Rob’s comments are in italics.Derek’s comments are in normal font.
I wanted to give a summary of my plan for the book and for the listeners to this podcast today. If you've been listening for the last year or so that we've been running this, we'll have already covered some of the material that will go into it. We will probably go through it again in a more systematic, structured way.
Provisionally, we've decided to call the book Unravelling the Money Puzzle. The book is meant to fill a very important gap in your education. We're all thrown into a world where money is a big preoccupation for all of us, in some cases voluntarily, in a lot of our cases reluctantly, but it has to be dealt with in some way or another. I often feel a bit like we've been pitched into a game where nobody's explained the rules of the game.
We all have a bit of practice as kids. We get given a certain amount of pocket money, and we have to budget for it, but without anybody explaining what that involves or how to go about it, it probably doesn't leave us with much ability to deal with the complexities of life. I will say that those complexities have got a great deal bigger throughout my lifetime. Nowadays, almost everybody, as far as I can see in the Western world, accepts being in debt to a greater or lesser extent and possibly a crippling extent as a more or less inevitable circumstance of life. As recently as, let's say, 60 years ago, that wasn't the case for most people. I'm talking about my own experiences in England. The same applies across Europe, the United States, and the Western world.
Are we including taking out a mortgage and things like that in that category of debts?
Well, I think I'll come back to that. A significant number of people did have mortgages in the 1950s and 1960s and probably even back to the 1900s. We'll be covering in greater depth how that worked when it was a workable situation and how it's working now that it's turned into a gigantic swindle.
Incidentally, not everybody is trapped, even today. I do know one person who bought a house, believe it or not, in London, Greater London anyway, about five or six years ago, I should think, and she and her husband have paid off the mortgage entirely.
It is possible not to be totally suckered by the system, but not many people have the leverage to manage to do that. Anyway, apart from mortgages and to a much smaller extent, bank loans for a very large purchase, like probably a motor car, were the only ones for most people. But apart from that, people weren't in debt.
That was not because they were particularly vigilant about it or self-disciplined. There simply wasn't the opportunity. There wasn't the mechanism. Most people dealt entirely in the cash economy. They got their wage packet on Friday. That had to last until the next Friday. When there was no more money in their wallet or their pocket, there was no opportunity to spend anything. The exceptions for that were very minor. Many working class communities had a local shop, which would allow well-known, regular, known-to-be-reliable customers to run up a tab if they ran out of money by Wednesday.
That was to the advantage of the shopkeeper, who would sooner sell a bag of sugar on Wednesday than lose the sale. It was obviously to the advantage of the customer, but if they didn't pay up on Friday, they wouldn't get anything else out of the shop until they did.
The system expires if you don't honor it.
Exactly. There was a slightly larger scale version for middle-class people. Most reasonably sized towns had a department store. The department stores were locally based businesses in those days, they've all gradually been absorbed into the massive chains, some of which have subsequently gone bust as we know. There was an account system customers who were deemed to be reliable, which usually meant at least having a bank account, which the majority of the population didn't, and who the bank would give a coded reply to the inquiry as to whether they were reliable, that was a satisfactory reply. They could make purchases over a month and then be sent an account at the end of the month. They'd have to settle the balance on that before the next month. Once again, if they didn't, there would be no more. If it got dragged out, eventually, the bailiffs would come around. There was probably a bit of flexibility for customers who were well regarded to make large purchases. If they wanted to buy a complete suite of furniture or something, the department store manager would be happy to sell that to them and give them perhaps two or three months to settle. But it was an informal arrangement, case by case, and a very small part of people's transactions. So, as I say, the rules of the game have changed dramatically.
There has been an enormous facilitation of people, mainly in the form of credit cards, to draw them into debt and then pay exorbitant interest rates if they don't settle. It's not only made very easy, but they're constantly enticed to run this up.
As I said, the rules of the game have changed dramatically, and we’ll cover how in the book.
The book will consist of three sections. The first one is demystifying economics. This is, you like, to give you an idea of what makes sense in the realm of the theory of money, what money is, what purpose it serves, and how well it serves that purpose or fails to do so. We'll also discuss things like wealth, capital, and how wealth is created and destroyed.
That leads to the second topic of the book, which is the creation of wealth. Wealth is created by collaborations of people in what is called an enterprise. When I use the word enterprise, we immediately think of a business, probably a small business. I'm using the word in a very general term. One dictionary definition is a group of people cooperating to achieve a specific outcome. That covers a business, a charity, a social grouping, a sports club, and a government.
Certain principles of running an enterprise apply to all of those things. I think most of us have a kind of intuitive grasp of some of them, but we're going to spell them out in explicit detail so that you get a real understanding and then you can think about it. You can think about all the enterprises that you're involved in in your life. Even if you're not running a small business, you're involved in an enterprise your employer runs. You're involved in an enterprise in so far as we supposedly participate in some form of democratic government. We're involved in an enterprise if we're in any club or social grouping or charity. Having an explicit grasp of those will be of immense value to you. It's extraordinary; all the topics covered in this book are not part of our formal education system.
Of course, if you're running a self-employed small business, you might well be all of those roles, but it's a pretty good idea to have a clear idea of the role and be clear how much time you're spending on each of those things, how much attention you're giving to each of those things, what your rate of return for the time that you expend in those things because of course if you're running a small business one of the things you might find is that if you get a grasp of the going charging rate for your thing, you'll find it's reassuringly much more significant than what you would be offered as a wage or salary for doing the same work. But it took me a lot of hard knocks to realise that it needs to be because all kinds of things must be carried.
If you're an employee, you get to the end of the week and you get your pay. If you're a small business, you may or may not get paid in any given period. You can guarantee that you have to do a lot of work in those other areas that have not got an immediate invoice attached to them yet, which are essential. So all of that has got to be covered.
If I can add to that, I think a job is almost like a preconceived container of value as defined by someone else. That definition of value might not actually match your real value, which is why a lot of people feel like they don't get paid according to their worth because it's someone else's definition of the value that you're going to provide from your time.
Exactly so, yep.
Of course, they wouldn't be providing the position for you to work in unless they perceived it, rightly or wrongly, as being of more value to them than what they're paying you. I might have mentioned then that I worked as a test engineer in an electronics factory. I went for the interview, and they said, “Well, we think you're probably overqualified for this job; we've only got this amount of budget for it.” I said, “OK, that's fine.” It suited me to have something at that point. They said it would be a month trial on either side.
Anyway, I reached the end of the month, and they'd been very impressed with my output. So I went to my immediate manager because, coincidentally, this was when I got the tip-off that there was a job going in the recording studio. I went for the interview and got that job. So I went to my manager and said, “You know this month's trial on either side? I want to terminate it when the month expires.”
Needless to say, he was quite upset. He went and saw his boss, who was even more upset. He went and saw his boss, who came round to me and said, “I don't suppose it makes any difference if we offer you some more money.”
Instead, they could have structured it so that we can pay for the first month and we will review the situation with you depending on your performance. That's the kind of thing that very rarely happens in large corporations. I've been shocked by the lack of attention to their self-interest by people running corporations. It seems to get worse the larger they are. Has that been your experience?
Yeah, I think it's short-term rather than long-term thinking to incentivise and keep the right people.
Part of the problem is that in most corporations, at any level, until you get to the executive suite, people have very little stake in the company's prosperity.
So, the book's third section is, in a way, the most important one for your future well-being over the next decade or two or three or however long you have left on this planet because the third section will deal with the peculiarities of our age.
Everything we've covered in the first two sections will be perennial principles, things that could have applied any time from ancient Babylon up until the present. Of course, there will be more of those which are perhaps more specific to the industrial age, more again into the information age, they're perennial principles. But we're living through an extraordinary time in human history. We will be covering what is peculiar about this, what has led up to it, what is unsustainable in the literal dictionary meaning of that word, what the options are, and what the options are for humanity in general and for you.
Any comments on that?
Yeah, and I think the options for what humanity are, the options for humanity in general, I think when I speak to so my dad about this, he's like, well, you can't do anything about it. I'm like, yeah, but if everyone thinks that, then we end up in that situation, and then that becomes true. Whereas maybe your decisions have more of a butterfly effect than you realize.
Absolutely.
Not only that, there is the phenomenon that has been speculated about by the wisest of people for literally thousands of years and which Carl Jung had, which he called the collective unconscious and which Rupert Sheldrake called the morphic resonance field and which many thinkers and philosophers and mystics and seers and wise people have contemplated for years. We certainly see some extraordinary examples of it. I'm told, you know, some of these things that could be urgent urban legends. I don't know, but milk was delivered in bottles with foil tops for many decades. Suddenly there was a blue tit who decided that they could pick through the foil lids of the bottles and drink the cream off the top of the milk. Very rapidly blue tits in widely different parts of the country or continent started doing the same thing. On the face of it, there's no mechanism for doing that.
A bigger scale example is that we were all taught that the beginnings of the agrarian civilization started in the Fertile Crescent in the Middle East, up the Nile, the Tigris and the Euphrates and down the River Jordan in the fertile river valleys around there. The extraordinary thing is that after human beings theoretically had the capability of doing that for at least 50,000 years, possibly 100,000, possibly 200,000, over that kind of geological time scale, there was very very little physiological evolution of the brain or the nervous system or anything else. Yet, at the same time, give or take a thousand years or so, a similar insight appeared in the Indus Valley in India, in the Yangtze Valley in China, and in the civilizations of Mexico and Peru. There was no conceivable way that any messages could have been exchanged between those in any tangible external sense.
This is one of the things that gives me hope. I think so many more people are thinking along the lines that we've just been mentioning that at some point, that will become a critical mass. The other thing that shows that we're boiling up for a bigger change than most people can imagine is if we look at the events happening now. You probably heard me mention the phrase reductio ad absurdum? That’s certainly what we're seeing in this country with Keir Starmer's posturings, in France with Macron's posturings, and in Europe generally with Ursula van der Leiden's pronouncements: people who are completely disconnected from reality. Starmer's been pledging billions of pounds in weapons and ammunition and munitions to Ukraine, been offering to send a peacekeeping force to stabilize the situation once the hostilities stop. All of these things are complete fantasies. They're not going to happen. We haven't had the money to run our hospitals, schools, and universities. See, yeah.
And those things are what people want.
Yeah. Even if we did have the money, that would be a better place to spend it. Another thing boiling up, if you look at the Ukraine conflict, is how futile it is to send this sophisticated weaponry.
It's a racket, isn't it? I think it's a form of taking money from the public domain that may not even exist yet. It's creating money in the public domain and siphoning it off to the private domain.
Yeah, absolutely. But it's reaching a point of absurdity. It's reaching a point of self-contradiction, which has to be becoming so in your face that it is more or less inevitable that more people will notice it.
Of course, the other major fiasco of the week was Zelensky's meeting with President Trump. There are two different narratives about this. One is that they're ashamed of, especially if they're American and beholden to the Democratic Party. They're ashamed of the disgraceful way that their president treated this brave freedom fighter. The other narrative is that Zelinsky came across, he had no idea of how to play the very small hand of cards he had to be fair, but he had no idea how to deal with the situation, brushing up against the guy who is arguably the most powerful person in the world, and certainly one of the biggest egos.
Once again, the mainstream media's view is somewhat skewed because they showed the end of the interview when Trump, according to some people, lost it, and, according to other people, they gave him some home truths and advanced it much the same way.
I've seen people who've analysed the whole thing. I haven't got 20 minutes to watch the whole thing all the way through, although it does make great theatre. I've seen some analyses and some clips from earlier on. The point is, Zelensky, for a start, just turned up in his combat fatigues, which is a conceit anyway.
He must sleep in his combat fatigue, so it's part of his act.
Yeah, it is. It was totally an act, and it was inappropriate for a heads of state diplomatic meeting.
Many Americans saw it as a deliberate insult, so it was not very well judged, even though that is his act. Then, in the earlier part of the meeting, he repeatedly interrupted Trump, contradicted him, and made demands in a very insolent manner rather than polite requests.
Trump was very gracious. He fended it off, made light of it, and then eventually just blew a gasket. Now, it's actually given him the excuse to do what I think he wanted to do anyway: cut off the munitions and weapons supplies and cut off the intelligence, which should bring the war to a much more rapid conclusion than it otherwise would.
Well, that has to be a good thing. I'm less confident about the situation in Gaza. If you want to know what the empire's up to, I would keep an eye on that location.
Yeah, I do not know either, but I suspect that there might be unintended consequences anyway, which are far more telling than anything intentional. I also think that a larger picture may be force majeure.
Okay, I think that could wrap it up for today, could it?
I think so, yeah. No, I think that's a good overview of the book. I'm excited to read it, even though I'm going to be contributing a lot of the input. Yeah, I'm looking forward to it. If anyone is listening, we'll update you in due course when we will launch a date.
Yep. Of course, by following this podcast and/or reading the transcripts, you can see the book unfold in real time over the next few months. Okay. Until next week then. Thank you, Rob.
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