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i like what merv is doing. the bond market leads all others.

let the others do what they want. the uk has its own solution.

Excellent piece, a great distillate of recent economic history.

So at the limit the choice remains do we carry on with the game ( market capitalism ) as per the rules? or turn over the table and go home to our country/state/tradebloc ?

So carry on, keep playing the game turn after turn ? To carry on would encapsulate the Marxist/Hegelian end result of a single global economic entity. The creditors in the game would exchange their money for the debtors wealth at a market rate. The political sovreignty of states would be subsumed under a global metaphysical entity 'market' - which becomes the final arbiter of human endeavor. Whoever achieves the dominent market position is in control. Ever played monopoly ?

Or walk away from the table ? How ? the players transcend national/state boundaries, they are not autonomous but multidependant. The 'counter party risk ' is huge. You can check out, but can you ever leave ?

Or a compromise is struck, out of necessity ? -in the words of Yeats-

what rough beast,its hour come round at last,
Slouches towards Bethlehem to be born ?

(W.B. Yeats , The Second Coming,

The G20 may give some form to the rough beast.

This is a superb and very astute analysis of this current crisis. You are absolutely right to say that it is the economic model of the past 20 years that has fallen apart. One of the fundamental reasons why the effects of this crisis within the UK are going to be unlike (and worse than) any that we, as a nation, have faced in previous recessions is that for the past two decades successive governments have pursued policies that have, in general terms, favoured large national and international sized businesses whilst smaller business have been burdened with dis-proportionate levels of petty beauracracy and excessive red tape which has effectively excluded many of them from the fields of activity in which they had operated. The costs of compliance and other administrative restrictive practices have simply become too great.

For any economy to succeed, money HAS to circulate. It cannot do so efficently when significant portions of the trading and business community are excluded from participating. Successive governments have seemed unable to grasp this fundamental point. These problems have been escalating for a number of years but the effects have been obscured by the application of liberal doses of cheap credit to the UK economy. Now that the credit has gone, the facade has been stripped away. What started as a financial crisis is now being revealed as a trigger that is exposing a much uglier reality.

Purely financial remedies are never going to be a sufficient solution to this problem. Until governments and politicians begin to comprehend this issue, I see little hope of any sustainable recovery.

Apologies for cynicism, but I cannot see anything of substance emerging from the G20 meeting.

Paul, you quite are right that both Versailles and Bretton Woods created "winners" and "losers" (and gave us the backdrop to a "new global order"), based largely on their existing bargaining power (the relative strength of the countries' economies and their status in the global beer-fest).

There are similarities, but there are differences.

As you note that those conferences arose in the aftermath of global conflict and at least some of the participants were very contrite. Unfortunately, as our own PM demonstrates, failure is proven more effectively and admitted in the aftermath of war rather than in the semantics of economic downturn. I have this deep dread that Brown is not alone in believing his own spin and that deep down he - and others - simply "don't get it".

The aims were also different. Versailles and BW were concerned with the peaceful co-existence of nations, rather than a return to a perceived "golden age" of recent boom years.

Secondly, we have loads more economists, but few rising above the general sea of the average. Those that are, or might be of the calibre of a Keynes, will be drowned out by a general consensus (that - ironically - may claim to draw from Keynes).

Finally, the whole issue of protectionism must be addressed. It can be turned into a classic Game Theory conundrum:

If no one adopts a protectionist approach, maybe all the world's economies will recover in - let's say 8 years. If a major economy adopts protectionism their economy may recover in 5 years, but those that still cling to anti-protectionism will lag behind - let's say to 12 years. If all adopt protectionism, the recovery may be 10 years on average. What is the best ploy?

(Actually I think "enlightened self interest" is the best way forward and anti-protectionism is a step towards a globalist agenda, but that's for another time, perhaps).

normally we'd expect exchange rates to do the work wouldn't we? China can hold the nominal exchange rate where it wants, but unless it can hold back domestic inflation it can't hold back the real exchange rate. Even if you have doubts about the textbook adjustment mechanisms, I don't really understand why this piece does not discuss the extent to which things might sort themselves out by themselves. [this is not to say concerted effort might not be desirable too, say capital controls]

Great stuff, Paul.

When are you getting your own show? About time this stuff was shown to a far wider audience.

#2 Superior

We could both be coming to the same conclusion in our round about ways.

Yes, the Eagles had it right on the title track to "Hotel California"; we've listened to "Life In The Fast Lane" and we're currently heading for the final track - "The Last Resort".

Paul,

Simply the best overview I have seen yet, and believe me I have read a few in my quest to understand what is happening to the world and my family and how I may be able to stop it and / or prepare for it.

I too get the feeling that the policies are trying to restore the failed status quo, noboddy within the incumbant political class has the stomach for the radical change required. They either dont understand or have too much vested interest (be it reputation or financial).

I also see the apathy out there, people dont take to the streets anymore but some kind of people led revolution is needed from the bottom up to re-shape the world.

I am trying to get accross the idea of a modern net based revolution. You dont need to throw rocks at the windows in wall street when you can empty your account and put your salary into an ethically run bank via the net plus 1 or two forms to fill in (you can download).

It would also appear that a political version is on offer through the launch next monday of the 'juryparty'. For the first time this will give people the opportunity to engage in internet based 'primaries' in this country to choose local candidates for a general election as independants, i.e. the people choosing the candidates they can vote for in the next election.

At the moment we have a choice of nominally 3 parties with candidates selected based on local internal party politics, not real life experience, courage and wisdom.

A popular high profile local candidate under that format could unseat targeted key figures in government for example.

There is an opportunity here to have a peaceful yet effective revolution of sorts. I am resolved just to keep banging on about it here until hopefully it catches on how we can use modern technology to revamp the system from the bottom up without cracking any heads in the real world.

Jericoa.

it could be significant if there is a change in the mark to market rules- depending what they are.

it would ease things.

China could build its own internal market, based on a sustainable balance of both consumers and savers. It could design and manufacture products for its own consumers, and give up being a cheap subcontractor for the West. The Chinese savers would provide the capital for setting up the new product lines for their own internal market.

China could then let the West sort out its own mess.......

An excellent article and some good comments, particularly from No 4. I like the Game Theory summary which concurs with how I have been thinking.

Unfortunately I can see only one realistic result. Political leaders are chosen by national electorates, not via international ballots. Particularly if there is money involved, is there any realistic prospect of any country paying more than lip-service to any policy other than protectionism which can be sold to the electorate as giving hope of achieving the 5 year recovery? When recovery does not come in 5 years, external forces can be blamed. In the world of politics it must be remembered that protectionism is what others carry out, never what one does oneself.

The French are the masters at looking after themselves whilst pretending to be good EU or world citizens but all nationalities have the skills. The car industry is currently perhaps the most visible test - one or more manufacturers needs to be allowed to fail but almost certainly, just like in the world of national airlines, all will be kept alive, essentially by protectionism.

It would be good to be proven wrong, but I cannot see much positive coming out of the forthcoming G20 meeting - a lot of good words but few actions and real commitments. This will be entirely consistent with past efforts against Global Warming and Third World Poverty. As a practical matter, I suspect that countries will become more insular (aka protectionist) and will try to become more self-sufficient. Gradually it is this which will lead to global recovery because self-sufficiency in the modern world is impossible. However it will take a lot of time.

Time is certainly what Crash Gordon does not have on his side - he has been desperate to re-inflate the global bubble very rapidly so that he can think about winning the election. I suspect it is his self-preservation instincts that are driving him to beat the Global Solution drum so that, when it fails, he can say it was the others that let him down. Given his current stance there is a danger that his covert protectionsim will be less successful than the efforts of other countries such that the UK is left neither protected nor within the global solution that would create the best answer for everyone.

SHOULDER TO SHOULDER AND BOLDER AND BOLDER (#8)

"I also see the apathy out there, people dont take to the streets anymore but some kind of people led revolution is needed from the bottom up to re-shape the world."

"At the moment we have a choice of nominally 3 parties with candidates selected based on local internal party politics, not real life experience, courage and wisdom."

Hi Jericoa. Regarding the first quote: I took to the streets in the 2005 election. I was standing on the toes of party ciphers, with their placard-and-balloon-toting (balloons, I despair) acolytes. I will be out there again. I am fortunate to be solvent and retired. If you are more encumbered, find one who isn't (one with integrity) and lean on them!

Second quote: Bravo! Well chosen words.
A rosette indicates allegiance to a party, not voters. Sir Paul has got some of it right with his 'Jury Team' (but he's not returning my emails). The voters are still admiring the Emperor's clothes; we must emulate the wise little boy and shout "He's in the nud" right across every ward.

Regards.

Only to the extent that interdependence creates mutual self interest will the G20 crystallize an agenda worth discussing.

The internet created global opportunities and a global market infrastructure. How many times do you read about a "synchronised" global downturn.

To my mind global capital imbalances are not "the problem" as Bernanke / Sant and all the rest now like to say - as if on a bandwagon. It is the prudent intermediation of capital flows primarily through the US / UK capital and credit markets which is the problem. Reestablishing trust in these 'centres of the unviverse' will be the real challenge.

No one is going to persuade China to change its command exporting economy to suit the social capitalist consuming economies of the West and vice versa unless national self interest can be demonstrated.Everyone will quietly and painfully learn their own lessons from this disaster and react in national self interest. To the extent that club rules further mutual self interest, a deal will be struck.

Interdependency will put off the day when real conflict emerges from the philosophical and political tensions between old and emerging economies.

"POLITICAL LEADERS ARE CHOSEN BY NATIONAL ELECTORATES" (#11)

You can NOT be serious man!

Take Blair: A party-pleasing wannabe, parachuted into a safe seat, elevated through the ranks by being good party material, promoted by the party to be leader, by having party and crowd pleasing qualities (though known to be shallow); he went on to inveigle us into a war while his chancellor ran us ragged. THEN HE SCARPERED!

Blair was in no way 'chosen by the national electorate' Brown less so, and heaven help us when the next one is installed with party application of cunning and gross expenditure.

Brilliant summary of the issues. The solution to these imbalances needs to take into account the limits on rationality of real people - instead of assuming that everyone is a 'rational agent', consider how people really behave and think. This would be a great addition to the usual diplomatic negotiations:

The whole subject is complex. However, in the light of the upcoming (April) G20 meeting in London, a report has just been released by the 1,850 world-wide experts of the Foresight Network. In this they agree with world leaders that much stricter regulation, along with new incentive structures, is the very least needed to counter the recession. Thereafter, some members - typically from the US – predict that a continuation of the existing monetarist approaches, led by an economically resurgent US after the banking bail-out, will eventually end the downturn. However, most members, especially those from across the rest of the world, believe that much more radical globally-led approaches are needed; based on Keynesian principles applied to a multi-polar (G20) world. These will, though, ultimately benefit all, by stimulating growth in the emerging nations; whilst introducing a fairer culture to those in the West. The detailed 13,000 word report can be found at: [Unsuitable/Broken URL removed by Moderator]

Gordon Brown will be voted out by an X. His parent was in favour of a man who left on a cross. G20 will be his defining moment. If he cannot get Obama to piggy-back him to the frontm the meeting is doomed. Was Bretton Woods not convened in 1944 to set up the UN? Post WWII dealt with monetary matters in which, like Versailles, the losers were dismissed from view. BW was a winners meeting.
There is too much self-interest for a new vision of the political scene to succeed. The UK is stuck with a system tailored to returning nonentities. Occasionally someone gifted is elected. Sadly their political life is short so true genius fails to shine through (Hugh Dalton, Iain Mcleod).
The next election will be dominated by the votes of the disinherited who have lost the savings of their lifetimes in the banks, etc. And yet we still persist with Trident. Why?
The world is gambling on Obama having the charisma to bring China into play and together show visionary leadership. A big ask but virtually all we have in sight.

awesome analysis. when's the book out?!

Good meaty stuff here.

I would agree that prevailing policies are seeking to restore what was there before the crash. This is to be expected as this is the only frame of reference our elites possess. They are aware that if the frame of reference changes so necessarily does the elite. Thus we end up dealing with the innate conservatism of government.

We are not just dealing with the failure of banks; we are dealing with the failure of a mind-set in both the state and capital.

Rather than the government being the solution, it is part of the problem. The question is that given this context can government produce a solution? At the moment the answer can only be not at all.

So for the time being we are left thrashing around in the dark hoping that one day some sort of equilibrium will arrive.

2216: Over four hours to moderate. Paul must far down the Ö÷²¥´óÐã pecking order

#12

'If you are more encumbered, find one who isn't (one with integrity) and lean on them! '

Easier said than done in the lowly circles I move in and the time I have available , hence I am here at 1:40am, up again helping making breakfast in 5 hours for the kids etc then off to work.

I keep doing what I can and thanks for your supportive words, it always gives me a boost, despair never seems far away with me.

My next pet project will be to let loose a circular e-mail to try to pursuade people to move to ethical banking. If the government don't want to nationalise the banks and make them behave as morally responsible servents of society we had better do it for them by disengaging with those whom do not follow a genuinley ethical buisiness model.

A run on the banks driven by moral outrage not a sense of self preservation. I really, really like the sound of that.

Potentially a really effective demonstration without a stone being thrown. I hope to finish it this weekend, it is designed to have mass appeal to reach far and wide via the power of spam shared between friends including simple instructions on how to open an ethical account, close your old one and arrange your affairs in a matter of a few (liberating) hours based on my own experience of the same.

Quite a modern way of doing things don't you think!

#19

This post of yours really resonated with me.

Off to bed now to dream of runs on banks generated by moral outrage'.

Of course the government could just nationalise them all before Monday if they want to avoid this!

Jericoa

A very good blog. Look forward to you developing these themes though Newsnight's coverage of the G20.

Worth considering are the demands of the "Put People First" protest which is planned to take place. With the backing of charities, faith groups, and trade unions, the wish list includes financial transparency and regulation, with a green new deal to act as a fiscal stimulus. If these are not concrete agreements of G20 I'd be surprised if the G2 leaders Hu and Obama don't mention these things.

# 21 Jericoa

Agree with you about stanilic's post #19.

Also, great idea of yours about starting a circular email to encourage switching to ethical banks. I will do the same and send it off to all my contacts.

I agree very much that this government and the way they think are part of the problem. #19 stanilic

Nothing of the way we have been operating in the west is sustainable. There needs to be a complete shift in thinking away from the model of economic growth. Why is unfetterd growth always considered to be a good thing?

We need to go onto a "tick-over" or even a reduction type of economy whilst the rest of the world catches up. We know how to grow enough food and to provide for our basic needs. Now we need to cut down on our energy use and learn to be more self-sufficient in terms of growing food and supplying for our needs. This does not need to mean throwing huge numbers of people out of work but in sharing the work out so everyone has an income and perhaps works only part-time. Nor does it need to mean a stifling of innovation and entrepreneurship as finding new ways of doing things will always be necessary.

The rest of the time available can then be spent on other worthwhile activities such as growing veg, caring for children, community activities etc etc.

We no longer need to be frenzied consumers of stuff we don't need whilst the rest of the world largely lives below subsistence levels.

#22 Charlie

You highlight the principal disconnect of the G20 Summit - how representative are the delegates of their respective "democracies"?

Let's consider Gordon Brown, as the host for this Summit. Surely he must realise that his career in UK politics will be over within the next two years. He has never enjoyed popularity with the City and is unlikely to be offered a parachute sinecure like his predecessor was given at JPM.

I suspect that he considers that his best chance is to resurrect the links he enjoyed in his youth to transatlantic alliance/global order groups - hence his active promotion of a globalist agenda and anti-protectionist stance.

As I have posted (and tried to demonstrate) above, I do not believe either of these best serve the interests of the UK electorate - or the G20 nations as a whole - for whom a policy of "enlightened self-interest" is favoured.

Yet the authentic voice of democracy may find itself on the wrong side of the barricades - and anti-terror legislation - while the "public servants" of all the G20 nations look after their own best interests.

(I write as one who despised the anti-globalisation "rent-a-mob" demonstrators of previous economic summits).

No. 24. janchild

I agree with you, consumers forever buying things they don't need is just empty headed.

Regarding food and energy, we should harness nature to do the hard work for us. Tidal power and woodland farming would work well for Britain. We would have sustainable food and energy, and be healthier for it.

Houses are necessities, and should be priced as affordably as possible. Low house prices mean low mortgages, which means more disposable income for households.

We'd all be better off, and the economy would be more stable.
More co-operation and less competition.

We seem to be having a heated agreement, here:)

There is plenty of evidence that consumerism makes people less, not more, happy. In case you missed it, good old Auntie Beeb did an excellent series about 'happiness' nearly 3 years ago. There's a really good article by Mark Easton, linked to that, at

One of the things that article highlighted was the role that some forms of advertising (and perhap marketing, generally?) play in creating unhappiness. The 'secret', as some societies discovered long ago, is to desire less and enjoy what we already have, more.

Difficult to achieve when we are constantly bombarded with ads telling us why we must have something or other. Even more difficult trying to persuade our children and grandchildren that we are right and the advertisers, their friends, celebs, politicians, etc are all wrong!

Brilliant article Mr. Mason

A moot point put very eloquently.

.....so the Easterners follow a culture of "work and save" and the Westerners follow a culture of "doss and spend".....economic globalism by nature needs harmonised behaviours...so do we all save more or do we all spend more?.....those with the upper hand get to decide which.

If it's a question of who has the power to decide the outcome to this massive question then I would back the Eatern philosophy over the Anglo Saxon one.

Remember all that stuff you learned on your grandma's knee....that you thought was sooo old fashioned.?......well think again.

Again Paul Mason, if you are reading.....that really is a very well written piece.

RE: 26 MrTweedy

"Regarding food and energy, we should harness nature to do the hard work for us. Tidal power and woodland farming would work well for Britain. We would have sustainable food and energy, and be healthier for it."

I sympathise with your ambition, unfortunately this is the wrong country.

Britain is seriously over-populated and already has to import much of its food and fuel. Increasing food production from Britain's shrinking supply of agricultural land will require a re-doubled commitment to intensive, industrialised farming - you know the sort of thing; battery chicken farms, hormone injections for cows to boost milk production, lashings of fertilisers and pesticides to support GM crops and so on. All rather the opposite of healthy, organic food production. Plus of course, heavily dependent on expensive technology and imported oil.

"Houses are necessities, and should be priced as affordably as possible."

Another intriguing idea. How many houses would we need to build to achieve that? How many square miles of agricultural land would be lost in the process? How will you replace the food production lost as a result?

"Low house prices mean low mortgages, which means more disposable income for households."

Nice theory. Unfortunately for at least the last 10 years, this government has relied on high and steadily rising house prices to fuel the debt bubble that created an illusion of wealth and a high street spending bubble. Low and stable house prices means little or no equity release and little or no profit for builders, estate agents and amateur property developers. Therefore, much less disposable income for households.

"We'd all be better off, and the economy would be more stable. More co-operation and less competition."

Actually, we'd all be worse off.

We would probably, of necessity, eat less and have far less variety to choose from. That might however make many of us healthier. Whether it made us happier is anybody's guess. Try looking at Second World War rationing and the diet it produced. Allegedly that was extremely healthy, although I've never heard anyone who lived through that time yearning for the cuisine of the period.

You can't sustain more than 60,000,000 people on these chilly, damp, windswept islands without a large and steady stream of imports. So you'd better have a way to pay for them. This rather simple observation has been beyond Gordon Brown's comprehension ever since he became chancellor. Depressing isn't it?

The usual smartie arsie analysis, running round in lots of circles, but lacking any conclusion with any sort of vision.

1) You talk about global redistribution, and then say that the western leaders are pusuing the same old, same old, big business led model.

But only redistribution in the west will affect the redistribution of power, which will in turn allow that model to be changed. Big business interests are prioritised in a system where big business holds power through money. Redistribution within borders means systemic change that can allow for international change

That's why nationalising banks is so important even beyond creating a lending system that worked - it represents a model change. And that's why its been resisted so much.

2) You want China to show a lead? Realistically, what sort of reaction would that get from rest of world - a lead from what is still, essentially, a huge Communist state. Anything meaningful would show that is is coming from a centrally planned economy, which would make it instant anathema.

3) You say that Obama is currently the only person with the momentum, suggesting that this is in relation to a global strategy - but his vision is essentially NATIONAL.

In relation to this, you fail to identify the relationship of low 'fiscal stimulus' in the EU with the fact that such national spending cannot in fact be a national stimulus because of the actual fact of EU intergration per se. This shows that national big-spend action for a wider context is not going to happen. It would be like pouring money down a drain. Lets get real on that one.

4) The IMF wrong-direction policies are what they have always been, through all the years of Structural Adjustment Programs, even if the acronmys have now changed. They prepare countries for rape by transnationals through international trade agreements, as ever (though you have foolishly dismissed the mousetrap element of trade agreements - probably because you dont understand them)

5) THE BIG ONE. The sort of globalised responses that you recommend not only ignore the envirnment, but would lead to an exacerabation of environmental ills. 'Deal with economy now and environment later' is not an option. Economic solutions have to priorotise environment.

So having Chinese people spend their savings on consumer goods they don't need is not the answer - and don't suggest it! Not even to save us - cos environmentally, it certainly won't save us.



No, we need to sort our own power politics, and our own environmental contribution. This is way beyond 'protectionism', the use of which by the way, media people like you should be questioning, not strengthening its ontology as a term of abuse.

Taking good care of own backyard - politically, regulatory, environmentally, and in terms of international solidarity - as Obama is attempting - is the way forward.

But here that means some very fundamental changes, primarily in power politics.

Your article doesn't even start to touch on this.

And stop reechoing that dreadful woman from Economist with snotty accent, who says, apart from snappy metaphoric phrases - absolutely nothing.

#27 wontbedruv
RE your blast on advertising
I thought you might enjoy my poem



Ad-junked

Selling dreams, selling schemes
Selling creams for your face and your stomach
Cars, computers, insurance, blue jeans and desserts
Shares, holidays, property, alcohol and soap
With a little bit of glamour they’re peddling hope
Trading on worry, you’re never just fine
If all’s hunky dory
They’d be wasting their time
Advertising
Just what you really don’t need
Appealing to insecurity, greed
A need for one-upmanship
Or a cheap fatty feed

Advertising

Where would we be without it?

#30 stayingcool

I agree with a fair ammount of what you say on a purely debating level but...

What have you got against Paul Mason?

It is easy to point out in anyones post what they have 'failed' to mention, no matter who it is. To consistently point out what he has not mentioned is unfair.

For example

He did not even touch on the fantastic defeat of Manchester united By Liverpool' in his post either....errrr...so what?

I think some of your points he will have touched on in previous posts (although I am not going to check them all!)

I might also add what have you got against women?

'that dreadful woman from Economist '

Does she have a name?

Here is another one

''The sort of globalised responses that you recommend not only ignore the envirnment''

He is reporting, he does not recommend one thing in his post..why are you putting words in his mouth...as a set up to then shoot them down?


The strangest thing about your post to me was that a lot of what you said I agreed with but I just can not figure out why you felt the need to put it in the context of an open attack on PM journalistic skill? It just distracted from the useful points you were making.

The consensus of people here (and outside here who I communicate with offline) look at paul as by far the best analyst..he is not a politician by the way, he does not make the visions, he analyses and commentates on them (or the lack of them).

Your not Robert Pestons Avatar are you?

(There is supposed to be some heavy self irony on my part in that last sentence of mine by the way) !!!.

Jericoa

Response to #32, and your defence of Paul Mason.

Paul says:
'Countries are made up of classes. And the rebalancing solution actually means a major redistribution of wealth in China, India and much of the global south away from the rich and towards the workforce'.

Yet it is cowardly not to acknowledge that the same is the case here. As the core problems have actually come from the class power inbalance within countries like our own, so heavily weighted that they have been able to do what they like, surely then redistribution here, and a rebalancing of power is even more important than 'telling developing countries what they should be doing'.

But this is not mentioned by PM. In fact such gut political realities are always avoided. But what is going in is deeply political. This economic crisis causing the rich to get richer and the poor to get poorer.

The media, and really that means the publicly funded media, is about the only mass shared space we have to engender change.

As it is almost completely a one way process, the onus on those who position themselves to frame that mass shared space is pretty much total.

So they (and here it is Paul Mason in question) have to actually take that full responsibility - or move over.

That means recognising and naming what is actually going on, without fear. No half measures, and excuses that they are doing better than anyone else is doing. That is just not good enough. The task is to rise to what is actually required at this time, no less.

"Policies are being framed with an aim towards recreating the boom. Washington wants to get credit flowing again to indebted US consumers. And exporters - especially in Asia - would like nothing better than a renewal of demand led by the world's biggest consumer. It is a recipe for disaster."

G20 Consultant: "How's Mr Wazstrungoutondebt doing nurse"?

G20 Nurse: "He's recovering quite nicely. He had another spell of severe twitching, grimacing and sweating, which seriously alarmed other patients and staff, so we gave him a fiscal stimulus and he seems much better now".

stayingcool (#33) Sadly, there are many more classes than rich and poor since we went multi-cultural/cosmopolitan/global/international. Class is another term for group, and these days, there are all sorts of groups and splinter-groups - not that one is permitted to discern let alone refer to them much as we are of course, all the same allegedly ;-)

No. 29. hants_gw

(i) Regarding Food Production
Woodland farming aims to let nature produce our food with minimal intervention. Traditional farming expends a lot of effort in trying to fight nature. Traditional farming is dependant on oil for machinery and also for fertilizers.
If we stopped fighting nature, Britain would return to woodland. Therefore, if we create woodland farms, nature will carry out the hard work for us. The idea is to create a food producing woodland, with vegetables growing at ground level, followed by fruit bushes, followed by fruit and nut trees and a final canopy of non-food producing trees. Wildlife would carry out all the pest control. The ground would fertilize itself through animal droppings and leaf mulch. Little machinery would be needed.
We wouldn't eat so much meat and we wouldn't be able to grow cereals. However, given the the planet's lack of natural resources, we will probably be forced to adopt woodland farming whether we like it or not.

(ii) Regarding Housing
I do not agree with making profits by restricting the supply of necessities.
When house prices have hit rock bottom as a result of the coming recession/depression, we should lock into that low price level. Restricting mortgages to a maximum of 3 times income would keep houses affordable. Ownership of more than one house should be banned outright or highly taxed. The government should build flats to accommodate students and undergraduates. Too many homes suitable for first-time buyers have been rolled into the buy-to-let market, or tied up as holiday homes.
The majority of the housing stock is second hand. Anything built before the 1970s has already been paid for. You would find there would still be enough profit for your builders of new houses.
The "equity realease" you talk of, is nothing of the sort - it is merely a polite way of saying you are increasing your borrowing by using your house as security. Houses are not stores of wealth.

(iii) The Recent Economic Model
The recent model is bankrupt, and no amount of wishful thinking by the government or the G20 will bring it back to life. The planet's resources are finite. Britain will be forced to face up to facts, and live within its means, whether we like it or not.

RE: 36. MrTweedy

"(i) Regarding Food Production"

Is anyone actually doing this, even on a small scale, say as a trial? I'd like to know what the actual food yield is per acre. As you can tell, I'm sceptical, but I'm willing to be convinced.

Right now the reality is that the UK imports a lot of its food and, personally, I don't believe there's a practicable alternative to that. The choices reduce to a) reduce the population density or b) export stuff to pay for the imports that we must have. Currently we do neither. If you think there's a way for the UK to produce all (or even close to all) the food it needs I'd be fascinated to see it.

"(ii) Regarding Housing"

I wasn't defending the behaviour of the recent past. However, it's a political reality that a lot of people have a lot to lose if housing ceases to be a bubble. Many people view their houses as a source of income as much as a place to live and they are reluctant to give that up.

"Ownership of more than one house should be banned outright or highly taxed."

So no private rental sector then? Are you anticipating that everybody will live either in a) the one property that they are allowed to buy (or already own) or b) state owned rental property? And, as you say, no more holiday homes for rent either. Do you think that might affect the tourism industry?

The real problem is that housing is in short supply because land is in short supply and with a steadily rising population then at best that problem can only ever be deferred for a short time.

Your point about equity release is spot on. Again, I am not advocating it, merely pointing out that much of the supposed prosperity of recent years was fueled directly or indirectly by the housing bubble. Lots of people still believe, rightly or wrongly, that their houses are indeed stores of wealth, and they vote accordingly.

"(iii) The Recent Economic Model
The recent model is bankrupt, and no amount of wishful thinking by the government or the G20 will bring it back to life. The planet's resources are finite. Britain will be forced to face up to facts, and live within its means, whether we like it or not."

I find this an intriguing phrase. I agree with a good part of it, specifically the idea that recent economic history was a detour into fantasy land and was always doomed to fail. However, I disagree with your observation about living within our means. We can't. There are just too many people here and the numbers keep on growing. There is no way to provide for this many people without large scale imports of food, fuel and manufactured goods - and all that has to be paid for. I think we need to re-structure our economy so that we can pay our way. As I said earlier, if you think 60 million people can be self-sufficient in these islands I'd love to see the details.

No. 37. hants_gw

Food
Woodland farming is being undertaken at present, and "supposedly" it can produce the same amount of food as traditional methods, but without all the manual effort and without the reliance on oil for machinery and fertilizers. I saw an hour long documentary about it on Ö÷²¥´óÐã2 the other week (Natural World - A Farm For The Future).
The trouble is, the farms who are currently engaged with woodland farming are not helped by the government. The farms are acting like talented "amateurs" with little official recognition. The farms are relatively small scale, and are not well known. The theory definitely works on a small scale, and supposedly it will work on a large scale......
As you say, we currently import a lot of food, and without exporting banking and insurance (the only export surplus we had via "invisible earnings") we won't be able to afford to import so many necessities. Therefore, I'm glad we have woodland farming to fall back on, if needed. Also, during the war, 40% of all fruit and veg was grown by private individuals in their gardens and allotments; again this eventuality is there to fall back on if needed.

Housing
I would allow second homes if they are the main source of income for the owner - ie if they are the main business venture. However, the problem is where do I draw the line? For example, Londoners who own a cottage in Cornwall where they only spend 4 weeks per year should be disallowed. A person whose only income is the rental from the 4 holiday lets they own should be allowed. But the person who owns 10 houses all rented to students must be crowded out of the market by the government building dedicated student accommodation. Terraced houses should be taken out of the buy-to-let market and made available to first time buyers.
We must aim to treat houses as a necessity. The housing bust will allow us at least some opportunity to do this, as all house prices will eventually fall by approx. 40% as a result of the recession.

Population
I agree with you, Britain feels overcrowded. But when I fly over England (I don't fly very often) I see a lot of green countryside. There seems to be enough countryside to provide food and housing, but I can't back this up, it's only a feeling I have.....

Current British Lifestyle
If everyone in the world had the same standard of living as the British, we would need 3 planets to provide all the resources required. Given that Asia is getting richer, and is more competitive than the West, I would expect the West to be forced to give up some of its wealth to accommodate Asia.
Therefore, Britain will be forced to live more within its means, as China and India eventually switch from being subcontractors for the West to developing their own products and then competing against the West. Think how Japan elbowed out the British car and motorcylce industry, how India elbowed out the British textile industry, how Korea elbowed out the British ship-building industry.
Banking, insurance and defence manufacturing were the backbone of British exports. Although BAE Systems is still doing well, our banks are lame and limping. What used to be British merchant banking is now largely foreign owned by the USA, Japan, Germany and Switzerland, and has been renamed "investment banking".

Conclusion
I agree with you that Britain relies too much on imports, and without viable large scale exports we will see our currency remain weak. A weak sterling means we must pay more for our imports, and it's this pressure which will cause us to live more within our means, especially when it comes to necessities.
I feel we will see a marked change in the way Britain lives in the future. The recession will force the world to adopt greener and more natural ways of living; I hope.
Only time will tell......