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Regenerating Industry

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Regenerating Industry

The editor of Professional Engineering magazine made some good points in November 2010 regarding the tasks to be undertaken by the current government but he went nowhere near far enough. Our National Debt is now around £77,000 per person, with conservative annual interest cost of a £2,300, and is about three times our gross domestic product. If UK Ltd were being run as a business this would be sustainable and repayable. Keeping the figures on a per capita basis if an individual earned £25,400 per annum and repays the loan over ten years at 5% interest he must repay £3,861 each year. This will be 15.1 % of his income. This would be difficult but not impossible. The problem is that even with the somewhat draconian measures announced during 2010 we will come nowhere near balancing the national budget, and we will certainly pay nothing off that debt. In short we are mortgaging our grandchildren by living far beyond our means. We are selling them into slavery and potential national bankruptcy.

To understand what we need to do to put a stop to this stupidity and to earn our way in this world it will help to understand how we got here. Firstly it is necessary to understand that there is only one source of wealth on this earth and that is the earth itself. Other than about 300kg of moon dust everything on this planet belongs here. To create wealth you must take elements from the rocks, soil and seas and turn them into products that help to support our civilisation. You can hunt or gather or fish or farm or mine and manufacture. The last three functions account for the vast majority of our wealth. Money is not wealth. Wealth is a product that someone wants to buy or trade. Money is simply a token and a very convenient way of enabling that trading.

The issue of money is a major factor in the production of wealth. The issue has traditionally – for the last three hundred years – been licensed to a very few people. We tend to call these people bankers but there is a whole range of valid functions to be performed in the financial services industry. The point is that society has known for millennia the importance of regulating money to attempt to prevent forgery and confidence tricks. Regulation brings its own set of problems. Those to whom we have licensed the privilege of issuing money have abused our trust and persuaded governments to deregulate their licenses so that they have now retained all the power, benefits and riches of issuing money but with few of the burdens and restrictions reasonably put upon their original licences. The People, the legitimate owners of the right to issue money, have been – and continue to be - cheated. The world- wide abuse of these powers is a major problem and must be addressed.

Our industrial society began to expand rapidly when breakthroughs in technology made the formation of limited companies worthwhile. Before the industrial revolution virtually all companies were trading enterprises and some were very successful. The industrial revolution enabled people of modest means to gather together and create wealth by mining and manufacturing. This was very successful and the companies thus formed have often become huge and national and even international icons. It is extremely difficult to find appropriate information to compare companies with countries but there is little doubt that there are now several hundred companies with usable assets that exceed the usable assets of 80% of the world’s sovereign states.

There is a well known and well used 80/20 rule that 80% of anything is related to 20% of some other thing. Using this idea there is no doubt that around 95% of the world’s wealth is controlled by less than 5% of the population. This would not be a problem if there was a level playing field but there is not. Those very few people have managed to establish themselves in places that have minimum regulation. The sovereign states have reached a point where they tend to represent the people who live in them but the majority of economic activity is no longer controlled by those states but by corporations that are not accountable to the people of the countries in which they operate and from which they make their profits. By this method most people have now been disenfranchised. The people of our world had struggled for many generations to bring freedom to be a fundamental condition of civilisation and they have now been cheated out of it.

There is absolutely no way the state’s debts can ever be repaid so the only way out of this is inflation – and possibly hyperinflation. Of course nobody wants that but neither does anybody have an alternative. Then those with savings and cash and credits like pensions pay as their credits, pensions and savings become worthless. The profligate with debts benefit as the debt also becomes worth less and is much easier to repay. Then the government finds it can repay its debts with monopoly money but the thrifty and aged lose everything. Another big scam.

The only way to create wealth is to make it – literally – by manufacturing things. At best, the modern financial system only skims wealth from we, the suckers who let it. The City has never created a single penny of wealth in its life. Its correct function is to finance the production of wealth but now it only does this in places that suit it where it can employ slave labour and exploit both people and natural resources.

This skimming process has already resulted in a twenty year stagnation in the real standard of living in Britain (and the US) and will not improve as long as we allow the European Union to act as an agent for the financiers and impose layer upon layer of draconian bureaucratic legislation on manufacturing and support industries. The law is strangling small enterprises literally to death.

Colin Walker

8th October 2012 

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