A leading city broker has blamed the riots that recently caused chaos in many of Britain’s major cities on an “out of control consumerist ethos” and predicts that the effect on our economy will be substantial.
Tim Morgan, the global head of research at Tullet Prebon, has published a series of reports, the latest of which recommends solutions to the political and economic troubles Britain is facing. Amongst the suggested resolutions are policies that should encourage saving, more positive role models, more public investment, and putting private investments into the creation of assets as opposed to inflation of existing assets.
“A deeply flawed economic and social ethos”
It says: “We conclude that the rioting reflects a deeply flawed economic and social ethos… recklessly borrowed consumption, the breakdown both of top-end accountability and of trust in institutions, and severe failings by governments over more than two decades.”
The report also claims that consumerism was the driving force behind the riots. It points to the hundreds of adverts people will see when using the internet and says that the message they send out is: “Here’s the ideal. You can’t have it.” Morgan also notes the inflation of private debt as a factor.
“I buy, therefore I am”
“The economy has been subjected to repeated ‘boom and bust’ cycles, above all in property. The overall pattern has been that an over-consuming west has borrowed and spent the surpluses of the increasingly productive and under-consuming East.
“The dominant ethos of ‘I buy, therefore I am’ needs to be challenged by a shift of emphasis from material to non-material values. David Cameron’s ‘big society’ project may contribute to the inculcation of more socially-oriented values, but much more will need to be done to challenge the out-of-control consumerist ethos.
“”The government, too, needs to consume less, and invest more. Government spending has increased by more than 50% in real terms over the last decade, but public investment has languished. Saving needs to be encouraged, and private investment needs to be channelled into asset creation, not asset inflation.”