Transcription
Okay, you good? Yeah, I'm gonna do this one to you, alright? Alright, so I wanna do one called ‘Forget About Money’. Really, the idea behind this is people, when they think about the economy, they very often tend to think about it in terms of money, and it stops them from really understanding how the economy works. And understanding that, really, the economy is about real things, real resources, real people doing real work. And I call this like money obsession, or money centrism. And you see this everywhere. And it's not just from ordinary people, you also see this from economists.
So, a good example of this is when we had the 2008 financial crisis. That led to a massive upward redistribution of wealth. And how did we deal with it? Slashing interest rates to zero, which is monetary policy, doing something with money, printing money, and quantitative easing, again, monetary policy, printing money. Covid, massive economic crisis, massive upward redistribution of wealth. What did we do? Slash rates to zero, quantitative easing, print money. So, really... And you know, these are the economists that run our, our countries. They run our economies. When there are crises, even crises that involve massive redistribution of real resources, they focus on money-centric solutions. And they totally ignore what has happened with real resources. And then, you know, we can obviously see now that the way that those two crises were managed has led to falling living standards. And I've been aware of this for a long time, and I've been critical of this for a long time, and I've been arguing about this for a long time. But when I argue with people about this, very often, regardless of whether they are on the right or the left or the centre of the political economic spectrum, whatever you like, they tend to say: ‘No, the problem is not real resources, the problem is money.’
So, I always remember, I did this Masters at Oxford, 2017 to 2019. And you're with a lot of like, classic, classic economists, you know, modern elite-trained economists. And, you know, I was saying, you know, the problem is massive upward redistribution of wealth. You know, wealth is being lost by governments and the middle class is, same stuff I always say. And this guy said, no, no, no, the problem is just that we didn't cut interest rates far enough. This is a nice guy, by the way. Like, I would consider him a friend. You know, he's not an idiot, he's a smart guy, classically trained elite economist. And I'm like, ‘Dude, like, we cut interest rates to zero!’ He's like, ‘No, we should have cut interest rates to minus three percent.’ And it's like, his criticism is we just didn't cut rates far down enough.
And I don't know if you ever saw the interview I did with the IEA. So, the IEA, for those who don't know, is it's a very right-wing economic think tank. And I went and did an interview on their channel years ago when I was a lot less well-known. It's worth watching, to be honest, quite funny. And I went on there against, is it Mark Littlewood? What is his name? And he was very respectful, but he came out, and this is quite funny when you consider the story I just told. He said, the problem is we shouldn't have cut interest rates to zero, we should have kept them at three, four percent. So. And, you know, at the time, I was there, it was quite funny because we could, we could already see at the time that interest rates were gonna come back up because it was, this was like when inflation was starting to come through. And I was like, ‘Dude, you're telling me you think if rates go back to three, four percent, that's gonna fix the problem?’ And he was like, yeah. And I was like, ‘Well, you are gonna see very shortly that that is not gonna fix the problem.’ Basically.
But I think this is really interesting, right? That you have this economic context in which every problem is dealt with by fiddling around with money, printing money, giving out money, printing out money. And that clearly doesn't work. You know, in the aftermath of 2008, I talk about this a lot, that cutting rates to zero was considered a super unusual, extreme, emergency policy. And everybody thought it would have this really powerful economic rebound effect. Same in Covid, by the way. So everybody thought these massive moves in money would have these massive real effects. And they just didn't have the effects that were predicted, right? So even though we are now, we're like 15 years on, more than 15 years on from 2008, the lesson, and in a context of academic economists basically being fixated on the way to fix every problem is money, the last 17 years should really have shown us economists have overestimated the power of money, specifically, and monetary policy. That should be obvious. And yet, even within that context, the main criticisms of the policy are that are not that there was an excessive focus on monetary policy, but on the one side, rates should have been cut further. And on the other side, rates shouldn't have been cut. There's money centrism from the establishment which is failing. And there is money centrism from the critics on both sides of the political spectrum. Like, it's just an absolute inability to view the f***ing real resources. And all the time that that is happening, that the sense that the establishment and the left and the right are all fixating on money, that wealth distribution is just going out of control. So you'll see like money, money, money, money, money, money, money, money, money, money, money, money, money. No one is looking at real resources. And at the same time, government wealth is f***ing collapsing. So you're just like losing, you're losing your real resources. And all you're talking about is money, money, money, money, money, money.
And I'm gonna wind in here, like, because I'm trying to get more medieval history into this. Let's put like some bits here. So if you wanna skip the medieval history part, there was this... there was this. So there's this idea in like Abrahamic religion, Christianity, Judaism, Islam. It's one of the 10 Commandments, you should not worship graven images. And it led to this, which means you shouldn't worship images of God. And it led to this like big discussion of whether you should be allowed to make a statue of God or draw a picture of God. And this is why to this day in Islam, you can't have a picture of God. And there were wars in Greece in the 8th century and 9th century, people are killing each other over whether you should have a picture of God. And it was because, you know, people worried that if you make a picture of God, people will confuse it for actual God. And I think what you're seeing here is people have confused money for real resources. And I think, I think we live in an age where like money is kind of the new religion. And people confuse money for real resources. And this is like, this confusion really prevents people from seeing, you know, seeing the forest in front of their eyes, basically. Because all they think about is money, they don't think about real resources.
So you see these amazing things happen, which is monetary policy fails to deal with the crisis, real resource distribution collapses, nobody notices. The best example of this is Covid. So Covid, we knew, and obviously I’ve talked about this a million times, we knew the government was gonna give a trillion pounds out, which it did. Trillion pounds. F***ing lot of money, right? 20 grand per person. US numbers even bigger. And when that happens, when you know tons of money is given out, and there's been no change in what's happened to real resources, you should know distribution is gonna change. Probably inflation crisis, probably a big increase in asset prices. It should be obvious, right? Cause you printed tons of money, you haven't done anything to real resources. But what was the media actually saying? The media was saying, ‘Oh my God, people have got so much money now, we're gonna have such an economic boom when we reopen.’ Like, how idiotic is that?
But this is like, it's like, you must have had this conversation when you were a kid at some point where where you or somebody says, hey, like, why don't we just make more money? Why don't we just print more money? Give everybody more money? Why don't we just do that? Or there's this US film called Idiocracy. Where is it? Terry Crews, that like really hench Black actor, you know, the guy? And he tried to become president. And he's like, we're gonna be billionaires. And he's just like, we're just gonna give everyone a billion dollars. And it's like, it's basically what we did during Covid, right? We print all this money, we give all this money out. Nothing could have been more obvious than that was gonna be an inflation crisis and a massive increase in asset prices. And I made tons of money betting on these things. And I spoke about these things happening. And yet the media narrative at the time was we’re just gonna have an economic boom because everybody's got so much money. And that is again, just like this really idiotic money obsession. And it always reminds me of this understanding that they had in medieval Europe, which is if you make too many, if you make pictures of God, people are gonna confuse it for actual God. You know, money is not. And I've said it before, money is not real resources. Money is not real resources. But this confusion between money and real resources causes so many problems.
And it's connected to the current, I believe, quite naive Labour economic policy of just build, build, build, grow, grow, grow. And this idea is kind of based... And they're even trying to do things like they're trying to convince ordinary people to not hold their savings in cash, but to buy stocks and shares. And they think it's gonna grow the economy. Like, it's... I can't explain to you how idiotic this is, right? If you think that the only thing that matters is money, then what you see is, oh my God, people that just have money sitting in their accounts, it's just being wasted. Like, let's get them to invest the money and the economy is gonna grow, right? Money is just a system, it's a spreadsheet, like, it balances, it has... some people are in credit, some people are in debt, it has to balance out. If people wanna know about that, we can, we can put in the description our videos on money and our videos on debt so you can understand that. Like, obviously, when the government printed and gave out money, people would accumulate money. That doesn't mean that you can just suddenly have a load of investment. Because if you want actual investment, what you need is to build more real resources, okay? It's not just about money. People might have money sitting in their accounts, but there are no unused real resources, okay? We don't live in a world now where there's like a million guys who are unemployed and there's like a huge like land out there. Like there are times in history where you kind of have unused resources. The best example probably is like the US, the European colonization of of the US, okay? So obviously there were Native Americans in the US, but the Native Americans were like basically driven out, they were like, there was a basically a genocide, they were all killed. And then you end up with like almost this empty land, empty land. And then you have, you know, a lot of unemployed Europeans. And then it's, okay, we take the unemployed people, we send them to America, they expand into this infinite land, and you can just grow and grow and grow. When you have these unused resources, you can just grow like this. But the truth is, we don't have, you know, we don't have like unused resources. We don't have loads of people who don't have jobs. You know, all of the resources are used, right? If you want, for example, to have more houses, then you need to take those resources from somewhere else. We don't just have a ton of builders and a ton of building materials just sitting by the side of the road to build the houses, right? You need to deal with the question of the distribution of real resources.
And you see this all the time. We get people in the comments saying, oh, ‘Gary, Gary, Gary, you're talking about zero-sum fallacy, we can always make more resources.’ Okay... how? Because at the moment, everything is being used, okay? If you want to build more resources, that's fine, somebody is going to have to consume less for you to be able to do that building, because the resources have to come from somewhere. Those builders that you need to build the houses, they are currently making f***ing kitchen extensions and renovations for rich people's houses, okay? So you need to somehow get the resources from them. You see what I'm saying? The obsession with money leads to an assumption that there are... that we can just do things like building new housing or growing the economy without taking anything away from somebody, which you just f***ing can't. Because, obviously, from the... and it's, it's this small-minded attempt to extend the economy of the individual to the country, which is, if I am here and I have half a million pounds or whatever, say I've got £2 million in my account, I can buy a plot of land and all the resources and I can build a house. And what that is doing is I'm taking resources, I'm outbidding somebody else for those resources. So from the perspective of an individual, I have money, I can build, I can create a thing, fine. In a society where all of the resources are already used, you cannot simply grow that economy, build those houses without taking those resources from somebody else. And what I am saying is, in an economy where you have this tiny group of people who increasingly own all of the resources, all of the assets, and have unbelievably enormous amounts of luxury spending, we should be reducing their consumption so we can grow the economy. And there's no other way to do it. There's no other way to do it. Listen, in the short term, it is a zero-sum economy. You cannot suddenly grow the economy. You need to devote resources to growing the economy, and those resources need to come from somewhere. You do need to deal with the competitive nature. And I think it's this money centrism that allows people to forget that the world is being used. There's no, you know, you cannot go into the wild and f***ing chop down the trees and build your own f***ing house anymore. Like, everything is owned. Everything is owned. You cannot grow the economy without getting the resources from the guys who own the resources. The people who own the resources are the f***ing rich. Either you tax the rich, or you don't get the growth. And you have this, you know, these very naive policies, which is like, we're just gonna grow, we're gonna grow, we're gonna borrow from the rich, and we're just gonna grow. You know, but the rich are only gonna lend to you at profit, so they are gonna take the growth. You know, the growth is all gonna be for them. You know, either you deal with this distribution, or you don't get the growth.
So, to conclude the video, money centrism gives the illusion that we can grow at no cost to anybody. It is not true. We exist in a world of real resources. What really matters is the real resources. I would encourage people to go down the street, look at the buildings, look at the high streets, understand real resources, real people doing real jobs, making real things. And the distribution of those things matters. At the moment, real resources are being aggressively transferred away from the middle class and the working class and the government towards the super rich. That will lead to a loss in the consumption of the middle class, of the working class, and of government services. Assets are not sitting on the sidelines. Assets are not money. What matters is real resources. What matters is real distribution. If you do not focus on protecting your share of the distribution, I guarantee you the people who have passive income of one million, £2 million a week will increase their share over time. Your share will decrease. Money is not the only thing that matters. You need to protect your share of real resources. Thank you.