Capitalism « Talking Bollocks

Posts Tagged ‘Capitalism

Jul

The UK in the red

Categories: Commerce, Con/Lib Coalition, Economics, Finance, Labour, Politics, democracy and new labour
Tags: democracy, British Empire, china, tax, pensions, wealth, World War 2, Gordon Brown, new labour, socialism, Capitalism, Rolls Royce, corruption, industry, dictatorships, globalisation, vested interests, budget deficit, World Trade Organisation, health care, defence budget, North Sea oil, GDP, world view, debt, United Kingdom, cuts, deficit, national debt, industrial revolution, British elite, European powers, America, USSR, world leaders, Marshall Plan, Western Europe, comparative advantage, developing countries, third world, dependent on aid, clean water, creative accounting, Global leadership, power, token democracies, Gross Domestic Product, GDP per capita, Education spending, Sovereign Wealth Funds, manufacturer, British leadership, Empires rise and fall, complacency, tough decisions, British Aerospace, Trent, aircraft engines, in the red

The uk in the red

I saw a cartoon in The Independent yesterday which implied that The Tory/Lib Dem coalition are using scare tactics to introduce spending cuts. I’ve also heard the Labour cabinet condemning all the cuts but giving no guide as to how the deficit (and the debt) which New Labour ran up should be brought under control. For those not steeped in financial jargon the debt is how much we owe and the deficit is the shortfall in our annual spending. So by running a deficit we increase the national debt. The talk by the new coalition government so far has concentrated on getting the deficit under control but bare in mind that Gordon Brown ran a deficit even during the boom years as the UK was spending more than the government gained in taxes!

Depressingly but, perhaps predictably, all we hear from everyone who has been asked to make cuts is justification for why their particular budget should not be cut. There was an education official on the radio recently “explaining” that the national debt is not like a credit card and that we can simply roll over the debt. Easy! We’re in debt, no problem, borrow more. It is this daft logic that has lead to the UK national debt of nearly 70% of GDP in 2009.

During the 18th and 19th centuries the United Kingdom became wealthy through empire and the industrial revolution and used that wealth to provide comfy lives for the British elite. Note that the majority of the British people had lives worse than many of those in India or elsewhere in the Empire mainly because of the cold British climate and the appalling working conditions during the industrial revolution. The British elite, however, did very well.

During the two world wars the European powers smashed each other to bits and America and the USSR stepped in as world leaders. The U.S. had ensured that the UK paid for aid during the war but the Marshall Plan got the UK and Western Europe back on their feat. The UK then hung on to it’s place in the world for a while. Our industry and trained workforce gave us “comparative advantage” compared to “developing countries” and so the UK and other European countries remained fairly wealthy and fairly secure. Sure Japan, Taiwan and others developed their own industry but most of the world remained pre-industrial.

Post World War 2 a Labour government came to power and, dazzled by the apparent success of Socialism in the USSR, started looking after the working class. For the first time ordinary people gained access to clean water, health care and pensions.

We developed a world view roughly as follows: The West leads the world, developing technology and operating industry, the far east copies the West and and performs some production and the “third world” supplies the raw materials but remains poor and dependent on aid.

But the UK was complacent., we became convinced that all our wealth was a natural state of affairs and that it could all be paid for by creative accounting. While we were naval gazing the Soviet Union collapsed, open markets became the vogue, China joined the World Trade Organisation and the rest of the world adopted capitalism and found that they were pretty good at it. Not only were they good at it they were unencumbered by a mature democracy or legislation to protect workers.

Global leadership, industry and power is now shifting from the democratic Western nations to nations who are either dictatorships or corrupt token democracies. As a quick preamble to my next bit of ranting I should explain, for the uninitiated, that the a common measure of a countries wealth is Gross Domestic Product (GDP). This is a measure of the total value of goods and services produced by a country. Because countries vary in populations another common measure is to divide GDP by the population and derive a figure known as GDP per capita. This gives a measure of how much each person, on average, produces.

Time for some figures.

UK GDP is sixth in the world, just above Brazil at 8 and India at 11 and below China at 3.

UK GDP per capita is 22nd just after Italy at 21 and Iceland at 19.

National debt is at 68% of GDP, higher than Ghana at 67.5% or Uganda at 19.3%

The UK’s budget deficit (how much more we spend than we earn) is at 14.2% of GDP, above Sierra Leone at 12.35% and Vietnam at 9.3%

And yet

The UK’s defence budget is 2.5% of GDP, that’s more than above China at 2% and Germany at 1.3%.

The UK’s Education spending is the same as South Africa and Mexico at 5.3% of GDP. That’s above Bhutan at 5.2% but below Fiji at 5.6% and Bolivia at 6.3% and Yemen at 9.5%!

It’s also worth considering that other countries do not have debt, they have surplus! They have saved money and built up substantial wealth in Sovereign Wealth Funds. For example:

United Arab Emirates 627 $Billion
Norway 443 $Billion
China 288.8 $Billion

The UK still has some cards up it sleeve. In 2008 we were the sixth biggest manufacturer after Italy but Russia was at 7 and Brazil at 8.

In recent history the UK has relied on North Sea oil to top up our income. I cannot find any figures on what percentage of our GDP is made up from Oil and Gas but I recall reading that the tax take on Oil and Gas was the largest contributor to the British exchequer followed by Finance. I believe that was before the financial crisis.

But north sea oil is predicted to run out within eight years.

All this is not to say that the United Kingdom is doomed, just that the world is changing and we can’t rely on the UK remaining wealthy by default. British policies today dictate the future of this country and if we continue to run up a debt our nation will decline. It not rocket science. There are younger and fitter countries in the world.

Just today I heard a British politician talking about maintaining British leadership. Our political elite have not yet caught up with the 21st century. Why should Brazil, Taiwan or China be interested in being lead by a mid size debtor nation on the other side of the world?

No nation or empire lasts for ever. Nations and Empires rise and fall. The British Empire has fallen and one day the UK will fall and I suggest that, if we are not careful, people will look back and see that the obvious start was the 21st century due to complacency, vested interests and the inability of a people to make tough decisions..

We are no longer one of the few great industrialised powers in a world populated by uneducated and illiterate farmers. The UK is now just one of many educated and industrialised countries. It is true that we have a more mature system of law and democracy but undemocratic and corrupt governments around the world see this as an encumbrance and not as something to emulate.

We are in massive debt, the oil money is running out. New Labour’s policies of spend and hope have failed. I support the current government’s prescription of large scale cuts but this should be supplemented by informed strategic planning.

We should also reconsider our commitment to allowing foreign entities to buy British assets and industry. Sovereign Wealth Funds referred to above often buy industry and assets from the developed world and this is acceptable if everyone plays by the same rules. However some of the largest of these funds are owned by nations who play by very few rules. Specifically we should be wary of allowing SWFs of single party dictatorships or corrupt regimes owning large stakes in the UK.

Globalisation is all very well while the foreign money is pouring in and funding industry and jobs but once these foreign owners have their feet under the table they often find that it is more efficient to centralise production and transfer the industry abroad. This would be fair enough were it possible for British companies to buy up industry in China, Germany or Japan in the same way but other countries are not as open as the UK.

Last Sunday night there was a TV program enthusing about one industry in the UK which remains cutting edge and world leading. This was British Aerospace and it’s production of Rolls Royce Trent aircraft engines in Derby.

The company was very impressive. What is less impressive are rumours that in order to gain access to the larger and more lucrative U.S. military business British Aerospace is trying to morph into a United States company. Once this is achieved how long will it be able to justify dispersing it’s business over two continents?

May

Warsaw 2010

By jonesxxx Leave a Comment

Categories: Hotels, Social comment, Thoughts, Travel and images
Tags: World War 2, london, commercialism, Capitalism, hotel, Restaurants, bars, Adolf Hitler, Russians, Germany, Warsaw, Sheraton, Bolesława Prusa, Charles de Gaulle, statues, Nowy Swiat, Indian, pick strawberries, Eastern Europe, public transport, communist regime, Trams, Route Master, buses, Materialism, false individualism, choice

Warsaw

Last week I visited Warsaw, staying at the Sheraton on Bolesława Prusa. A good hotel with plenty of marble. One evening I took a short walk north past the Charles de Gaulle statue onto a street named Nowy Swiat. Here can be found many restaurants and bars, probably frequented by the wealthy along with ex-patriots. After an excellent Indian at the Bhuda restaurant I took coffee at the Cafe Colombia while listening to an elderly American explaining to a couple young Poles how he admired the Russians because they had launched a military attack on a Russian cargo ship which had been commandeered by Sudanese pirates. “They picked on the wrong country!” he exclaimed many times.

On the aeroplane I had chatted to a Pole who had picked strawberries in Kent one summer in his youth. Sleeping in tents they had travelled from farm to farm. Now he was a business man travelling throughout Europe but he thought that perhaps he had enjoyed strawberry picking more.

The Russians will discuss World War 2 at the drop of a hat and he told me that when Hitler’s attention turned from attacking the UK to invading Russia this had been because the Russians had been massing an army on Germany’s eastern border. Proof of this, he said, were the thousands of Russian troops taken prisoner in the first few months.

Rondo Charles de Gaulle

This had never occurred to me. Like many Brits my knowledge of Eastern Europe during World War 2 is scanty and I had been taught that Hitler was a bit unstable and had invaded Russia merely because he wanted to take over the world. Of course this is Rubbish. With Great Britain at bay Hitler had turned his attention to a pre-emptive strike which, he must have hoped, would disable Russia.

Walking back from Nowy Swiat as the light faded I thought that Warsaw is in fact a great place to live. The public transport seems excellent and the buildings, though often blocky, are interesting and nature seems hell bent on tacking back the city with trees and grass growing everywhere. Almost as ubiquitous as the grass are the statues. I remarked on this to a Pole and was told cynically that the Russians love their statues. I got the impression that the former communist regime would throw up a statue at every intersection and I guess that after a while they must have run out of anything relevant and started building monuments to every petty bureaucrat. No offence intended to Charles de Gaulle who I’m sure played a great part in the history of Nowy Swiat.

I liked the mixture of the old and the new. The modern trams contrasting with those from the old soviet era; though noisy and drafty they have charm from having been designed before the obsession with efficiency ironed out every crease of character. I was reminded of the old open backed Route Master buses in London and how they rattled and shook.

Tram

Warsaw appears to have embraced capitalism and commercialism for it’s promise of a better future. It seems a city with a destination firmly in mind. Though not yet as rampantly commercialised as London, in some ways it is more advanced with taxis having TV screens in the headrest to beam advertising at the helpless passenger.

Unlike London, Warsaw has not yet choked on the obsession with materialism and the false individualism of choice.

Once the old trams are gone they will be missed.

Dec

Kmal Shaikh dies so that Wen Jinbao can save face – the fruits of engagement

By jonesxxx Leave a Comment

Categories: Bollocks, News, Politics and democracy
Tags: democracy, talking bollocks, china, pensions, Capitalism, cheap labour, World Trade Organisation, civil rights, Soviet Union, tantrums, Wen Jinbao, execution, Kmal Shaikh, drug smuggling, lethal injection, Copenhagen summit, Chinese leadership, lost face, internal affairs, save face, point of a gun, kowtow, Chinese, Engagement, western companies, authoritarian regime, improved human rights, liberalisation, totalitarian instincts, greater profits, male landowners, vote, voting rights, ancient democracy, Cold War, health care, workers rights, failure of socialism, closing pension schemes, compete with China, ebay, sacrifice democracy, children's future, throw away items, socialist, capital punishment, execution in china, capital punishment victims, chinese executions, chinese execution, lethal injections, trade with china, trade deficit with china

How many need to die to save the face of Wen Jinbao?

The British media is reporting that China has gone ahead with the execution of Kmal Shaikh, a 53 year old father-of-three from London who was convicted of drug smuggling in China. His family have claimed that he was mentally ill and requested a medical examination. The examination was refused by the Chinese and Mr. Shaikh was executed by lethal injection.

The British government had made representation to the Chinese but I suspect that there was some fall out from the recent Copenhagen summit where the authoritarian Chinese leadership “lost face”. The Chinese regime has a reputation for throwing tantrums whenever anyone tries to interfere in it’s “internal affairs” and this time was no exception. As far as the Chinese were concerned Mr. Shaikh had to die for China to save face.

So, the British government is now angry, but one has to ask why? Why did anyone believe that a regime that maintains it’s grip on power at the point of a gun would worry about killing one man? Why does the West kowtow to China?

The answer we are given, by our supposedly informed elite, is that we need to “engage” with China and this will bring reform. Engagement usually boils down to allowing western companies to employ Chinese workers in order to lower costs.

This engagement is taken as an article of faith but I wonder if anyone can site an example where it has worked. I know of no instance where an authoritarian regime has liberalised because outside influences have traded with it and thereby increased that regime’s power. In fact, if assisting a regime to grow richer and more powerful is a recipe for improved human rights, liberalisation and greater democracy then surely this tactic should be tried with Iran.

Our elite are of course TALKING BOLLOCKS! Supporting authoritarian regimes makes them stronger and entrenches their totalitarian instincts. The key to this is that our elites are not interested in greater democracy, they are interested in greater profits.

Our leaders frequently use the terms democracy and capitalism interchangeably but they are not the same. Since the second world war western countries have, in general, been both capitalist and democratic but prior to the war democracy was not so prevalent.

In the UK, prior to 1832 only male landowners could vote. This gradually changed until it included most males by 1918 but women did not get complete voting rights until 1928. So the UK’s claims to be an ancient democracy is complete poppy cock! The UK was, and remains, a capitalist country while democracy is a recent add-on brought about by two world wars and the rise of an alternative to capitalism in the Soviet Union.

During the Cold War, with the threat (and implied alternative), of the Soviet Union, western countries became more liberal. Pensions, health care and workers rights blossomed. However, since the collapse of the Soviet Union, and the inferred failure of socialism, these hard won gains are being eroded. In the UK, one hears constantly of companies closing pension schemes along with exhortations that we must “compete” with China. By “compete” our elite mean that we must accept lower standards in the work place and lower wages.

Our leaders claim that “engagement” with an authoritarian regime will raise their standard of democracy and human rights but the truth is that the Chinese regime has no interest or need to improve human rights and rather than their standards rising we are being forced to lower ours.

We are told that we must compete or we will lose out, but hold on, the implication of this is that if China did not exist we would suffer some terrible fate as we would not be able to take advantage of their cheap labour. This is bollocks! The west went from strength to strength when the Soviet Union and China were both outside the World Trade Organisation. We may choose to trade with China but we do not “need” China.

It is true that the west has benefitted from all sorts of cheap goods from China. One only has to go onto ebay to wonder that it’s possible to buy a USB flash memory radio transmitter for £ 4.61 (yes , I did this!!). This is amazing value but do I need it? No. Would I sacrifice democracy, human rights and our children’s future for the ability to treat all goods as throw away items? NO! Do I want a world where goods are cheap but freedom is limited to an elite? NO!

The truth is that elites are always greedy – socialist or capitalist. Our leaders want engagement to increase profits but at the cost of democracy, civil rights and human rights. The protection from powerful elites is democracy. China is not a democracy and has shown no interest in democratizing.

We should be extremely cautious about becoming reliant on China for any key product or service. We should also be more robust when dealing with the Chinese. As a start there should be major repercussions from the Chinese leaders reckless behaviour at Copenhagen and execution of Kmal Shaikh.

Which do we value more, democracy and human rights or a Chinese USB stick?

Dec

China in Who’s hands?

By jonesxxx 2 Comments

President Hu - Who made him leader?

There is an interesting article in todays’s Independent blaming China for the failure of the Copenhagen climate summit. The article quotes a source who was supposedly in the room when the heads of state were drafting the document who says:

“If China had not been in that room you would have had a deal which would have had everyone popping champagne corks…..”

“The Chinese were happy as they’d win either way. If the process collapsed they’d win because they don’t have to do anything and they know the rich countries will get the blame.

“If the deal doesn’t collapse because everyone is so desperate to accommodate them that they water it down to something completely meaningless, they get their way again. Either way they win. I think all the other world leaders knew that by that stage and were just furious that they couldn’t do anything about it.”

Why am I not surprised?

Protestors? - pah!

China was admitted to the World Trade Organisation (WTO) in December 2001 after the United States dropped it’s veto. Since that time trade with China has grown very quickly and the Chinese economy has grown massively. The generally accepted view is that China is now OK as it has accepted capitalism. This is wrong. The regime in power in China today is not substantially different from the regime which drove tanks over unarmed protesters in Tiananmen Square just two years before being admitted to the WTO.

The West too often confuses democracy with capitalism, they are not the same. It is possible to have a democratic government that is socialist. It is certainly possible to have a capitalist government which is non-democratic and China is the proof of this.

Both China and the West have gained from the flow of trade but we should consider that, having now allowed so much industry to move to China, we have become reliant on an authoritarian regime which cares for nothing but perpetuating it’s own existence. We should also keep this in mind when businessmen and political leaders talk of the necessity of allowing the free flow of trade to countries where there is “competitive advantage”. This competitive advantage is, very often, the absence of political rights, civil rights and the rule of law.

China may have legitimate reasons for not being able to commit to the climate change targets discussed in Copenhagen but it’s impossible to tell. The Chinese regime is not elected and therefore illegitimate and cannot be said to represent the views of the Chinese people. When one deals with regimes such as China one must accept that their word is worth nothing.

During the negotiations between the United States and the Soviet Union to limit Nuclear Forces Ronald Regan frequently used the phrase “Trust, but verify”. United States president, Barack Obama, seemed to understand this when, during a speech at Copenhagen he appeared to upset the Chinese by implying that verification was key to any agreement. The fact that this was mentioned caused the Chinese representatives to throw a hissy fit and refuse to attend various meetings.

Send in the tanks!

And that’s another thing, China too often uses tantrums as a negotiating tactic. We are told by Chinese watchers that this anger is related to the difference in culture. Perhaps it is. Perhaps the Chinese fly off the handle so often because they are not used to having to justify themselves.

I wonder how the Chinese regime would have responded to the demonstrators in Copenhagen? Rather than explaining their position perhaps they would simply have sent in the tanks.

This should give us pause for thought.

Sep

Why does fraternity stop at Dover?

By jonesxxx Leave a Comment

This morning I listened the Today program on Radio 4 and heard Tony Woodley, the joint secretary of the Unite union, discussing the recent take over of Vauxhall/Opal by a Canadian parts manufacturer named Magna. Obviously Mr. Woodley argued for retaining the jobs at Ellesmere Port and Luton.

Save Vauxhall campaign logo

The role of a Union is to represent the worker so it is right that Mr. Woodley argues for protecting the jobs of workers. In a Capitalist system, it is also right that the managers of the company protect the value of the company for shareholders. Ideally the two sides would meet to discuss the issues involved and reach some kind of compromise.

These days, corporations have become global and many are classed as multinationals and have shareholders from multiple nations. The managers of these corporations will naturally look to base their business in a location which provides the maximum Return On Investment (ROI) and in the case of Vauxhall/Opal this might mean that they may decide to close down Ellesmere Port or Luton in favour of continuing or expanding production in Germany.

You may not agree with Capitalism but this is how it works.

The response of trade unions has been pitiful. Mr. Woodley has merely argued that the British government should intervene to protect British jobs. This is an inadequate response.

Politically unions tend to be lean to the left and some are outright socialists emphasising the fraternity of workers world wide. Indeed the very purpose of a union is to unite workers so that they cannot be picked off individually by the employers.

“United we stand, divided we fall” is a common phrase within trade unionism yet when job cuts loom union leaders scurry to save their workers jobs at the cost of foreign jobs.

The corporate managers must love it. Governments of each country are badgered by their unions into supplying incentives to the multinationals. More often than not these incentives boil down to tax payers money and the tax payers are the same workers who’s jobs the government is trying to protect.

Dr. Johnson has been much in the news recently and it was he who said that patriotism is the last refuge of a scoundrel. I am not suggesting that union leaders are scoundrels but they show a woeful lack of imagination and principle when allowing corporations to play one nation off against another.

We have comparatively free markets within The European Union for goods and services. The unions within Europe should unite to protect the jobs and rights of workers throughout Europe.

Of course the argument is then that the jobs will go outside the European Union but as we do not have a global free trade area yet perhaps global union action can also wait.

Sep

Government Bailouts – The Worst of All Possible Worlds?

By jonesxxx 2 Comments

I think the fairest definition of my opinions on economics is liberalism. I see the benefits of Capitalism but I have the gut feeling that it drives us to work too hard and to treat the world as nothing more than raw materials. I can see that Socialism lacks a mechanism for accountability and can lead industry to become so incompetent that it cannot perform it’s function.

I saw part of the documentary on the collapse of Lehman Brothers recently and it seems that all the rich and powerful bankers were hoping for a bailout by the American tax payer. There was a clip of some high falutin banker complaining that Lehmans only needed 30 or so billion to keep it afloat and billions of dollars worth of value was wiped out across the world because the money was not forthcoming.

Government Bailout

I think the guy misunderstood the nature of capitalism. That value wasn’t wiped out by the collapse of Lehmans. That value didn’t exist in the first place. The list price of various financial instrument was driven up and up by irresponsible lending and the collapse of Lehmans was a market indicator that the value was illusory.

If the U.S. Government had bailed out Lehmans that illusion may have continued for longer but it could not prevail indefinitely.

To paraphrase Withnail and I, the market is like a balloon that you are hanging onto which is going higher and higher and the only question is: how long can you hold on?

The U.S. Government were right to allow Lehmans to go to the wall. Though I do not know which is better Capitalism or Socialism I do know that what is worse than both is to pretend to have capitalism while insisting that the tax payer picks up the bill for failed companies.

Nationalised companies have no dividends to pay and so should be able to operate at a lower cost than private companies but they become inefficient. Private companies, by contrast, have market pressure to drive them to be efficient but they must pay dividends to share holders and that extra cost could wipe out any efficiency gains. You pay your money and you take your pick.

Worse than either are private companies that are bailed out by the government because they have no market pressure to make them efficient and yet they must pay dividends.

The worst of all possible worlds to misquote Doctor Pangloss.

Aug

21st Century Schizoid Man

By jonesxxx Leave a Comment

I just emailed a friend who sits at a desk most of the day and said are you there? I wanted to phone and ask for opinions on some photographs I intend to try to have displayed in a gallery. I received an email back listing all the busy things that she was right in the middle of and what did I want?

I started to reply that “I wanted to call and if you have time….”

And then I thought FUCK IT! What is it these days that all I ever do is ask people “if they’re not too busy…”

Now in part this is because of my job. I am an IT auditor and so it is my job to ask questions and yet I realise that the people of whom I’m asking the questions obviously have things to do which from their perspective are more important.

However, when I consider many of my friends, they booked their lives like an aeroplane schedule. Last week I Emailed my friends and gave them two weeks notice that I was going to go out for a birthday drink. Many of them couldn’t make it because they were booked up.

I have a friend who arrives at work in London at about 8am and leaves at about 8pm. When he gets home he has numerous tasks to do related to raising six kids.

Kids are definitely part of the problems though not necessarily so. I have several friends with often I call them up and we chat and then the conversation takes some bizarre turn and I realise that, without a pause, they have started talking to one of the kids.

But it’s not only kids. At work it used to be possible to walk up to someone’s desk and talk to them but more and more people have become so obsessed that they require you to book a meeting for the most trivial things. We are becoming a society which values activity as a end in itself.

My own professional is IT and I recall that twenty years ago my day might consist of numerous activities: Writing code, running cables, checking logs, designing systems and cleaning the machine room.

All these activities have now been specialised and so we employ a group of individuals for all tasks. Once this is done it is possible to begin increasing their efficiency. We are becoming no better than the factory workers of the 19th century. We do not move from our desks. We have no change of task. The clean desk policy and the hot policy ensures that we have no personal relationship with our environment or the people sitting next to us.

Our politicians are obsessed with the idea that our schools and colleges should teach skills. They are no longer places for of learning, they are places for training. There is an important difference. Training is something one passively accepts without question. It is to enable one to be able to repeat a process like an automata. Dogs are trained to “stay”, soldiers are trained to kill. Learning is something that one does actively.

I heard a man on the radio say that Marx believed that capitalism survived because it was adept at producing goods but that this activity would eventually grind to a halt and communism would take over.

It certainly seems true that capitalism is better at innovation and production than communism and I myself had speculated that one day the inventions and efficiencies may grind to a halt. When we all have cars, flat screen TVs, iPods, hairdryers, toasters, sandwich makers and marble topped kitchens.

But it occurs to me that our society is moving into a new phase of production. We are now moving into production of virtualised goods. Music, movies, computers games etc. These are the stuff of leisure. If humanity had no need for work we would naturally make music, and sing songs, perform theatre and play games.

Work to Live

But now capitalism has industrialised our leisure time. It has taken our natural tendency toward leisure and play and forced us to pay for this. It has achieved this by dividing the production and consumption components.
Companies employ us to produce products which the marketing machine convinces are indispensable for leisure. At the same time that we must work to produce these products we must also work to buy the products. And of course a cut goes to the share holders.

I was discussing the undoubted increase in material wealth that has taken place in the UK over the past twenty years and a friend said that while it was true that the middle classes now took second cars for granted the real wealth and power stayed with the super rich the same as it always had.

There, I have just had an email back:

“Yes, yes. I started to go through all of your images to identify my favorites. In the middle of this my internet connection went out….. I have about 1/2 hour before I have to pick up my daughter ………..”

Forget Brave New World, forget 1984, what was it that King Crimson sang? “21st Century Schizoid Man”

May

Ducks, Dance, Network Theory, Pricing Models, Insulation, Two bog seats Prescott

By jonesxxx Leave a Comment

A tedious week at work. I reflected on the way the English language has been debased by commercialism when I read the words “Loyalty payment” and “Highly competitive exclusive offer”.

The ducks are still on the pond. The two males can be seen most days and mid week the female waddled out of her hut

2 ducks

and the two males sped after her. A tremendous fight ensued and at first we were unsure what was occurring. It became obvious that one male was earnestly pursuing the female while the other male tried strenuously to fend him off. After a while the female achieved some distance and the two males finished their fight with one chasing the other away. The hierarchy restored the female was left alone and the two males returned to being good buddies. A Pakistani colleague commented: “Just like the America, once their authority is established they want to be your friend”.

I watched an interesting documentary on Network Theory on Tuesday evening. Six degrees of separation and all that.

This year I ensured that I would see some of The Brighton Festival by drawing up a plan and booking in advance. Mostly this has been theatre but I was asked by some friends if I wanted to see some dance and I thought: what the hell, I’ll give it a go.

So on Wednesday evening I saw Aphasiadisiac at The Dome. This was not what I had expected and was inspiring. There was not much that most people would call dancing about it. The performance was created by a guy named Ted Stoffer and performed by a Belgian dance company named Les ballets C de la B.

I know very little about dance so I don’t really have the vocabulary to describe it. I was impressed by the ability of the performers to use their bodies to communicate. I was amazed at their ability to create a mood or a feeling by the choreography. They played the music themselves using a trumpet, a saxophone, drums and an accordion. The music itself was very good and at one particular point the performers all came together and sat and stood in a very tight group of five directly in front of us while they played. I found the proximity disarming and became self conscious. It felt strange to go from being a passive observer to somehow being observed and almost part of the performance.

Other parts were good in different ways. The awkwardness of a couple sitting together was portrayed perfectly through body language and facial expressions. A girl played an instrument and looked around while two of the men ran around as though desperate to remain in the spotlight of her gaze. Extraordinary stuff which opened my eyes to the world of dance. The Youtube vid below is of a different performance.

On Friday British Gas turned up to survey my loft prior to getting it insulated. B&Q are currently doing some very good deals to insulate your loft with parts and labour included for £198.

I began cogitating on how it is not really in the economic interests of the gas company to insulate my loft. It is in their interest to encourage me to consume as much gas as possible while it is in my interest to consume as little as possible while ensuring I am conformably warm.

I read somewhere that companies are much better at cutting their costs than individuals are. This makes sense. Companies makes plans and prepare budgets to control costs whereas most individuals are not so rational.

But panning back a bit and considering climate change and The UK’s dire economic condition it is in the Global Interest and National Interest that I consume as little gas as possible.

So surely we have the pricing model wrong. The model is currently configured so that the agent which is most efficient at controlling consumption (The gas company) actually benefits from excess consumption.

I recall a similar conversation on the subject of taxation. Our politicians tell us we should be saving energy and cutting CO2 emissions yet the greatest part of our taxation is placed on work. Taxation has two effects, firstly and obviously, it raises money to be spent by the government but secondly it deters the activity which is taxed. This has been known for centuries from windows to tobacco.

So the effect of our taxation system is to deter work. Surely we want people to work so why not lift all income tax and place it on petrol? If it were done intelligently I could still afford to drive my 2 litre car 90 miles a day to work. It would just make it painfully clear how much money, and therefore petrol, I am wasting.

It seems to me that there are three entities who can control costs: The seller, the buyer and the government. With conventional pricing models the economic motivation are for the seller to increase sales and the buyer to reduce sales. The government is the third entity and currently pays for services which are deemed communal such as waste disposal.

And waste disposal too has a dodgy pricing model. It is currently in the interest of retailers to bulk our their products with wasteful packaging as this helps to sell more product and the waste disposal costs are bourn by the tax payer. There have been attempts to makes consumers pay for the amount of waste that they produce but the problem with this is that consumers can cheat by fly tipping. Far better to charge the costs of waste disposal as a tax to be paid by retailers.

I have thought for a while that the main deficiency with socialism is the lack of a feedback mechanism. Command economies continue to manufacturer products which consumers do not want and fail to manufacture products which they do want because the production is not influenced by the consumer. Capitalism gets around this problem but the current capitalist model encourages and rewards over production.

I read an article in The Economist a while back about the British aviation engine manufacturer Rolls Royce. This was deemed a successful company because of the innovative pricing structure it had adopted. Rolls Royce does not make it’s profits from the sale of engines and can make a loss on engine sales. Instead it charges it’s customer (the airlines) for engine air time. Each engine is fitted with various computer systems which relay telemetry back to a control centre in Rugby. Engineers can then detected potential problems early and perform preventative maintenance when an aircraft next lands.

This is an excellent idea. Rolls Royce can become a successful engine maker, gain market share and earn greater profits. But at the same time the manufacture of engines is not the driving force. In fact it would be in Rolls Royce’s interest to keep engines airworthy for as long as possible and therefore restrict engine manufacture.

I suggest that we could do with this sort of thinking when designing pricing models for all sorts of goods and services. We still use capitalism but design the system in such as way that production is not the driving force for profits.

On Saturday afternoon I visited The Old Municipal Market to see an artwork by Anish Kapoor entitled The Dismemberment of Jeanne D’Arc

: The Dismemberment of Jeanne D’Arc

Yeh Anish, nice name!

The big blobby bits are the bits I’d seen clips of but I found the big red elipsical hole in the ground most effective. It appeared that Mr. Kapoor had opened up the ground to reveal that beneath the first few inches of dirt the living flesh of the planet Earth had been exposed. The Earth is alive!

On Saturday night I saw another small theatre production named Bane at The Three and Ten in Brighton. This was described as a “One-man comedic film noir parody.” Part thriller, art comedy the single actor played a plethora of characters and pulled it off brilliantly.

No round up of last week can be complete without mentioning the MP expenses scandal currently bubbling away in British politics. Last week The Daily Telegraph revealed that John Prescott had claimed for repair of a broken toilet seat twice. – You couldn’t make it up.