Pete’s blog

It is an age old question – why are we here? What is our purpose? Why do we exist? But I think it is a question we need to ask ourselves once again. Big corporates and advertising have convinced us that our purpose is to produce and consume. The more stuff we make, the better our economy; the more stuff we buy and own, the richer we are. For most of our history our sole purpose has been to survive, except now we are not just surviving, but are thriving. So what should our new purpose be? These are some suggestions and some thoughts on how this needs to be taken forward. Yes I am finally laying some blueprints on how to change the world.

1. Survival. Survival is still our number one purpose, but how we think about survival needs to evolve. Survival started with individual survival, it then broadened to survival of the family, the community, the village, the city, then the nation. Recently in history we have started considering the survival of more than our nation – the United Nations, the European Union, etc. But we need to take a very big step still. We need to consider the survival of the entire human race. We need to stop asking what is in our nation’s best interest, and instead ask what is in humanity’s best interest. And this starts requiring a longer term view of everything - food security, water security, nuclear war threat, disease, etc. Unfortunately it also needs cooperation on an unprecedented scale, and how do you decide what is in humanity’s best interest? I’m sure America will tell you that they do everything in humanity’s best interest, they certainly save the world often enough in movies, but almost every other country will disagree with something the Americans do. So first thing to think about – how do you determine humanity’s best interest?
2. Life/Earth. We are unique on Earth, we are able to understand, control and manipulate our environment like no other animal. With this ability should come responsibility. Our second purpose should be to protect life and the life on Earth. This is not just for the purposes of our own survival (so not turning the planet into a giant wheat field), but for the survival of all life and biodiversity. This is where our science and technology and consumerism is letting us down. We should be spending vast resources in learning how to live in harmony with the planet and how to sustain life. Our purchases should be aimed at reducing our footprint, not increasing it. There are three long-term futuristic possibilities – merge with nature (open our houses and lives to nature and live in harmony with it), isolate from nature (build massive, self-contained, self-sufficient cities – arcologies) or separate from nature (go into space and leave Earth to its own devices). Second thing to think about – how best to protect nature.
3. Procreate life. Once again we are unique on Earth – we are the only species (other than bacteria and viruses) who are able to break the Earth’s gravity and travel in space. In order to maximise our survival chances and also to preserve life, we need to colonise other planets and space. This I personally believe is our greatest purpose, to spread life into our galaxy. It is a purpose that offers the most possibilities, the most hope and the most inspiration and could potentially unite us as a species like nothing else. It also offers the possibility of obtaining the resources needed for our survival without damaging the Earth.
4. Learn. We have already been able to understand many of the laws and processes of the universe and life. This has enabled us to do amazing things – land people on the moon, build powerful computers, explore the world, travel at huge speeds. Learning about our universe, our world and ourselves should remain as a priority. However we should never forget the other purposes of humanity when doing that research and choosing how to apply it.

And there I think are humanity’s four purposes – humanity’s survival, protecting the Earth, spreading life, and learning. None of them seem very high on the list of priorities of the average man on the street, or of big corporates, or of governments. Time for a major shift of resources and spending?

Going to try and challenge conventional wisdom this week and try and look at the current economic crisis from a different angle.

First going to look at deflation. Spoke a little about deflation in a previous blog about how it is a bad thing… but this time I’m going to argue that maybe it is exactly what we currently need. Several Western countries are currently facing the possibility of deflation and have cut their interest rates to extremely low levels (the lowest rate in the history of the Bank of England) in order to reduce the risk of this occurring. Deflation is something feared by economists, and rightly so, it does weird things to your economy. What deflation means is that goods will become cheaper, so if you wait, you can buy something for less. People stop spending now, because they know they could get it cheaper later. People buying less stuff is not a good thing, especially if you are in a recession. Deflation also causes very bad psychological issues in your economy – companies’ profits fall every year, you get an annual salary reduction, your house is worth less every year… Seriously demoralising.

One of the root causes of this current crisis is that people spend now on credit rather than saving and buying later. Credit flowed too freely, and people are in masses of debt. People do not know how to save any more and to manage their finances. So how do you teach them? Incentivise them? Well if goods were cheaper in the future, people would have a very obvious reason to consider waiting before making a purchase. Why buy a car now on credit, when you could wait a year and buy it cheaper using savings? So bring in deflation, it will teach people how to save. The initial transition will be painful – people will stop buying things and start saving instead and the economy will take a nosedive. But long-term it will lead to a far healthier economy. Normally you spend your way out of a recession – you lower interest rates and encourage people to spend and buy stuff and thereby generate economic growth. Except I think this time people no longer have anything left to spend, you can lower interest rates as much as you want, people cannot and will not borrow any more. Cutting interest rates might avoid deflation, but will probably lead to several years of minimal growth à la Japan. Leave interest rates high, deflation happens, you have an acute recession for a year, followed by robust growth supported by high savings levels and more financially secure consumers… perhaps?

But that is the nice way of looking at the benefits of deflation, there are another more extreme way. Most of the world’s current problems are the result of consumerism gone wild – environmental degradation, climate change, financial crisis, etc. If consumerism is out of control, how do you reign it in? Create deflation – high levels of deflation. People will delay any purchase that is not critical or necessary for survival, consumerism comes to a grinding halt, the planet is saved and we all live happily ever after… Oh yeah and any economy based on consumerism completely collapses and everyone loses their jobs, but at least we’ll save the environment and won’t be such irresponsible spenders any more. Change management is always such a difficult problem. But why not ignore the consequences of switching systems for a second and have a think about an alternate society where deflation is the norm. Interesting world I think…

And then one more quick counterintuitive idea, I think this recession will create jobs and boost entrepreneurship. A lot of people have lost their jobs, and quite a few of them in the financial sector. Qualified, educated people have been retrenched. Now people like security and do not like risks, so given the choice between an office job working for a company and starting your own business, most people would choose the office job. Now what happens if you lose your office job? Now you don’t have a choice, you need to start you own business to survive. Educated people being retrenched? Perfect people to start their own businesses. Expect large growth in small businesses in the next few years.

Think about it

Got an interesting one tonight, going to talk about both the HIV pandemic and climate change, and in the way I love best, at the same time I am also going to be talking about personal stuff too

Humans are fantastic at denial, living in the past, not changing with the times, getting stuck in ruts, etc. Simply put we have trouble keeping up with reality. Why am I going to talk about HIV and climate change? Because they are 2 very good examples of exactly that behaviour.

First HIV. In previous mails I have spoken at length about the scale of the problem with which we are faced, particularly in South Africa. HIV is widespread and affects everyone in South Africa, whether directly or indirectly. If you look at the numbers and at the people affected, you cannot deny that HIV is a big part of South African life and will be here to stay until a vaccine is invented. Yet how we deal with HIV and respond to it is like it has only just started to become a problem, that if only we act now we can stop it… “Don’t get HIV, use a condom”, “HIV free generation”, “if you are good and don’t do anything bad you won’t get HIV”… Too late, South Africa has HIV. Yes maybe when there are a small number of infections, you can promote that sort of message. But you reach a point when that message becomes meaningless, alienating and quite often just plain stupid. How do you tell a child who was born with HIV that he should be condom-wise and part of the HIV free generation? How do tell someone who is HIV-negative, but has lost 2 family members to AIDS that they are HIV free? Refusing to face reality can be as obvious as saying South Africa does not have an HIV problem, or that I can never get HIV because I am not poor and I don’t sleep around. But refusing to face reality can also hide itself in our attempts to face reality. Not recognising the actual scale of the problem and not tailoring your response appropriately is just as much a refusal to face reality.

Climate change. Our response to climate change actually has some remarkable similarities to HIV. There are endless debates and arguments about whether climate change is real or just some big made up scare-tactic. We argue about how to prevent climate change, how if we all plant more trees and drive hybrid cars we can bring climate change to a halt. We talk about climate change as if it is this future event that may happen unless we do something about it now… Um… Sorry to tell you this, but climate change has already happened and as a recent study concluded (New Study Shows Climate Change Largely Irreversible), there is very little we can do to reverse the damage we have already done. In the same way as we are not at the beginning of the HIV epidemic, we are not at the beginning of climate change, we are in the middle of it. Why hasn’t the weather changed, why haven’t sea levels risen? Well the problem with climate change is that it happens really slowly. We’ve already messed up all the input parameters, it is just taking a bit of time for these to work through the system and to produce a result.

So what part of our attitude and response do we need to change? Well in both cases it is no longer a pending or potential problem. If it was a potential problem then, yes, your response should be to prevent the problem from happening. But in these cases, it is an actual problem, the problem has already happened. Your response is far broader. First you need to prevent the problem from growing further. Use condoms, plant more trees, recycle. To say, “well HIV is such a problem now, I may as well not use a condom” is the equivalent of saying “well since climate change is inevitable, I may as well drive my gas-guzzling 4×4”. Yes we have a problem, but problems can always be worse. Secondly you need to teach people how to live with the problem. Your mother or friend has HIV, how do you interact with them? You have HIV, what do you need to do, how do interact with people? What are all the different ways that you can contract HIV? How do you treat HIV? Similarly with climate change: which areas are going to be affected? How do we help them adapt and deal with the problems? How can we counter these effects? And thirdly and most importantly, we must always look to solving the problem. Finding that vaccine, finding a cure, finding a way to reverse all the CO2 we’ve pumped into the atmosphere, finding a way to live in a sustainable balance with the earth.

So in summary how do you face reality in three easy steps? Prevent, live with, and cure. Prevent and cure are the two sides we cling so desperately to. Because if we are not going to deny a problem, then we must at least have hope. Prevention and finding a cure are expressions of hope, hope that we can stop the problem, hope that we can fix the problem, hope that we can reverse the problem. Yet the most critical component is often left out – living with the problem. We focus so much on prevention and cure that we do not see the damage that is occurring around us. We fail to see the problem itself. Addressing how to live with a problem means you have to acknowledge and accept that you do actually have a problem and that it is not going away anytime soon.

And see this as an evolution. Firstly put all your effort and energy into prevention. If you prevent a problem, you’ll never have to live with it or cure it. But if that does not work and your problem grows, then spend more and more effort into living with the problem. This means adapting to the problem, controlling the problem and limiting its damage. Then lastly, when you have a cure for the problem, put all your effort into that cure to get rid of the problem as fast as possible.

Well have fun thinking about all the HIV and climate change messages you see. See how they fit into my framework. And have a little fun applying that framework to your own personal problems too.

Finally, the long-awaited, long-in-the-draft-box, third email in the series about voting and governments.

This one is going to explore a key question: what do you expect a government to do? What is a government’s role and how involved should they be? One of the key political and philosophical debates that has once again been brought to the fore by the recent financial crisis.

A barebones, slightly cynical description of government would be: an institute that determines people’s behaviour. The subtleties arise out of how you determine people’s behaviour and how large or small a role government plays. And this for all aspects of people’s lives and behaviours – religion, work, economics, education, science, etc.

First the question that everyone deals with every day of their lives – how do you get the behaviour you want out of other people? Be nasty, be nice? Encourage them, command them? Have strict rules, have general guidelines? Now if you want to know what your choices are, then there are a million psychology and management books out there that will give you ideas and theories on how to get the best results out of people. Governments may be bigger and deal with a lot more people, but the majority of theories still hold. So I am only going to go into the generalities.

First how do you enforce behaviour and prevent unwanted behaviour? A pretty a major choice really, but it comes down to two things – who determines or how do you determine the rules and regulations, and how do you enforce them. You can have a constitution that specifies the beliefs and rights of the society, a legal system to protect and codify those beliefs and rights, and a police and judicial system to regulate behaviour outside of these accepted norms – a modern constitutional democracy. Or you could have one person that determines all the rules and regulations – a monarchy or dictatorship. You could have a group of people that, in return for privileges, enforce the rules – feudalism. You could enforce the rules using military force – martial law. Or you could have a very strong police force to crack down on unwanted behaviour – a police state. Or pick and choose, mix and match – a single person that determines all the rules, but a legal, judicial and police system to enforce those rules; you could have a constitution to set the rules, but use military force to impose those laws; or a constitution for the rules, but a group of privileged people who can decide how they implement the constitution.

Next how narrow or broad should the laws be, and how strict should they be? You can command or you can regulate. Command is very narrow rules, where very little freedom is given. Commanding a market would be setting prices, quantities or products. The most extreme example would be something like communist Russia, where every output and product is determined and controlled by the state. Regulation is about broad rules that allow freedom, but prevent negative or unwanted behaviour. Regulating a market is about preventing monopolies, setting production quality standards, setting minimum wages, etc. Regulation is in many ways far better than command because it only requires you to look after things when they can or do go wrong and not absolutely everything, making it a lot easier and efficient. Most Americans would refer to these two systems as a command economy and a free-market economy. However for all Americans go on about free-markets, they have perhaps the largest regulatory bureaucracy in the world. It is not a free-market, it is a regulated market. When that regulation fails, then it can create situations like the current economic crisis.

And this brings us to the next choice – how much control or regulation? I only need to mention the recent financial meltdown and most of you will be saying, “yes, lots of regulation, regulation is good, a lack of regulation is bad.” Yes, a lack of regulation can be bad, and bad regulation can be worse, but regulation also stifles creativity, requires resources to manage and can sometime be very difficult to implement (like for example if no-one actually has any idea of how to value a Credit Default Swap).

For a change of perspective, I will stop talking about the economy for a second and tell you to think about control, command and regulation in terms of people… Everything I have just said about business and markets applies equally well to people. Control people or regulate people? How many of you are saying “I don’t want to be controlled or regulated at all!”? But the regulation of people is critical to maintaining society – getting locked in jail for life for killing another human is a type of regulation. A lot of the laws and regulations around people are pretty obvious – not having them would result in a disruption to society and interfere with the freedoms of other people. Murder, theft, fraud, law of contracts, property ownership laws, etc. But then there are the unclear areas, and the question of whether you regulate people for their own good and their own protection. Gay marriage? Does it impinge on other people’s rights? Drug use? Should people not be allowed to fry their brains in whatever manner they choose (as long as they do it in the privacy of their own home and not destructively in public)? The problem is also that some laws are accepted as being for the good of society by the majority (or sometimes the minority) and then imposed on everyone. Slavery and apartheid? Or more modern debates – immigration, intellectual property, religious education, etc. A lot of people would say that modern society has trended towards fewer restrictions on people and more freedom, however I would argue the opposite. We have far more regulations and laws, but these protect the freedoms of a far greater number of people. Groups of people in history had far more freedom than people today, but people in modern democracies have far more freedom.

Of course freedom of people is a very difficult thing to measure. Who is more free? A Somalian child, a Chinese child or an American child? An African-American living in a ‘ghetto’ or an American oil tycoon friend of George W Bush? A Vietnamese child working in a sweat shop or a Zimbabwean child with no work, no food and no money? And for all the examples I have listed, think of the role of their respective governments in their lives and in determining their freedoms.

The last question is: which aspects of society and people’s lives should government be involved in? Religion – theocracy? Not religion – secularism? Since both government and religion generally tell people how to live their lives, some people see no conflict between religion and government and so believe religion should form a key part of government. Others believe that religion is a personal choice and that religious beliefs should not be imposed by a state. Government’s involvement in science is a hot topic at the moment and it is only going to get hotter – climate change is a key area where government and science will increasingly overlap. Yet in the past, government involvement in science was primarily in military development. Education? Should government enforce a standard syllabus, or should it set a framework of outcomes which the educational institutions should achieve?

I should now hopefully have given you enough to think about governments and what they can do. Why not invade a small country and try out a few of the variations yourself? Play around and see what works and what doesn’t

For the next topic in this series I am going to try and tackle the really daunting question of “do we really need a government at all”?

Happy New Year everyone. I’m back to the old tradition of the very unweekly email, it has been so long since the last one. I have one half finished mail still waiting from last month, hopefully you’ll get that one soon – it is the third in the series about choosing your governments.
But this mail is on a much more personal note - what do you do if someone you care about loses their way and ends up in a deep, dark hole? I have been meaning to write it for a while, it was from my experiences of ‘being here’ for a close friend who has been through a very rough patch… but now I really need to write it, because I have just realised that another close friend was ‘being here’ for me too. So this email is being written from both sides of the deep, dark hole.
So what do you do? How do you get them out of that hole? Firstly, whatever you do, do not follow them down into the hole, do not go to where they are, do not try and lead them out, do not try and drag them out, do not sit next to them in the dark. There is one time and one time only when you can actively go to them and lead them out – this is when they specifically ask you to. It does not matter if you’ve been down the same hole yourself and know the way out, it does not matter if you have a map with the route clearly marked, it does not matter how good your intentions or how much you care for the person. If you do, one of the following is going to happen:

• You might lose your way yourself in the dark. Now there are 2 of you stuck and you are no help to each other.
• If you go down into someone else’s hole, you are giving up your own sunshine. It is far easier to help someone and stay positive when you are standing in the light.
• If the person is lonely in their hole and you go to them, then you are only going to make them happy in their hole, because now they have company in the dark and will not want to leave.
• If the person is hurt and afraid and you try to go to them, they might flee in fear from you deeper into their hole.
• If you do find the person and lead them out, they will probably not learn the way out themselves, and in no time at all will be lost down the same hole again.

And understand that directions out will hardly ever work – they are lost, confused and in the dark. What might seem obvious in the light of day, is not so clear in the dark.
So what do you do? You have a choice, you can leave them there or you can try and help them out. If you leave them there, they will probably figure their way out eventually … but they might also never make it out. I warn you, helping them out of the hole will not be an easy task – the deeper the hole, the harder it is going to be on you. So choose carefully, how important is this person to you? How much time are you willing and able to give? It is worth it, because if everything goes well, you will have a friend for life, someone who would in future be willing to help you out of whatever hole you find yourself in.
So you want to help them out? First you have to know why you are willing to do this, why is this person important to you. Next have a look around you and at yourself – know where you are and who you are. Know this place, always know how to get back to this place, because you are going to need to be right here as hard as you can. By being here, you have somewhere to lead your friend and your friend has somewhere to go. This is the essence of what it means to be here for someone. It means to always be yourself, to hold onto who you are and to find your own caves to explore, instead of always being stuck in other people’s. In cliché terms, you are being a guiding light, a rock to cling to, the calm in the storm. If you be here, your lost friends will always know where to look for you and where to find you.
But understand that ‘here’ is not a static spot, ‘here’ is where you are. So the first thing is to keep reminding your friend where ‘here’ is (not telling them go to ‘here’). Call to them and visit them and tell them where you are.
The first step in the dark for your friend is going to be one of the hardest – not knowing which way is out and what lies ahead of them. Be patient with them and offer them encouragement. If you are being here for them, letting them know where here is, they will at least have a better idea of which way to go. Once they are moving, it is going to take even more patience and control. They might head in the wrong direction or suddenly stop and head backwards. You have to be strong and do not do any of the things I warned you about at the beginning, just keep on being here. Trust me, it can be very hard not to shout at them “You’re going the wrong way! Turn around!” Just be patient and keep on letting them know where ‘here’ is.
With all my earlier dire warnings, understand that I am not saying leave them alone and don’t help them at all. You should offer them as much help, support and encouragement as you can (I never said you shouldn’t). Just be careful about forcing help on them and scaring them away from you. And I am going to give you an exception to the rule about giving directions (because there is always an exception). If your friend is heading for a ravine, you have to say something. I’m not talking a small drop which will hurt, but they will survive (have the bandages and plasters ready at the bottom of those), but a deadly ravine from which they will not return. If you see your friend heading for one of those, stand in front of them, warn them, stop them, tell them to turn around, yell at them, do whatever it takes. And if all that fails, get ready to catch them just as they step over the edge. Unfortunately judging when to intervene can be a very difficult decision, because on the way out, they will often walk on the very edge of ravines and never fall in. You have to watch them carefully and only intervene when they are definitely going to walk off.
Once they have found their way to the exit of the cave and are about to step into the sunlight, you will have one last test of your strength and patience. Getting to the end, your friend might close their eyes to the harsh sunlight, turn around and head back into the cave. Do not run after them, do not chase them, do not shout “Come back!”. Just keep doing what you’ve been doing all along, just keep being here. When their eyes have adjusted properly, they will come out again. And don’t forget, some people prefer the dark.

So I dedicate this post to good friends and always being here for them.

I was supposed to be writing about governments this week, but I had some desperate pleas from my friends to explain what on earth is going on with everything at the moment.

I’m just going to touch briefly on South Africa’s politics at the moment, maybe I will do a longer blog on it later if I have some time. What is happening in South Africa at the moment is called democracy – it is a good thing, it is supposed to happen like this, stop worrying. Mbeki has set a very important precedent by leaving as easily as he did – in a democracy as young as ours, the precedent of the quick and easy changing of leaders is fundamental. Worried about South Africa becoming like Zimbabwe? Don’t. What just happened is everything that Zimbabwe is not. What if Mbeki had clung to power and refused to step down… would that not be typical Mugabe-style leadership? And compare what is happening in South Africa to what is happening in other developed nations – especially Britain. Gordon Brown is under considerable pressure from his own party to resign… sound familiar. The Israeli Prime Minister Ehud Olmert has just been forced to resign, because of – believe it or not – allegations of corruption. Change happens, change is important and the smoother that change is the better and the healthier the democracy is. As for Trevor Manual, have you perhaps considered that he has out stayed his welcome? You know that he is currently the longest sitting finance minister in the world? 12 years. And anyone remember how everyone said when his predecessor – Chris Liebenberg – left, the country would collapse? And when Tito Mboweni took over from Chris Stals, how the country would collapse? Change is good. How do you know that there is not someone even more brilliant waiting in the wings?

But onto what I really want to talk about – the end of America, the end of capitalism and the end of the world… You might have noticed that the world economy at the moment is in a bad state. Major banks are failing and the US government has just passed a bail-out package potentially worth more than South Africa’s GDP. What is going on and what does it mean for us?

First, what happened? This is the same ongoing credit crisis that was happening at the beginning of the year. Read my previous blog Buy Now Pay More Later -  for more details. But basically the banks created these really complicated financial instruments and then sold them all over the place and bought them from other banks and repackaged them and sold them again. Everything is now so knotted and twisted that no-one really knows how it all fits together. So at one end is a bunch of people that borrow money to buy a house or a car and at the other end is a financial instrument that is supposedly worth something. Unfortunately the people at the bottom end are having a lot of trouble paying for their houses and cars because they were given more debt than they could afford and the overall economic situation has not been good for them. In the good old days this was quite simple, there was the guy in debt and there was a bank. The bank repossesses the guy’s house, sells it on the market and offsets the amount that they get from the sale against the amount outstanding on the loan. Either the sale amount is more than the loan and the bank doesn’t take a loss or the sale amount is less and the bank shows a loss. Easy to work out. And you can also do a estimation of the number of people defaulting and the average house price and calculate how much money the bank is likely to lose in a year. Unfortunately you can’t do this anymore. The bank cut their loans into various sizes, repackaged them and sold them to other banks. So when Joe Soap defaults on his repayments, no-one quite knows which banks will be affect and by how much. Sound disturbing? It should!

So now you have all these banks who are going to have losses, but they have no idea how big those losses are going to be. If the losses are too much, the bank collapses. So banks have 2 concerns, they might collapse and other banks that they deal with might collapse. Paralysis. Banks are terrified to lend money out, because their current debt book might be bad, and because any bank they lend money to might collapse and not be able to pay them back. Unfortunately short term debt is the oil that keeps the system running. Companies borrow money from the banks at the end of the month to pay their staff, who then use their salary to pay their monthly bond repayments or other debt to the banks, closing the debt circle. If the bank does not lend to the company, the company cannot pay their staff, who default on their loans, which then affects the bank, making them less willing to lend out more money.

This is vicious circle the bail-out package is trying to address. By buying up the dubious debt from these banks and by injecting money into the system, it removes the uncertainty and banks start lending money out to everyone again… we hope.

So that is what happened and what the bail-out is all about, but what happens next? Um… I have to say I don’t know. This really could go either way. The one extreme is that there are no more bank failures, the economies start picking up again and in two years time everyone wonders what the fuss is all about. The middle path is that there might be a few more smaller bank failures, but most of the financial institutions hold together. America goes through about 10 years of recession or very low growth, but eventually recovers, hopefully a little wiser. The worst case scenario is that another major financial institution fails, resulting in a domino failure of the entire financial system. America goes into a depression which could last as long as 20 years, dragging the rest of the world with it. The most probable scenario is the middle one, but let’s have a look at the worst case scenario.

The danger is very real. The crisis and the buy-outs have resulted in there being fewer banks, and banks like Bank of America and Citigroup are getting larger. This is called concentration risk. Now if one of the mega-banks fail, the effect will be disastrous. Fewer players, with more of the market… very risky. America is almost certainly heading into a recession, which means that there will be more defaults, foreclosures and bad debts. This is not over yet and only time will tell what the future bank failures are going to be.

But on the positive side it helps to compare the current situation with the Great Depression. There are some very key differences. Firstly a lot of protections were put in place after the Great Depression – for example unemployment insurance and federal insurance of bank deposits ($250 000 of each savings account in a bank is guaranteed in the case of a bank failure). Both of these would have a major mitigating role if things do go pear shaped. Secondly after the First World War, countries cut foreign trade and turned inward. The first great globalisation of the Victoria age was brought to an end and there was little integration – countries suffered alone. And thirdly, the America economy in the 1920s/30s was a lot less sophisticated and diversified. The service sector was very small, the industrial sector was new and the financial sector was very basic. The Great Depression was very strongly tied into the agricultural sector as a result. It was farms that were being foreclosed in those days and in many ways it was the flow of agricultural goods rather than credit that came to a grinding halt because of that crisis. A lot of lessons were learnt from then and have been learnt since.

This crisis isn’t new. Japan and Sweden have been through something very similar, they survived. In fact Sweden got out of their crisis very well. The scale of it is the problem this time. And there were warning signs too, Enron being the biggest. A company built on complex financial deals, that when unravelled had no substance – sound familiar?

So what happens now? Well for us on the street, we wait and hope… and get money ready for the biggest opportunity of our lifetime. Now is one of the best times to buy shares. Trust me it will be difficult if you do, expect not to make any money for at least a year, but your future gains will be far more. Just one warning, only invest money that you do not need – buying at the bottom is great, but predicting which is the real bottom is as difficult as predicting the top of a bubble. You do not want to invest all your life-savings at the bottom, only to have the bottom fall out from under you.

If you do not have any extra cash, and most people out there are suffering badly at the moment, then you must just tighten your belt, learn about financial discipline and support each other. It will get better, and when it does, remember what you learn in this time.

But in summary, things are bad, corrective measures have been put in place, adjustments are happening, things are going to get worse before they get better, but I don’t believe that everything is going to collapse.

In June I started what was supposed to be a series about different types of government, unfortunately I got distracted and so part 2 is only coming to you now. However the follow-on has now become incredibly relevant. South Africa is seeing some very interesting democracy in action (for a quick comment on that, don’t stress, democracy is all about changing leaders, don’t get too attached. The easier one president leaves, the easier it is for the next one to leave) And I hope you have been watching the US elections, because it has been fascinating. I recommend you go back and reread my democracy blog (the first in this series), America is a text-book example of what happens when democracy decays, when people no longer care. Chose a backwater woman with no experience and your rating goes up (that is the nicest way I will ever describe Mooselini); think too much and talk to deeply and you get accused of elitist, intellectualism and lose rating points. And so the comment I ended that blog with “If you don’t care then maybe democracy isn’t for you”, becomes the question “So what if democracy isn’t for you?”

But let’s not get write off democracy just yet, because there are so many options and flavours to try. Firstly, who gets to vote? There is a compulsory democracy (like Australia) where every person is required by law to vote. No voter apathy – you will vote. How about only allowing people that have undergone a voter election course the right to vote? Or a year’s course in politics? How about only allowing university graduates to vote? How about only landowners (has been done in the past), or people with a certain amount of wealth? Surely the educated and the wealthy would be the most responsible people to allow the right to vote? But the rich and the educated will always be able to look after themselves, the poor should be the ones choosing who would be the best person to help them out of poverty – a plebocracy? The possibilities are endless – each segment of society having very different goals and priorities, which are often in conflict with those of other segments. The decision on who gets to vote is very strongly linked to what you believe a government should be doing…

Also what you vote for and how you vote has some interesting possibilities. One idea I really like is, instead of voting for a single choice, you vote for 2 or 3 – first preference, second preference, etc. What this means is that moderate parties have a very decent chance. You are might be a firm supporter of one major party, but you are also concerned about environmental issues and so put your second preference as the Green party. Environmental issues now gain a lot more prominence, reflecting the general concern that most people might have for the environment. Or a moderate party might win the election in a very polarised country with two opposite, competing parties. The voters are not willing to vote for the opposing party as their second preference, but are quite happy with the compromise moderate party. This form of voting is especially effective in the parliamentary/representative form of government (people get seats/representation depending on how many votes they get). On the negative side this system might be very difficult to administer, requires a wide variety of political parties, and has the potential of being too moderate and boring. But on the positive, it can create a large political space allowing more players and more people to have their say, as well as bringing issues that would otherwise be ignored to the fore.

One variation on what you vote for is that you can either vote for a party or you vote for a person. It is difficult to find a pure form of either of these, because a leader that has the final say is important, and also it is impossible to either run an election campaign or run a government in a large country all by yourself. But as an example, Britain tends more towards the party democracy system, whereas America tends more towards the executive (individual) system. In a party democracy, the party chooses its leader and can swap leaders as and when it wishes. This is a very robust system because it is effectively a democracy within a democracy. The public chooses a group of people who they think best represent their issues. This group of people, who are theoretically well educated in politics and the issues in their country (since they chose to enter politics) then choose from themselves the person they believe is best suited to lead them. What is the problem with this form – well pick 5 verbs to describe British politics and I bet one of them will be “boring”. Party democracies are slow moving and can take a while to radically shift policy – sometimes a good thing, sometimes a bad thing. The other thing that can happen has just happened in South Africa – someone can become leader of a country without having to convince the majority of the people that they are the right person… all they need to do is convince the majority of the ruling party that they are the right person. Smaller target group, easier to influence.

An executive democracy on the other hand is where the public directly choose the one individual who they wish to lead them. Executive democracies are fast moving and decisive and can undergo rapid changes. The personality and beliefs of the chosen leader will define the government’s policy. Highly advantageous, but put some idiot with a middle name starting with W in charge and it can also be highly disastrous. This form of democracy is the most susceptible to democratic decay, since personality can play a far stronger role than policies. Note that parties are far better at developing policy than individuals. John McCain has taken full advantage of America’s leaning towards this system, he has run his campaign not as the next leader of the Republican party who have been responsible for Iraq and the bad economy, but as a ‘fresh’, ‘new’ leader who has nothing to do with George W Bush’s policies. If the public saw the last 8 years as Republican policy, McCain wouldn’t stand a chance, but he has convinced them that it is Bush’s policies.

But why just vote for a person or a party? Why not also vote for the issues? I would like [Obama/McCain] to be the leader, but I want him to follow a [pro-choice/pro-life] policy, to [withdraw from Iraq/stay in Iraq] and to [prioritise healthcare/education/industry]. Mix and match. Sadly it would be difficult to administer and to hold the leader to account for implementing what people voted for. Also people can make stupid decisions – give them a choice of [raise taxes/lower taxes] and they will pick [lower taxes] every time. Not always the right decision.

Other things to mess around with are when you vote. Limited term lengths are a popular idea at the moment, most neoliberals will tell you that anyone who stays in power for longer than 8 years will definitely become corrupt and will cling to power. I would like to point out though that Franklin D Roosevelt won four terms (12 years) in office in the US (they have since limited it to 2 terms) and Margaret Thatcher was Prime Minister for 11 years. Why should we limit our leaders’ terms? If they are doing a good job, keep them in. With practice they can only get better. Limited terms result in short-sighted policies. But sadly people do tend to get power crazy, take a look at Zimbabwe - leaders that stay in power get too attached to that power, they believe that they know best. Unlimited term lengths requires very, very strong legal, civil and governmental structures that will make sure that the leader will leave when it is time for them to go.

Then how about changing when you have elections. Instead of having regular elections every 4 years, why not have a continuous election? How would that work? Everyone can register whether they are happy or unhappy with the current government. If at any point you decide to change your mind, you go to an election centre (or log onto) and register your new status. A majority of people want a new government, then you have full elections to select that government. Plenty of problems with this idea though…

And there you have some different ideas for democracy, and also one of the key problems too – democracy is very hard to define. What is democracy? If a country only elected a new leader every 20 years , would that country be democratic? Why not? Democracy is government by the people and the people decided that they only want to have elections every 20 years. What if the people decide to have a leader until their death? Everyone votes to have one permanent leader… is that not still democracy then? How about if you have very well run elections every 4 years, but a small group gains control of the media and uses it to brainwash the population into believing that their group is the best to lead the country? Democracy?

I think it all comes down to what you want from your government… which will hopefully be the next topic.

Going to delve into some post-Fordist Marxism here. Been thinking more about good people and how they fit into the workplace, and came up with an interesting perspective. One way of looking at the world is as a series of class struggles – Mr Marx was a big fan of this idea. The timeless struggle between the haves and the have-nots, the ruling and the servants, those in power and those without power. But it is a struggle that has had some major victories – the people freed themselves from monarchy with democracy, the slaves were emancipated, women got the vote, blacks got equal rights. These victories have not ended discrimination or hierarchy, far from it. One of the biggest divides is still the rich and the poor, the haves and the have-nots. But it has introduced a new dynamic. Your potential is no longer restricted by arbitrary divisions, it (theoretically and only in some countries) is now possible to obtain any level of power or success no matter if you are black, white, male, female, rich or poor. It can just be a lot more difficult for some people. This has effectively eliminated any group dynamic from the struggle – the only commonality between people is their level in the society and that can change. No longer will there be slave revolts, women’s suffrage movements, black civil rights movement or anti-apartheid struggles – it is now a personal and individual struggle.

Now some people interpret this as meaning that it is each man (or person) for themselves, screw everyone else just look out for number one. These are the empire builders, that carve out their little kingdoms and surround themselves with yes-men; people who do not consider or value other people’s opinions; people who measure themselves entirely by their own success; they will bite, claw and backstab their way to the top and then cling onto power by any means necessary, not caring how they use that power, only that they have that power. This interpretation is that since everyone is now equal in the struggle, the struggle is against each other. But this is wrong, this is not how it should be interpreted. The struggle is with each other. The battle is not to see who gets to the top, but to see that everyone can reach their own top. We are all in this together, we are not in this by ourselves.

So what does the second interpretation mean in practice. If you have power, if you are at the top, it is your duty to help those below you to reach their potential. Helping them does not weaken your hold on power, it strengthens it through the support of those you help. Power is not meant to be held, it is meant to be given. If you lift those below you, you with be lifted with them; if you push those below you down, you will never get any higher and chances are that eventually everything will collapse under you. Just remember you are not creating yes-men, you are helping them reach their own potential.

If you don’t have power, your duty is to help those around you. Power can be created by groups – combining the tiny little bit of power each person has into a cohesive group can create large amounts of power. Help those around you, support them and pool your efforts, you will accomplish far more. Be strong against the empire builders, do not allow them to grind you down, use the power of the group to resist them. But do not resist everyone above you, support the good people, both those above you and amongst you. Every bit of support you give a good person will provide a tenfold benefit to everyone they go onto support. Also be wary that you aren’t building your own empire, you should be pursuing group goals and not just your own goals (if your own goals are the same as the group that is great).

But just remember what I said at the beginning, it is still a personal and an individual struggle. Do not get caught up in group-think, you are your own person, you have been emancipated, you have been given freedom and choice and opportunity, do not allow others to take that from you. Remember this and be strong when you are faced by an empire builder, remember this is still a struggle, don’t take it laying down, don’t become one of their yes-men. And when you have power, don’t let others force you to use that power badly. How you use that power is your choice and your responsibility.

Welcome to the new revolution – we’re fighting this one one person at a time!

It has been a while since I have written something arrogant and pretentious… ok it has been a while since I wrote anything… but just lately I have been having a lot of exposure to conflict between people and I started wondering what makes a good person, a nice person. Since I strive every day to be a good, nice person, what are the principles that I try and live up to when dealing with other people? So here is what I came up with – Pete’s guide to being a nice person:

• Other people always have something to teach you, learn from them
• Do not ever assume that you are better than someone – everyone will be better than you at at least one thing.
• Give others the benefit of the doubt. Don’t assume that any action is deliberate, malicious or intended negatively. This is not to say you should be naive, be wary of others’ intentions, but rather allow them to prove their good intentions before condemning them.
• Trust people for their intentions, not for their actions. Trusting someone because you believe their intentions are good (or bad) is far better than trusting someone to do or not to do something.
• Do not expect anyone to do something that you would not be willing to do yourself
• Do not judge anyone for doing something that you have done yourself
• Be patient when explaining things to other people, their inability to understand does not mean that they are stupid. In fact if you are unable to explain something to a ‘stupid’ person, you yourself do not understand what you are trying to explain.
• If someone disagrees with you, it does not mean that they know less than you, it may be that they know more than you, or have interpreted things differently.
• Be open about your opinions and beliefs, allow them to be scrutinized and challenged by others
• Listen to other people’s opinions and beliefs, respect and try to understand why they hold those beliefs
• Always consider how you can make other people’s lives easier with the things that you do
• Be patient, tolerant and open with even the most frustrating of people
• Help others without any expectations of recognition or reward
• If someone helps you without expecting recognition and reward, repay the kindness a thousand fold
• Do everything you can to help other good people succeed
• Always admit when you are wrong
• Be gracious and allow others to admit when they are wrong
• Learn from your mistakes and help others to understand their mistakes
• Other people’s interests are equally important as your own interests
• Tough love - always aim for the long term happiness of others and not their current happiness. This can be the hardest because it can mean hurting someone now, if you know it will make them happy later. Tough love can only be applied if you follow every other point listed above – especially be wary that you are not assuming that you know more or are better than the other person.

Well there we go, a short list of slightly different ways to be a good person

Be good everyone!

The unweekly email is back! Getting an email every week from me was clearly unsustainable and was ruining the name ‘unweekly’ Want to write a bit about governments in the next few mails. Going to start with some thoughts about the worst form of government… except for all the others (thanks Mr Churchill).
Let’s begin with an ideal utopia. Imagine a country where everyone is very well educated, politically savvy, aware of everything going on in their country and are concerned citizens. They decide that the best form of government for them would be a democracy – they would elect from amongst themselves the best leaders to run their country. Since everyone is so switched on politically, this is quite an easy task and they do indeed elect a superb leader who does all the right things, promotes the greater good and makes the country a great place. Now this person is doing such a great job running the country that everyone else stops worrying about politics and events in their country – they know that they are in good hands and that their leader will always do the right thing. Then it comes time to elect a new leader. Unfortunately the people are slightly less switched on this time – so both the people doing the electing and the choice of candidates is not as good as the first time. No one really minds, the new leader does a pretty good job anyway, the country continues to grow and the people forget even more politics. A couple of cycles later and no one is really interested in politics, nor events in their country, nor the concerns of the people, nor issues the country faces – there is a government that takes care of all that for them. Unfortunately the people chosen to lead have been getting progressively worse. The voters don’t really care or know about the broader issues and bigger picture, and only really care about their own little world and its problems. They have consequently started voting for the candidate that offers quick short-terms gains and quick fixes to their problems. Since the candidates are chosen from the general population and the general population is less politically savvy, the candidates know very little about politics, government, what the true problems the country faces and how to deal with them. The candidate that will win is now the smoothest talker, not the best leader, the one who makes the boldest promises even though they are impossible to keep. The original people in this utopia would have been able to see right through such candidates, but now the people are enamoured by them.
And so you have the natural decay of democracy.
And this is the reason why democracy is such a difficult form of government to form and maintain. Firstly, to form a democracy the people need to be politically savvy enough to understand it, to want it and to have people amongst them who are good leaders. George Dubyah’s idea that you can somehow impose democracy on a country is doomed to failure. If the people don’t buy into it, it will collapse all too soon, especially if they feel that they are not truly able to choose their leaders and if they do not understand what their leader’s role should be. Secondly, maintaining a democracy requires that its people do try to remain politically savvy. This unfortunately takes energy and commitment. People have to keep up to date with current affairs, understand not just what their needs are, but what their fellow countrymen’s needs are, and to be able to understand enough about politics and leadership to be able to judge their leaders. The stronger and greater the number of people that do this, the stronger and greater the democracy. Democracy is a fantastic form of government because it makes its leadership accountable and provides an opportunity for the best leaders to come to the fore. But in order to work it needs its citizens to care and to take an interest. Democracy is government by the people, and so the government is only as intelligent as its people, as wise as its people and as caring as its people.
How about you? Do you know the issues that your country faces? Do you know what your government is doing? Do you care about the problems and needs of your fellow countrymen? Do you take an interest? Do you stand up for the issues that are important? Or do you just complain about how bad the government is and how it never does anything for you? Do you not vote because you believe there is no point? Do you just let the government get on with governing whilst you try and live your little life?  If you don’t care then maybe democracy isn’t for you.