I can’t explain it any better than this.

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.

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.

Here is a video of Don Beck speaking at the UN. You can find more videos of him speaking on YouTube.

Don Beck and Chris Cowan wrote a book called Spiral Dynamics based on work by Clare Graves. Spiral Dynamics is a theory of human development. The theory is that when humans are faced by more complex life conditions they evolve more sophisticated models to deal with the those conditions. Not only do our bodies evolve but so do our minds and in turn the collective consciousness of societies.When people say that we need to evolve a higher consciousness they usually mean that we need to step up to the next level of the holarchical-model (holarchy). The reason is as Einstein often quoted saying goes is because: “We can’t solve problems by using the same kind of thinking we used when we created them.” Environmental destruction and war are brought about by lower level thinking. Fighting for perceived to be scarce rescources is a useful strategy when you are a hunter-gatherer but it’s not the most useful strategy at this point. The thinking that created that strategy is outdated.Some people find it difficult to conceive of ‘higer consciousness’. What does it mean? I think one way to illustrate it is to think of an instance where a problem is solved in a highly original way. This could be Ghandi practising non-violent protest or a football player beating a defender in way that no-one could have imagined.

You’ll know when you’re operating on a higher level when someone sees you do something and exclaims: ‘That’s impossible!’

This is a great video illustrating the realities of globalisation. Some of the statistics are a bit meaningless as they aren’t provided in any context, but the general ideas are sound.

It shows a lot of things that I’ve come to realise and discover about the world since the late 90’s. Most of my time in school I was being indoctrinated with the idea that I had to study and learn skills in order to get a job. Fashion myself into a cog that could fit into some machine. Problem is, that kind of thinking came out of the industrial age. India and China are pusing out around 4 million graduates a year. Anything that doesn’t need face to face contact will be outsourced. I have a friend who takes on programming contracts, but doesn’t actually do the work. Someone in India does it for him. There’s no such thing as a job for life anymore, soon a lot more people won’t have jobs at all. That doesn’t mean they won’t be productive or earn money. They’ll just go about it in different ways than previous generations.I had so many of these realisations around the age of 16 but I always trusted adults knew what they were doing and that I didn’t have the full picture. But about 2 years ago it finally hit home: most people don’t know what the hell they are doing. They just blindly follow what society-programming tells them to think and do. As I grow in confidence I learn to trust my instincts much more. I believe it’s life’s way of letting me know that I need to evolve.