What a wonderful thread. I have only just discovered it today, but almost everything I have thought has been eloquently put by EngineerTony. I also agree with about 90% of Jeremy Bosk.

The Undercover economist, who writes in the FT and seems a smart guy to me points out that we need to make a certain amount for ourselves, even though the Chinese can do it cheaper and better. If we don’t we don’t have anything to trade with. EngineerTony gives many well-chosen analogies to illustrate the financial industry but I would sum up by describing it as the ‘middle man’ enabling industries that do something useful to function. But we can’t function as a society with only middlemen.

We all are agreed we are stuck with democracy. The difficulty is that is that we need large numbers of people, the electorate, to make good choices. And the trouble with that is that people, generally are rather fallible.

As a member of the human race I have noted the strength of peer pressure and the effectiveness of words, rather than facts or logical thought. Finally people, quite naturally respond to self-interest, or, if you prefer, greed.

So we have to design our society to cope with these characteristics, not become enraged when people behave as could be predicted. I agree that solutions are not easy. But we should at least identify the problem, then set about solving it.

It seems to me totally obvious, for instance, that the financial industry pays itself far too much, and that top people generally are paid too much, and it keeps getting worse. Obviously people benefiting from this situation aren’t going to agree, so let’s not even ask them. I also agree that it is very difficult for shareholders to be effective, for simple administrative reasons.

What’s wrong with the UK?

If I wasn’t British (English) I certainly wouldn’t like us. We are bigoted to an amazing degree. Our opinions are about 90% predictable from our backgrounds. We don’t like change, foreigners, argument, and engineers. We think we are better than foreigners, and yet in my experience almost the only thing we are quite good at is humour. And our approach to problems is not solving them but to blame someone. Also we are very reluctant to take a long-term view of anything. What do we have against arguing? I don’t mean exchanging insults. I mean courteous respectful exchange of differing opinions. We still have expertise at a certain technical level. That’s why we are good at motor racing, but in my lifetime top management has been disgraceful. Everyone is scornful of politicians, yet they come from ‘us’ and are elected by ‘us’. It seems to me that it must be extraordinarily difficult to be a politician in this country. You have to have a squeaky clean past, because the media will be sniffing about for any dirt, however irrelevant. You have to make a good persuasive speech, be careful not to say something you might regret 10 years later, and figure out how to run the country. When you are in opposition you have to make promises and commitments to get elected, then when you get into power and find out the realities of government you are called every name under the sun for departing from your original intentions. A big problem in the UK is the media, particularly the press. But we keep buying the popular newspapers. I don’t. I subscribe to the FT on the internet, get the Washington Post for free on the internet, and get TV news mostly from Aljazeera

The Americans are having similar debates with research from one, The Hamilton Project, posted here:

http://www.brookings.edu..._growth_innovation.aspx

I don't know if you have to subscribe to enter the site, I did so years ago and am not bothered by unwanted emails.

Patrick Moylan has a good point about getting involved in politics to achieve change. The trouble is that somewhere along the way you lose sight of your goals and the quest for power becomes the only end, or you just get old and tired.

Pre Thatcher I was a Tory activist and pre Blair I was a Labour activist. Then I spent a few years passively voting Lib-Dem. The latter is a mistake I will never make again. Of the elected politicians I have personally known three pre-Thatcher Tories were thoroughly decent and one went to gaol for conspiracy to steal. Four post-Thatcher, pre-Blair Labour politicians were honest, caring and motivated by public service. Last month I went to vote, at the polling station in the Hindu Temple around the corner, for a Pakistani born Muslim standing for Labour.

The Cobden Centre is halfway intelligent in its arguments and Steve Baker seems like an old-fashioned decent Tory of the sort who will never get to the top. I still think Austrian School economics is close to Voodoo. Positive Money is muddle headed IMO. But worth a look to see from whence other people receive their ideas.

ICD

Just caught up with your post. Thanks. I agree with 90 per cent of what you say :-) The bit I disagree with is on greed as a motivating factor. It exists for sure and motivates many: but others are motivated by idealism, benevolence, self-respect, all kinds of internal rather than external factors. Even religion, although responsible for many evils, can stimulate good behaviour. Although I believe its effect on the individual is more to do with that individual's basic personality.

I would add to your list of sources for quality news:

http://thescotsman.scotsman.com/

which is free,

and

http://www.investorschronicle.co.uk/

for intelligent commentary as well as share talk. Like the FT, its sister paper, the IC costs real money but provides real value.

==================

Still on life support

I agree with you in so far as the UK still has great wealth and potential. However there are vast swathes of the country and sectors of society that live in misery and squalor. As Patrick says education and training are the key for the future but they will not be much use to those ground down by poor social conditions. The old and the sick are under constant threat from ideological extremism that results in NHS disruption and old people's homes like Southern Cross falling victim to financial engineering and (yes) greedy bosses.

What can we do about the lumpen proletariat? as Marx might have said.

Prof

America's problems are far deeper than corruption and incompetence in financial services. Some parts of their education system are world class: in others the teaching of evolutionary theory is banned in favour of creationism. Their media ranges from excellent - the aforementioned Washington Post - to evil fascist lunacy. The evil fascist lunacy has many more followers than the quality media. Fox News on television and Rush Limbaugh on talk radio make our Daily Mail seem almost honest and moderate - in a Hitler versus Mussolini kind of way. Their electoral system is far more dominated by big money even than ours. They elected George W Bush...

Jeremy
Your bit about Fox News and the Daily Mail made me laugh out aloud. I agree of course. But I threw in greed for two reasons. One is that the wordsmith will say greed to make it sound bad and motivation, incentive or whatever to make it sound good. But it has the same meaning, usually. My other point is that it is best to design society to take advantage of greed, motivation etc. In fact that is capitalism surely? Work hard and cleverly and you will become rich and successful. I am not against those 'good' things you mention, of course, but another failing we human beings have is to convince ourselves that what we are doing is ok even when it isn't. I am fairly sure that there are a number of jobs that are grossly overpaid by any fairness yardstick, but you will be hardpressed to get the occupants to admit that. And even the other directors will say that we have to pay the going rate to get someone of suitable talent. Well, yes, but they are all overpaid. So what to do? I just think it is too unreliable to rely on idealism. Better, surely to treat it like sport. If it is in the rules you can do it and vice versa.