Tag Archives: Capitalism

My Life Analysed – The madness of my mortgage

I bought 25% of my lovely brand new, 2 bedroom flat in Surrey about 4 years ago now, and in that time I’ve saved £22000  ready to buy it outright. A recent valuation ‘valued’ the flat @ £190 000, so when I buy outright I will need to borrow about £120 000 to buy the 75% I don’t own, which, added to the roughly £20 000 I still owe on the bit I already own will mean an overall mortgage of £140 000….

Based on the best deal available (with The Post Officce according to Money Supermarket) if I take this mortgage out over a 15 year* period, I will pay £44 000 in interest, meaning I will pay back a total of about £184 000. Based on my take home pay which is just over £2400/ month, or about £29000/ year, this equates to about nearly six years of my life.

The only ‘rational’ response to this situation is one of anger. Anger at the fact that in this social system where land ownership is concentrated in the hands of the few and where a handful of financial institutions are given the right to generate money and thus interest out of thin air, I end up giving away 5 years of my life in order to make profit for the propertied elite and a further 1 or more years to pay the rentiers.

If I were given a quarter of an acre of land, some tools (which I could borrow not own), some people to work with occassionally, and the odd bit of expertise for the techy stuff, and I could build my own place for less than £10 000 – and do it in six months – so less than a year of total work-money-time.

Instead of this, however, restricted by Britain’s archaic planning regulations and the near certainty of not being gifted a quarter of an acre in a Tory heartland, I’m forced into a situation in which the only means** whereby I can meet my basic human needs results in my giving a further 5 years of my time to pay the profits of the various institutions surrounding the construction and financing of my flat – the original landowners, the construction company and the financiers.

Given all of this, I think people should not see ‘getting on the property ladder’ as something to be celebrated, not when our efforts to climb it are fast followed by the shaft-pole of capital.
To go a bit Baumanesque on this, housing is a basic human need, but the housing market in the UK is, I believe, a great example of one of those parts of the system that most of us have very little control over, and we are forced into accepting an extremely inefficient individualised solution to meeting this basic need – Renting in insecure accomodation for the first decade of our adult lives while we scrimp enough for a deposit, and then paying a hugely inflated sum when we finally purchase the property.

We never even imagine that we can change this system – And for many of us we think we’ve  ‘won’ when we ‘play hard ball and get 10k off the asking price, or we might feel smugly satisfied when we ‘save’ a few grand from shoppping around for a good mortage deal, failing to face up to the fact that a few grand is nothing compared to the £100K in interest we’re facing over the next two decades.

Having settled into our mortgage repayment schedule, our house then becomes part of our ontological security, and we go about filling it with our identity-markers to further make ourselves secure….We forget about the fact that this object which ties us to the system more so than any other object only does so if we allow those with more power than us to leech years of our lives from us.

What is really grim about this situation is that although the house, that locus of ultra-individualised privatism offers a very insecure security because the same system that ties us into the 25 year mortgage is also the same system that can generate both high unemployment in the interest of short term profits or high interest rates in the interest of long-term (relative) stability, not to mention the current issue with inflation.

Someone remind me again while I’m going along with this>>>????**Actually I am being somewhat melodramatic, there are alternatives… As I’ll outline later.

*Over the more standard 25 year term,  I would pay back £84 000 in interest – brining my total life-work up to about 7.5 years…..



The Institutions of Economic Globalisation

The institutions of Economic Globalisation

Economic globalization refers to increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, services, technology and capital

Most social scientists would point to four ‘institutions’ that oversee international trade and investment, and that attempt to steer the global economy on a path of continued economic growth. It is important for students to understand something about these institutions because all supporters and critics of economic globalisation refer to these institutions (Hyper globalists are the supporters, Marxists and the broader anti-capitalist movement the critics).

You should read this through once when directed and refer back to it when we look at material that either supports or criticises the spread of global capitalism

The four institutions that make up economic globalisation are The World Trade Organisation, The International Monetary Fund and World Bank, The G8 and Transnational Corporations.

1. The World Trade Organisation (WTO) – was founded in 1949, has 149 member states and 149 states are WTO members, constituting over 90% of all world trade with a further 31 in the process of joining.

 The WTO is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.” [1]

The WTO functions through a number of meetings involving high- up officials from Nation States often referred to as a trade ‘round’ where they agree on the future terms of trade (for example how much to tax import and exports of goods and services)

2. The International Monetary Fund and The World Bank

 The IMF has 187 members. It monitors the world’s economies, lends to members in economic difficulty, and provides technical assistance ([2]). The IMFs mission is to facilitate international trade, promote high employment, achieve sustainable economic growth, and reduce poverty around the world. If a country gets into too much debt and can’t pay it off, it is the IMF that lends the country, setting conditions the country must abide by in order to receive that loan.

The World Bank was established in 1944, is headquartered in Washington, D.C. and has more than 10,000 employees in more than 100 offices worldwide. Like the IMF it has 187 member states  

The World Bank works closely with IMF. It provides low-interest loans to developing countries for a wide array of purposes that include investments in education, health, infrastructure, and natural resource management. ’It says that is mission is to ‘fight poverty with passion and professionalism for lasting results and to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors.’ The World Bank is thus the largest single organisation responsible for bringing undeveloped countries whose populations make up at least 2/3rds of the world’s population into the global economy.

The World Bank believes that economic growth through industrialization and free trade are essential for countries to develop. They argue that there are sees the five key factors necessary for economic growth: 

3. The Group of Eight (G-8) is a forum for the leaders of eight of the world’s most industrialized nations, aimed at finding common ground on key topics and solutions to global issues. The G-8 includes Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. While the leaders of these countries are in regular contact, they meet in summit format as the G-8 once a year.[3] ALSO [4]

4.    Transnational Corporations

 Transnational Corporations are some of the largest include Shell, ICI and Microsoft. Since world war two these have expanded massively.

 Held and Mcgrew point out that Transnational Corporations account for more than 25 percent of world production, 80% of world industrial output, approximately 40% of world merchandise trade and 10 percent of world GDP. They also suggest that they have become powerful in determining where in the world production takes place and have played a major role in reordering the productive relationships between nation states[5]

Transnational Corporations have benefited hugely from the trade rules established by the WTO. Ellwood (2000) argues that these are now the driving force behind economic globalisation, wielding more power than many nation states. Today, 51 of the 100 largest economies in the world are run by TNCs rather than Nation States.



[1] http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm

[2] http://www.imf.org/external/about.htm

[3] http://g8.gc.ca/about/

[4] http://www.guardian.co.uk/world/g8

[5] Held D and Mcgew, A (2007) – Globalisation/ Anti Globalisation: beyond the great divide – Polity.