Hoping for growth - from corrupt service industries?

As manufacturing starts to wain, and retail sales and consumer confidence continue to fall, are we going to see politicians once again try to highlight (and rely upon!) 'potential growth' arising from the UK's 'expertise' in the service sector?

Well if they do, they won't refer to the hard-pressed and hard-working retail sector ... but the corrupt practices of groups such as insurance companies and 'no-win no-fee' ambulance chasing lawyers ... who, by actively conniving together (e.g. insurance companies referring people to pushy ambulance chasers!), have forced up already sky high premiums by nearly 40% this year ... 

The lawyers pocket £1000's in fees, and the insurance companies charge all costs back to the motorist.  On top of this, the practice of insurance companies referring accidents to accident lawyers* is also making them 4x more profit than from providing insurance premiums - a shocking revelation. In effect insurance companies are now more keen to be a claims management company than an insurance company - to the detriment of all motorists.

Many people are now charged far more for car insurance than their energy** (value = keeping warm, cooking and washing etc) ... with the average insurance bill set to exceed £1000 by 2012. Insurance premiums are colossal - yet they add no value. Insurance companies call it 'piece of mind', but get Government to enshrine its purchase in law to force you buy it!

Insurance companies and no win-no fee lawyers are parasities - who leech off hard-working people and who destroy real value/wealth creation in this country! So why do politicians allow such scams to continue ... well because they are lobbied heavily by insurance companies ... and because many politicians are lawyers themselves!

Combining these parasitic organisms with the corrupt practice of banks will cause this nation to implode (i.e. collapse) ... not 'grow' ... and if politicians think we can solve the country's problems by exporting these 'services' abroad they are even more deluded ... 

The leeches in our society know no bound ... and need to be driven out ... just like a plague of locusts/rats ... 

      

* Even Jack Straw, a Barrister and ex Justice Minister himself, has said this practice is a racket and must stop!

** Despite energy prices also shooting up, and energy companies being referred to the competition commission!

Criminals, Pirates and Propaganda

Many bloggers (including myself) point out the importance of splitting retail banking from investment banking once again, but a fellow blogger recently highlighted some of additional challenges ahead too: 

"The difference between the reality of banking and finance and the propaganda that their publicity machines exude is just as apparent as it ever was. However because they have so much money, muck like tobacco companies, they are well able to resist change. This reality of capitalism will not be done away with by a few blogs!

I really do not see any genuine prospect of any nation stopping the banks from sucking the lifeblood out of the World's people without genuine revolutionary change. All banks will have to become smaller and less powerful and it is now a battle for the World's nation states to achieve this and it looks like the nation states are failing badly.

It must no longer be a source of pride that any nation has a world dominance in banking and financial services. Instead it should be a badge of national humiliation and shame. Being a World power in banking must be seen as akin to being a failed state and no better than present day Somalia. Bankers need to be see as pirates and leeches on the lifeblood of any nation and the World.

The propaganda of the banks must be resisted and countered for the very simple economic reason that the people of countries like the UK cannot afford to bail them out. We must see and portray bankers more as international criminal and pirates in order that we counter their propaganda ..."

Banking ... Wealth creation, wealth manipulation, or wealth destruction ... you decide ... and if you're not sure, take a look at a few of my previous posts here (e.g. wealth manipulation, wealth destroyers).

Removing the destructive target driven culture

In the blogosphere I often see posts from others which go a long way to explaining what's going on around us right now ... and what could also be done to change things for the better. Many are well worth sharing with you here too, as they chime very well with this blog; including the following one below (from a new blogger to the BBC):

At 2:32pm on 11 Dec 2009, Russell Branch posted:

"Wealth generation comes from adding value for which people are prepared to pay. At its most fundamental, this is indeed from making, growing or creating things - converting raw materials into something which has a perceived monetary value. This value can be found in intellect, objects and "things", or indeed services such as provision of health, safety or protection. It depends upon the kind of society we want to live in as to how we rate and value these various things.

However, the current society we live in is governed by a ruling class who have taken central control over so much of our life through a target driven culture that the values are being skewed, or lost, in the name of political dogma. In our working lives, it is a truism that "what gets measured, gets done" but this simple fact belies the cost of the measuring! As one example of this out of thousands, and its repercussions: -

(Note, I came to know know about this following a conversation down the pub :-) , and I am making no statement whatsoever about the validity or not of this particular target)

There are new minority recruitment targets for the fire and safety services (document is here). In itself, this is not necessarily a bad thing. But just think what this implies.

At some high level, this has been decided as a "target". It has necessitated the compilation of the figures as a first cost. But take this down to a local recruitment level. It is now necessary for someone to collect, collate and report on the outcome of every recruitment interview, and someone else to help make a decision on recruitment based not only on "the best person for the job" but also on their race, creed, colour or sexuality. This will also probably add in extra time in legal consultations to protect the service from accusations of bias from both the majority population and the minorities, plus additional training for the interviewer in removal of bias. Thus, two or three extra people are needed, all of who are taking away money from the ability to pay for front line service professionals.

As another example: my ex wife was an admin manager in a health trust. For every target handed down from a centralised decision making process, it was necessary to employ administrators just to prove that the targets were being met. In the NHS, there are hundreds of targets. For every three lower grade administrative assistants on £15K per year, count this as two young nurses on £22.5K per year, and just think a) how many more front line service providers could be employed or b) how much money could be saved, if the target culture was severely dismantled and local accountability handed back to local NHS services - plus all of the civil servants who collect all of these reports and collate them back into statistics for politicians to selectively quote as proof of their prowess.

Major savings are possible at the stroke of a pen ..."

And my comments to the above - "absolutely - I couldn't agree more ... what we need is 21st century management practice which would introduce "systematic & effective bureaucracy stripping" ... replacing league tables/targets, removing all the non-value added activities currently destroying the effectiveness of front line services, and redeploying resources to provide more front line services, as well as to supporting front line staff to systematically improve the level (and types) of services provided ... e.g. take a look my recent post here, as well as my book all about this too.

Traditional 'Economics' is dead - and a 'New Economics' is emerging

Stephanie Flanders recent asked for the "New name for a New Economy', when in reality the question should have been about a "New name for a New Economics" ... so I pointed out the huge insights Dr. W. Edwards Deming offered to the world nearly 20 years ago (and from which Leanomics and my book 'Lean World' are founded), and as the discussion continued some commentators questioned whether a "New Economics" is here now, or even needed, so I posted the following:

"... IMHO 'a New Economics' is not here yet, but it is starting to emerge - and following on from my previous post ...

'Economics is the social science that studies the production, distribution, and consumption of goods and services' (Wiki).

IMHO Just like other 'sciences', 'economics' (as defined above) has been functionalised, is too narrow in scope and is effectively dead. The failure all around us now is testament to this. It fails to account for the values (and/or the lack of values) people uphold, their beliefs, the political systems, leadership and management practices, the environment, the intrinsic motivation within people and social relationships that exist.

The fact that we are comparing ourselves more and more to basic animals (i.e. species with very low intellect) arguably shows how low we have now fallen, and how moral values have been progressively jettisoned from the field of play. The fact that economics today is more about how people make money from money (wealth manipulation), rather than adding any real value (wealth creation), is also testament to this, and the purpose of money as a basic bartering system has been almost completely forgotten. This is the world of Poweromics, which is still very much in operation today, with no moral/ethical values, standards or rules, and seeks to manipulate the system for ones own gain ... and it has failed the vast majority ... but has successfully transferred yet more wealth to a small minority - the already wealthy (even from those not yet born - eg spiraling Government debt due to bailouts/failure).

Ignoromics will gradually reduce as the majority of people's lives get much worse ... but Government's will no doubt create wars and blame other people, to divert people's attentions/anger away from themselves, the real villians & from what's really going on.

Some countries are already challenging Poweromics and turning themselves around, kicking out Poweromics (e.g. poor leadership, management, corruption) and using lean management practice (and Leanomics) to improve overall well-being and to create a sustainable prosperous 'economy'. Those that fail to act will fail to survive, and will die by their own ignorance, arrogance and ineptitude. Those current leaching off the others like a plague of locusts will also eventually destroy all the fields they are feeding off, and/or will find a new resistant strains that 'repel attacks' ... and those places where Leamomics starts to thrive will have no time/interest in 'parasitic organisms'.

'Leaders' looking to deflect blame, rather change the system (as well as the way they lead/manage), will be given short shrift soon ... and IMHO that time is not very far away"

One of the original commentators went on to say ... "I hear some college professor at Oxford is to give a huge chunk of his future earnings to a new charity - that's what I call a real change of behaviour but how many will or can really afford to follow his lead?"

To which I commented "This is just a small/individual example of Leanomics I would suggest - it's worth noting more young people/graduates are starting to shun the traditional corporate world ... as they also see the world very differently too ... and they are unlikely to remain on a 'sinking ship' either" ...

Building up a bigger crash

Whilst the Bank of England continues to print money to service Government debt, Banks are busy stoking up the next crash via another pyramid scheme (rewarding themselves huge bonuses in the process too) ... for instance, take a look this US article (as it also applies/relates to the UK too), as well some of the key additional points I've summarised below:

“Interest rates are close to zero; in effect the Federal Reserve is subsidizing the risk-taking and bond trading that has allowed Goldman Sachs to produce billions in profits and that infamous $16 billion bonus pool (analysts say it could grow as high as $20 billion). The Treasury has lent banks money, guaranteed Wall Street’s debt and declared every firm to be a commercial bank … They are all ‘too big to fail’ and so free to trade as they please—on the taxpayer dime.”

The Wall Street Journal reported Monday that Morgan Stanley has concluded that the amount of cash circulating in the global economy is at its highest level by far since the firm began tracking it 30 years ago. This vast wave of hot money can find no profitable outlet in production, so it is being pumped into stock markets and speculation on commodity prices and currencies. The result of a colossal global asset bubble that must sooner or later burst."

If the money taxpayers had provided to banks was steered into traditional banking only, and commercial banking separated from speculative trading (e.g. by Government's re-instating a Glass-Steagall type act), this type of behaviour would not be possible. Bankers would not be able to use government cash to underwrite short-term speculation to fuel their massive bonuses again, and they wouldn't be able to call upon taxpayers to fund their failure again either (i.e. once their current pyramid scheme collapses).

Commercial banks focus on lending to real 'wealth creators', to enterprises/institutions adding real value for others as well as to the well-being of the economy. Creating real wealth takes time, energy and resources, and is not a short term decision/investment/gamble. On the other hand, 'wealth manipulation', adds no real value, except to the bankers, traders and the already wealthy (who benefit further from this manipulation of wealth - particularly when it's taxpayers money being used to pay for all the failure). 'Wealth manipulation' takes very little effort in terms of time, energy and resources (e.g. beyond the passing on of 'pieces of paper') so banks see it a much easier (and 'profitable' way) of 'making money' from money (i.e. the velocity, and profit, from money is much greater), particularly when all the risk (i.e. failure) is taken on by someone else (the taxpayer).

... and it doesn't take a rocket scientist to work this out, so why have UK/US Government's chose not to heed such advice, and done absolutely nothing about splitting the banks up in this way? ... why have mainstream economists identified the fundamental flaws in the economic model? ... and why have the media been 'absent' in investigating this properly ... well it doesn't take a rocket scientist to work all these out either ...

and fail again it will ... but wow - decades more misery to sell news* ... and as the crisis deepens ... an attempt to create more wars to deflect people's attention away from the immoral/guilty ... so they can continue to quietly profit from the system ... and so the newspapers can sell more news ...

For this to change, Ignoromics needs to reduce quickly ... and Poweromics needs to be challenged too ... if apathy prevails for much longer, the outcome is pretty clear ... 'war'

* NB Good news/success doesn't sell (only bad news and celebrity does).

Connection between 'worth' and 'reward' obscured

The Archbishop of Canterbury, Dr. Rowan Williams told BBC Two's Newsnight programme: "There hasn't been a feeling of closure about what happened last year" ... "We haven't heard people saying 'well actually, no, we got it wrong and the whole fundamental principle on which we worked was unreal, was empty'."

What we are looking at is the possibility of a society getting more and more dysfunctional if the levels of inequality that we have seen in the last couple of decades are not challenged. Dr Williams went on to say ... "It's a failure to name what was wrong. To name that, what I called last year 'idolatry', that projecting [of] reality and substance onto things that don't have them."

He also said that the crisis was a lesson that "economics is too important to be left to economists" ... and he went on to suggest there was a role for "awkward amateurs" in examining how the City operates.

Dr Williams also said there was a sense of "bafflement" and "muted anger" at the bonus culture and said "I think that's one of those things that feeds the... diffused resentment, that people are somehow getting away with a culture in which the connection between the worth of what you do and the reward you get becomes more obscure".

He could have gone a lot further, and questioned the value/ethics of building an economy based on 'gambling' (instead of adding real value for communities), and the legitimacy of gambling with other people's money ... allowing a small minority to profit greatly when it goes well, only to be bailed out by the vast majority (taxpayers) every time it goes wrong.

He didn't mention the need to split commercial banking from investment banking, but he did mention the importance of 'wealth creation' (value creation & well-being) compared to 'wealth manipulation', which I have referred to in past blogs ... Leanomics will need to replace Poweromics (in terms of 'economics') very soon if our nations are to have any chance of a survival, 'success' and a 'sustainable future'.

More people need to take responsibility and challenge what is happening (see 'for evil to flourish') and as far as having 'awkward amateurs' examining how the City operates - I couldn't agree more ... in fact Leanomics would naturally create this ...

As time goes on, and things get worse, such messages will get progressively stronger, highlighting the fundamental lack of ethical and moral values prevailing in our 'leadership', as well as the fundamental gap (and flaws) between 'creating value' and 'monetary reward' that current exist ...

'Cutting' your way to 'success' is flawed

Supporting enterprise that creates value for others (and wealth for the nation) would be a good idea - as the revenues, and hence the taxes paid for by corporations / workforce, is what's actually needed to fund any public services in the future ... yet little mention / action by politicians with regard to this ... they all show they have no real policy/ideas on this at all ... hence their focus on cutting costs ... and they haven't really got a clue about that either.

What we see is current 'leaders' failing to 'lead' ... the government gave hundreds of billions of taxpayers money to financial institutions ... who prefer to i) make money from money (i.e. wealth manipulation'), to ii) gamble using other peoples' money, and to iii) profit from the good times and get bailed out by us in the bad ... nothing has changed, and we are continuing down this road again ... but with very little to show for it, except a massive debt to pay off, higher taxes and less & less cash to pay for public services.

Investment in entrepreneurship and real enterprise is needed to rebuild a sustainable economy and to fund future public services ... instead of trying to get investment to return into property again (alongside gambling) in the hope that international markets believe people in the UK will be prepared to take on more debt so that they can take a disproportionate chunk of people's salary in the process (for adding little/no value at all) once again ...

If the UK still plans to go for the latter, don't expect it to last for very long, as debt will continue to spiral out of control, more unemployed will need to be supported by the state due to the lack of enterprise, and many more enterprising/hard-working people will make a different choice on where they would like to live (e.g. remember EU borders are all open now)- and they will be unlikely to choose here (e.g. because of high property prices, high taxation and imploding public services ...)

Simply 'cutting' your way to 'success' is a flawed strategy. Innovation and value-added enterprise, supported by freeing up more resources to allow more value to be created, is far better (e.g. robust & sustainable) ... but current 'leaders' haven't got a clue ... fail to understand this ... and unfortunately the chicken's will eventually coming home to roost.

Posted on the Stephanomics blog (Post 17), and links to chapter 1 (page 9) of my book!

Challenging 'Greed' and creating a 'Leaner City'

Extracts from a City diary, from an insider who has worked in the City of London for over a decade ...

"... You get to the top by making more money than your peers. Competitive crafty, greedy people give their employers what they want and rise up the ranks. Greed is inevitable ...

... We're told by our chancellor that the solution to our crisis is more effective regulation of our banks, but regulation will never stop greed. Chancellor Darling also cites the notion that "spreading your risk is a good thing." This is a classic academic over-simplification and fails to account for human behaviour ...

... All that happens when risk is "spread" is that it ends up in the weakest hands and overall the system becomes saturated with the same risk. The mantra that diversifying risk is "good" ends up producing the opposite effect: we all fall down together ...

... It's why we must disentangle investment banking from more ordinary, commercial banking. It's the only way to stop another crunch in however many years' time ...

... After the Great Crash of 1929, the Glass-Steagall Act in the USA forbade commercial banks from conducting investment banking business. Since then, financial crises came and went without the disaster we've just witnessed. Separation of the two forms of banking prevented contagion ...

... The investment banks could be as greedy as they liked without recklessly endangering the rest of the population. Glass-Steagall was repealed after nearly seventy years in 1999 and it then took just eight years for the investment bankers to bring our entire global financial system to its knees, hold it to ransom and then get paid to fix it ...

... The politicians' solution? Merge more banks together and embed investment banking even more deeply into our financial blood system. Institutions that are "too big to fail" should, if we apply common sense, be "too big to exist". But instead they have become "too big to resist" ...

... If I am right, the next financial crisis, when it comes, stands to make the last two years look like a "warm up". When these newly engrossed banks fail, what then? For the time being, more of the same is the only prescription the politicians can conceive of. The bailouts that were sold to the public on the grounds they would help the ordinary citizen have failed to do anything other than nationalise previously private debt, leaving the "little guy" to fend for himself and pay up to the hilt for the privilege ...

... Closer to the ground, it's common to believe that these are uniformly hard times for everyone in the City. Not necessarily so. The firms that survived the bust have never known it so good - less competition, fees have gone up, margins have got larger - all courtesy of the reduced competition created by our politicians waving-through mergers as a solution to the crisis ...

... But none of what I see makes me any more hopeful for a better, leaner City. I want a City that properly serves the economy and acts as the lubricant, rather than the engine, of growth. I want commercial banks to make boring, safe loans. I want investment banks to be able to blow up without taking the country down. I want the ordinary citizen to be insulated from financial excess, not left out in the good times and then billed for the bad times. Yet none of this is on the way. Leaving me to simply ask: Why? ..."

Again great insight which very much echoes many of my posts (e.g. take a look at this recent one for instance) ... and I think the answer to last question partly lies in the fact that it's not in the interests of the 'small minority' currently in 'power', who desperately want to 'maintain power' so they can 'profit from power' (i.e. applying Poweromics). However Ignoromics will also have to reduce for this to be properly challenged ... for real change to take place ... and for us to see a "Leaner City" ... one applying "Leanomics" ... and focused on adding value and wealth creation (for communities/society) rather than wealth manipulation (for a small minority).

The 'battle of values' ahead is becoming ever clearer, and as more people take notice (and take responsibility) new 'leaders' will emerge and change things for the better (nb current 'leaders' are unlikely to this - for the reasons outlined in my previous post), and this is not very far away ...

Referred to on Stephanomics recent blog.

'Land' of the 'Free' ... but who's 'paying' for it ?

I've often referred to the folly of wishing for (and relying upon) house prices to rise again, as for most people this simply equates to 'paper wealth', not 'real wealth' (as everyone still needs a roof over their head), and it creates a huge (and totally unnecessary) financial burden on our children, and our children's children (e.g. because every month a huge proportion of their hard earned money has to go straight to the banks in interest).

Whilst this clearly starves people of their own money, it also constrains their standard of living, their freedom and choices, as well as their natural creativity & ability to innovate too - which could otherwise have been put to good use in creating 'real value' for others ... for their community, as well as creating products & services that are tradable all around the world (which creates more 'value' and 'prosperity' for a nation).

At present most people do not realise what's going on and they simply join the 'treadmill of life', looking to buy a house, taking on huge debt and having to desperately look for ways to pay it back (e.g. through any 'money for nothing' scheme they can see themselves, such as more property speculation, using buy-to-let-schemes, for instance). The problem with this (besides all the ethical ones) is that 'wealth manipulation' does not add 'any real value' (or wealth) to an economy / nation, or increase a nation's overall well-being & happiness ... and it doesn't reduce a nation's trade deficit or level of borrowing either (in fact it makes all of them worse) ... and just like any 'pyramid scheme', it's now starting to collapse, big time, and it has the ability to take the 'whole nation' with it ...

So how have we got to this? Well, there are many steps that have taken place, but arguably one step in the wrong direction took place in the UK during the late 80's/90's (under Margaret Thatcher) as she tried to introduce the Poll Tax. Do you remember all the demonstrations that took place as a result, the fact that it led to Margaret Thatcher eventually losing her job, and that it was updated/changed to a Property Tax instead (that's still levied today)? It turns out that the changes Margaret Thatcher made were still highly significant - as a land tax (or Land Value Tax) would have worked entirely differently in 'economic terms' to a property tax - as one taxes land ownership, whilst the other taxes people based on the value of a property (and not the land itself) ... which we need to understand further ...

Land Value Tax is well known and arguably one of the simplest, fairest and best methods of taxation, as it taxes all land ownership based on it's potential value, based on it's natural position/resources and the community/amenities placed around it (e.g. people, jobs, transport, services) ... which are placed their by us - the Community (hence the original, and true definition, of a 'Community Charge'). It deliberately separates the 'value of the land', from the value of a 'property' (i.e. the basic bricks/mortar) on that land so it can tax land, and not the building - which is effectively the opposite of what we have now! By taxing land ownership (not the individual tenants or property) it also drives landowners to seek better 'economic' use of any land they own (instead of simply hoarding it and watching the value of their land grow without doing any work at all) ... and it has numerous more positive aspects too ... for instance when implemented properly the land tax itself cannot simply be passed on to those who live there, or who 'use' the land, because of the overall environment and the natural 'economics' that's created, as it simply taxes land based on it's 'economic value', and if landowners seek to pass on this tax, then people & enterprises are able to adapt and move to where the 'economic' conditions are more favourable (and the landowner has to pay the tax whether they are using it to it's full potential or not !) ...

A Property Tax (i.e. based on the size/value of a property) naturally moves the focus of attention away from adding value and switches it to 'asset speculation' instead. It also arguably avoids one of simplest forms of taxation (e.g. it cannot be avoided, it stops asset speculation/hoarding, and it arguably provides one of the most 'natural', 'ethical' and 'fairest' forms of 'economics' known to mankind). The avoidance of land tax, coupled with the fact that 'land' is one of the very few things left that is still not subject to 'inheritance tax', has made wealthy land owners pay far less for 'owning land', to 'hoard land', and to pass on land/wealth to future generations (without the risk of inheritance tax) ... so they can also continue to make money from it without doing anything at all (yet another example of 'wealth manipulation' instead of 'wealth creation').

One could argue that a Conservative Government would naturally want to do this as the party is well known to be 'sponsored' by the very rich, who are clearly the small minority benefiting greatly from such steps. However, when Blair/Brown took over they did very little about it, in fact they complicitly supported house price inflation, as coupled with banking (nb mainly 'asset speculation' and 'wealth manipulation' again), became their way of 'building' economic 'growth' without apparently having to work hard or creating lots of real value (and by two 'leaders' who preached to us prudence and who were supposedly brought up in the 'ways of the church')! One clear (and arguably callous) example of this was when they deliberately changed the Bank of England inflation target to one which specifically excluded house prices ... to allow house prices to continue to rise unchecked (i.e. as interest rates would no longer have to rise). Hence the 'illusion of wealth' was extended a lot longer, which will make the fall much deeper and greater now.

Real wealth is created by building new homes, not the price of existing homes going up. The bricks and mortar in themselves should arguably normally depreciate as they get older too, though the land value may grow (which is another good reason for separating the two). Yet the current system continues to incentivise landowners to hoard land and benefit from its continual growth in value (at very little cost - nb the low ceiling deliberately put in place with the property tax) and often without using it. Insufficient supply of housing, due a mixture of hoarding, demographic changes and increasing marital breakdowns (nb which are often related to money and stress!), means basic 'economics' (i.e. supply and demand) will make prices of property more than they could/should be, but arguably the main reason for all of this was to raise tax but i) to avoid a 'Land Value Tax' (so as to mostly ignore the real 'economic value' of land), and ii) to favor 'wealth manipulation' over 'wealth creation' ... and until both of these are reversed, things will only get worse ...

Value creation will continue to decline and unemployment will grow, borrowing and trade deficits will continue to get worse too ... all that will continue is wealth being transferred to the landowners, the bankers, and the already rich, whilst everybody else pays for it in their taxes, mortgage interest and their worsening quality of life (and for generations to come) ... so who's 'paying for it' - well it's pretty clear that good and otherwise hard-working people & communities are ... in terms of their well-being & happiness, the 'spare' money they have to spend, and in the 'freedom' they have and the 'choices' they are able to make ...

Solutions do exist, but those currently in 'power' will try to 'fight' any such change. In many ways we face a battle that 'transcends nations', and circumstances will continue to get worse until more people start to take proper notice, realise what's actually going on, and decide that this must change ... in the future we need to reward 'wealth creation' not 'wealth manipulation', and we need to move away from the toxic mix of Poweromics & Ignoromics we currently have today ... to a much wider, much fairer, and far more holistic form of 'economics' ... which I call 'Leanomics' ...

Land Value Tax should arguably be introduced early on (nb places like Hong Kong, Denmark, Singapore, Taiwan and Australia already have it and it works very well), so that it can replace, or at least dramatically reduce, other arguably less fair forms of tax* ... such as taxes on jobs/employment [Income Tax, National Insurance Contributions], taxes levied on enterprise [Corporation Tax] and taxes paid for providing goods/services (i.e. real value!) to others [Value Added Tax] and all the other 'stealth taxes' [e.g. road tax, congestion charging**] for instance too ...

As can be seen here, Leanomics is based on an entirely different 'values system', and one that focuses on (and rewards) ...

"People taking responsibility for adding value and continuously improving the situation for others (e.g. customers, communities, overall environment), based upon fundamental values such as trust, honor, responsibility and respect"

... a system very different to one the UK has right now, but ones that other nations (particularly smaller nations and those in the far east) understand only too well ...

* It is also worth noting that these are all set to rise dramatically in the future (VAT increases etc have already been announced), not reduce, to pay for all the current failure!

** If you're perhaps wondering where 'carbon taxes' fit in, and why I've included road tax and congestion charging as 'stealth taxes' here too, you may also want to read this.

Wealth creation vs Wealth manipulation

In this blog I've been discussing the 'battle of the future', a 'battle' that 'transcends nations' - a 'battle of values' ... and as the 'illusion of wealth' now evaporates, and as our current 'leaders' dis-regard the future of our children, and our children's children (to try to prop up a 'failed system' for a few more years), the battle will become ever clearer ...

And I define this 'battle' in a very simple way ...

Leanomics vs Poweromics & Ignoromics

where ...

* Leanomics = People taking responsibility for adding value and continuously improving the situation for others (e.g. customers, communities, overall environment), based upon fundamental values such as trust, honor, responsibility and respect.

* Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed.

* Ignoromics = People are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better.

and where Poweromics and Ignoromics are 'partners in crime', which arguably describes the prevailing 'values system' and 'economics' we have today. But in the 'battle of values' ahead there is also another 'battle' we will face too, and that is the one of ...

Wealth creation vs Wealth manipulation

... for instance take a look at my reply (Post 71) to a great post on Peston's Picks ('who'll be shot when banks misbehave') below ...

"I agree with much of what Post 61 said, and particularly the following ...

"... the solution does not lie in tinkering with the norm, or fiddling around the edges - the solution has to be to dump the system which forced public money to be used to bail out the banks ... The solution is simply to get off your backside and overturn both the political and economic system. I can't tell you what the result will be - but it's no good moaning about it unless you are prepared to do so ... Every other solution is simply time wasting ... New regulation will not resolve it - hanging bankers from bridges won't resolve it - changing the Government from red to blue won't solve it ..."

IMHO we also need a 'new values system' - one that rewards 'value creation' & 'wealth creation', instead of 'wealth manipulation'. The latter of these often destroys 'value' (and 'overall wealth' too) and hence this should be made far more difficult to do and arguably be taxed far more too ... but therein lies a problem, the people in 'power' will fight tooth and nail to maintain their grip on 'power' so they can continue to 'profit from it', and from 'wealth manipulation' (e.g. bankers, politicians) - supported by laws introduced to help create this environment and to maintain it into the future too (nb as post 64 pointed out above all these laws fail to challenge, in any effective way, all the unethical practices being carried out by themselves).

The internet will change everything eventually, including 'power', 'politics' and 'economics' ... and the real 'battle of the future' is a 'battle of values' that 'transcends nations' which will continue to accelerate as 'times get harder', 'understanding grows' and 'apathy reduces' ... (which is arguably what 'current leaders' are really getting worried about ... hence all the knee-jerk reactions we currently see to try and delay this for a few years more).

IMHO there are interesting times ahead ... history tells us change will happen, but with the arrival of the internet change is likely to happen in very different ways ..."

NB there are a great many other insightful comments on this blog too ... and I would recommend reading it ... as the comments show us the 'future battle' is becoming ever clearer ... and take a look at this equally relevant blog too ...