Too Much Money

A while back, a friend of mine recommended that I watch an internet film called The Story of Stuff. I can only assume she did this out of sadism, as the film is twenty minutes of a highly irritating woman telling you that, you know, we all use too much stuff, you know. She also sounds like she thinks the viewer is eight years old, and it's the sort of thing that makes you want to increase your carbon footprint just to piss her off (a well-known phenomenon known as "the Bono effect." Having someone tell me things I already know, in a manner that assumes I'm moronic, isn't my idea of a good time.

But; lots of people have seen this film, apparently, and modified their behaviour because of it. So hey, it seems to have worked to an extent. In a fit of seriousness, I've decided to do the same... except that I thought I'd talk about how our economic and cultural society operates.

Think big, I say.

So: this is my Story of Stuff, about the way money works these days. It's an article that is going to consist of me stating the obvious, because the obvious is - sometimes - what we all forget. And for those of you who get annoyed, as annoyed with me as I did with that stupid Story of Stuff woman... well all I'm saying is that I did warn you.


Fact Number 1: Our system is based on consumption.

You see, I said it was going to be obvious. Anyway, if this was a documentary, this would be the bit where I showed archive footage of George Bush, post 9/11, telling his fellow Americans to go out and shop.

(Just before I start, I want to get this off my chest - as annoying as "my fellow Americans" is, it's nowhere near as irritating as John McCain continually addressing "my friends". Even if I didn't think he was a gormless, useless git who's probably going to die and let Marge Simpson's psycho-sister run the most powerful nation on earth, I'd still feel annoyed at someone assuming my friendship when I haven't even met him. Anyway, back on-topic.)

There's lots of reasons that everything seems to have gone tits-up at the moment, but here's a definite subsidiary factor; we're not buying as many things as we were before. Specifically, we're not buying houses, although the principle goes beyond property. When people stop buying stuff it's a no-holds-barred disaster.

Let's start by asking this question; what do we actually need?

The answer is that we don't need very much at all. Shelter, obviously; clothing, but no more than - say - 5% of the clothes that we buy; food, although you could comfortably cut that in half as well; medicine, on occasion; and alcohol, which is fundamental to the human condition. Then you've got things like heat and light, although even those could be drastically reduced if necessary (very few people, twenty years ago, heated their entire house as a matter of course; they just heated the room they were in. It's also worth remembering that the UK Government, during the 1970s fuel crisis, encouraged people to brush their teeth in the dark to save power. Try and tell people to do that today and you'd be taken away by meaty orderlies armed with syringes, and faces that look like they've been polished with a floor-cleaner).

If we all lived along those lines, we'd have a fucking miserable time of it, especially if we ever ran out of drink. So maybe wondering what we could cut our consumption by, if we pared things right down to the bone, isn't all that instructive.

So let's look at a milder example; what do we, individually, want? Forget "need", because it's a pointless question; what do we want? I mean really, really want, not the "well I saw it in a shop and I fancied it" sort of want. Perhaps the best way of telling which of your possessions you actually want is to ask yourself how you'd react if someone took them away. Most of us have DVDs / Clothes / CDs / Shoes that, were they to be stolen, we'd hardly even notice after the initial 24-hour period of indignation. And, if you're one of the many people who like to upgrade your consumer hardware, you can tell you don't really want the latest iPhone; before long you'll be throwing it out and getting a new one. If you can look around your flat, and honestly claim that you'd miss more than half your possessions from your life, you're probably beating the national average.

In order to keep turning a profit, businesses have to sell us more stuff than we have any real desire to own. Hence they spend fortunes on Advertising or Marketing professionals - "wankers", as you and I know them - whose job is to convince everyone to buy shit without thinking whether they'll actually get any enjoyment from it.

Were we all to just stop, in the morning, then the advertising people would lose their jobs. So would the people who made the stuff we don't want, and the shop assistants who sell it to us, and the conveyancing solicitors and the the sales managers and... well, enough people to completely collapse our economy. One of the reason that I have relatively little time for the green movement is that they produce facile movies like The Story of Stuff, but don't embrace the political dimension of their movement - that the Green Agenda is fatally compromised under our current socio-economic system. If everyone took the "reduce, reuse, recycle" advice seriously, then the country would fall apart and three-quarters of us, at a conservative estimate, would be out of a job.

Fact 2: Consumerism is inflationary by design.

What is consumerism, anyway?

Like anything else ending in -ism, it's a cultural and economic system for organising society (the exception is organism, which doesn't mean a society run by organists... that's called the Church of England). The important word in that sentence is "cultural", because people tend to forget that our economy and our culture are just different sides of one thing - probably because the people who talk about the economy tend to be economists, and economists don't have any friends. You might use the word econo-culture, except that it sounds too damn ugly.

All societies need some sort of organising principle, and the good thing about consumerism is that it's a remarkably simple one to administer. It just means that you remove as many restrictions on behaviour as you can, encourage everyone to think in terms of self-betterment, promote a materialistic ethos - which, with human beings, isn't a difficult thing to do, and then let market forces do the rest. That's it. That's the whole thing.

It works, if you limit your view enough. It's generally stable, because no-one's really in charge so no-one can really change things; instead we have a political status quo that evolves like an ecosystem, and all we expect from anyone is to "manage" it. We don't really view Western politicians as leaders any more, except when there's a war on - no-one, not even the most hardline political activist, is ever going to turn around and assassinate Brian Cowen, because we know instinctively that it's a pointless thing to do. Cowen isn't in charge, not in the sense that De Valera or Churchill or even Sean Lemass were in charge. We judge our politicians on little more than their competence, because ideology just gets in the way of them doing an efficient job.

The consumerist society has its roots in the 60's, but even in the 80's it hadn't taken hold. There was a genuine belief that the economy was something the government was supposed to plan and control - they just weren't very good at it. The problem, in short, was that there weren't enough jobs to go around. Mechanisation and computerisation made many jobs obsolete, and the government couldn't find any sort of decent solution. The right-wing solution was to live with mass unemployment, which wasn't a popular option. The left-wing idea - and here I mean left-wing in a pretty moderate sense - was that companies should simply pay workers the same amount of money for working shorter days, but that obviously wasn't a runner either.

The consumerist solution seems stark staring bonkers, but it worked; just employ people to make more stuff than ever before, and then convince other people to buy it, and that way everyone's got something to do. In a planned economy, that's an unthinkably perverse idea. But the consumerist market isn't planned, and that's what happened.

So, no-one's in charge and the market's more like an ecosystem than anything else. Market forces - Darwinism of an economic kind - rule the day. This means that all companies have to operate on Game Theory - if you want the full explanation look it up on Wikipedia, but it effectively means assuming that everyone else wants to fuck you over. So, if you're a company in a free market, the only way of being certain of survival is to get bigger; if you don't, your competitors will expand instead, and soon you'll be swallowed up. One of the words that's tossed around by economists ad nauseam is "growth", because "growth" is the only tactic a company has to avoid folding. And the only way to grow is to make more of whatever it is you make.

And obviously, if you're in a market in which everyone is constantly expanding, then the whole market expands too. It's easy not to listen to business news - or at least it used to be, until we discovered that Iceland's in so much debt that all its citizens are going to have to sell all their organs for the next seventy years - but, when we used to hear that "The Irish economy grew by 2.4% in the last fiscal year," we tended to forget that it meant "this year, we made 2.4% more crap than the year before." And the consumerist movement is so deeply ingrained into our psyche, so much a part of how we think, that we don't even question whether "growth in the economy" is a good thing.


Fact 3: Our economy runs on credit.

This is one of those things that financial types have been parrotting lately, as a justification for demanding billions and billions of everybody else's money to enable them to "sort out" the mess that they got themselves into in the first place, and if all that wasn't enough, they don't even have the good grace to sound apologetic about it. There are times when the English language hasn't invented the words to describe certain phenomena, but "absolute cunts" is about as close as I can get.

Credit, it must be remembered, isn't real money. This statement assumes that there's anything such as real money at all, which to be fair, there isn't; it's an invented system that prevents us having to find the local farmer an antique rocking-horse so we can swap him a bag of potatoes. But... let's assume, for simplicity's sake, that money is a real, tangible thing. I'm sure any economists will already want to punch me after reading my definition of Game Theory, so alienating them a bit more isn't going to hurt.

A quick lesson for all those who have interesting lives and don't give a shit how banks actually work: of all the money that's lodged in a bank at any one time, only a tenth - at the very most - will ever be withdrawn as cash. The remaining 90% just sits there being saved. Long ago, banks got clever and started lending that untouched money to other people, and after a while they started calling it "mortgages".

These days, it all goes a step further. If you lodge €100 with a bank now, they use that as backing to make up another grand or so, which they lend to other people in virtual form. No-one actually withdraws any sort of money as cash these days, so they're perfectly safe in doing so. And if a lot of their real money suddenly vanishes, because its been withdrawn or someone goes bankrupt, they just borrow more made-up money from another bank, then pay made-up interest on it.

In other words, of all the money floating around our economy, a huge proportion of it doesn't exist. The stock market, the share value of companies, mortgages and hedge funds and all other such gibberish... these are almost completely virtual. In a sense, all money is virtual, but... it's now so far-removed from the aforementioned bag of potatoes that it's just an enormous computer game. The fact that most of it is gambled by stockbrokers, on a stock exchange system so unpredictable that it makes more sense to just go to Ladbrokes and pick a horse with a hat-pin, is actually vital to the way the economy works; if all that money in the stock market was actually used to buy real things, like rice or pasta (just to make a change from potatoes), then there's be so much money sloshing around that we'd end up paying for bread with wheelbarrows full of money, like in 1929 Germany.

(Although, I must say, I could never work out why they didn't just use the wheelbarrow as legal tender instead and save themselves a lot of trouble. Bloody Germans, no good at lateral thinking.)

So, here's how it works; a bunch of jumped-up coked-up twatbags, or "stockbrokers" as they're known, spend their time guessing which companies will be popular with other jumped-up coked-up twatbags, and gamble millions and millions of virtual money to try and make themselves yet more virtual money, all of which would further enrich the lives of rich people if that money actually existed in the first place. However... this virtual money does leak into the real world (i.e. the world where people actually produce something and get paid for it - an old-fashioned concept, but there you go). It happens every time someone goes to a bank and borrows money from them. The only way to keep the system working is to make more stuff, both physical stuff and virtual stuff, so that there's always more things to spend the ever-increasing supply of money on.

At this point you can only ask yourself; well, what could possibly go wrong?


Fact 4: Things can't expand forever.

The banks found themselves going bust because they lent money to people who couldn't pay it back.

Look, bankers aren't completely stupid. They lent the money because they assumed that the world economy would continue to grow - or, to put it another way, the price of houses would always go up. Oh, hang on, that does seem completely stupid.

But... imagine, for a moment, that you spent your entire life working life making up virtual money for other people to play with. Imagine that, for years, you've been financing a system which grows relentlessly, because it's evolved to work that way. Imagine that you're just one of thousands of entities in this system, that your actions are guided by the principle that you must expand to survive, and the knowledge that everyone else is increasing their turnover and they'll swallow you if you don't do the same thing. Suddenly, the mistake seems... understandable. Still pretty stupid, but understandable.

The problem's obvious. Property developers will build an apartment on a fat bloke's left tit if he doesn't move for a fortnight (there's a rumour that, in America, this has happened on seven unrelated occasions). Ergo, the number of available houses keeps increasing. This is all happening in the West, where the population is staying the same at best. So; there's only so many of us, and we only need so many houses. After a while, people will stop buying them.

So, because people stopped buying quite so many houses, the value of them fell; because the value of them fell, the banks found themselves with bad debts and their profits started falling; at this point, stock-market types started selling their shares in those banks, because they knew all the other stock-market types would sell theirs; because this took away the banks' supply of virtual money, they had to borrow some off other banks, but those other banks were in the same boat; and at that point the big made-up gambling game started to look scary and threatening, so everyone stopped playing and took all their virtual money with them. Suddenly, the banks don't have any money to lend out, so companies can't borrow any more money, so they can't make as much stuff as they used to, so they can't keep paying people to make it.

The thing is that, although houses are always going to be the obvious example of how this can happen, the problem applies across the board. There may be a few readers who, when I described economic growth as making more stuff, have astutely said that "a-ha, but it's not just 'making' stuff! There's the service industry, and the financial sector!" True; but no matter how hard you try, there will always be a link to the real world somewhere down the line. No matter how abstract and virtual and incomprehensible the money-go-round gets, it's based on the same old acorn - one person making something, another person buying it. Unfortunately, our current system is based on constant expansion, and that isn't possible in the physical world. The stock market only exacerbates the problem, since any wobble in a company's profits will result in it getting eviscerated by the brash, soulless, egomaniacal Sons-Of-Thatcher who call themselves "traders" for short.

I can't be bothered going into the "limited resources of the planet" thing, because it's cock-obvious at this point. Suffice it to say that, if we took the advice of all the green campaigners on our travel habits, then we'd put all the airlines out of business overnight... and in the long term, as the oil runs out and gets more and more expensive, we're simply not going to be afford to fly all over the place and the same thing will be forced upon us. It's also worth pointing out that there's a limiting factor from the other end too; there's only so much stuff that you can actually sell people. Sooner or later, they'll have enough, and even Carrie fucking Bradshaw will decide that she doesn't need to buy any more handbags this week. People get sated, they get bored, and they just generally grow the fuck up. The only known exception to this rule is women's shoes.

Here's the good thing about the current crisis; after years of it sustaining itself by constant expansion, we'd stopped thinking about it. Suddenly, people are noticing that our economic system is completely, ridiculously, dangerously unplanned - although less people have noticed that it's fundamentally unsustainable as well. What we can see is that consumerism, however it works in general, is completely useless in a crisis situation. No-one's in charge; everyone operates on an every-man-for-himself-principle; thinking of the bigger picture isn't possible, because no-one controls the bigger picture; when things go bad, it all starts to move with all the precision of thirty toddlers locked in a brightly-coloured room with and endless supply of fizzy drinks. And Gary Glitter. At the moment, the world's governments are having to buy up private companies to keep it all working, because - if left unchecked - the whole thing would come crashing down around everybody's ears.

And that, I'm afraid, will be inevitable. Sooner or later.

Any questions?


Fact 5: Willie O'Dea reminds me of Kermit the Frog.

Well since no-one ever comments on my "serious " articles, I thought I might as well give yiz something, you miserably facetious overgrown children. Honestly, I don't know why I even bother...


I don't know why, he just does.