I can’t explain it any better than this.

My apologies for continually harping on about money and economic matters, but the reason why the western economies are in such as mess is down in part to confused ideas about money and wealth. A good example is the terms we use to describe certain kinds of money or ways that money or wealth are represented.

For example; why is it that credit cards (credit has positive connotations if you look it up in a dictionary) actually put you in debt to the bank? While debit cards (with which you can pay with your own money) actually use your own credit.

Even from the banks point of view, using a credit card leaves you indebted to them while using your debit card allows you to use the credit that you have stored with them.

And does owning a large amount of mortgages mean you have accumulated many assets (yes, if you keep collecting interest) or a liability (when people start to default on their mortgages).

So when you buy a house, have you invested in property as an asset (when house prices increase), or have you taken on a liability (maintenance, bills and increasing cost of mortgage repayments)?

The answers aren’t black and white, it’s up to you to make up your mind depending on the circumstances. It’s just more evidence that you have to question the prevailing ways of describing the world.

To explain: black swans were discovered in Australia. Before that, any reasonable person could assume the all-swans-are-white theory was unassailable. But the sight of just one black swan detonated that theory. Every theory we have about the human world and about the future is vulnerable to the black swan, the unexpected event. We sail in fragile vessels across a raging sea of uncertainty. “The world we live in is vastly different from the world we think we live in.”

Shit happens, we just don’t know how and when? Everyone know this right? Well everyone except the experts that work in banks such Bear Stearns, Bradford and Bingley and Northern Rock. They predicated a lot of their investments on the idea that they could calculate the risks in the market and the world at large.

It seems blindingly obvious that humans are imperfect and that any models we will come up with are imperfect as well. So why bet he whole house (or should I say other peoples houses) relying on your imperfect models. I guess if your greedy and stupid you would. So they did, hence the credit crunch, house price crash, recession and who knows even a full scale depression.

The philosopher / trader Nass Nicholas Taleb (together with every 19 year old philosophy undergraduate) understood this and he has written a book about our human falibility when it comes to predicting the future called the Black Swan. It’s named on the fact that people used to use the image of a black swan as a metaphor for the impossible (there are black swans in Australia).

The Times Online has an interview with Taleb. Nassim Nicholas Taleb: the prophet of boom and doom

In this new regular feature I’ll investigate some popular memes that I think need to be questioned or critically examined.

Today I’ll take a look at the Property Ladder meme. In the UK we are experiencing the beginning of a house price correction / crash, supposedly there one already underway in the US. Now the reasons and consequences of this are varied but I believe the Property Ladder meme has played some part in it, at least on the consumer side of things.

Here’s how Wikipedia defines the term:

The property ladder is a term widely used in the United Kingdom to describe an individual or family’s lifetime progress from cheaper to more expensive housing. According to this metaphor, cheap houses for first-time buyers are at the bottom of the property ladder, and expensive houses are at the top. ‘Getting on to the property ladder’ is the process of buying one’s first house, in the hope of leaving it for progressively better houses as one’s salary rises.

The above paragraph explains the crux of the matter. These two words are just a metaphor for a reality. The metaphor isn’t necessarily an accurate description of what is really going on.

First of all ‘Property’ in this phrase implies that the average person signing a mortgage owns that house. But an investment is something that puts money into your wallet. Like a business you own or a stock that pays dividends. A house is a liability, it takes money out of your wallet.

Most people don’t own they house they think they do. The bank owns the house. When you take out a mortgage ( mortgage means ‘a pledge till death’ in French) you are taking out a loan with the bank to pay for the house. The bank owns the house, they’ve invested in it and it puts money into their wallet in the form of your mortgage payments.

The second part of the phrase is even more insidious. What else are ladders for other than climbing higher of course. See how all the associations you have with ladders are brought to your false idea of owning property. You are tricked into thinking that you own something and that it is a normal thing to try and get bigger and better property when you can.

So a couple of years ago someone came up with the term Property Ladder to describe what they were doing. It has a nice ring to it and seems to describe succinctly what people were doing and wanted to do, so it caught on. But here’s where the real memetic effect takes place. It started spreading and affecting peoples behaviour. All of a sudden everyone wanted to be a property investor, and hold a property portfolio. UK TV was flooded with programs about becoming property and buy to let investors.

This deluded idea that everyone could become a property millionaire overnight (and the availability of cheap credit to those that couldn’t really afford it) is causing a massive financial problem in quite a few countries. This isn’t an isolated problem, the credit crunch, commodities bubble and inflation are all related.

Now these issues have been going on for years, but as long as everyone thought they were benefiting no one really seemed to care. It’s incredible but I have friends that studied economics and business that just parroted the term ‘getting on the property ladder’ like mindless automatons, without thinking what it actually means. They just assumed that because everyone else was trying to get onto this property ladder then it must be a good thing to do right?

As you might have noticed I sometimes post about political and economic issues. The reason for this is that I think these are areas where a lot of people are indoctrinated into a particular paradigm and don’t realise that a lot of assumptions they have are not immutable laws of the universe, but are in fact quite arbitrary.

For example, if you’re a little confused about what’s going on with the world economy at the moment then I recommend you watch these excellent videos. Now I don’t know whether it’s all part of some world wide conspiracy as seems to be the conclusion of these videos, but it is still a great introduction into how the banking system works.

I post videos of optical illusions and psychological experiments because it shows the limits of our perception and cognition of the universe. They make you aware that what you see and what is out there in the world is not necessarily the same thing, the map is not the territory as they say. This isn’t limited to material objects. It works just the same for concepts, ideas and beliefs, ways of living and being.

So if you find yourself having a negative emotional reaction to anything you see in these videos or instantly dismissing it as a crack-pot conspiracy theory, please consider that you are unconsciously protecting your current idea of reality. Something which might not be serving your long term best interests.

In the second part of the documentary Frontline Persuaders, marketers explain how advertising has moved away from explaining the features of products and towards the emotional benefits that a consumer gets from buying products.

The idea is to create meaning system for consumers through which they get identity and an understanding of the world. Douglas Atkin explains how he started to research cults, fans and devotees in order to find out how people become involved in them in order to create that devotion in consumers for brands. People that love Harley Davidson, Mac’s and the Grateful Dead all have something in common that explains their rabid devotion.

Douglas breaks it down into two key points:

1. People want to belong.

2. They want to make meaning (of their lives and the world around them).

It’s easy to think of brands and advertising that try to sell you a lifestyle, a belief-system, a way of thinking about life and the world. I don’t know how you’ve experienced advertising but I’ve always found it pretty transparent. ‘Buy this and you’ll be cool, you’ll be part of the in crowd’. And to be honest I’ve always found it pretty offensive. Someone is telling me what I’ll BE when I buy their product!?

The creepiest part of this documentary is the engineering that is applied to the Song Airline brand. In stead of saying something is great, employees are encouraged to say: ‘That’s so song’. I don’t care what kind transcendent lifestyle experience it is to fly with Song, that’s all it is at the end of the day, an airline. All in all, highly pretentious. And as the presenter points out, despite millions spent on marketing and advertising you’d find it to difficult to come by evidence that shows how successful this kind of marketing is at selling particular products.

What is does succeed in doing however is creating the mindset in many people that purchasing certain things and services actually enhances you personally in some respect. Don’t buy into that.

PBS has a really good 90 minute documentary on their site about how advertisers, marketers, think tanks and politicians are using the latest ideas in psychology and memetics to persuade you to buy their products or vote for their political party.

Frontline Persuaders

I’ll write an analysis of some of the concepts and ideas presented in the documentary at some point.

The term memetic engineering was developed by Leveious Rolando, John Sokol and Gibran Burchett who were researching and observing the behaviour of humans after they were exposed to to certain memes. Memetic engineering is the analysis of an individual or individual’s behavior, the selection of specific memes and the distribution or propagation of those memes with the intent of altering the behavior of others.

Although it’s difficult to predict which memes will take off, it’s certainly possible to follow guidelines and rules to craft your message so that it is as ’sticky’ and ‘contagious’ as it can possibly be.

A good example of memetic engineering is described in this article: Meme, Counter-meme. It describes how Mike Godwin created a maxim in order to counter unproductive discussions on internet forums.

Stress Management Tips and Techniques: Changing your strategy

In my first article on stress management tips and techniques I asked you to start noticing the strategy you employ to get into that stressed state. You’re going about your business as usual and then something in your environment triggers a response in you. You might say something to yourself, see something, hear the voice of someone in your ears, or get a particular feeling in your body.

If you keep notes on these responses as they come up during your week you’ll start to become more aware of your particular way of getting stressed, your strategy. You’ll notice a pattern. Maybe you say to yourself ‘I’ll never get this done on time’ then you see a mental image of yourself working till late and then you’ll get a dizzy feeling in your head and a pain in your stomach.

Now pay attention to the particular qualities of each part of the strategy. In NLP we call these qualities the sub-modalities. For example, if you say something to yourself notice how loud the voice seems to you, where in your body does it come from, or is it outside your body? What is the pitch, tone and emotion of the voice like?

Once you know what these sub-modalities are you can change them in order to scramble the strategy. That means that in your mind, imagine changing particular qualities of each part of the strategy. For now just stick to the first part of your strategy. For example if you are telling yourself ‘I’ll never get this done’ in an angry voice, change it to a light hearted laughing voice. If it seems loud, adjust the volume, if the pitch is low, try making it sound high like a cartoon character.

Finally run through you strategy from start to finish making sure that you use the new sub-modalities. Practice this a few times. Next time you encounter a situation that brought about the old stressful response consciously choose the new strategy. Practising it enough times will make it happen automatically and you’ll find your response is a much more productive.

Stress Management Tips and Techniques: How do we do it?

In this series of articles I’m going to be showing you some stress management tips and techniques. I was inspired to do so when reading an article a Times Online Article: Coping with Stress

which says that half a million people in the UK are being made physically ill by their stress. Not a good thing.

My approach is going to be a bit different in that I’ll be helping you to use NLP techniques to manage and reduce your stress.

A lot of people will say that their workload, partner or circumstances. But if we look closely we’ll see that isn’t really the case. Does your work magically climb into your brain and trigger stressful feelings and emotions? The fact is that your response to the outside world is something you can have total control over. You might not be used to it, but it’s certainly something you can learn to do.

Back to the questions; ‘How do you make yourself stressed?’

Imagine yourself, sitting at your desk, or walking along, all of a sudden something happens and you start making that ‘stressed’ feeling in your body. What is the chain of events that leads to this happening. For example do you, say something to yourself like ‘I’ll never get it done in time’, make an image in your mind of you working till late in the evening, feel tension in your neck, shoulders and stomach.

Your task for today is just to notice what your strategy is for putting yourself in the ‘stressed’ physiology. Make a note of what you say to yourself, what you see in your minds eye and what you feel in your body. Maybe you can make these notes over the next week every time you get these feelings. Once you’re able to observe what your strategy is you’ll be able to change it.

In upcoming articles about stress management techniques I’ll explain what we can do with this information, but for now you might find that observing the strategy that you follow will already lead you to feeling more detached from the immediate emotions.