Something is rotten in the state of Denmark
I am 64 years old. From the time I was young, there was one golden rule � the British Economy and the world economy in general on average got better every year. This was what held everything together � it enabled the democratic consensus, it held society together, it gave people hope.
Since 2008, and actually more probably since 2003 or even earlier, economies have been stagnating or declining, and individual living standards of ordinary middle class and working class people have been declining.
But the politicians are blindly refusing to recognize that or to talk about it, and all the economists seem to have no solution. We are told that there is no alternative to the established order. The political and economic systems we are living with are the best of all systems in the best of all possible worlds.
Since the politicians and the economists have no answers, or refuse to divulge what is going wrong and how to fix it, then we have to guess and surmise ourselves what could possibly be done about the mess we are in and how we could possibly get out of that mess.
Let us discuss pros and cons � factors working for a better tomorrow and factors working against�
We have more and better technology in 2013 than we have ever had
Populations globally are better educated than they have ever been
Communication is very advanced
People in many or most countries are less prejudiced against others on grounds of race, religion, etc than they have ever been (but with a long way still to go)
Environmental constraints seem to be playing a part � potential resource shortages, climate change
Some people would maintain we are overpopulated globally � certainly we cannot continue to expand our population infinitely
Our politicians seem if anything to have become less socially aware and to be spending a lot of effort and resources on self-enrichment, probably at the expense of everyone else
We have moved away from national state self-sufficiency towards a globalized distribution of factories and production (notably towards China), which may impoverish so-called rich countries
We are told that there is globally a sovereign debt crisis � i.e. many governments, particularly western governments � such as Greece, Italy, Ireland, Spain, Portugal, USA – are excessively indebted. This debt is difficult to pay off, and apart from privatizations � where possible � must be paid off in the near, middle or distant future by each nation�s taxpayers and their descendants.
At the same time, we are told that there is an excess of capital globally, but that it has problems finding investments which will be profitable. Therefore it is parked as cash or cash-equivalent paper and is unproductive.
So � who are these creditors � to whom is the money owed which is causing such stagnation, decline, and loss of production and declining living standards globally? Are these creditors from Mars or Saturn? No � they are rich and ultra-rich individuals and families from here on earth. There are approximately 1,400 Billionaires in the world as of 2013. I guess their combined worth is $7 trillion++
So � immediately � one possible solution � which the ultra-rich will undoubtedly rubbish � let the ultra-rich take what is called a haircut and wipe out from the system some percentage of their wealth and what is owed to them. How that is done and where the haircuts are allocated will not be a simple matter, but it can be worked out and negotiated. Someone needs to do the numbers.
Another piece in the jigsaw � generally, companies, individuals, organizations and governments invest in projects which make maximum profit, regardless of whether these activities are socially useful. i.e. it is possible that global resources are NOT used to fund certain projects which would be very useful because they are non-commercial. It is also possible that some projects which are profitable or very profitable are socially dis-useful. During the period 1945 � 1979 there was some recognition of this there were projects which were funded or not funded because of social reasons; shadow-pricing for example was one mechanism used to justify such projects. However during 1979 � 2013, naked untrammeled capitalism has largely held sway. With the results which we see now.
Thus � a second contender for solutions � reverse the extreme capitalism (the anglo-saxon model it has been described as) of 1979-2013 towards the kinder more social democratic capitalism of 1945-1979.
In general, capitalism can be categorized into �kind�, �cruel� and in-between. During the period 1945-1979, in the west, there was generally a kind form of capitalism in action � of the value-added by a company, the workers would be paid in the region of 60-80%. The rest would go to the managers and shareholders. In the Third World during the same period, by comparison, workers will typically get between 1 and 20% of the value added, with the managers, owners and shareholders getting the rest. And that is how capitalism operated in the west before 1945. Regrettably, after the fall of Communism in 1989, capitalism in the West has regressed from the 80% share towards the 20% or smaller share.
This cruel capitalism by the way is one reason why the Third World stays poor � when workers are effectively underpaid they cannot create an economy. When low income people are paid more they tend to spend it and build the economy; then higher income people are paid more they tend to save it.
So � another piece in the jigsaw will be to make public the cruelty or kindness of private and public enterprises, and by legislation or pressure to increase the kindness factor. At the moment, media does not recognize or talk about these factors.
Now let us examine technology and employment � technology and automation create unemployment (this truism is denied by most conventional-wisdom-oriented economists), but at the same time they create wealth. The crucial factor is � who gets that wealth which is created? The present global model is for example that all kinds of skilled jobs � skilled manual, professional and others � are displaced by machinery, computers, software and robots. If we continue on this present path then we will end up with 85% unemployed, 13% working in Fast-Food or equivalent low-wage jobs, and 2% of highly paid workers running everything.
Families which are lucky (if the west can resuscitate the family model which we have largely trashed), will have one or more members out of 30 in category A or B. Families with everyone in category C will have a very poor or possibly even non-survivable standard of living.
Let us get serious � what percentage of jobs have real meaning and are genuinely useful to society? It must be realized that the present path of emphasizing employment rather than income is fated to fail. Although the USA and Britain effectively control the world, and although both regard Socialism as anathema, it is very obvious that their continued obsession with capitalism as an economic model for the indefinite future will result in tremendous riches for a few and very dire poverty for 98% – the disease and scourge of mass poverty which in our memory was limited to the Third World will invade and conquer the West � that process has already started and is very visible (unless you only watch television and never go outside).
Capitalism has been very useful � it has created tremendous technology and tremendous wealth. But that period is now over � capitalism has to revert to the kinder 1945-1979 model or even to surrender to a form of socialism which has never yet been seen or practiced on this planet.
The challenge will be to preserve individual freedom and what we have known as western democracy. But that challenge will exist whether we choose socialism, a kind capitalism, or the existing cruel and apparently self-terminating form of capitalism � the present path will breed massive discontent, public unrest, and inevitably governmental retaliation, overreach and even fascism.
Some will say � �the west has signally failed to solve the problem of third world/ global poverty � how can the west then solve that existing problem plus the new problem of poverty which has come home to roost in the west?�. Please everyone, be aware that all the donor efforts and the efforts of international NGOs such as Oxfam are a massive smoke-screen. The Haiti experience has opened many people�s eyes to such a scenario, and � trust me � the west does not wish to make the Third World strong and prosperous. Thus the argument that the west could not organize the end of mass poverty is a fake argument � it is just that we will not use the existing personnel, organisations or political masters to do it.
The elimination of mass poverty is a technical challenge but is by no means impossible within a reasonable timeframe. What will be the most difficult will be to motivate the ultra-rich and those in charge of things to have a brain, soul and heart extreme makeover.
Summarizing, since the days of Jesus Christ and the days of the Prophet Mohammed, mankind has progressed tremendously and beyond imagination in terms of technology. In terms of human values we have probably stood still or even regressed � we are still primitives.
We have now reached a stage in our civilization where our primitive human values and politics threaten to take us hugely backwards in standards of living and quality of life. These threats may even cause us to self-destruct and to leave our planet to ants and other similar life-forms.
What I discuss and propose here requires a huge thinking outside the box. But ultimately, are we as mankind prepared to self-destruct or do we have the willpower to survive and to create a decent life for every human on this planet? The choice is very simple.
Alex Weir, Kingston-upon-Thames, Sunday 17 March 2013