We are all mystified by the call to violence that a police action judged inequitous/unjust brought about. Perhaps, the response has a lot to do with the stimulus, which is an assessment by people that their economic situation is unjust. This is very real. If enough people believe this, such as students who had aspirations for education but who were disappointed with costs, they would riot if the correct stimulus were applied.
The Bubble of Education Costs:
Today we have levered inflation of the education sector which is another balloon about to explode world wide. Why in hell can't people be educated out of libraries and the comfort of their own homes. Or why can't Apple iPad schools not be educating students at 1/100 the cistern of universities. It's a bubble waiting to burst big time. If Bill Gates can succeed, so can almost anybody using an iPad and information on the Internet. Truly employers better get used to self educated people because they will put them out of business if not employed. Demand a certificated and bleed your company's profits away. Self education is the wedge that will burst the present bubble of education costs.
Multiple reasons:
I think the riots may have been due to more than one stimulus and require solutions at many levels of social administration not just specifics. The disconnect between people's aspirations and what was and is being experienced is primarily an economic disconnect. There is most definitely an injustice associated with the life experience of home ownership and job ownership, both related to employment.
While the house price inflations of 2000-2010 were not as bad as the inflation of Germany in the mid twenties, the effect cannot be underestimated, nor can the sense of misery associated with unemployment that also characterised the mid 1920s. Then, the world experienced riots between struggling labour and established employed. Marxism fought fascism, and fascism won some places while Marxism won others.
Project forward these issues that damaged societies in Europe and you have a profound sense of injustice. Sure English and German society were prosperous, but the under society were not. The liberal party all but disappeared in Britain, while in Germany the upper class lost it's legitimacy as did those Jewish families that ventured from the flight to gold and the appreciation in property values.
Recognise that the real issue was not the absence of property which led to the calls for lebensraum, but the absence of a just way for those in the under economy to acquire property at a price they could afford.
Britain's pressure pot riots have a general solution, but they require thinking outside of the normal boxes of specifics and generalities. The main issue was the use of the property market to create growth, but the rise in prices occurred too rapidly and was overtaken by speculation, divorces, two income families, and leveraged borrowing.
The Disconnect Between Property Acquisition and Incomes:
Let's get real economic growth is measured in terms of houses and cars. Much of it is due to inward migration.
There has been mostly crappy growth in Europe. Ugly cities with pollution are not growth, just more crap. American growth has been population driven and products have been crappy junk from China disguised as production but really retailing.
Incomes could not pay for housing and widespread demand went unsatisfied. In America, house prices don't rise because there is so much land or lebensraum, but there property prices went through the roof.
Using property for growth and employment still is seen in America and Britain as a viable economic policy despite the absence of jobs with incomes outside the housing industry to pay for the magnificent properties being built.
Lord Keynes would have said the real problem was effective demand, and an absence of real jobs. He would have focused on total demand just as the economists of Obama and Blair do/did! They would only get part of the picture!
Schumpeter at Harvard would have said the old industries need to die first to make way for new. Microsoft has to die to make way for Apple. That's what the stock Market is all about. It's as much about growing companies as killing them off. Too much leveraging allows the walking dead compaies to survive and a capitalist economy becomes clogged up. The toilet won't flush out the crappy companies to make way for good stuff.
Pricing Education High is Inflation and is as bad as a leveraged housing Market!
It's utter stupid inflation Mr Cameron! You need to see that addiction to leveraged housing market has been replaced by a leveraged education Market. Both have squeezed out those at the lower ends of the income streams.
So my solution as an economist is to recognise that Schumpeter was right and Keynes was right, but that neither are understood because the present lists of economists have crap understanding about leveraged growth. How do I know? I just read and look at TV, and watch the riots!
Un-leverage all the markets that are sodomy in disguise:
Housing and construction
Corporate takeovers
Education
Bailouts for walking dead companies
Inward migration
MPs expenses
Obsolete technology
Do the HP thing and recognise the tough choices!
Email me: wuhlax@gmail.com
Twitter: @wuhlax
