I don’t know what Boris Johnson’s IQ is but his speech at the annual Margaret Thatcher Lecture suggests that he is a spectacularly stupid little man.

At the core of his speech was a celebration of Margaret Thatcher’s success in transforming Britain into “a buccaneering environment where there was no shame – quite the reverse – in getting rich.” The cult of home ownership that began in the 1980s along with the restoration of London “to it’s Victorian eminence as the financial capital of the world”  are lauded by Boris as wonderful things that have happened in no small part due to human greed which he sees as “a valuable spur to economic activity.”

Consider, Boris, the stupidity of celebrating these things:

The financial deregulation that occurred in 1986 allowed banks to lend almost without limit, which fuelled an explosion in mortgages, credit cards, and the treacherous orchestra of “financial instruments” that brought our banking system to its knees in 2008.

The legacy of this deregulation is a mountain of household debt totalling more than £1,400,000 million on which we pay interest of around £60,000 million/year (to put that last figure into perspective, the UK government spends around £50,000 million/year on education).

A tiny fraction of the money that we pay as interest on debt is returned to us as interest on savings. The rest of it is captured by the bankers and their chums. They hoard it to make them feel rich, or use it for financial gambling.

Loan repayments – principal and interest – represent a constant flow of money out of the productive economy. The only way to replace the missing money (that the productive economy needs in order to function) is to borrow it, which puts us further into debt, increasing the amount of repayments – principal and interest – that have to be made.

At some point (probably sooner that you’d like to think) these repayments will become so large that they will overwhelm the rest of the economy. Our financial systems will seize up causing widespread chaos and misery.

When this happens, Boris, you and your chums who are buccaneering around London will discover that the wealth you worship is nothing more than an illusion. The money that you love and celebrate is not wealth. It was created out of thin air and written into our bank accounts as mortgages, loans, credit card balances, and overdrafts. The flourishing economy that you enjoy in London is built on the back of this illusion.

Nobody in the City of London or anywhere else produces one single atom of wealth in return for the money that they create and capture as interest. When the music stops, when we’re no longer able to borrow enough money to repay the money that we’ve already borrowed, you’ll learn the hard way what wealth really is.

Here’s a little thought experiment to help you with your lesson:

Imagine yourself on island with a bunch of your best chums, greedy boys all ready for a night of feasting and fun, dressed in your dinner jackets, your pockets stuffed full of platinum credit cards and fifty pound notes. Except there aren’t any taxis to be had, nor restaurants to be found. No tables or chairs. No crisp white linen. No silver or glass or porcelain. No aperitifs. No amuse-bouches. No menu. No food. No drink. Nothing manufactured or cultivated. No waitress, no chef, no sommelier, no-one to serve your needs. No farmers, no fishermen, no builders or engineers. No-one at all but you and your commodores of commerce, sultans of finance, these masters of the universe that you so much admire. No warmth, no comfort. Nothing but the land beneath your feet and the endless sea all around.

Tell me what wealth is and who produces it.