Category Archives: Economy

UK Election Exposes Shocking Social Chasm

It happens that as the UK goes to the polls today many marginal constituencies are based in rural areas and expose an unexpected economic vacuum throughout the economy.

The numbers are striking.  Very wealthy people live next to swathes of people surviving on charity who would rather work but jobs are scarce and low paid.

The Cotswolds charm tens of millions of tourists each year. It is a place that provides a rural sanctuary for billionaires.   ….  but it is the hub for many more who are in such a financial crisis that they are unable to feed themselves.

Maybe the issue is not about red or blue, labour or conservative, but about a system change in which it is recognised that the city is dead without its hinterland, that people need work however much automation is available and that the gulf between rich and poor is not about equality but about fairness, justice, equity.   Human beings need sustenance and love.

BBC:  Election 2015: What’s important for rural voters?

Social, economic, intellectual capital and the memes of society: expectations determine wealth.

The emerging science of memes hold the key to modern business success.  Be a part of a growing meme and you win.  That is the aim of leading marketers.

What is a meme?  It is culture.

How do you measure it?  Using social, economic and intellectual  measures against a backdrop of psychology.

Getting data is not easy, though guessing data is everyone’s prerogative.  A UK study has produced extensive data which can help you understand yourself, your happiness and your life goals, whether or not you live in the UK.: Regional Personality Differences in Great Britain

The Big Personality Test worked out people’s “Big Five” traits. These are widely recognised and well-used scientific measure of personality.

  • Openness – To what extent you are receptive to novel ideas, creative experiences and different values
  • Conscientiousness – To what extent you are organised and exhibit self-control
  • Extroversion – To what extent you are inclined to experience positive emotions and how attracted you are to social, stimulating experiences
  • Agreeableness – To what extent you are concerned about the feelings of others and how easily you form bonds with people
  • Neuroticism – To what extent you react to perceived threats and stressful situations

ukpersonalityneuroticism_openness_624

ukpersonalityconscientiousness_464ukpersonalitynewextroversion The findings become more poignant when considered against socio-economic groupings characterised in  The Great British Class Survey completed a couple of years ago:

  • Elite: This is the most privileged class in Great Britain who have high levels of all three capitals. Their high amount of economic capital sets them apart from everyone else.
  • Established Middle Class: Members of this class have high levels of all three capitals although not as high as the Elite. They are a gregarious and culturally engaged class.
  • Technical Middle Class: This is a new, small class with high economic capital but seem less culturally engaged. They have relatively few social contacts and so are less socially engaged.
  • New Affluent Workers: This class has medium levels of economic capital and higher levels of cultural and social capital. They are a young and active group.
  • Emergent Service Workers: This new class has low economic capital but has high levels of ’emerging’ cultural capital and high social capital. This group are young and often found in urban areas.
  • Traditional Working Class: This class scores low on all forms of the three capitals although they are not the poorest group. The average age of this class is older than the others.
  • Precariat: This is the most deprived class of all with low levels of economic, cultural and social capital. The everyday lives of members of this class are precarious.

You can draw some broad insights:

  • You are likely to be happier anywhere if you are less neurotic.
  • Investment in social and intellectual capital gives equity to all economic profiles.

PLOS One: Regional Personality Differences in Great Britain

BBC: Where does my personality fit in?

BBC: The Great British Class Survey – Results

Global systems in transition – accountants seeing the light.

Dr Hazel Henderson has released a summary of her upcoming book Mapping the global transition to the solar age – From ‘economism’ to earth systems science.

Drawing on over 40 years of data and experience, it offers a comprehensive summary of the issues faced by global systems and indicates ways forward.  It is sponsored by people and organisations from a traditional mindset, such as the ICAEW,  which endorses its validity to conventional businesses.

It is worth downloading the free version and reading it while on train or plane going to your next meeting as it could stimulate new thinking that will help your business thrive.

Ethical Markets

ICAEW

 

The price of oil is under pressure – high stocks and soft demand

The oil price has been a focus of attention for half a year or so since it dropped rapidly last year when Saudi Arabia stopped restricting supply.  The immediate effect was to put pressure on marginal sources, like fracking, and to give consumers a break.

This report by The Economist offers valuable insight, saying that the industry believes that the decline in prices will be long term. While a recent bump in prices has been driven by production going to restocking rather than sales, inventory is nearly at full capacity and so restocking will not provide relief from the steady supply.

Large oil firms have cut capital spending budgets by 20% and see new discoveries falling.  That would suggest a rise in prices, but inventory is high, production is stable and demand is not growing.  As big business, government policy and consumer behaviour increasingly turns to sustainable energy alternatives, the demand for burning oil may decline.  Let us hope so.

The Economist: The Saudi Project, part two

 

Deflation is everywhere. So what? It’s another crack in the wall.

Concerns about deflation are becoming widespread.  Deflation is unwelcome because it makes loans more difficult to pay off and dampens economic vitality by encouraging hoarding of cash (some banks offer negative interest for deposits).

There were concerns about the spectre of inflation back in 2008/9 but they were held at bay until the recent drop in oil prices.   Now it is difficult to encourage the optimism required to stimulate economies because the fundamental dynamics have not been addressed.

Job growth has not delivered livelihoods to people at the bottom of the pyramid.  Growth in part time jobs has occurred as businesses  fill needs without committing to the full cost of employment.  This means people have a job but can barely save cash at the end of the week, if at all.

While people in big cities might feel more optimistic the fundamental activity of economies around the world continues to be impacted by natural resource constraints and a top heavy, over-extended economic system.  The recognition of deflation is another sign that global systems have not been repaired since the financial crisis.  It is worrying.

As a sustainability advocate, I also see things from another angle, which is that deflation is exactly what the world needs.  The science of the biosphere is that there are too many people consuming too much for natural systems to bear.  It has been possible because of oil (millions of years of sun’s stored energy) but the consequence has been deterioration of ecological systems leading to climate volatility, species loss, water shortages and the impending vicious cycle of habitat loss.

We need success without growth.   That is possible, but we must all choose.  Policy makers must be bold if they are to see the new paradigms that are possible.  We must do more with less.  We must respect and enjoy our connection with nature.  As far as the banking system goes, it must continue to deleverage and become more transparent.  The biggest unspoken hindrance to positive change is corruption which increases the higher up the pyramid you go.

What to do?  Vote for change with your wallet – buy clean food and other goods, eschew packaging and dross.  Support people who make things.  Educate everyone.  Enlighten culture by supporting the values that everyone knows are right.  And if you are at the top, turn your organisation upside down – that will make the world a better place.  Good luck.

The Economist published three articles on deflation this week, so it must be serious.  Here they are:

The high cost of falling prices

Worse than nothing

Feeling down

1% own more than everyone else by next year: a decadent milestone in the implosion of civilisation.

 Oxfam research shows that the share of the world’s wealth owned by the richest 1% increased from 44% in 2009 to 48% last year.  Each adult on average has $2.7m.  On current trends the wealthiest 1% will own more than 50% of the world’s wealth by 2016.

Today the 80 richest people have the same wealth as the poorest 50%.  20% of people (including you – sorry!) own 94.5% of wealth.  The average wealth of the poorest 80% is only $3,851 (€ 3,320) per adult.

The wealth at the top is not just from hard work and prudent asset management.  That would at least be honest.  Much of it has been accrued through tax avoidance (even tax evasion), collusion, corruption and confiscation by force.  It’s not just the wealthy that cheat – many people game the system and take housing and unemployment benefit while having jobs – though of course they are not the bulk of the problem.  And overall, humanity has taken too much from nature.

The imbalance will not last.  The longer it takes for fairness (not equality) to dominate our systems, the more likely that rebalancing of wealth will occur by violent revolution, destroying much of the wealth, rather than humane evolution which might preserve wealth.

Systems are clearly breaking down.  Economic systems remain confusing and stagnant despite at least 6 years of patching.  Employment opportunities are shrinking as technology continues to automate production from food, to cars to banking.  Everyday there is another report of environmental disintegration, whether from climate volatility, species loss, or water shortage.  And people are not any more fulfilled.

System change is still possible and increasingly urgent.  Everyone can make a difference by choosing how they invest and spend their money.  But those at the top must lead change or expect to be swept away in violence as society disintegrates in the coming decades.  This is becoming more certain.  The Limits to Growth have been passed.

BBC: Richest 1% to own more than rest of world, Oxfam says

Astraea: Data shows global growth now past tipping point. Global collapse occurring. Whole systems change imperative.

Wikipedia: Limits To Growth

DMI: A Synopsis: Limits to Growth: The 30-Year Update

Club of Rome: Limits To Growth

 

“The Facts” about sustainability, the environment and your future.

Below are the facts stated in the film Cowspiracy and their references.  Which ever side you’re on it’s good to know them.   For example, one takeaway from the ideas presented is that we can resolve environmental problems, reform economic systems and still keep our cars, if we change our diet.  If you take that with a pinch of salt (ha ha) it actually sounds quite interesting.  Anyway that’s a conversation for another day.  Here are the facts:

Animal agriculture is responsible for 18% of greenhouse gas emissions, more than all transportation combined. [i]

Fao.org. Spotlight: Livestock impacts on the environment.

http://www.fao.org/ag/magazine/0612sp1.htm

Transportation is responsible for 13% of all greenhouse gas emissions.

Greenhouse gas emissions from this sector primarily involve fossil fuels burned for road, rail, air, and marine transportation.

Environmental Protection Agency. “Global Emissions.”

http://www.epa.gov/climatechange/ghgemissions/global.html

Livestock and their byproducts account for at least 32,000 million tons of carbon dioxide (CO2) per year, or 51% of all worldwide greenhouse gas emissions.

Goodland, R Anhang, J. “Livestock and Climate Change: What if the key actors in climate change were pigs, chickens and cows?”

WorldWatch, November/December 2009. Worldwatch Institute, Washington, DC, USA. Pp. 10–19.

http://www.worldwatch.org/node/6294

Methane is 25-100 times more destructive than CO2.

“Improved Attribution of Climate Forcing to Emissions.” Science Magazine.

http://www.sciencemag.org/content/326/5953/716.figures-only

Methane has a global warming power 86 times that of CO2.

NASA. “Methane: Its Role as a Greenhouse Gas.” Jet Propulsion Laboratory.

http://www.jpl.nasa.gov/education/pdfs/podest_ghg.pdf

Continue reading “The Facts” about sustainability, the environment and your future.

COP out? Yes! Sadly as expected, but what else could happen …

The 20th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change treaty ran over by a couple of days as delegates from over 190 countries “negotiated” the language of resolutions to control carbon emissions.  Rich countries don’t want to pay for past emissions; emerging economies don’t want their opportunity for the luxuries enjoyed by rich countries to  be jeopardised.  The consensus was that results were unsatisfactory.

The confrontational nature of discussions means they will not develop new systems that save humanity from growing environmental pressure and related economic problems.  No viable solution can be found until everyone recognises the common goals which are underpinned by the interconnectedness of people to planet and its biosphere.

Can you do anything?  Yes!  It never seems to be enough but taking a step in the right direction does make a difference.  Changing consumption habits and changing what you say to your friends is what changes culture and behaviour of a population.  Every little bit you do to make a difference, DOES make a difference.  The more people that take a step in the right direction, the sooner we’ll have more attractive options than environmental implosion, economic volatility and social violence.

So even if they don’t “cop on”, we can all make a change for good.

At a recent book signing for Common Sense, I was asked questions about what can be done.  The consensus was to cut back on beef consumption because it’s simple and has a huge impact.  Once you’ve done that it’s easier to cut back on other gratuitous consumption like packaging, cosmetics, detergents, and travel and easier to spend more time with friends and family.  Enjoy them and the planet while you can.  🙂

We’re ALL living next to slaves. 36 million of them.

Walk Free published the 2014 Global Slavery Index which makes for sad reading.  167 countries have them, including some which really shouldn’t:

Japan 240 thousand
South Africa 110 thousand
Singapore 5 thousand
USA 60 thousand
Italy 11 thousand
Germany 11 thousand
France 9 thousand
UK 8 thousand
Ireland 300

The report defines slaves as people subject to forced labour, debt bondage, trafficking, sexual exploitation for money and forced or servile marriage, none of which sounds like it should be acceptable in the countries above.

What can you do?  Be aware that it happens.  Don’t turn a blind eye.  And if you see signs of it, tell someone in authority.

Global Slavery Index Report – findings

Walk Free

BBC: Almost 36m people live in modern slavery – report

 

 

Malnutrition costs the global economy over 3 years’ GDP growth

The Global Nutrition Report said that  globally, malnutrition led to “11% of GDP being squandered as a result of lives lost, less learning, less earning and days lost to illness.”

And the numbers are made more appalling by the fact that they cut both ways: not enough food and too much food.  Every nation except China (whose regions could probably be included if you separate urban and rural) had crossed a “malnutrition red line”, suffering from too much or too little nutrition.

On the sad side of the spectrum the UN World Food Programme estimates that poor nutrition causes nearly half of deaths in children aged under five, that’s- 3.1 million children each year.  In addition lack of food restricts brain and immune system development.

_78913064_overweightwoman2paAt the fat end of the wedge the problems include obesity, diabetes, vascular disease.

Ironically half of the countries are grappling with under-nutrition and also over-nutrition problems!

You would think that bi agribusinesses and food companies would have helped but they seem to exacerbate the problems by pushing sugar to the overfed and pulling livelihoods from the underfed.

The global nutrition report.

BBC: World is crossing malnutrition red line, report warns