I wanted to do

a video about a concept

which I’ve been calling the illusion of improvement.

This idea is about a kind of a philosophical question,

which is can it be possible

for every single individual in a society

to be getting richer over time,

and yet for society as a whole and for families as a whole

to be getting poorer over time?

And this is an important concept,

I think, because

in my opinion, definitely people in this country,

the UK and many Western countries

have been getting continually poorer

for at least the last 20 years or so.

And yet if you look at most individuals,

you will find that over time

they do tend to get richer over time.

And that is because in most careers

you get salary rises as you get older

and many people are able

to accumulate a little bit of cash and buy property,

which makes them richer over time.

So how is it possible that these two things

simultaneously are happening,

that individuals are getting richer

and yet society as a whole is getting poorer?

So I think the best way to explain

what's happening here is through a graph.

Now, we don't do many graphs or diagrams of this channel,

but I think this diagram here expands really nicely

what is happening.

So on this graph,

you've got time on the x axis

and you got living standards on the Y axis.

So what you have is four separate generations over time.

And if you look at these four generations, you can see

each generation over time is getting richer,

but their children

are also getting richer over time,

but from a lowest scoring point

and reaching a lower end point.

So each generation over time is getting poorer,

but each individual person is getting richer.

And I think this describes really well

what is happening now.

And the reason I wanted to talk about

this is because another thing

which I've been talking about on the channel

is we have seen in the last

15, 20 well, to be honest,

30 or 40 years a very aggressive increase

in house prices and other asset prices.

And I suspect we will see very aggressive

house prices in the next few years.

Now, what is interesting about this is this

this economic action, the increase of house

prices,

it really bankrupts families over time

because each generation finds it

harder and harder to buy a house.

They have to pay more rent.

They have to pay more interest

because they need bigger mortgages.

But if you look at individual people,

they will normally tell you when house prices rise,

it's good for me.

So we have an action which is impoverishing families.

And yet most individuals within those families

think this is good for me.

So I think it's really important

for people to understand this diagram, essentially.

What is important to understand

is if you want to understand how your family is doing,

how your community is doing, how your society is doing

financially, it's not enough to look at just yourself

and your path over time,

or even you and your kids and your path over time.

What you need to do is compare

your kids to you at their age

and your grandkids at their age.

So if we go back to the graph,

if you look at the living standards for young people,

so I'll put XXXX’s in the graph here,

which marks each generation when they were young,

And you can see that each generation

when they were young is getting poorer over time.

If we do the same thing for middle age again, middle aged

people are getting poorer over time.

The elderly again getting poorer over time,

despite the fact that each individual generation

is getting richer over time.

It's very important that you do this

if you want to understand

the future of your family and your communities,

you need to compare generations

when they were the same age.

So I think

once we understand

this, we can start to sort of

get rid of the division,

which is increasingly happening

between elderly and the young when it comes to voting.

I think elderly people see that

their lives are getting better over time.

They assume their kids lives will get better over time.

And they fail to realise that despite things like

increasing house prices which

benefit them but hurt their kids,

the long term trajectory,

the long term

trajectory for their family, for their kids,

for their community is increased poverty over time.

Now, that raises an interesting question,

which is well,

if all families, or the vast

majority of families are being poorer over time,

but society as a whole is not getting

poorer, GDP is not decreasing,

then where is all of that missing wealth going?

And to explain that, we're going to add

one other line on this graph here,

which is the living standards of the rich over time.

So as ordinary families are getting poorer,

they're losing their wealth,

the rich are getting richer at the fastest rate

ever in history and their living standards

are dramatically increasing.

So what we have

is quite an interesting situation,

which is from a class perspective, ordinary families

are basically being impoverished by the very rich,

but the rich are able to convince ordinary families

that they're getting better

by creating this illusion of improvement,

which is every single generation, year by year,

feels like they're getting richer and every family

generation by generation is being made poorer.

So that's it basically.

This is the illusion of improvement.

It's really important to understand this

because in the next 10, 20 years,

house prices are going to go through the roof,

and especially of older generations

who maybe own property

are going to feel that they're winning

and they're often going to fail to realise

that the consequence is their kids

and their grandkids are being made poorer.

If we can get enough people to recognise this,

then we can get together. We can say we don't accept this.

We don't accept the situation

where wealth flows from ordinary families

to the very rich, where living standards

continue to decrease over time.

If we don't realise this,

then it will happen and we will fall into a situation

where the vast majority of families

fall into poverty over time.

We can reverse it.

The only way to do that

is by making rich people pay their fair share

instead of taxing

everybody who's working hard for their money.

We're going to keep pushing for it. We hope you support us.

Watch this video again.

Share it with your friends, Share it with your family.

Send it to your mum, send it to your nan.

Let's fight back.

Let's not accept poverty for ordinary people. Thank you.