3 examples of products that arose out of a deregulated lending sector that was allowed to self regulate, with the post 1979 political ideological support of a ‘free market neoliberal doctrine’ allowing a light touch regulation regime within the sector.
Spoiler alert, it didn’t turn out well
Three examples that I personally and many millions of citizens had to navigate (1988-2009), through mazes of poor legislation, based on neoliberal ideologies of individualism and therefore individual responsibility.
“Which is a handy smokescreen for those businesses who want to shift risk from one party (the lender) to another (the borrower) whilst isolating the borrower as an independent individual versus the banking system”.
“There is only one winner in this loaded game”.
I’m glad to say this eventually unravelled, but with huge losses to the borrowers and to the once trusted reputations of various banks and building societies, here are just three of many heavily marketed products from the 1988-2008 that were sold to the unsuspecting public. The Mutual Building Society mortgage model of pre Big Bang (1988) no longer existed and the public had yet to catch up with this fact, so the driven lenders (who needed to show ever increasing profits for their shareholders) had to find other and additional ways of extracting money from future borrowers, knowing that only a few people actually understood the true value of the products namely, the inventors
In the following three pages are just 3 of the most prominent and now all banned examples of these products
An outline of a strategy to address the commodified housing market. The idea originated from a thought experiment in 2018.
One of the first paradoxical issues surrounding Rent Control (RC) is the difficulty of implementing it, particularly because it would negatively impact the wealthy establishment the most. This often leads to a refusal to even consider the proposal.
This post is a response to a question I didn’t have time to address at the end of a presentation. I discussed the fundamental aspects of the current housing model and explained why unregulated private purchases and rents have become entirely market-driven due to the finalization of the mortgage debt market and the commodification of the living spaces we call home.
The question is an obvious first hurdle to even thinking about an introduction of private RC,
Slightly paraphrased question from my classmate Mark;
“How are you going to get an acceptance from small private landlords let alone institutions”?
My response stems from ideas I’ve been developing for a few years, inspired by a theoretical Beveridge 2.0 report. This includes addressing the “five giants” of a 21st-century neoliberal society in the UK. It’s very broad, but the main point is how you convince people that the stick of RC will benefit the nervous middle (50-90 percentile) and suspicious asset wealth (top 10%).
Addressing bias
According to behavioural economist Daniel Kahneman, we tend to exhibit a stronger bias toward loss—known as “loss aversion”—than toward gain. This bias significantly influences our decision-making. Initially, it may seem beneficial to be overly cautious, as common sense suggests that careful consideration of financial decisions is wise. However, this tendency can lead to poor judgment in certain situations, as illustrated by gamblers who obsessively chase after their initial losses while ignoring the more rational option of accepting a loss and walking away (Kahneman, 2011). In contrast, an AI algorithm would evaluate the odds and would likely accept the initial loss if it determined that doing so was the best course of action for maximizing long-term gains. Humans, on the other hand, often struggle with this due to the emotional weight of the initial loss, often reacting with the fast thinking, emotion-led reactionary part of our decision-making dual apparatus ( the other being the slow rational side).
So, with this in mind, to counter the loss, we need a greater gain. Thus, in this report, I figured four carrots to the one stick. This is so important to creating societal jewels (i.e., the NHS) that can be justified to the majority over the small minority of self-seeking short-termists ( and we will see in the paper that all benefit long-term, again, the NHS).
Though it should be stated that any welfare fiscal spending cannot show a direct profit by its very nature, it’s once, twice, thrice removed. The measurement of GDP growth is only seen as a fiscal measurement of ‘production’ ( highlighted as the definition of production has been constantly manipulated; for example, only recently has rentier landlordism been included as a product, even though its extraction, nothing is actually created). The separation of generations cared for, educated from birth to grave, kept healthy, has food, shelter, warmth and no fear of retirement to concentrate on producing measurable wealth during the hours of productive employment.
“Not all can be commodified for direct profit, but what can be produced unhindered by welfare concerns will be measurably more efficient in final output. A sick hungry workforce is absent in mind and body.
On the 4th of November I had a lecture on Neoliberalism, a term that I have a rough grasp as to its meaning as we all live in a neoliberal world in most of the northern hemisphere, this is the present ‘normative common sense’ of our economy and social individualistic aspirations.
A really great and thorough lecture with angles that i had not seen before and thus consequences.
Knowing how well researched and read Anna Minton is it was rather depressing to hear her admit that to a point that the concepts of the ‘reclaiming the commons’ had fizzled out. Yet as Mark ( PhD student attending the class who is working on voluntary housing schemes) commented there are projects on the go in the country, but had to admit the enthusiasm of the recent past has declined. Bumped into a paper this morning reinforcing this depressing reality (see further below for an abstract);
Blair’s ‘Third Way and Cameron’s ‘Big Society’ both tried (and failed) to tap into our former natural egalitarian sense of societal values (Henrich 2021) that are a disconnect from the baseline of Neoliberal thought, that as Hayek would say that at our core we are all ‘self seeking’ and therefore the only real value is monetary and thus we all should work and accept this value, and the invisible hand of the market will solve all our woes if we just give it time (recently completely dismantled by ‘trussanomiocs’).
The reason the Big Society almost instantly failed was that it’s such a contradiction to the common sense that we the public had been taught/indoctrinated for the past 40 years (1979-2010), namely; ‘there is no such thing as society’ every man woman and child for themselves, along with the suspicion we were being taken for fools, expected to work for nothing to support the bottom end of society whist the wealthy yet again ,’run off with the money’. A London East End term would be, to be ‘Mugged off’.
This is the classic ‘all actions have a reaction’ reality, you prime a population to become hyper individualistic, to follow ‘their ‘ dreams, add to the mix ‘positivity’ ie, you can do this! with a sprinkling of status aspiration and boosterism ( no negativity even with obvious failures, think Boris Johnson former PM who promoted Brexit for his own gain and could never understand the criticism as to why it failed, and it has ref -4% growth compared with those in the EU) and you have a citizen that relies on ‘feelings’ more than reality. Perfect politician and media fodder for manipulation and denial of uncomfortable facts ( ie Michael Gove; ‘we no longer need experts’).
The term from an academic perspective is ‘social capital theory’, where we take what we have to offer as individuals with others and collectively do something for the benefit of society/community and not necessarily for monetary profit, ie ‘the big society’.
Two examples of people movement on the Isle of Dogs; Sideways and Vertical.
When putting together a presentation concerning a brief history of the Isle of Dogs in the Eastend of London, I stumbled on a 2nd less well known influx during the 1960’s, also promoted by a centralised organisation, but far more inclusive than the later corporate organisation foisted upon the community in 1981, namely The London Docklands Development Corporation (LDDC).
The former was the London County Council (LCC) (later to become the GLC) which derived from the post war housing consensus and in particular the 1947 housing act.
So as with all things, looking a little more deeply into the policy of a pre LDDC government select committee, comments within the paper questioning the new law to be presented to parliament. As with many acts of parliament is has to go through various cross parliamentary committees to scrutinise a controversial bill. This bill was no exception born out a new ideology of Free Market Neoliberal Capitalism as promoted by the Thatcher Government of 1979, from the theories of Friedrich Hayek and Milton Friedman (and the rest of what was known as the ‘Austrian School’).
“This was the first real opportunity to enact the low regulation ring fenced policy centrally governed via unelected quangos on a large scale”.
To say this was a 180 degree shift from the previous economic and social ideology would be no exaggeration. This is born out in the two shifts in the islands population, the first in the 1960’s which I will call a horizontal shift of people, so not strictly Gentrification in the Ruth Glass terminology of the 1960’s and the present day, and a 2nd more seemingly effective solution in the context of monetary value to the area, but not necessarily for the original local population.
Recently watched a Vpro ( documentary maker from the Netherlands) documentary. Highlighting the issue of University inventions and thus patents being given away free to private industry to use and then profit from, with the bizarre reality of the state buying them back including a rent for the patent! Think pharmaceuticals and the NHS.
The well known and often quoted is the iphone, most of the internal components were government funded projects for defence, navigation and general public funded university research, all used by Steve Jobs and co, and cleverly put together to create the ubiquitous smartphone which was then marketed for huge profits, with none going back to the publicly funded organisations as if it was all the ideas of just the private sector (remember these corporations also avoid taxation).
So Mariana Mazzucato goes through this in her book The Entrepreneurial State (debunking public v private sector myths, video further down the page) and the Vpro video.
One section near the end caught my imagination. Problems are there to be solved, the Kennedy moonshot speech;
“We choose to go to the Moon. We choose to go to the Moon… We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win, and the others, too”.
I am very aware that where money comes from is very complex, controversial ( some say for reasons of keeping the public ignorant) and has been argued about for at least 5000 years (anthropologist David Graeber: Debt; A 5000 Year History). The modern banking system has evolved quite rapidly over the past 300 years, changing as each idea fails or causes a boom bust cycle, which again is what unfettered capitalism does ( yep, Marx, Keynes observation) it’s almost as if capitalism if unregulated kills, but if controlled can bring life, and the ‘love’ (or the status it can bring) of money is the root of all evil, or certainly brings out that inner demon of greed we all have lurking within us.
“The ultimate result is slum tenancies, built as a minimum for the procreation, briefest of rest and subsistence of working labour”
It's about people, stupid... 