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With all the turmoil in the Financial Markets, I noticed someone suggesting that with the nationalisation of two major Banks, Capitalism was dying, it is not a view that I agree with because of basic human nature. People do actually need the incentive that by their own effort, skill or intelligence, they can be “better or different” to those around them. This does not just apply to wealth creation, it is also what inspires truly heroic deeds in both the military and civil sphere.

But if we were to say that the way that things have been done in the recent past have to change, I would say that was obvious and I believe that change will be beneficial too…

The Key problem…

We have been living in a world of apparent prosperity that disguised a total lack of imagination and a narrowing of aspirations to “house, car, clothes, celebrity…” We have seen absolutely no new and astounding ideas in the area of wealth creation by which specifically I mean something that leads to an enlargement of the “commonwealth”.

Even what has happened in China whilst astounding in its scale, is little better than a larger scale of the events that led to the Industrial Revolution in Britain, displacement of people from rural areas with them being concentrated in urban one’s to provide the cheap labour to create the mass production of of artefacts. As Birmingham was once the Workshop of the World, China is today but this has not produced anything new and startling technically.

To illustrate just how creatively sterile and pathetic we have become, the most radical product of the past 5 years is probably the Apple iPhone – a ruddy mobile phone ! If you stop and think about “radical and new life changing technology” since the end of WWII, it is a very small list, Nuclear Fusion, the Jet Engine and massed produced personal computing power and one might argue that even these had their origins in that War, both sides flew jet aircraft in combat before it ended, the Atom Bomb ended the war and code breaking, Enigma and so forth set the pattern for practical computing.

The infernal combustion engine being well over a century old and whilst there have been spin offs, space exploration has yet to provide anything of great commercial value to match the pride and dollars pumped into these programmes by any country. Probably mobile phones are significant except that they are extensions and evolutions (wireless) of something that already existed and like motor cars, yes they are life changing in terms of greater distribution but not in purely technical an conceptual terms of “unique devices”.

The Victorian and Edwardian Age

I am by birth a “City Boy” and I actually like cities not just the London of my birth. Cities are constant works in progress that show there self confidence and vitality through constant building, re-building and renovation. If you look around London both in public buildings and even in private housing, most of the good stuff was done in the Victorian and Edwardian period, a time of great self-confidence and vitality.

But even in manufactured goods, whilst the pace of technological advancement was far slower than today, there was constant experimentation a constant going forward, not just in Britain but in all the Industrialised countries. In comparison, we are not creative enough, we are not even being creative in terms of distributing and improving the known impacts of the devices we have and this does have a significant impact.

Too Narrow a Commercial Base

I do not agree with Gordon Brown when he talks loosely about the Global problem starting in America with Sub Prime mortgage problems, that is a foolish thing to say by a man eager to deflect criticism of his total fiscal incompetence. Sub Prime was the symptom of the disease of too much money chasing too few real investment opportunities.

Commercially the whole global focus narrowed to the extent that as we now see, we were living in a “Domino World”. Bankers created paper money instruments because there were no really new technical projects under way which was allied to a culture of ‘annual performance’ targets and ‘short termism’ on making investments.

New Growth

What we are seeing is not the death of “capitalism”, it is the birth or re-birth of imagination. Necessity is the Mother of Invention they say and perhaps it is only through privations that the West in particular and the world in general will rediscover the inner genius of mankind that can produce genuine new ideas.

Yes, I am an optimist and I believe that from these ashes of non-industry will bloom real innovation and a capitalist system that gets back to its roots of seed capital and nurturing growth rather than slash and burn to make some Fund or Unit Trust show the highest annual growth. The capitalists will have to become farmers, the easy money, easy ride, quick bucks have gone and a smaller scale but a wider base of enterprise will become the order of the day.

There is a Danger

Politicians and Governments are not good at doing things but inevitably will rush to put in place draconian “New Regulations” to ensure that “It can’t happen again” which of course it will but, in a slightly different way.

Regulation is always a tough one to do properly and it has become increasingly more difficult as these Islands have fallen more and more under the thumb of Brussels and the EU Courts. Now whilst I am all for getting out of the ‘political EU’, my point is not based upon that personal conviction.

Because of the diversity between the very basis of Law historically in Continental Europe and the UK, all Laws and 80% now come from Brussels, are ‘compromises’ constructed by bureaucrats to deal with what they see as ‘technical differences’. The resulting Laws and any further passed at Westminster are ‘mealy mouthed’ and we find ourselves engaged in a constant war over legal technicalities in the British Courts.

Britain Needs to Regain Control of Law

To make any regime of regulation work, we need to get back to our basic principles of Parliament passing Laws and our Judiciary interpreting them, we need to introduce a degree of “uncertainty” in the sense that a Judge may focus on the “Spirit” of the Law and “What Parliament Intended”.

Currently any regulation has to encapsulate any and every potential eventuality so that if say “Red, White and Blue Walls” were included in the legislation but “Yellow and Green” ones not mentioned the defence is…and culprits escape on technicalities.

The point I’m trying to make is that with any Law or any set of regulations, they should be guided by sound principles, clear intent through clear expression in common language and therefore “defences based upon technicalities” rather than those principles become null and void.

Regulation needs a purpose and a clear definition the clearest example of which were the “Ten Commandments” handed to Moses.