One of the liveliest minds at the Bank of England is its chief economist, Andy Haldane. He frequently sounds off with ideas you don’t normally expect from someone employed by such a bureaucratic organisation.
For example, he recently suggested that — computers being as powerful as they are — there’s no reason why we shouldn’t all have a personal account at the Bank of England — presumably doing away with high street banks altogether!
Another was that the pound — or the dollar or the euro — could adopt a block-chain technology, rather like the Bitcoin, so that each of us could make person-to-person payments directly without going through intermediate bank accounts. This was taken further by suggesting that, as most transactions are now becoming purely electronic, we might not need cash itself for very much longer.
All these have been said tongue in cheek no doubt but they cause us to think a little. His most recent statement, however, was made more seriously when he was asked about planning for retirement. Is it better to base it on property or in a pension fund? “It ought to be saving for a pension but it’s actually property every time”, he replied. “We’re building far too few houses. House prices will be heading north for decades to come.”
What Haldane could have said also is that pension funds rely on dividends on shares and high manufacturing wages but they’re both coming down, and will continue to do so as world-wide competition — already very great — intensifies. It’s already the case that many pension funds have “terrifying shortfalls” according to Ed Monk, writing in today’s Sunday Telegraph.
However, if Haldane had said this then he would also be implying that capitalism as we have known since the 19th century is coming to an end as we enter a new type of professional services era. M’mm . . . perhaps it would be too radical to say so — the Bank of England might not even be needed in the new scheme of things and he’d be without a job!