Silver Lining

hi ho silver lining

Here’s a rather salutary assessment of the economy from our Chairman here at Channel 4, Luke Johnson, in the FT. I have to say, it resonates for me – I’m pretty much a “a house is for living in” kinda guy.

For too long it has been more profitable in the west
to finance consumption rather than production.
That cannot continue. I am afraid that the west’s credibility
– and luck – has run out.

In the early days of Simple Pleasures 4 I began reflecting on what people really need, a stream of consciousness prompted by a Demos gathering which reminded me of a book which had really gotten me thinking – Coasting by Jonathan Raban.

Been meaning to get back to that post, Reflections on the Fundamentals of Life, for ages – nothing like a bit of financial meltdown to encourage thinking about the principles of economics.

So what did Coasting prompt? Looking back I seem to have re-invented Maslow’s Heirarchy of Needs. Still, no harm working out stuff for yourself.

What struck me last week, the week of the US presidential inauguration, was that Britain is in desperate need of a bit of self-confidence. With the City fucked by its own petard and North Sea oil drying up we’re really going to have to work out where we add value to the world.

So we arrive on earth like the Terminator, naked and balled up as a package with the basic needs outlined in that earlier post. The economics of our existence start from the need to cover those basic needs by doing the equivalent amount of work or value adding. But those needs simply meet our bestial basics. As King Lear argues, we need something over and above that to make life worth living.

“O reason not the need! Our basest beggars
Are in the poorest thing superfluous.
Allow not nature more than nature needs,
Man’s life is cheap as beast’s.”

Watching Vicky Cristina Barcelona the other week, what constitutes that ‘something over’ has got really out of whack. The New York life-style portrayed in the movie (through Vicky’s impending marriage) was truly repellent.

The shift of emphasis from consumption to production and adding value could be the silver lining of these dark clouds. Is this the moment when we reflect and recognise what is true value and what matters? These are themes that have been on my mind over the last couple of years such as in this post prompted by  a Buffalo Springfield classic.

The schadenfreude around the collapse of the banks, or more so, the bankers stems from the fact most of them don’t produce anything or add value – they guess and they gamble, they speculate and they risk, they continue to short-sell bank shares the moment the ban is lifted to profit as usual at other people’s expense.

Talking of profiting at other people’s expense, Luke’s article reminds me of a bafflement I had as a teenager about just how did the economies of the West and the rest fit together. How come American’s have those huge fridges and South-East Asians live in huts, scraping together a bit of meat to go with their bowl of rice? How come we get paid hundreds of pounds a day when for equal effort and more they get pence? How come poverty here comes with a 32″ telly? A good friend of mine lent me when we were teens a copy of a JK Galbraith book, The Nature of Mass Poverty I think it was, which I struggled with but didn’t ultimately come to grips with – I’d probably get on much better with it now as the interest is truly there.

Luke raises similar questions: So why should industrious Asians earn a tiny fraction of what citizens in the west earn? Especially when they have so much of the cash and productive resources, while we have deficits, high costs and poor demographics.

Now what I know about economics you can fit on the back of an ATM slip – hence this second stream of consciousness thinking out loud.

Around the JKG time I was also baffled by how can this constant growth add up? How can countries expect to grow year on year with finite resources? How can we expect pay rises as a given year on year? Doesn’t there come a point where no matter how clever you are about squeezing the most out of existing resources and in creating technology to increase productivity those two graph lines eventually run into each other and cross?

My gut feeling about this moment is that we must use it as a time to readjust our values, to refocus on what is really important. We must use it to refocus as a country and as individuals on what value we can add. Having said that, it was a bit depressing to see the reactions to falling oil prices – after a few weeks of people really thinking about the car journeys they were making, the headlines swiftly reverted to ‘Supermarket forecourt price wars!’

The next three commissions on my plan are Landshare, where people who want to grow their own food are linked to people who have bits of land which can be grown on; the Secret Millionaire online where the online community get to give a million pounds to community groups and small charities which quietly add value, largely unseen; and a project on Adoption that tries to highlight the value of each and every child and enable it to be realised fully. I feel they are the product of a particular positive, back-to-basics  vibe. Despite the grimness of the IMF report which ranks Britain’s economy as the most adversely impacted this year of any major economy and the Lords scandal which ranks Britain’s high ranks as smelling as rank as it comes, I can’t help but feel there’s opportunity here…