In this Institute of Economic Affairs podcast, IEA Communications Director Callum Price interviews Rory Sutherland, Vice Chairman of Ogilvy Group and prolific commentator on economics and society.
Fascinating interview, I like Rory already! Highly colourful and informative. Some of that interview chimes readily with my notion and his liking of Gary rings true with me too. Great intuitive mind Rory, and the thought of ‘thinking’ instead of structure for economists and lawyers must frighten the life out of them if you take procedures and systems away from them! I’m with you, there are a lot of professional people who fail to join any dots without an instruction manual. That said, I’d like to join and add to this debate if I may?…Rory accepts that wealth or money should be rotated back to those who SPEND it, as that’s what makes the economy and he is right. My view is also more carrot than stick to make choice more autonomous to the individual. But if I can explain my ‘system’ it might help you Rory in joining the dots as I see them! MONEY is as always a fair exchange of work. Your work, for mine. But as you have seen that fairness has become skewed. Is David Beckham worth a thousand front line troops? Or, is a Banker worth a thousand nurses? That sort of fairness. But I have come to the conclusion that a free market is just that. And we might try but we can’t buck the market. But whatever their earnings, it’s a result of a free market. If 60,000 people through their own choice want to pay Sir David £100 each to kick a ball (or an Argentinian defender) then who are we to stop that? But, let’s check the exchange part? That’s not really fair either! And the TIME under which all that earnings are held dictates how much TIME our tax paying pot is devoid of it. Now I’m all for us paying costs, their wages, bills loans and mortgages by a specific date but, what about them having to SPEND it too? How can any economy work properly, at its optimum, if that very system allows those who don’t need to SPEND all their income, all the time in the universe, to hold it indefinitely without it ever contributing to our tax paying abilities? By not paying any tax whilst it’s withheld from us and our need to generate revenue and tax revenue? That’s the fault with our present archaic monetary system. For millennia, the rich have been able to hold money out of our reach away from the tax paying economy and away from the daily economy we all rely upon to pay each other profits in a fair exchange of work. Mainly because, the system never knew who had what and where! It was a faith, hope and charity monetary policy!… you faithfully work and hope you get paid enough to live and pay taxes as well as hope when it is SPENT the money returns again in time to do it again week after week but, if not there is always charity! Bill Gates type of Charity! So you see Rory, the system could never be policed or controlled because of the unknown path of MONEY. Ludicrously, that’s still our policy and system! Faith hope snd charity. Yet we both realise that unless MONEY is returned to the system then, we clearly become devoid of it thus Preventing the growth and the reward we all need. But now! We can completely change that situation and in so doing put right the flawed system we have endured for hundreds of years. By controlling the knowledge of who has it and where and how much, can be easily gleaned. By using digital banking and payment cards. In 1979 Thatcher stupidly removed exchange control regulations. Wrongly thinking it would bring money in! But as we can see now after the passage of time, money can now go out! In such weight and quantity we cannot pay our way. Leaving the rest of us devoid of our own sovereign MONEY. Apart from MONEY itself (being used as a fair exchange of work) the other rule and basis of a working economy is SPENDING. Without either there is no economy. So an economy has to have a constant flow of MONEY to fairly exchange for each other’s work and that exchange is triggered by the money being SPENT. So it follows that holding onto MONEY without SPENDING it, works against an economy and its need to ensure a free flow of MONEY to keep the traction of the economy going. It’s not ‘growth’ it’s just constant flow. The need for growth only comes into play if the flow is too weak or to light. Then the need to increase flow and weight of MONEY is clearly required. We see that now! We have stagnant growth and insufficient tax take and BOTH are specific to an insufficient amount of MONEY in the system and insufficient SPENDING taking place. This is obvious as our system allows the rich to hold onto unspent, unused, idle and hoarded MONEY. That withholding of MONEY from our working pot means we generate too little tax take. So, we are short of MONEY in our daily working pot because most of our MONEY is being held out of our reach and out of our tax triggering system by those who have too much of it and don’t have to SPEND it back because the system can’t make the return happen! Also, whilst the rich hang onto all that MONEY they don’t pay any tax on it! None!! So they don’t SPEND it so it generates no Vat or duty, they don’t pay tax on holding it either! There is no incentive to SPEND it and no rule to take tax revenue from holding it! Now, to add salt to that wound, when our government needs to borrow MONEY they borrow it from those very people who have too much of it! So instead of the system ensuring our own MONEY is SPENT back freely it now comes back into our pot or rather, the governments pot, with a capital debt attached and interest attached. So they want it all back plus more! Or worse still they want to invest it that makes it a debt plus interest plus future profit share! Making them richer and us even poorer and less able to keep up the repayments as well as supply the tax paying pot of sufficient to pay the taxes we have now. In essence the status quo of tax that’s normally taken out is under threat with less MONEY and less SPENDING in the pot. This is how it is now. We have been borrowing for over 25 years at least. We struggle to pay our usual tax take and pay our way. So we have seen underfunding of services and infrastructure despite higher budgets, the total MONEY is and was never sufficient to meet our needs due to so much of our actual MONEY not being SPENT and the result is a stagnant economy with £3,000,000,000,000.00 trillion pounds of debt! So there we have it Rory. The Gary view that too much wealth is undemocratically being held by the rich is correct. So, now it’s clear there is and always has been underfunding from insufficient amounts of our MONEY in the economy and too little of overall SPENDING then you can see we have been in this dire situation for decades. So what’s the answer? Well we definitely need to reintroduce MONEY that’s not in our system to finally be SPENT back to reintroduce it for rotation and revolving in our working pot that does pay taxes! I estimate that the tsunami of SPENDING all our MONEY would be so great that the coffers of the exchequer will be overflowing! Enough to not need any taxes, other than Vat. One tax only. We will finally have sufficient funding to pay sufficient tax to have the best services, roads, hospitals and planes on aircraft carriers! Anything and everything. We won’t mind a big state if it’s affordable! And it would be. We could have higher wages, higher pensions, higher benefits. And ironically the rich would be richer from all that increased MONEY pot being SPENT rather than now being unspent unused and idle. How? By reintroducing exchange control and keep all money in the UK. Swap all existing money for new digital currency and put a ‘spend by date’ on all or part of that money. And make them spend it! Or get it taken by the exchequer. Use it or lose it! Earn as much as you can! But you have to SPEND all or most of it. Buy asset or whatever you want. Enjoy your work effort. No need to save if you earn enough each week and it’s always going to be there each week. No need to borrow from gilts ever again. No need for bonds. No need for any taxes except Vat. Autonomous and perpetual flow of money. But a free market choice of how you SPEND and earn. But this new system now ensures it’s constant flow to pay all our ways. Simple really! Now, If goods need to be sold money stays in the UK. For those to SPEND too! They will have to SPEND it on goods back! An even exchange of trade. Just what Trump wants. A trade balance. Rory, there is apparently £19 trillion pounds out there in the aether. And we last took £1.1 trillion pounds in tax take. Our government is SPENDING about £1.5 trillion pounds per year. So yes, a deficit. But that amount represents just 5% of tax take!!?? If you just use a bare rate of 20% then in that £19 trillion we should get a massive £3.8 trillion pounds in tax if that amount was SPENT just the once. Yes not over and over again, just once! If we SPEND all £19 trillion pounds once we should get with vat alone, £3.8 trillion in tax revenue in one year! What the f**k! No wonder we are going bust. We should be taking nearly £4 trillion pounds in vat and we can only manage £1.1 trillion! That tells me Rory, the pits short of MONEY and SPENDING. MS=R. What’s your thoughts Rory?
Let the road to equality begin. Positive action. Rory S has agreed to give 50% of his salary paid directly into the Dept of Health & Social Security for re-distribution.
Fascinating interview, I like Rory already! Highly colourful and informative. Some of that interview chimes readily with my notion and his liking of Gary rings true with me too. Great intuitive mind Rory, and the thought of ‘thinking’ instead of structure for economists and lawyers must frighten the life out of them if you take procedures and systems away from them! I’m with you, there are a lot of professional people who fail to join any dots without an instruction manual. That said, I’d like to join and add to this debate if I may?…Rory accepts that wealth or money should be rotated back to those who SPEND it, as that’s what makes the economy and he is right. My view is also more carrot than stick to make choice more autonomous to the individual. But if I can explain my ‘system’ it might help you Rory in joining the dots as I see them! MONEY is as always a fair exchange of work. Your work, for mine. But as you have seen that fairness has become skewed. Is David Beckham worth a thousand front line troops? Or, is a Banker worth a thousand nurses? That sort of fairness. But I have come to the conclusion that a free market is just that. And we might try but we can’t buck the market. But whatever their earnings, it’s a result of a free market. If 60,000 people through their own choice want to pay Sir David £100 each to kick a ball (or an Argentinian defender) then who are we to stop that? But, let’s check the exchange part? That’s not really fair either! And the TIME under which all that earnings are held dictates how much TIME our tax paying pot is devoid of it. Now I’m all for us paying costs, their wages, bills loans and mortgages by a specific date but, what about them having to SPEND it too? How can any economy work properly, at its optimum, if that very system allows those who don’t need to SPEND all their income, all the time in the universe, to hold it indefinitely without it ever contributing to our tax paying abilities? By not paying any tax whilst it’s withheld from us and our need to generate revenue and tax revenue? That’s the fault with our present archaic monetary system. For millennia, the rich have been able to hold money out of our reach away from the tax paying economy and away from the daily economy we all rely upon to pay each other profits in a fair exchange of work. Mainly because, the system never knew who had what and where! It was a faith, hope and charity monetary policy!… you faithfully work and hope you get paid enough to live and pay taxes as well as hope when it is SPENT the money returns again in time to do it again week after week but, if not there is always charity! Bill Gates type of Charity! So you see Rory, the system could never be policed or controlled because of the unknown path of MONEY. Ludicrously, that’s still our policy and system! Faith hope snd charity. Yet we both realise that unless MONEY is returned to the system then, we clearly become devoid of it thus Preventing the growth and the reward we all need. But now! We can completely change that situation and in so doing put right the flawed system we have endured for hundreds of years. By controlling the knowledge of who has it and where and how much, can be easily gleaned. By using digital banking and payment cards. In 1979 Thatcher stupidly removed exchange control regulations. Wrongly thinking it would bring money in! But as we can see now after the passage of time, money can now go out! In such weight and quantity we cannot pay our way. Leaving the rest of us devoid of our own sovereign MONEY. Apart from MONEY itself (being used as a fair exchange of work) the other rule and basis of a working economy is SPENDING. Without either there is no economy. So an economy has to have a constant flow of MONEY to fairly exchange for each other’s work and that exchange is triggered by the money being SPENT. So it follows that holding onto MONEY without SPENDING it, works against an economy and its need to ensure a free flow of MONEY to keep the traction of the economy going. It’s not ‘growth’ it’s just constant flow. The need for growth only comes into play if the flow is too weak or to light. Then the need to increase flow and weight of MONEY is clearly required. We see that now! We have stagnant growth and insufficient tax take and BOTH are specific to an insufficient amount of MONEY in the system and insufficient SPENDING taking place. This is obvious as our system allows the rich to hold onto unspent, unused, idle and hoarded MONEY. That withholding of MONEY from our working pot means we generate too little tax take. So, we are short of MONEY in our daily working pot because most of our MONEY is being held out of our reach and out of our tax triggering system by those who have too much of it and don’t have to SPEND it back because the system can’t make the return happen! Also, whilst the rich hang onto all that MONEY they don’t pay any tax on it! None!! So they don’t SPEND it so it generates no Vat or duty, they don’t pay tax on holding it either! There is no incentive to SPEND it and no rule to take tax revenue from holding it! Now, to add salt to that wound, when our government needs to borrow MONEY they borrow it from those very people who have too much of it! So instead of the system ensuring our own MONEY is SPENT back freely it now comes back into our pot or rather, the governments pot, with a capital debt attached and interest attached. So they want it all back plus more! Or worse still they want to invest it that makes it a debt plus interest plus future profit share! Making them richer and us even poorer and less able to keep up the repayments as well as supply the tax paying pot of sufficient to pay the taxes we have now. In essence the status quo of tax that’s normally taken out is under threat with less MONEY and less SPENDING in the pot. This is how it is now. We have been borrowing for over 25 years at least. We struggle to pay our usual tax take and pay our way. So we have seen underfunding of services and infrastructure despite higher budgets, the total MONEY is and was never sufficient to meet our needs due to so much of our actual MONEY not being SPENT and the result is a stagnant economy with £3,000,000,000,000.00 trillion pounds of debt! So there we have it Rory. The Gary view that too much wealth is undemocratically being held by the rich is correct. So, now it’s clear there is and always has been underfunding from insufficient amounts of our MONEY in the economy and too little of overall SPENDING then you can see we have been in this dire situation for decades. So what’s the answer? Well we definitely need to reintroduce MONEY that’s not in our system to finally be SPENT back to reintroduce it for rotation and revolving in our working pot that does pay taxes! I estimate that the tsunami of SPENDING all our MONEY would be so great that the coffers of the exchequer will be overflowing! Enough to not need any taxes, other than Vat. One tax only. We will finally have sufficient funding to pay sufficient tax to have the best services, roads, hospitals and planes on aircraft carriers! Anything and everything. We won’t mind a big state if it’s affordable! And it would be. We could have higher wages, higher pensions, higher benefits. And ironically the rich would be richer from all that increased MONEY pot being SPENT rather than now being unspent unused and idle. How? By reintroducing exchange control and keep all money in the UK. Swap all existing money for new digital currency and put a ‘spend by date’ on all or part of that money. And make them spend it! Or get it taken by the exchequer. Use it or lose it! Earn as much as you can! But you have to SPEND all or most of it. Buy asset or whatever you want. Enjoy your work effort. No need to save if you earn enough each week and it’s always going to be there each week. No need to borrow from gilts ever again. No need for bonds. No need for any taxes except Vat. Autonomous and perpetual flow of money. But a free market choice of how you SPEND and earn. But this new system now ensures it’s constant flow to pay all our ways. Simple really! Now, If goods need to be sold money stays in the UK. For those to SPEND too! They will have to SPEND it on goods back! An even exchange of trade. Just what Trump wants. A trade balance. Rory, there is apparently £19 trillion pounds out there in the aether. And we last took £1.1 trillion pounds in tax take. Our government is SPENDING about £1.5 trillion pounds per year. So yes, a deficit. But that amount represents just 5% of tax take!!?? If you just use a bare rate of 20% then in that £19 trillion we should get a massive £3.8 trillion pounds in tax if that amount was SPENT just the once. Yes not over and over again, just once! If we SPEND all £19 trillion pounds once we should get with vat alone, £3.8 trillion in tax revenue in one year! What the f**k! No wonder we are going bust. We should be taking nearly £4 trillion pounds in vat and we can only manage £1.1 trillion! That tells me Rory, the pits short of MONEY and SPENDING. MS=R. What’s your thoughts Rory?
Let the road to equality begin. Positive action. Rory S has agreed to give 50% of his salary paid directly into the Dept of Health & Social Security for re-distribution.
What a great man!
I already do that!