In this third post about money, I have changed the title to one which accepts that bankruptcy is already here. By way of reminder, global indebtedness exceeds ten years of global production. If you need another statistic, the UK national debt is now £77,000 for every inhabitant of this country. We have mortgaged our own future and that of our children.
There are those who would paint this as a national tragedy, which it would be if most other countries were not in the same position. Bizarrely, since starting this series, the stockmarket has risen because the US Federal reserve has pumped another $0.6 trillion into the punctured tyre. The Bank of England speaks of following suit with Quantitative Easing 2. Madness continues. We are faced with a very big challenge, and this posting is about the big questions that are about to be asked of each of us. The price of failure could be high. It isn’t easy, and I hope that you will bear with its message through to the end.
I was a teenager when Harold Wilson’s government devalued sterling and he made the infamous statement that “the pound in your pocket has not been devalued”. Today, we do not explicitly devalue because currencies are all floating relative to one another. There is no fixed point to devalue against. Instead, when countries print more money (the reality of QE2) they simply reduce the worth of the money that previously existed. The pound in your pocket is not being devalued – not as such. It is simply worth less today than it was yesterday, and you can count on that trend continuing. To some extent you may expect that to continue in all countries.
Even so, nerves are frayed out there in money-land. Ireland is being baled out again. US investors have not responded as the Fed hoped they would and are not buying the new Treasury bonds (and are being blamed for their irrational behaviour). If (or rather when) sentiment turns down, the whole world is likely to slide together. At this point, the pound in your pocket does start to lose value, but your debts do not reduce. Internally (and this is what Wilson meant) your mortgage will still take just as many pounds to pay. But more of your money will be required to meet other basic needs (food, fuel) as inflation takes hold again. And house prices will drop, leaving many more in negative equity. If you have the option, now is a very good time to pay off all debts and avoid new ones. I wish that I could.
Meanwhile, the hard-line economists will sing their traditional song about how it is public expenditure that has caused this problem. They will tell you that the public sector is now larger than the private sector, so that too much of our income is not “productive”. Most of service sector output cannot be exported because it needs its customers present. We cannot earn enough to pay for our imports. Our taxes increase, so making less incentive for entrepreneurs. They will tell you how we should be like Hong Kong with its 15% top income tax and its lack of government activity. Then everything would be just perfect.
Of course, there is some truth inside all that they say, but it misses the real point. The question for each citizen of the UK concerns what kind of world we want to create for ourselves and our children. Are you ready for the end of state-funded elder care? Are you willing to see the communities which educate severely autistic children closed down? Are you willing to pay directly for services which your local council currently provides?
There is little doubt that the state has become rigid, over-regulated, tick-box driven and with so many standards and accountabilities that it is hugely inefficient. But remember that it only did so because many private sector organisations could not be trusted to maintain adequate standards of service. Only today, the news speaks of the Care Quality Commission (CQC) closing down sub-standard care homes, only to see them re-open under new names with the same management, and all their inspection history wiped clean?
I am abbreviating some complex issues here, and hope that readers can follow the plot, which in summary is one about balances and choices. Please bear with me, because the goal is worth reaching. Many of the actions which national or local government takes exist because we believe that they need to be done. We outrage over Victoria Climbie and baby Peter. We are distressed by pensioners found in a state of decay because no-one even knew that they had died. Most of us also have some belief in fairness, in the financial support of those who are out of work, or long-term sick, or mentally ill.
Economists will present these choices as if they are all about the money. Don’t be fooled by this. Money does not measure quality of life. As Bobby Kennedy said in 1968, “Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.” That may sound like a romantic presentation, and perhaps there is a tinge of sentiment there. But GNP also does not account for our care of the elderly, prevention of abuse and support of the weakest. Some of that now looks to us like basic civilized behaviour.
It’s not about money, it’s about Values. What is important to you? Do you want to put the Money first? Do you want to put Care first? Do you think that if the taxes were lower and the economy stronger Care would occur automatically? What will be important to the people of this country as the value of our income and our assets slide inexorably during the years to come? Will the Nation be willing to spend one hour less in front of the TV, in order to do something for a neighbour? Can we cope if the iphone becomes a luxury and not a necessity?
We have made many aspects of social care into an industry, outsourced the job that Terry Pratchett describes as “Grasp for them as can’t bend, reach for them as can’t stretch and wipe for them as can’t twist”. It now requires professionals to do these things. People with NVQ’s under the guidance of registered organisations under the CQC with “nominated individuals” who ensure that all the boxes are ticked.
In Spiral terms, it is not only the economy which has gone over the edge. While the economy lost its way through weak Blue failing to contain rampant Orange materialism, our care systems have seen Blue order combine with an Orange belief that everything can be measured objectively. Anything that cannot be measured either does not exist or is of no importance. There is no room for quality, no possibility to include the intelligence of our public debate, the integrity of our public officials or the care that we give to our elders. Industry is similarly afflicted with quality kitemarks based on processes rather than outcomes.
Out social care systems were Green Value impulses, but they do not run from those Green values. They are dominated by the Blue-Orange culture. They are mechanized, institutionalized versions of the Green Value system. For sure, many individuals within the professions concerned really do care, and live their Green values, but as a society we are not there yet because we are stuck in the Orange belief that money comes first. That is about to be put to the test.
While I am comfortable to predict that the slide will come, I am not clever enough to think that I know what it will look like. I find it interesting that Downton Abbey, with its depiction of a benevolent, caring class system, is to be followed onto the airwaves by the return of “Upstairs Downstairs”, another such portrayal of the old order, but set in the middle of the 1930’s depression. We are exploring our relationship with the values of the past and hunkering down more deeply, going back yet further than the Cath Kidston fashion echoes of the 1950’s. The collective intelligence is a wonderful and mysterious thing.
Unfortunately hunkering down will not be enough, and the 1930’s also witnessed the fascist blackshirts and anti-Semitism. Aspirations were different, families, communities and neighbourhoods more cohesive and stable. We were not dependent on global food distribution systems to feed our cities. We were not addicted to technological fixes. To survive global bankruptcy will require humanity to make the Gravesian leap to Yellow, to integrate its first-tier systems. We will need to take personal ownership of our impulse to care. We will need leadership that understands how to support that cultural shift. Are the Sun and the Daily Mail ready to get behind that change?
More importantly, are you? Beneath all of this cultural shift is our upper-left quadrant personal relationship with money. In my new book, I explore in depth the way that our first-tier engagement with fear of lack, desire for power, selfish control and systemic greed have built the world we live in. The socio-economic challenges described here come together with global challenges of sustainability, ecological damage and political instability. If we are to get out of these, we will have to make a big transition. We will have to make our Green caring strong enough to balance our self-centred fear and greed. We will have to use that lever to take us beyond the first-tier limits and into a second-tier relationship with money and with society.
This may well be the first practical test of our journey to enlightenment. Do we, the integrally literate, spirally educated and spiritually intelligent people who are supposed to understand these things, have the willingness to deal with our money shadow. Are we ready to show those around us some leadership and help them through the challenges?
My book “Future Money” is intended to help with this journey. It gets inside both our personal relationship with money and the systemic changes which we need to bring about. These things go hand in hand. Our systems are reflections of our thinking and if we do not change, the systems cannot. Money is the keystone holding up the arch of our systemic rigidity. It is the reason that Copenhagen failed and that Cancun may do no better. “Future Money presents a manifesto for surviving global bankruptcy. It is intended as a support and a road-map for our journey. I think that we need all the help we can get.
Jon
Future Money is available only as an e-book, currently in pdf form through www.spiralworld.net . It has a “cover” price of £15, but readers of this blog can reduce that price by £5 by entering the discount code “LIC” at the checkout stage. It is also available for Kindle through (of course) Amazon.
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