Money is broken


We are being plagued with cold calls at the moment. The phone will go ring, there will be a pause, then a background burble of conversations. A decidedly non-English voice will say one of these time-honoured phrases:

“Hello, is that Mr Once?”

“Hello, can I speak to Mrs Once?”

“May I speak to the homeowner please?”

This is when you get The Choice. It is one of life’s little pleasures.

You could go into rant mode and give them some advice connected with sex and travel. (Hint: the second word is ‘off’).

You could put the phone down. I’ve now got it down to a fine art. I can spot the tell-tale signs that it’s a cold call and hang up before they get a chance to speak. Then I can go through the rest of the day exulting at a particularly fine put-down.

Or you could let them speak for a while – deliberately wasting their time – and then switch into rant mode or put the phone down.

If I am feeling particularly mischievous I will sometimes see if I can get them to put the phone down on me. One good way to do this is to try to sell them something. Or to order a pepperoni pizza. And when they say that they don’t sell pizzas, ask for a hamburger instead. Then fish and chips. A massage.

You can have hours of fun with this.

And when you get three or four of these calls in quick succession, you might find yourself wondering if the apocalypse is coming. Maybe these are the modern day versions of the biblical plagues. They had locusts and rivers running with blood. We get cold calls and climate change. It’s the same song, only the words have changed.

But there’s more to it than that. Hold on a minute. Stop. Pause. Reflect.

The temptation may be to get irate and feel persecuted. But if we put our charitable hat on for a little while, we might ask why these companies are trying to contact us. What is really happening here?

And that leads me to the almost inescapable conclusion that money is broken.

The original concept of money was quite simple. It was a way of exchanging my labour and goods for someone else’s labour and goods. I would toil all day in the fields to grow a basketful of carrots. Meanwhile Fred the blacksmith would get hot and sweaty in the smithy making a new hammer. I would swap my carrots for Fred’s hammer.

And if Fred didn’t want my carrots, I would swap them with someone else for money. Fred would accept this money for his hammer, because he knew that he could swap it for something that he did want. All would be well. My carrots would go to someone who wanted them. I would get a hammer. Fred would get a hammer’s value worth of something that he wanted.

So far so good. Everyone is happy. Money works. We swap it between each other so that we can get the things that we need.

Then we discovered the side benefit of money. Competition for sales drove us to make better hammers, to discover America and develop the i-phone 7. And coincidentally to create most of the world’s successful empires.

And this was where money started to develop a bit of a problem. Instead of passing equally between me and Fred, it had an awkward tendency to get stuck. Some people starting collecting more and more money. Sometimes quite ridiculously more money than anyone else.

They then pass the money on to their children who become fabulously wealthy without needing to dig up carrots or smithy a hammer.

Take the oil-rich countries of the Middle East. Around a century ago, landowners in places like Qatar, Saudi Arabia and the United Arab Emirates found that they had won the global geological lottery. By some fluke of prehistory, their land just happens to be sitting on top of massive oil deposits. Which means that the most difficult decision that they have to make is whether to have this week’s Lamborghini in silver or black.

This has led to massive wealth inequality across the world. Some of the statistics around this are quite staggering:

The richest three people in the world have more financial assets than the lowest 48 countries combined.

The 85 wealthiest individuals have more wealth than half of the world’s population – that’s roughly 3.5 billion people.

More than a third of the world’s population lives on less than $2 a day.

In order to compare income on a like for like basis, economists have invented a measure called Purchasing Power Parity or PPP. This combines how much you earn plus how expensive goods are where you live.

For much of the western world, (including most of Western Europe and the United States) the average PPP adjusted monthly wage is between $2,500 and $3,500.

As we go down the list, we find the Eastern European countries (including Russia) hovering around $700 to $1,200 per month.

The average monthly income in China is $656.

We don’t have figures for the absolute bottom end of the scale. But by the time we get to India, the Philippines, Pakistan and Tajikistan the average PPP adjusted monthly income is less than $300 dollars.

But here’s a curious thing which brings us right back to our cold calling. The majority of cold calls are from India, the Philippines and Pakistan – three of the poorest countries in the world.

And that can put cold calling into a different perspective. It can be seen an attempt to transfer at least some of the West’s wealth into the less well-off countries. The person working in the call centre probably earns far less than one tenth of the salary of the person they are calling.

My local supermarket will cheerfully sell me a tee shirt for £6. And when you think about it, that’s a ridiculously cheap price. I couldn’t or wouldn’t make a tee shirt for that. That price has to pay for the raw materials, the transport costs, the supermarket’s overheads and the poor so-and-so who makes the tee shirt in the first place.

You need to look at the label to understand what is happening. Made in China.

Then we have the immigration issue. Immigrants, often from Eastern Europe, coming into the UK to work. And there will be some who will grumble that they are taking British jobs and using the National Health Service.

The UK Independence Party (UKIP) has made an entire political party out of this one issue. Keep the foreigners out. British jobs for British workers. That sort of rhetoric.

But it’s not quite so easy, is it? For one thing, many of these migrant workers are doing jobs for low wages that local people aren’t interested in. That’s our £6 tee shirt again.

Many of them are paying taxes, which helps to cover their costs. The Treasury estimates that immigrant workers have a slight net positive impact on the exchequer. In other words, they bring in more money to the system than they take out.

But here are the harder questions …

Why should a fortunate few enjoy such higher levels of personal wealth than everyone else? And I’m sorry to say but that probably includes you and me.

Should we try to hang on to this wealth or allow some of it to be redistributed to less fortunate parts of the world?

What jobs will we all do in the future when technology replaces many of the jobs that we currently do?

Coming back to our cold calling theme. I now don’t go into rant mode. I’ve stopped the smart arse answers and trickery. Now I just put the phone down without speaking.

To be sure, some of the calls are money-making scams. They are illegal, deeply irritating and can cause a huge amount of misery for the people who are taken in by them.

But the person on the other end of the line earns far less than I do. All they are trying to do is make a living.

It’s not their fault that money seems to be broken.


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