uk in economic crisis

Sachin Nandha

@sachinnandha

Sponsored by JP Morgan

Are we epistemologically reliable?What do we know? What can we know? How do we

know?


Historicism

The “Best” ideas flourish & spread

“Best” is always being redefined according to the geopolitical as well as socio economic landscape of the time.

Organised

KNOWN PUBLICALLY


Can these “best” ideas sometimes lead us to disaster?

Case of Easter Island


200 BC Polynesian’s begin to settle

300 AD Island completely settled

600 AD Ahus constructed

1000 AD Massive deforestation occurs

1500 AD Resources become scarceIntense warfare begins

1600 AD Resources depleted Cannibalism begins

1722 AD Spanish arrive

Are we hard wired to be capitalists

1. We are conditional – we are trained by hunter gatherer minds to be competitive, group orientated and power driven.

2. We are hierarchical – which allows us to divide labour and distribute resources “reverse dominance hierarchies”

Productive hierarchies (businesses) vs. Allocative hierarchies (dictatorships or aristocracies)

State should be productive but can be hijacked easily by Allocative types

3. Envious zero-sum thinkers

4. We are traders by nature

www.cato.org


Psychological viewpoint“Modern skulls house stone age minds.”


Limitations of the economy

“Consumption beyond one’s means is good for the growth of the economy, but bad for the individual who is pilling up debt”

Milton Friedman

What is Money?Money is property. Property is a bundle of rights to exclude others from what I have through the use of government force.

Concentration of wealthInterest perpetuates wealth disparity


Where are we now...

A Look at the

Paradoxes of Our

Recent Past and

PatternsSponsored by JP Morgan

• Emerging Best Ideas• Herd Mentality• ‘Bullish Behaviour • “Bubbles” Forming• Shorter Cycles– decades and

years, not centuries?• Short Memories

Look out for…


Sponsored by JP MorganSponsored by JP Morgan


OPEC Crisis

Winter of discontent

Sell of public assets


• CNN News 24• Sky News 24• Growth of the Internet mid 1990’s• Growth in optimism – “Things Can

Only Get Better”

I990’s Coming of the Information Age


Technology Boom – Experts View

‘We have one general response to the word “valuation” these days: “Bull market”. The internet has introduced a brave new world for valuation methodologies and it is a time of especially high risk/reward, in our view. When you overlay the high valuation of many start-ups with the relatively high valuation of the general market, well, we are where we are just trying to do our jobs and find some early stage great companies. If they execute, the valuations will take care of themselves. Again it’s about monster markets, great management teams and good products.’ Mary Meeker, stock analyst, Morgan Stanley.


Sponsored by JP MorganSponsored by JP Morgan

New Millennium – Safe as Houses

• Different this time• Aversion to Stocks • Relaxed Lending• Buy to Let Relaxed• Media Bandwagon



Concentration of wealth


Historic Oil Prices



What is going on now?


Challenges facing us

Rising unemployment

Decline in manufacturingRising sovereign

debtRising household debtRising oil prices

Rise of India and China

Rising inflation

Historical low interest rates


Human condition

Social character

Herd mentality Consumer

Envious zero-sum thinkers Competitive

Traders Materialism (our relationship to nature)

Driven by greed and fear “Greed is good”

Short sighted Individualism Can we keep going like this?

If not, where do we go?What attributes do you need to

succeed?

What does it all mean?


To avert the next great calamity, what we need is not better hindsight, but wisdom to better navigate through a

deeply troubling future. We need "good" capitalists.

Where now?

uk in economic crisis

Education

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