How is wealth destroyed and where does wealth come from? October 11, 2008
Posted by Andy Roberts in : economics, theory , 5commentsWhere did the wealth destroyed on Stock Markets come from?
If 20 percent of the value of world stock markets can be wiped out in one week, as has just happened, then where does that wealth actually disappear to? Is it buried in a big hole somewhere, scuttled at sea or sent on a rocket into outer space? Apparently not, but if money can simply disappear from world markets how can we make any sense of the concept of value in finance. How is it measured and where did it come from in the first place?
Theories of value
In the first post of this series I asked “where does money come from” and gave a brief history of the origins of money in the form of precious metal coins used to facilitate the process of trade from simple barter to the exchange of goods of different values. Without exactly defining where money comes from I hinted at the idea that monetary value is realted to the total amount of work or labour which is tied up in bringing the goods to market. That’s a theory which is known as the labour theory of value and is not always widely accepted, probably due to association with a certain Karl Marx who took that theory, which was already known by cpaitalist economists, and developed it a bit further with his concept of “socially necessary labour time”.
Money grows on trees
People who don’t subscribe to the labour theory of value believe that money comes from being rewarded for taking risks, that value is determined entirely by the balance between supply and demand, and that substantial sums of money can somehow just “grow”. They say that money doesn’t grow on trees, but that’s not too dissimilar to the idea that interest just accumulates on investments because money begets more money. In reality, investments such as stocks and bank deposits typically pass through a number of hands but end up being used to buy goods not for consumption but for increased or more efficient production. Investment of capital buys machine tools, land, property and other wherewithal to employing labour in order to create goods or services for the market which can be sold at a profit. The important point here is that the capital doesn’t generate a single penny of orginal value until the employment of labour has happened. To be profitable, the output from this process of applying labour to previously accumulated capital must be of actual use to a buying market, and must be produced with a total number of labour hours which is competitive with alternative setups, such as differently tooled machine shops employing labour under different terms and conditions. That’s pretty much all that’s meant by the “socially necessary labour time” formulation really, to counter the idea that simply getting enough people to work hard for the the most minimal wages will necessarily creaste wealth.
Wealth Ceated by Labour
All wealth is created in the first place by labour, and that is the real answer to the question answer “where does money come from”. It comes from work that has been done by somebody, that has been abstracted and turned into a type of commodity itself, which can then change hands and accumulate, which can be exchanged for special kinds of products, Which can then be deployed in the employment of further labour. Capital is an accumulation of the results of previous rounds of expended labour, or “dead labour” as is sometimes expressed. The capital exchanged on world money markets then represents a further abstraction as speculators buy and sell options to receive the fruits of other people’s labour in the future, that hasn’t even been expended yet, and place bets on the likelihood of prices rising and falling.
Destruction of Wealth in a Slump
In a serious recession, when stock markets crash, and seemingly abstract wealth is destroyed, this is not just a accountancy game played out with pieces of paper or rather electronic transfers. It does actually play out into the very real destruction of productive capacity as enterprises go under or cut back and the very concrete machinery, buildings, expertise and systems are abandoned due to lack of a buying market that can afford their products at a profitable price. All of that overcapicity which has been built up out of the relentless requirement to reinvest and expand will be scrapped, levelled, and laid waste at the greatest of human cost until enough real capital has been wiped out for the accumulation cycle to begin all over again. In the current circumstances the effects are particularly catastrophic because the downturn had been temporarily postponed for a couple of decades or so through the use of massively expanded credit, which could distort the outward shape of the cycle for a short while, but never the underlying forces at work in any free market system based on the private ownership of capital.
What’s odd about this Dartboard? Found in an East London Pub October 2, 2008
Posted by Andy Roberts in : London , 8commentsDo you notice anything odd about this dartboard seen in an East London pub recently? Most darts boards look a bit like this, but different.
How on earth would you ever end a game of 301 on such a dart board?
Theatre Breaks September 29, 2008
Posted by Andy Roberts in : theatre breaks , 1 comment so farTheatre Breaks not for cutbacks
Having avoided traditional summer holidays the past two years, preferring to go abroad in the off seasons, I certainly won’t be cutting back on theatre breaks and other little weekends away or short breaks in the UK. Neither will hoards of other people up and down the country regardless of what the doom and gloom mongers would have us believe.
Some might be thinking twice about booking long haul trips to Oceana and Asia, granted, and the shopping trip to New York is looking decidedly passe but there’s never been a better time for squeezing in a little treat of a weekend, just the two of you, with a bit of style in London’s West End.
Hotel and Theatre Breaks in London
With the shrinking of the finance sector and slightly less demand for business trips to London, the big hotels have a few rooms going spare and these are being bought up by tour operators who can then offer even better value hotel and theatre breaks in London. The advantage of booking a hotel at the same time as your advance theatre tickets should be obvious really. To get the best out of a good night out at a top West End show you don’t want your shared elation to be instantly let down by a long and tiresome journey back with the night crowds. Instead, an after show drink in the hotel bar and a comfortable night allows the magic to continue though to the next day, with who knows what London has in store. Sightseeing, culture, chilling out on the river, fine dining - central London has it all with always more surprises, even if you only live in the Greater London area or home counties.
Theatre Breaks by Rail
Cars are practically useless in central London so it’s usually best to arrive by train. The extra fast east-coast line is proves increasingly tempting, with discerning citizens from Doncaster, York, Newcastle, Darlington, Leeds, Wakefield, Sheffield, Stoke able to arrive at Kings Cross London in just a couple of hours or less. It’s a great way to travel from Norwich, Exeter, Cardiff, Coventry, Manchester. Bung it all on the same booking transaction and you can save up to 40% on the advance rail fares.
Favourite London Theatre Shows
One or two musicals have closed recently and there are some interesting new ones coming up, but here is a selection which have become standard West End Favourites:
Les Miserables
Phantom of the Opera
Billy Elliot
We Will Rock You
Mamma Mia
Blood Brothers
Dirty Dancing
Sound of Music
Hairspray
New shows you can book theatre breaks for now:
Oliver
Imagine This
Carousel
Zorro
Theatre breaks Booking tips
* Try to be flexible with your preferred dates, but if you fancy a Saturday night or even New Year’s Eve these are still worth checking.
* If you have two or three possible shows in mind then you get more hotel choice and overall cost possibilities.
* Weigh up hotel prices against location eg The Strand Palace is very convenient for most of Theatreland but Billy Elliot and Wicked are on at Victoria. Some of the best value hotels are near Kings Cross or South Kensington / Gloucester Road so you might need a London black cab after the show.
* Extra nights can be good value so see if you can possibly make time for a three night stay in London and make the most of your theatre breaks booking.
Where does Money come from? September 26, 2008
Posted by Andy Roberts in : economics, theory , 4commentsHave you ever been asked, Where does money come from?
This might sound like a stupid question - “where does money come from” - but how many people actually know?
In recent days European and UK national banks have pumped billions of Euros and pounds into the economies to try and stabilise a volatile market. The US is debating whether to spend $700 billion dollars on covering bad housing debts. People are asking why should tax payers pay for the well heeled banking speculators mistakes, and will it be enough! Where does $700 billion come from? Where does one dollar, Pound or Euro come from?
Origins of Money
Money originated soon after the time when the simplest forms of trading began. Once people got the hang of surviving from day to day in a hand to mouth existence, they had a little spare time to themselves. Different people started to specialise in different types of work. So if I could make more than enough animal skin coats for myself and family, and somebody else could catch more fish than they needed, we might give some away to each other. At first this must have been how it worked. Descended from primates who lived in large social groups, we mostly looked after each other by instinct.
Early Humans
As things progressed, early humans who were genetically pretty much identical to ourselves became more efficient at simple farming, making pots and other basic crafts. The opposable thumb left over from gripping tree branches was a big help, as was the ability to form grammatical meaning out of vocal cries.
Surplus and Transport
The extended families grew into tribes and the tribes into larger communities. People wandered further afield and bumped into other settlements, sometimes specialised for a slightly different lifestyle. Rivers and coasts were the super highways along which regular travels could be undertaken and occasional trading relationships were established.
But there was only ever anything to trade as long as people were surviving reasonably well and had some spare capacity to create a surplus of worthwhile products. Without refrigeration, a surplus of fish became a stinking heap after a few days so that was no use. A good pot could be used for preserving foraged food for longer though, so a pot was well worth bartering for if you haven’t got one. But how many animal skins are worth two pots?
The Underlying Calculation of Barter
The calculation would have been based roughly on availability. If community A had produced a surplus of 4 pots since the last trade and commuity B had produced 8 extra animal skins then two skins for one pot would have seemed like a fair trade. As the surpluses grew and the number of parties taking part increased so the bartering became more complicated. One canoe is worth 9 animal skins so if I give you 5 pots you can give me one skin change, which I don’t really need, but I might be able to swap for some particularly tasty berries. In this example the animal skin is being used for its exchange value rather than its intrinsic value, and it’s exchange value is still linked to the amount of time and effort put into catching the animal and processing the skin, including some part of making the tools for hunting and scraping.
Precious Metal Coin Money
The inconvenience of carrying around skins, pots and canoes just for use as small change soon became a burden, so anything just as valuable but smaller and more transportable was preferred. In it’s earliest form, money was made out of precious metals and the value of the coin was related to the weight and value of the silver or gold. That is, to the amount of work involved in finding, mining and refining the precious metals. This worked so well you could set off from Phonoecia (Iraq/Lebanon) and sail across the Med, through the straits of Gibraltar, up past the coast of Gallicia all the way to the West of the British Isles just to collect some tin and drop off a load of grain.
Confidence in the value of metal coins was such that some people were even able to give up farming, boatbuilding, mining and pottery to become full time travellers and traders.
End of Where does money come from part one - more next week..
Sea Eagles in Scotland - problems of reintroducing species September 23, 2008
Posted by Andy Roberts in : wildlife , 5commentsSea Eagles Release Programme
Various attempts have been made over the years, some successful, to reintroduce wildlife species into areas where they have become extinct in the past.
The ospreys in England are one well known example, and a similar scheme is currently underway to reintroduce sea eagles into Scotland. This season is the second in a five year plan to release young sea eagles taken as chicks from Norway and already there are some breeding pairs reported. They’ve been seen around the Isle of May in Fife as well as in the North West Highlands. But there is a problem. As the farming today programme on BBC radio 4 reported, crofters in Gairloch are complaining about the sea eagles taking lambs. It is claimed that as many as 50% of one farmer’s lambs have been destroyed and that conservation groups are not taking the problem seriously.
RSPB
The RSPB pointed out that there are only three breeding pairs of sea eagle in the Gairloch area, and it would be highly unlikely the birds were responsible for the loss of all of the lambs. A spokesman for the crofting foundation said “We feel they put the birds here without our consent and without asking our advice.” So there we have a conflict of interest that may be quite hard to resolve. Sheep have been kept on hillsides ever since the land was cleared but white tailed sea eagles are historically indigenous to the country. How do we decide when to embark on a reintroduction programme? If there were a way to compete with the greys I’m sure we’d all be in favour of the reintroduction of red squirrels into the english countryside where they have been wiped out. Some people would reintroduce the wolf into Northern forests. But if it were possible to bring back the sabre toothed tiger and let them loose on Salisbury Plain I somehow don’t think it would happen.
Who decides?
Wild boar were once a common species in english woodlands and modern gastronomic tastes have brought about domestic cross bred boars, some of which have escaped and multiplied in the wild. Where this has become a problem they have been culled as an interloper, like the Canada geese in Victoria Park, Hackney. Who is entitled to make these decisions as to which species shall be allowed, reintroduced or culled? There is a difference between environmental concern and conservationism, habitat management, agricultural needs and possible pandering to a sentimental foem of tourism with attraction only to certain kinds of species which attract charity revenue.
Sea eagles have landed - video
Sea Eagles Update:
Lamb not on sea eagles’ menu, says RSPB
The Royal Society for the Protection of Birds ( RSPB ) described the claims of some crofters as nonsense and said that the birds would have taken only carrion. It said that the birds thrived mainly on a diet of herring gulls, fulmars and fish fed to them by friendly trawlermen.
I’m not very happy abut the fulmars!
Lamb-eating sea eagles upset Scottish farmers
William Fraser, chairman of the Gairloch and Poolewe branch of the Crofting Foundation: “In a few years time there’ll be no sheep left on the hills,”
Untangle This September 21, 2008
Posted by Andy Roberts in : wildlife, Art , 1 comment so far
Sometimes it can seem as if everything has been so interwoven and tangled up that it will never be possible to straighten out any one individual strand. But why would you need to anyway? The main thing from the subjective point of view is not to get washed up on the beach in the first place.
Loading Up The Lobster Pots September 16, 2008
Posted by Andy Roberts in : UK , 1 comment so farLoading up a small boat with lobster pots ready to put out from Anstruther in the East Neuk of Fife.
I’ve always been fascinated to watch the comings and going in these little fishing village harbours in Cornwall, France, Spain and now the east of Scotland.
“We watch the working boats come in,
to see what they have caught”.
School Of Everything September 3, 2008
Posted by Andy Roberts in : learning, Microjobs, Long Tail, edublog , 2commentsLast night at Channel 4 in Horseferry Road, London The School of Everything launched. I’d heard about school of everything from various places over the past year, and gathered the idea is to encourage informal learning about subjects that people wish to learn more about, rather than agendas to promote qualifications and assessment. So people with a need to learn can be put in touch with people who have some knowledge or skills to share, so it’s a matching service.
Upon arrival at the school of everything homepage, you are greeted with the simple slogan in large bold type “Learn more”
and then you get the chance to either sign up as a person, or as a teacher.
Within the UK, this might provide a vibrant alternative for all sorts of learning which are no longer covered by the run down local authorities’ adult education sectors. The school of everything also has ambitions to become a well populated international website on the global startups scene.
Learning by Doing - interview part 5 August 30, 2008
Posted by Andy Roberts in : distributed research, Action Research, Wiki , add a commentContinuing the interview with Cormac Lawler, in which we begin to address the nature of “learning by doing” as it relates to distributed projects, and wiki in particular.
Cormac Lawler:
About changing of groups’ structure over time, I think my own domain (Wikiversity) is showing an increasingly strong tension along the lines of making Wikiversity a place of ‘blue-sky’ or experimental learning versus an alignment to known pedagogical forms. See Wikiversity_talk:Learning_resources#the_wiki_way.3F and below for some discursive material on this topic. It’s perhaps not an example of a change of guard as such (and the debate within Wikiversity’s development is not new), but I’m starting to see the tension as a pretty fundamental one for Wikiversity.
Andy Roberts asks:
Reading that discussion again on the Wikiversity page, it strikes me that both sides of the tension referred to are in fact agreed upon working within the same framework. The dispute, if I’m not mistaken is over the nature and quality of the learning resources which are to be accumulated in the Wikiversity. Neither side appears to be questioning the basic model of education based on learning from supplied content. The references to ‘experimental’ forms seem to remain within experimental forms of content provision, without questioning that preconception. Despite the claim that
“Wikiversity has adopted a “learn by doing” model for education”
the doing appears to consist entirely of editing pages to create more resources.
Do you think a bias towards conventional content based learning is built in to the wiki way?
C:
It’s a fascinating question - and I think you’re right that it is to a large extent. However - and this is more on the basis of knowing the involved people, rather than on what is on the page I linked to previously - I think that there has always been a strong desire to take a broad look at educational activity, and what role a wiki can play in that process. For example, some of the “content” produced on a wiki can be a record of a discussion where someone asks a question, and people respond with answers, suggestions, and/or questions of their own. Some of the content on Wikiversity has been explicitly initiated and developed as a debate - eg en.wikiversity.org/wiki/War_and_Iran. I don’t know if that conforms to your view of conventional content creation?
However, this “learning by doing” is a tricky concept - and I’ve been
pushing JWSchmidt, the originator of this concept in Wikiversity, to be more
explicit in explaining to me and the community what he thinks it might mean
in practice - and in detail. So far, I’ve found the concept as applied to
Wikiversity to be infuriatingly opaque - and I can see that others do too.
It’s something that I’ve always wanted to clarify on Wikiversity - what do
we mean by learning by doing, how can someone be guided through or motivated
to begin in such a model, and what kinds of educational experiences can we
anticipate, so as to scaffold learners if, whenever, and however
appropriate?
A:
How might other learning processes be facilitated through Wikiversity? I’m thinking of the newer emerging learning models such as connectivism, which would place the emphasis on the network between people and the community above content. This might require additional tools to the document based wiki, but needn’t be entirely separate.
C:
I agree - and we’ve been discussing tools to facilitate just such initiatives on a centralised page: Wikiversity:Technical_needs including the SocialProfile extension www.mediawiki.org/wiki/Extension:SocialProfile. We already have a ’sandbox server’ to experiment with different tools - but to actually get extensions and other innovations approved on a relatively small Wikimedia wiki is difficult when in the shadow of Wikipedia. However, with community mobilisation, and more developers’ resources at our disposal (a software developer hiring was just announced yesterday, and there may very well be more) - we should continue to build on the mediawiki platform to see what it can offer in the world of connected, collaborative learning.
I see we’ve forked into a discussion of Wikiversity - and it’s very welcome! - but I also very much wanted this discussion to focus on action research and issues that we’ve both experienced in an online AR context. I think I’ll leave this to my next mail. 
Cheers,
Cormac
Earlier posts in this series:
- DARnet-interview-part 1
- DARnet interview part two
- Part 3: Questions About Wikiversity
- Part 4: Wikiversity and Wikipedia
August Rain and The Harvest August 19, 2008
Posted by Andy Roberts in : UK , 1 comment so farWith the August bank holiday weekend coming up soon, the end of summer looms large ahead and I for one shall be welcoming it with open arms. Just a few years ago at this time of year I would have been sitting in a tent in a field somewhere like North Wales enjoying the outdoor life but for the past two years the traditional holiday month of August has been a washout and it has been just as well to stay at home and get some work done.
The real summer of course invariably takes place in June and early July and this year was no exception so why are the school children, parents, students and education workers forced to take their annual rest time in August, the damp chilly fag-end of the season? Well legend has it that it all goes back to a time when the youth of nation were required on the land to help with bringing in the harvest. I was even involved in that particular agricultural tradition myself as a lad, picking up potatoes in the fields of Shortlanesend near Truro.
John Richards had a small mixed arable farm, a couple of old Massey Ferguson tractors, a hay barn and two daughters. So labour intensive was the work required at specific times of the year that small armies of child workers were recruited, happy to be exploited for a small pittance per hour in the name of doing some real, grownup work, passing the endless boring long days of summer and earning a bit of pocket money. In order to join in I had to cycle a small pushbike down the hill into town and steeply up the other side for a couple of miles just to get there. Upon arrival at the proper start time there was always a lot of waiting around to be done before you even knew what was happening. Some crucial piece of machinery would be waiting to come back from a neighbouring farm, or the key to the diesel pump shed had gone
missing, we were waiting for a field inspection or somesuch holdup. Eventually perhaps just before lunchtime we might actually get out onto the field and do some potato picking. The old red tractor chugged down the length of the field for once row at a time, pulling an attachment called a spinner which was like a big circular rake. It dug through the soil, scooped up the densely grown ripe potatoes and flung them up into the air. What happened to them next? They fell back onto the ground of course, and our job was to bend down and pick them up and put them into buckets. It was back breaking work in the summer sun, hour after hour. The buckets of potatoes were tipped into sacks, then the full sacks tied up with twisted wires and loaded onto a trailer. At the end of a good day, the trailer would be stacked full of half hundred weight sacks of good quality clean potatoes, but only if conditions were perfect. There was one thing that was guaranteed to scupper the whole process and that thing was rain.
A little bit of light rain and we would carry on harvesting the potatoes. Never mind if we all got a bit damp, it’s was Cornwall so we were used to that. A sudden shower and we’d take cover hoping it would pass over. If the shower eased up we’d be back out again, even if only for a quarter of an hour before it got worse. But once the serious , persistent rain started up that was it. You can’t harvest potatoes out from muddy fields, at least not with the equipment available to a small family farm in those days. If it rained overnight there would be no work the next morning, then maybe not for the next week if it kept up. Maybe even a fortnight! Eventually in a bad year the potatoes would be left in for so long after they were ready that they’d just rot in the soggy ground, abandoned until it was time to plough them back in again, a breeding ground for blight and other fungal diseases.
So there’s nothing new about rainy, washout weeks in August, that’s quite normal and yet so often we feel cheated when the sun doesn’t shine endlessly through the summer season like in Portugal or the Mediterranean. Where does that expectation come from I wonder?
is an online professional who initiated DARnet 
