on while our democratic systems remain largely unchanged. Perhaps inevitably, this leads to the kind of disequilibrium we are currently experiencing – where increasingly dissatisfied, disenchanted and disengaged voters feel angry, and express it in the way they vote, or even don’t bother to vote at all.

Unfortunately, this rarely turns out well. In fact, to coin a phrase, it creates situations where you, “vote in haste and repent at leisure.” You are already seeing this after both these recent cases. For example the very narrow winning margins have left those who did not vote the “right” (winning) way unable to accept the results. Thus you end up with anti-Trump protests, (totally understandable when he was elected with only 27% of the eligible vote) and legal efforts to stall Brexit and perhaps even invoke a second referendum. Voters simply do not feel the margins were a large enough mandate to merit the significant changes the results are likely to bring.

This is likely to exacerbate the polarisation already prevailing prior to voting. Yet it is difficult to separate cause and effect. The level of debate on both sides for both campaigns was disgracefully bad and gave voters very little insight or understanding of what their votes would actually mean. Rather arguments sank to the lowest level of negative claim and counter-claim, with nary a whiff of policy or constructive ideas, and – as has subsequently been demonstrated – no clear idea of how to proceed after winning.

Truly, this democratic disconnect has become a chasm. There is, therefore, a desperate need to find solutions to regenerate and restore true democracy before it disappears completely and becomes little more than a footnote in history.  This demands a campaign for real change. It means taking the time to re-evaluate the whole political, social and economic order and – much as the US founding fathers did – developing a fresh system to address the historical shortcomings that have caused the current situation, and, simultaneously, provide the capability for leadership, ongoing evaluation and continuous improvement.   

As Zig Ziglar said, “We cannot start over, but we can begin now and make a new beginning!” Let the campaign begin.

_____________________________________________________________________________ 

I urge you, please, to get hold of my book, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped, and promote discussion and debate around the solutions it offers so that action is taken to address these problems, restore meaningful democracy and safeguard a better environment for future generations.  

Desperate Times + Defiance + Democracy = Donald Trump

Donald and Hillary

Donald Trump Triumphant

So, Americans have voted and Donald Trump is now President-Elect. Certainly an historic result. Now the world waits – anxiously – to see whether this is good historic or bad historic.

The great irony, perhaps, is not so much that Trump won, but the continuing failure of the political system (and pundits) to recognize just how angry voters are: how fed up people are with a system of vested interests that persists in ignoring their plight while taking them for granted. And this despite the warning signs of Brexit. Trump himself said that his election would be “Brexit times 10” and the consternation the results have brought suggest, for once, his hyperbole might not have been misplaced.  Persisting with the analogy, however, just as Britain is faced with a “soft Brexit” or a “hard Brexit”, so the world is faced with a “soft Trump” or a “hard Trump”. That ultimately will determine whether this is a good historic or a bad historic.     

Any thinking person recognizes that the issues facing the developed countries today revolve around the following inter-connected issues:

  • An aging demographic, with an unprecedented demand for healthcare and social support;
  • Unprecedented debt levels eroding investment and lowering living standards;
  • Climate change and the increasingly urgent need to safeguard the earth in order to ensure any kind of future, also placing unprecedented demands on financial resources;
  • Tax systems which are not fit for purpose, but which penalize the poor and compound government’s inability to raise the revenues to provide reasonable social support and necessary infrastructure investment;
  • Rampant technological and artificial intelligence (AI) development eroding jobs and compounding both the lower living standards and the revenue collecting abilities.   

This is a pretty dangerous combination. They create a sense of foreboding and desperate times that lead to despair. And when there is no sign that these issues are being dealt with people become defiant. Unfortunately, the US election campaign failed to identify or address any of these issues. Consequently we are left with a result that is ultimately a massive act of collective defiance.

While you can undoubtedly take some positives from Trump’s measured victory speech, it contained nothing to suggest that he has any plan to address these issues. It is all very well to talk about looking out for the people, “doubling growth” and “making America great again”, but none of that will be possible without addressing these enormous problems. The extent to which he does get to grips with them will determine whether it is “hard Trump” or “soft Trump.” When we know that we will know whether the result is a meaningful one, or simply a last great act of defiance.

Last great act of  defiance_____________________________________________________________________________ 

I urge you, please, to get hold of my book, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped, and promote discussion and debate around the solutions it offers so that action is taken to address these problems, restore meaningful democracy and safeguard a better environment for future generations.  

 

Democracy’s Achilles’ Heel

15563815 - sports ankle and achilles heel injury concept

“Money is the root of all evil.” At least that’s the adage that we often fall for. But, the correct proverb is, “The love of money is the root of all evil.” Not the same thing at all, and, when you think about it, much more sense. After all, money is just a medium of exchange. It has no power of its own and, of itself, is neither good nor evil. Remember, the Romans used salt as a form of currency (hence the expression of “being worth one’s salt”) and you could hardly claim that “Salt is the root of all evil!”

Yet, even the statement that “Love of money is the root of all evil” isn’t totally true either. Oh, it is undoubtedly evil, especially when you recognize that love in this context actually means excessive longing or lust. The lust for money undoubtedly has motivated, and continues to motivate, much that is evil in the world. But is it really the root of all evil?

You would have a strong case for arguing that lust for power is just as strong and has done more harm than lust for wealth. Who knows how many people have died as a result of megalomania. History is full of the deeds of tyrants and the dangers they have posed, and even today you only have to look at the devastation in Syria to see the damage that hanging on grimly to power can wreak.  But it isn’t always so blatant. Or the consequences so obvious.    

The absolutely awful 2016 US presidential election is a good example. Here you have two widely despised people whose determination to win the post of “leader of the most powerful nation on earth” seems to have no limits and, in both cases, appears to be the culmination of many years of abuse of principle and ethics. Paradoxically, their histories mean neither can be a true leader, if you believe a leader is someone who inspires trust; or even if you accept the Webster dictionary definition of the verb “lead” as, “to guide or direct in action, thought or opinion; to draw or direct by influence.”  

The great irony, however, is that whoever wins will discover that they haven’t secured power. All they will have achieved is status, with the illusion of power. This is because the vast sums of money raised to secure election makes them obligated to their donors, and, as a result, bound to carry out their wishes. Thus they can only be executors, with their actions shaped by their donors. Even if Donald Trump’s claim that he is paying for his own campaign is true, he will still find himself in that position, because, ultimately, power resides with the system and the people who control the system.  

The argument about the financing of elections is not new. It has become an increasing concern over the years for all those who value and champion democracy. But the problem runs deeper than that. It is no coincidence that more and more wealth is residing in fewer and fewer hands. The system is designed to facilitate that and ultimately these people hold the real power. And, as long as they control the system, they will be able to ensure that things do not change and, thus, entrench their power even more.

This seems to suggest that love of power and love of money are inextricably linked. Maybe or maybe not. It doesn’t really matter. What matters is that economic wealth ultimately constitutes power, and democracy will always find itself susceptible to manipulation by the people who generate the wealth and control the monetary systems. This is natural, and perhaps even acceptable as long as those people’s actions promote the greater good. However, it remains democracy’s Achilles’ Heel and we have reached a stage where that assumption cannot be taken for granted. Our entire democratic system is in jeopardy. We need to wake up, recognize this and take steps to prevent the possibility of democracy’s total demise, before it is too late.   

_____________________________________________________________________________ 

I urge you, please, to get hold of my book, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped, and promote discussion and debate around the solutions it offers so that action is taken to restore democracy and safeguard a better environment for future generations.  

Time to Stop Fighting Old Battles!

Tweedle dum & Tweedle deeOne of the most annoying aspects of both the current UK political scene and the US presidential campaign is the continued rallying around old, discredited ideologies. Politicians and commentators alike persist in portraying issues along socialist or capitalist lines, attacking and vilifying anyone who occupies a different space on the political spectrum. The fear-mongering around the “Brexit” referendum has even invoked the possibility of a renewed Cold War.

Of course this is a very real possibility, as long as we persist in viewing things from the old paradigm.

You have to ask whether the manifest voter disillusionment with politicians might not, in fact, be an instinctive rebellion against the constraints of such conventional thinking? If it is, it is supremely ironic that efforts to escape career politicians have simply resulted in situations like the rise of Donald Trump, and the further entrenchment of ideological dogma. This suggests that it is not politicians but ideology that is at the root of the problem.  

Unfortunately, few seem to be alert to this or to escape from this line of thinking. This article epitomises:

  • The inherent left/right dichotomy in modern politics
  • The iconic status of political parties in our system
  • The rigid thinking that attaches to political parties and their inherent inability to adapt
  • A blind faith that politics is simply a pendulum and that things will ultimately swing back.   

As such it is indicative of the need for a fresh approach and a new paradigm. The collapse of communism is evidence of the fact that pure socialism does not work, while the global economic crisis and the Great Recession brought about the near-collapse of the banking system, along with the increasing divide between the rich and the poor, is evidence of the fact that capitalism does not work either – even when tempered by moderating regulations and requirements. And while stock markets have reached pre-crisis levels, there is nothing to suggest the problem has been fixed.

There are all sorts of stark warnings about future job losses as a result of automation and improved technology. Even if they are grossly over-stated, they point to a future where work will be harder to find and there will be greater unemployment and under-employment, especially with a rapidly growing population. Forget the social costs involved, this will inevitably also result in a shrinking market. Similarly, the capacity to borrow is reaching its limits and there is little scope to pay for increased public services. Consequently, the future looks bleak from both a capitalist and a socialist perspective.    

All this makes a new approach imperative. We have to find a way forward that:

  • Enables business to drive the economic growth that only business can, whilst safeguarding the environment and natural and human resources in the process.
  • Provides for the less fortunate in society while limiting the growth of government
  • Moves beyond the futile fighting that currently prevails.

Surely that can’t be too difficult, if we simply agree that we all want something that works and find a new starting point for getting there.

_____________________________________________________________________________ 

Please get hold of my book, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped read my ideas as to how we could change our economic systems and promote discussion and debate around them so that we can restore democracy and safeguard a better future for future generations.  

Make a Difference

Making a difference is something I would say is the common desire of most of humankind. And that is not only because it has been a primary motivation for my own life and career. Extensive research, summarised brilliantly by Dan Pink in his book “Drive”, identifies Autonomy, Mastery and Purpose as the 3 innate primary motivational forces. Replace ‘Purpose’ with ‘Determination’ and change the order to M(astery), A(utonomy) and D(etermination) and you can readily see how, at the personal level, they together encapsulate the need to “Make a Difference.”

You may consider this to be ingenuous, and only a mental gymnastic exercise, but there is more to it. Our survival as a species has depended, and actually still depends, on our ability to collaborate and work as part of a group. This is hard-wired into the way we are made and, this physiological fact, means that we all derive our sense of well-being and hence our psychological sense of self-worth from our contribution to something outside of ourselves. The desire to make a difference is therefore a very real phenomenon.  

Interconnectedness 24339389_sUnfortunately it is not an easy goal to realize. As a species we are part of a great, inter-connected whole. In order to understand the world around us, however, we tend to simplify things by isolating them, categorising them – usually by means of arbitrary definitions, convenient boundaries and clear labels – and then studying them in isolation. This means that, all too often, we tend to overlook or misrepresent these inter-connections. National boundaries are a perfect example of this, where historical, cultural and even geographical factors, have been totally ignored.

Politics, sociology and economics are all fields – often even referred to as sciences – where this short-coming is particularly prevalent. The division of government administration into ministries such as health, education, justice etc. for example, creates silos of special interests and lack of “joined-up thinking” that leads to sub-optimal results for all as the result of limited perspectives, conflicting ideologies, restricted resources and bitter competition for what resources are available.

“The Democracy Delusion” is my attempt to illustrate how so many of society’s current woes stem from this failure to recognise the inter-connectedness of things. In doing so I have also attempted to offer solutions that take more account of this inter-connectedness and thereby to make a difference myself – at least as far as any one individual can. My hope is that you also feel a strong need to make a difference and that together we can create a shift in thinking that compels action and therefore that actually makes a difference.

Accordingly, I invite you to get hold of, and read, “The Democracy Delusion” and encourage others to do so too, and then to stimulate dialogue, discussion and debate around the ideas in it, that lead to action. That way we can ensure that together we do make a difference.

Overdue: Tax Review Calls

What good news to hear that the Labour Party is proposing to review the complete tax system. It is one of the first sensible ideas I have heard in ages and long, long overdue.

Taxation is the primary means of funding government. It is also an integral part of both our financial and economic systems, and helps shape the running of our economy. It therefore seems logical that the financial crisis should have instigated a review of the taxation system. But alas that seems to be too much to have hoped for.

Unfortunately, all too often, efforts to fund government administration and drive policy invoke the law of unintended consequences, sometimes to disastrous effect. The 2008 financial crisis itself is likely an example. It was fueled in part by a complete contempt for government and governance. You need look no further than “Dieselgate” to see this in action. This shameful episode epitomizes the type of malicious myopia, even willful blindness, of large organisations. It certainly illustrates their attitude to government

Who's runningoff with all the money?

Who’s running off with all the money?

regulations.

And even though there may be no direct link, this same attitude applies to tax. Industrial scale tax avoidance unquestionably plays a significant role in our economy. The lack of taxes paid by corporations such as Starbucks and Amazon, (to name two that have recently been in the news) inevitably increases the strain on government, adding to the demand for more debt and/or making debt repayment more difficult and driving “austerity.” 

This is a natural and inevitable consequence of the fact that corporations are also required to pay tax. Efforts to reduce tax thus become a leading factor in business strategy and tactics. In turn this has played a massive part in tax advisory services and tax avoidance becoming an industry in its own right.

Recent events in Cyprus and Greece, where foreign bankers now effectively run the country, show that, at the end of the day it is always the man in the street who ends up paying the bill. Austerity is, alas, the inevitable outcome of failures to curb past excesses. It may be avoidable, but only if we fix the systems that allowed it to happen.

It is therefore imperative that any review of the tax system takes a wide view and goes beyond just the levying of tax and looks at the financial system as a whole. We must:

  • Move beyond adding further layers of complexity to an already over-complicated subject;
  • Look to principle rather than policy to form the basis of a new tax regime
  • Avoid perpetuating the ideological divides of the past (which hopefully a principle based approach will enable.)
  • Endeavour to separate commercial enterprise and tax planning
  • Cater better for global operations and make business domicile irrelevant.

Any review that fails to do this, will ultimately be a failure and let the people and the country down, badly.  It is a matter of national economic survival, not just party survival.  

Rethink the Response to Civic Nationalism

The status quo is not what it was. The recent referendum in Scotland is having an ongoing ripple effect that carries the promise of inevitable change. And we need to ensure that we shape that change to safeguard a better future.

Many people are still wondering how the result turned out to be as close as it was and how a relatively small and seemingly innocuous minority reached a groundswell of over 2 million people. Yet, for once, political analysts seem united.

They all agree that the separatists were able to exploit the percolating prevalent and persistent dissatisfaction with central government and surf the wave of discontent. They call this “civic nationalism.” They see this as disillusionment with politics and politicians, resulting in people looking to regain control of their own destiny.

Feeding Frenzy at the trough 14289342_sIf, however, that is the case, the answer is certainly not to create more levels of government. Not to create more troughs for incompetent, self-satisfied and self-serving politicians to feed at.

The answer to any problem cannot be more of the same. Yet, all the solutions currently being proposed to civic nationalism revolve around a model that offers more of the same. You need to think very carefully before you allow this to happen.  Einstein said, “You cannot solve a problem from the same level of consciousness that created it.” If the system is not doing what it is supposed to, then you have the wrong system. You don’t need to repair the system, you need to replace it. So let’s rethink our response to civic nationalism and focus on the causes.

While the situation seems unique to the UK, civic nationalism is a widespread problem with the causes fundamentally the same everywhere. So let’s work together to develop a new system and not be rushed into anything that will not solve anything and ultimately leave us even worse off. Let’s ensure that we enable a future that is better for all.

A Fractured Society: Pointer to a New Dark Age?

“Rich double their wealth in five years.” That was the front page headline in a recent Sunday Times. Now I don’t know about you, but for me that is ominous, because living standards for the rest of us are falling.

A BBC report claims that, according to the Institute of Fiscal Studies, a mid-range UK household’s income had declined by 6% in this time. So here you have clear evidence that the rich are getting richer while the rest of us are getting poorer. And, while the report suggests that this decline “was felt equally across high and low income groups,” (one has to question the dividing line between rich and high income) it adds that, over time, the affects will be felt more by the lower income groups.

Continue reading

Fixing a failing political system!

If you believe that our political system is failing dismally, you are not alone. Leading thinkers like Thomas L. Friedman and Michael Mandelbaum are trying to alert us to this fact. Not only that, they are also stressing the need for urgency. In their recent book, ‘That used to be us’  they state, “Our sense of urgency also derives from the fact that our political system is not properly framing, let alone addressing, our ultimate challenge.” (P10.)

Their book is focused on the US political system, but the problems it portrays, and the fact that many of us are sleepwalking through them, are not unique to the United States; they are phenomena that are endemic throughout the developed world today. Friedman and Mandelbaum bemoan the failure to reap the dividends of “winning” the cold war, the rapid decline and the threat to the country’s “exceptional nation” standing, but the issues they describe are by no means unique to that nation. Unfortunately, US dominance of the world economy compounds the problems for the rest of us, and we therefore are as dependent on their ability to address their own problems as they are.

Continue reading