The Selling of Sense, or How Corporate Capitalism Rewards Low IQ Behaviour

Someone I know very well manages a few moderately-sized client contracts. He is a cog in a machine of many - sales, management, technical, and so on - and it would stand to reason that all cogs should be going in the same direction at the same speed. This is not the case, however, and it’s entirely because there is no reward incentive to do so. From the perspective of maximising profit, it is actually better for the business to grow rapidly, beyond the point of effective function, fail and collapse, than it is to grow sustainably and thrive for a long time.

People may question how planning to fail a business that costs money to set up and expand is maximising profit: the answer is investment, both by shareholders and by lenders. As most understand, lenders make money on debt through interest charged on credit, and shareholders generally make money when the business they’ve invested in is doing well. This creates a scenario where businesses, faced with exorbitant costs for pretty much everything, will borrow and beg to fund expansion - and then find they need to keep expanding in order to please their powerful new financial overlords.

Let’s create a hypothetical to demonstrate this. A plan for a new restaurant is tabled - rents are high, staffing costs are through the roof, and margins on selling degradable produce like food are notoriously thin. In order to ensure covers walk through the door there must be a USP, and often that revolves around ‘being Instagrammable’. Finding the right location and decorating it appropriately costs a bomb, and the new restauranteurs need to find some way of paying their staff and buying their food before even one seat is filled. Enter the business loan; now making profit is mandatory, because if the directors of this tiny little company are found not to be prioritising the interests of their extremely powerful and wealthy creditors at point of insolvency, they will be held personally liable for the debt.

So they expand. More locations equals more covers equals more money - but it also demands more staff, more rent, more food, more cute interior decor. Solutions are desperately sought. Maybe a nice little pop-up in Selfridge’s to slash the rent costs and increase the footfall? If the restaurant has been successful enough, shareholders might invest in an easy dividend win. As the profits are eaten into more and more by their obligations, it becomes impossible to spend where it actually matters: on staff and on produce, the two core factors in running a restaurant. Patrons drift away, locations begin to close, staff move on to something new. Finally the carcass of the business is stripped to the bones in order to satisfy the twin vultures, and the cycle is complete.

There is a concept known as high and low ‘time preference’. It’s more colloquially described, respectively, as ‘living for today’ and ‘planning for the future’. When you see phrases online such as “here for a good time, not a long time” that is the individual describing a high time preference, and this has been associated with lower IQ. One study in 2010 suggested that higher average IQ nations will dominate in global economies whether open or closed, and a follow-up in 2012 extrapolated this to the point of demonstrating that nations with higher average IQ tended to have “higher savings rates and higher ratios of net foreign assets to GDP” - so when a former economic powerhouse like Britain declines to such an extent, it must be asked how that has happened. The answer is because our economic framework now rewards low IQ behaviour, as demonstrated in the example above, and this is simply not intended to be sustainable. As such, our finances now begin to resemble those from nations with lower average IQ: poor.

Resolving this downward spiral will be monumental, particularly because all real wealth in Britain leads back to one thing - land. (Here I define real wealth as tangible assets, such as land and property, rather than intangible, such as stocks or shares.) The value of land exploding has made many sources of sustainable growth, such as domestic industry, unviable in a global economy. In order to dismantle a debt-based system, it must first be made possible to live without debt, and this will require drastic action. Further increasing the cost of business by endlessly raising the minimum wage threshold or adding evermore risible taxes in order to feed expansive social welfare programs is the government merely chasing its own tail as it avoids finding difficult but genuine solutions. At present, we cannot afford to preserve anything that does not have a long-term benefit to our nation, and that includes the inherited luxuries of the landed gentry as well as the many descendants of various settler-migrant populations.

It is time to start rewarding those who make low time preference, high IQ decisions - and by reward, I don’t mean give them favourable interest rates in the hope that eventually they will sacrifice these valuable traits in order to add 0.01% profit on to the bank’s balance sheet. I mean make their lives easy, good, and an enviable example for others to replicate. Make being frugal, healthy, community-minded, and productive in a sustainable manner highly prized amongst your citizenry and in turn your nation will become fertile ground for the most desirable to thrive.