UK riots were product of consumerism and will hit economy, says City broker/ Analyst’s report points to ‘deeply flawed social ethos’ and calls for a shift of emphasis ‘from material to non-material values’
The recent riots in London and other big cities were the product of an “out-of-control consumerist ethos” which will have profound impacts for the UK economy, a leading City broker has said.
The report by the global head of research at Tullett Prebon, Tim Morgan, is part of a series in which the brokerage analyses bigger issues for the UK. It details recommendations to resolve what it sees as a political and economic malaise: new role models, policies to encourage savings, the channelling of private investment into creating rather than inflating assets, and greater public investment.
It warns: “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 note pinpoints the philosophy behind the riots as consumerism.
A typical internet user sees a hundred adverts an hour, the report says, and the underlying message many receive is: “Here’s the ideal. You can’t have it.” Accompanying this is an inflation of government and private debt, a key theme of Morgan’s other work.
“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.”
Morgan adds: “A young person who tries to become the next Alan Sugar or James Dyson is as likely to fall short as if he or she sets out to become the next global football star.
“But… failure to become the next Alan Sugar can still leave a person well equipped for a career in management, finance or accountancy. Failure to emulate James Dyson will leave the aspirant with useful engineering or technological skills.”