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wonderpup

Economic Illiteracy Or Opiate Of The People?

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It is to be hoped that our great and good understand the concept of supply and demand and the price/cost dynamic this engenders- simply put-all other things being equal- if the supply of a thing goes up then it's price- it's market value- will tend to go down. Simple enough.

Yet despite this we are constantly assured by our leaders of the following;

1) That increasing the supply of degree educated people will increase their earning power ( their 'market value')

2) That increasing the productivity of the workforce will increase their earning power ( Their 'market value')

So we are told that the secret of individual prosperity in the modern age is to increase the number of qualified people looking for work or to decrease the number of people required to the do the work that is available.

But common sense suggests that precisely the opposite will be true- that if we increase the number of qualified candidates the earning power of degree educated people will tend to decline as more of them compete for the same jobs- and that if we increase the productivity of the workforce less workers will be required to maintain output meaning that the number of workers competing for jobs will also increase- meaning that their earning power too will likely decline.

How to explain this apparent failure to grasp the most basic of economic principles by the people we elect to run the country?

The only way I can make sense of it is to conclude that buried somewhere in their thinking is the assumption that by increasing the capacity of an economy to produce you automatically increase the capacity of that economy to consume- thus- this thinking suggests- the more degree educated people you create the more jobs will appear for degree educated people to do- and the more productive your workers become the more workers will be needed.

As a self employed artist I really like this idea because it means that if I wish to increase my income all I need do is increase my output and as a direct consequence more people will appear who like my work and want to buy it.

But as appealing as this sounds I still have this nagging problem with the idea- because if it's true that supply begets it's own demand it means that no business can ever fail, since by the very act of producing a good or service one has by default created the demand for that good or service.

And this sounds just a little too good to be true. So either our glorious leaders are hopelessly optimistic to the point of idiocy, or they are propagating these comforting notions purely in an attempt to soften the ugly truth that in a globalized economy in which demand is rapidly becoming a scarce commodity in it's own right the future for most people is a gradual decent into relative poverty as the race to the bottom proceeds toward it's obvious destination.

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You are confusing our 'leaders' with people who actually give a $hit.

Don't think of them as 'leaders', think of them as farmers. We are the pigs and they are the farmers.

Ok, so what are the farmers farming? Health, happiness and social cohesion? Hahahahah! Close, but no.

They are farming the production of money, the creation of debt and the manufacture of GDP. What else do they know? An educated worker is just a fat pig. A fat pig in massive debt is the perfect farm product.

Ask your questions again against this backdrop and it all makes perfect sense.

You are the pig. You create the stick to beat yourself with (debt for you are born with nothing) and a ring through your nose to draw you on (your future worth because of your education). You are then put on the tread mill called the 'economy' and get to beat yourself stupid while following your nose ring of future wealth until you die.

It goes something like... oink slap oink bang oink slap oink bang chink chink squeal, chink chink squeal, oink slap oink bang oink slap oink bang chink chink squeal, chink chink squeal.....

It's not great I agree, but the farmers don't have to actually do anything so why would they care how hard it is?

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At the end of the day, an employer doesn't give two sh1ts about someone's university degree unless it's directly useful in the job position being offered. They see a 2:1 on the CV and it's "meh" from the employer. That's what £40K in debt gets you.

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We could go mad trying to answer this question.

"Jobs" - i.e paid employment, only exists because the black plague wiped out Europe's workforce, land owners were then forced to provide benefits above a simple roof and some food in order to attract labour. As Labour i.e people have become more omnipresent, their value has declined. Education in of it self doesn't actually produce anything other than simple Sheep/Pigs that follow a debt model (talk to an 21 year old to understand what their world view is...). What this shows is the market will only adapt when it is forced to, not because of some God given right for everyone to have a job.

Its only the people who have develop a life long drive, a determination to create a productive asset or system that actually rise above this mess, they are the employers, the true tax payers etc. I don't know if its a innate trait or nurture vs nature...perhaps it can be taught, but today's universities certainly don't have a clue how to do it. They say you can put a good student in a desert with a basic maths book and he will re-invent algebra, you can do the same with the unmotivated student and they will simply burn the book for heat. It seems to be the combination of delayed gratification, immense focus, lack of distractions, and leadership of people. Knowledge is not always that relevant.

The skivers and the inherited wealthy are the two ends of the market that need to change in order to provide these people with labour and capital to create more jobs and products for humanity's future. I agree that basic amenities should be provided to all, especially those who cannot help themselves. But after this, those that can, should do - and anyone that doesn't should be shamed - that was how it used to be. Striving, in of itself is why we have some self worth, take that away and you simply consume and die - what was the point.

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Its only the people who have develop a life long drive, a determination to create a productive asset or system that actually rise above this mess, they are the employers, the true tax payers etc. I don't know if its a innate trait or nurture vs nature...perhaps it can be taught, but today's universities certainly don't have a clue how to do it. They say you can put a good student in a desert with a basic maths book and he will re-invent algebra, you can do the same with the unmotivated student and they will simply burn the book for heat. It seems to be the combination of delayed gratification, immense focus, lack of distractions, and leadership of people. Knowledge is not always that relevant.

Good point. A lot of people want to "phone in" their entire working life: essentially just "turn up" - go to uni, get a degree, apply for a "professional" job, get it, do the minimum required in the job so you don't look out of place, occasionally do well, but never outstanding. These types of people (and they are the majority) are sleep-walking into a pretty crappy future in my book. They're also the same type of person who will dive into a huge mortgage as soon as they can, as well as a private pension. They think they're always doing thing right thing, but they're actually on very thin ice the whole time. Then when they become redundant, they are utterly useless in pulling themselves up by the bootstraps.

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You are confusing our 'leaders' with people who actually give a $hit.

Don't think of them as 'leaders', think of them as farmers. We are the pigs and they are the farmers.

Ok, so what are the farmers farming? Health, happiness and social cohesion? Hahahahah! Close, but no.

They are farming the production of money, the creation of debt and the manufacture of GDP. What else do they know? An educated worker is just a fat pig. A fat pig in massive debt is the perfect farm product.

Ask your questions again against this backdrop and it all makes perfect sense.

You are the pig. You create the stick to beat yourself with (debt for you are born with nothing) and a ring through your nose to draw you on (your future worth because of your education). You are then put on the tread mill called the 'economy' and get to beat yourself stupid while following your nose ring of future wealth until you die.

It goes something like... oink slap oink bang oink slap oink bang chink chink squeal, chink chink squeal, oink slap oink bang oink slap oink bang chink chink squeal, chink chink squeal.....

It's not great I agree, but the farmers don't have to actually do anything so why would they care how hard it is?

:D

Only March but already we have a strong candidate for post of the year! Funny and yet utterly utterly depressing at the same time.

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It is to be hoped that our great and good understand the concept of supply and demand and the price/cost dynamic this engenders- simply put-all other things being equal- if the supply of a thing goes up then it's price- it's market value- will tend to go down. Simple enough.

Yet despite this we are constantly assured by our leaders of the following;

1) That increasing the supply of degree educated people will increase their earning power ( their 'market value')

2) That increasing the productivity of the workforce will increase their earning power ( Their 'market value')

So we are told that the secret of individual prosperity in the modern age is to increase the number of qualified people looking for work or to decrease the number of people required to the do the work that is available.

But common sense suggests that precisely the opposite will be true- that if we increase the number of qualified candidates the earning power of degree educated people will tend to decline as more of them compete for the same jobs- and that if we increase the productivity of the workforce less workers will be required to maintain output meaning that the number of workers competing for jobs will also increase- meaning that their earning power too will likely decline.

So the road prosperity is to close all schools and universities and for everyone to do as little as possible then ?.

Our overall wealth is collectively what we produce - if we increase that then we are all (in the round) wealthier.

In order to increase the overall wealth of an economy overall, you have to erode or eliminate localised wealth-through-scarcity this is the apparent paradox you are obviously incapable of coming to grips with. Wealth-through-scarcity is a zero sum game because its one actor in an economy increasing its margin at the expense of another, overall wealth increase can only come through abundance. Its like the difference between creating "wealth" via BTL (scarcity) vs wealth by building more houses (abundance). Engineering a deliberate scarcity of skills can no more create wealth than doing likewise with housing can.

If you want to disprove this paradox then by all means just name one product or service, really just one, that would cause a net benefit to economy by being more expensive.

Edited by goldbug9999

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If you want to disprove this paradox then by all means just name one product or service, really just one, that would cause a net benefit to economy by being more expensive.

Asides from mortgage debt? ;)

Edited by LC1

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Asides from mortgage debt? ;)

It has no direct utility of its own therefore I don't count it as a product or service representing wealth, but rather its a financial instrument that allows you to buy products and and services e.g. a house. Even then cheap credit is only bad because it gets channelled into bidding up something else that is scarce, if everything is abundant then loose credit becomes relatively benign. Loose credit plus scarcity elsewhere is the toxic combination.

Edited by goldbug9999

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Good point. A lot of people want to "phone in" their entire working life: essentially just "turn up" - go to uni, get a degree, apply for a "professional" job, get it, do the minimum required in the job so you don't look out of place, occasionally do well, but never outstanding. These types of people (and they are the majority) are sleep-walking into a pretty crappy future in my book. They're also the same type of person who will dive into a huge mortgage as soon as they can, as well as a private pension. They think they're always doing thing right thing, but they're actually on very thin ice the whole time. Then when they become redundant, they are utterly useless in pulling themselves up by the bootstraps.

I think that's a bit harsh, although it probably does describe a lot of people. However I don't really see why just regarding a job as an irritating chore that you need to do in order to have those things in life that actually make it worth living and no more should be regarded with scorn. It doesn't necessarily mean that they can't pull themselves up when they have to. Personally speaking I can think of no reason whatsoever to put in enough effort into my job to be outstanding at it, even if I've enough drive to do more than the minimum possible (it's more interesting if I put a bit of effort in). The job is merely a means to an end.

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At the end of the day, an employer doesn't give two sh1ts about someone's university degree unless it's directly useful in the job position being offered. They see a 2:1 on the CV and it's "meh" from the employer. That's what £40K in debt gets you.

It's probably a little worse than that...I interview regularly for sales positions (still in the right B2B environment highly lucrative and in Britain in spite of the snide comments we are good at )

The most successful are generally 2.2 candidates who had a good time at Uni (but their rapid career progression leads to commission based high earnings to wipe it out their debt) who have good eq so can sell.

So an average 2.1 in any other career what did it get you ?

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Good point. A lot of people want to "phone in" their entire working life: essentially just "turn up" - go to uni, get a degree, apply for a "professional" job, get it, do the minimum required in the job so you don't look out of place, occasionally do well, but never outstanding. These types of people (and they are the majority) are sleep-walking into a pretty crappy future in my book. They're also the same type of person who will dive into a huge mortgage as soon as they can, as well as a private pension. They think they're always doing thing right thing, but they're actually on very thin ice the whole time. Then when they become redundant, they are utterly useless in pulling themselves up by the bootstraps.

+1 Plenty of opportunity even now for people who are prepared to put it in and for Christ's sake why would anyone spend years of their life in a job just getting by waiting for the weekend ? Tragic

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+1 Plenty of opportunity even now for people who are prepared to put it in and for Christ's sake why would anyone spend years of their life in a job just getting by waiting for the weekend ? Tragic

Suggest a job that's anything else... I've never thought of anything that I'd want to do for eight hours a day, five days a week. The one I've got is interesting enough but that demand on your time will almost always be a chore unless it's something you really, really love, and that'll always be rare. But chores don't really bother me too much (again in contrast to a society full of people that would regard a TV without a remote control as a horrible chore).

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I agree. A job is a job is a job. They are mostly dull and just prevent you from doing what you want to do. They are means to an end - nothing more.

This is why lottery winners always leave their jobs at once. I mean, wouldn't you?

Edited by Errol

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Suggest a job that's anything else... I've never thought of anything that I'd want to do for eight hours a day, five days a week. The one I've got is interesting enough but that demand on your time will almost always be a chore unless it's something you really, really love, and that'll always be rare. But chores don't really bother me too much (again in contrast to a society full of people that would regard a TV without a remote control as a horrible chore).

Fixing things, making people look good hairdressers , beauty therapists always come out top of the happy life index

My observation that a connection with people and making their life better seems to work.

I can say I have enjoyed the majority of my working life and that's even before I had the satisfaction of working for myself and creating a business.

I enjoy speaking so getting paid to do it is great (either 121 coaching or Non exec stuff, ) I have always enjoyed fixing things, situations or people so running an IT services business is great (I get to do all three)

I am a non exec in a media business and the youngsters around me seem to absolutely adore film and creativity it's inspiring

I don't think it's as rare as you think.

Edited by Greg Bowman

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I agree. A job is a job is a job. They are mostly dull and just prevent you from doing what you want to do. They are means to an end - nothing more.

This is why lottery winners always leave their jobs at once. I mean, wouldn't you?

They don't all and many bemoan the fact they won the lottery

I want to play golf or ride my motorbike 7 days a week - how soon before I get bored ? a month tops ?

To do something you love on a daily basis takes an attitude to risk most people don't have, either by starting your own thing, re training or moving geographically. Doesn't mean it isn't out there just for whatever reason it's not happening to you.

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Well the general push of society is less contact with people, and less fixing and making things, so expect those satisfying aspects to reduce, since "efficiency" is far more important than those.

Going out and setting stuff up myself is my idea of complete and utter hell (or at least one part of it).

I'd still need something more fixed and not just leisure to do if I won the lottery, like I said I don't really have the objection to chores that most people seem to (and the removal of many of them hasn't really helped people).

Edited by Riedquat

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Guest eight

They don't all and many bemoan the fact they won the lottery

I want to play golf or ride my motorbike 7 days a week - how soon before I get bored ? a month tops ?

To do something you love on a daily basis takes an attitude to risk most people don't have, either by starting your own thing, re training or moving geographically. Doesn't mean it isn't out there just for whatever reason it's not happening to you.

So you don't get bored of talking about IT services, but you do get bored of playing golf and riding your motorbike?

I'd suggest you're not quite right in the head representative of the norm.

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They don't all and many bemoan the fact they won the lottery

True, but Ive had some time off between freelance gigs and was never bored. It depends on the individual. Im all for starting your own thing, doing it myself, but in so doing I find what I create is limited to what there is a market for. Unless you're 'into' what there is a market for, that necessary restriction makes doing your own thing less enjoyable than if you could just do whatever pleased you.

I think happiness is about being creative and 'working' in that sense, it doesn't feel like work. I get pleasure from what I do due to the associated aspects of it, the creativity, finding a market, satisfaction, all that, but its not up to me what I make.

If I won the lottery I would still create and 'work', but not for money. I would therefore be free to work on what interested me the most which isn't likely to be what you can sell to make money.

If you're bored after winning the lottery I would venture the problem is with you not finding that you want to do, not with a lack of 'work' in the earnings sense.

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So you don't get bored of talking about IT services, but you do get bored of playing golf and riding your motorbike?

I'd suggest you're not quite right in the head representative of the norm.

I'd guess it's about getting a good work-life balance, helps you appreciate the rest of the time and stops any of it becoming too routine. Works on a small scale too, putting my feet up at home is just that little bit more satisfying after I've got the cat fed, washing done etc. (and those things in their own right give a little bit of minor satisfaction, enough to be suspicious of getting rid of them, i.e. I don't actually want a dishwasher).

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Guest eight

I'd guess it's about getting a good work-life balance, helps you appreciate the rest of the time and stops any of it becoming too routine. Works on a small scale too, putting my feet up at home is just that little bit more satisfying after I've got the cat fed, washing done etc. (and those things in their own right give a little bit of minor satisfaction, enough to be suspicious of getting rid of them, i.e. I don't actually want a dishwasher).

Well some seek validation in work, and others just see it as a means to an end. The problems come when the former type expect the latter to be more like them.

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So you don't get bored of talking about IT services, but you do get bored of playing golf and riding your motorbike?

I'd suggest you're not quite right in the head representative of the norm.

I love technology perhaps I am rare. My ambition when I was a teenager was to run my own business (had no family role models) but visualised one of those fifties industrial estates with a red Jag XJ outside got that after 9 years.

Then developed other ambitions for the business. Good question re the bike and golf - Truth is I will never be a pro golfer and have you spent any length of time with single figure handicap middle aged golfers ? christ talk about lose the will to live. Biking - I am a class 1 police standard motorcyclist and will probably go on to instruct but again how many track days observed rides can you do, tour a bit but every day ?

Business and technology combined and running a business is great fun and lets me do all the other stuff, including travel broadly tax free...

It is always changing quite enjoy being a 54 year old who is ahead of must millennials on the latest vibe

Edited by Greg Bowman

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Well some seek validation in work, and others just see it as a means to an end. The problems come when the former type expect the latter to be more like them.

or visa versa

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.

I think happiness is about being creative and 'working' in that sense, it doesn't feel like work. I get pleasure from what I do due to the associated aspects of it, the creativity, finding a market, satisfaction, all that, but its not up to me what I make.

If I won the lottery I would still create and 'work', but not for money. I would therefore be free to work on what interested me the most which isn't likely to be what you can sell to make money.

.

Agree with both these statements I guess I am lucky in that I do get to choose by my own decisions good or bad how much I make

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