Why Everything Feels Like a Scam

Everything feels like a scam now, and that feeling is worth trusting.

It’s not paranoia or nostalgia. Something real is happening, and most people are pointed at the wrong culprit.

One distortion, a thousand points of contact

Everything feels like a scam because the unit everything is priced in loses value on purpose, year after year. When the money itself leaks, everyone holding it has reason to stop holding it. Whoever sets a price passes the loss on, and whoever doesn’t is left holding it. You meet that scramble at a thousand points of contact, the chocolate bar that shrank, the £6 coffee, the subscription that creeps up while the service gets worse, the pay rise that somehow left you poorer, the fees charged for what used to be included, the sense that saving is for suckers and everyone you know is flipping something. Each contact reads as a separate little con. It’s actually one distortion at the money layer, spreading through everything built on top of it.

What should be happening

Technology makes things cheaper to produce. Your phone swallowed the camera, the film, the postage, the map, the CD collection, the torch.¹ In a free market, under a money nobody can add to, those gains show up as falling prices, because when one producer gets more efficient, a competitor copies the method and undercuts them until the saving reaches you. Where nobody can copy it, the saving stays with the business. Everywhere else, the natural state of a market full of improving technology is that your money slowly buys more. You work the same hours. Life should be getting cheaper.

So everyone asks “why is everything so expensive?” The better question is “where did the saving go?”

Why the system can’t allow it

Nearly all our money is created through lending, so nearly every pound in existence is also someone’s debt.² Those debts are fixed in pounds. If prices broadly fall and nothing is done to stop it, wages eventually follow, but the mortgage payment doesn’t shrink.

A system built on this much debt can take a slow fall that comes with better tools. In that fall it’s the cost of making things that drops, and pay drifts down slowly behind it, so the money to meet a fixed payment is still there. What it can’t take is a sudden fall in the prices credit pushed up, houses first, because then the losses spread through the banks. In that fall it’s the lending that has stopped, so incomes and the house fall together and at once, and the fixed payment is hit from both sides in the same year. Houses come first because people buy them with borrowed money. The debt takes a bigger bite of every income. And where the loan was written against a house, the house is worth less too, so the bank stands to lose more on that loan. So every time a sudden fall in those prices threatens, the system is rescued with new money, and the rescues keep getting bigger.

In between, governments and central banks create more money and credit to keep prices rising by about 2% a year, deliberately, as policy.³ Central banks publish why they aim there. They want room to cut interest rates in a downturn, they know wages resist falling, and they say the official measure of prices overstates the rise.⁴ Those are the reasons they give, and the debts aren’t among them. The debts show up in the rescues, not in the everyday 2%.

Technology should be making your cost of living fall by about as much as output per hour of work grows, a point or two a year on the published productivity figures.⁵ Instead policy pushes prices up by about 2%.⁶ The real gap between what you should pay and what you do pay is bigger than the headline inflation number, because the fall you should have had is hidden inside that number. No official statistic reports that fall, because statistics measure what happened, and this is the distance between what happened and what should have happened. That gap has two parts. One is the saving you never received as lower prices, and the other is the rise you paid on top of it. Both compound, year after year, for decades.

The saving didn’t all vanish. Part of it reached you as higher pay, late and unevenly.⁷ Part of it was never made, because cheap credit kept alive firms that would otherwise have closed and freed their workers, their buildings, and their machines for better uses, so some output was never produced and nobody holds it. The rest was transferred. New money usually enters the system through financial markets and cheap loans, so the people closest to it catch the gains first.⁸ Banks, governments, people who already own assets. House and share prices rise while your wages lag behind.⁹ The money you hold stands in for hours of work already done, and what those hours will buy is set by prices when you spend. When money and credit are created faster than the economy makes things, your stored hours buy less. So there is a scam, in the strict sense of value taken without consent, by a method almost nobody is shown. But it’s one scam, at the base of the system, not a million little ones.

Why it feels like a million little ones

It feels like a million little cons because the small businesses you deal with are being squeezed much the way you are.¹⁰ The café’s rent, ingredients, wages, and card fees all rise, but customers revolt at a £7 flat white, so the cup shrinks, the beans get cheaper, the staff get cut. Shrinkflation is cutting the size or quality of a product instead of raising its sticker price. It’s a price rise wearing a disguise, and that’s what makes it feel dishonest. Stretched staff read as a company that stopped caring. Auto-renewing subscriptions and drip-priced airline seats read as traps. A drip-priced seat is a low headline price with fees added at every step. The auto-renewals and the drip pricing aren’t the squeeze, because they work on how people read a price, and they were measured and regulated before the recent cost rise.¹¹ Those two are a sales trick, a bet that you’ll read the first number and not the last. The smaller cup, the thinner service, and the cut staff are the same squeeze being passed down the line to the last person who can’t pass it further, which is you.

Then there’s the change in how people behave, and I think this is the part you’re really smelling. When money loses value by design, sitting still means falling behind. Cash in the bank is a guaranteed loss in real terms, so ordinary people are pushed to take risks they wouldn’t otherwise take, just to stand still.¹² When taking those risks becomes an ordinary thing to do, culture follows. Side hustles, day trading, meme coins, courses about selling courses. The payoff for patient, honest work falls against the payoff for owning assets, and money set aside loses ground while it waits, so the tilt runs toward grabbing something now. People can feel that shift in the people around them even when they can’t name the cause. A society’s honesty rests on its incentives as well as its morals. When the measuring stick itself can be bent, bending things pays better than building things. The 2% target is published, but what it does isn’t.¹³ Nobody shows you the fall it had to cancel first, so the saver can’t see the size of what the target takes.

And at the top, the pattern is out in the open. A bank that gambles and wins keeps the bonuses. A bank that gambles and loses gets rescued with newly created money, while the small firm down the road goes under. Big companies borrow at rates you aren’t offered and buy up their competitors. Losses get socialised, gains stay private. Lobbying for the policies that keep asset prices rising beats building, so that’s what gets funded. People watch that and conclude the game is rigged. They’re right. They just usually aim the anger at the wrong level, the landlord, the manager, the other political tribe, rather than the design that rewards all of them for behaving this way.

Why now, specifically

It feels worse now because the gap keeps growing. Technology’s downward pull on the cost of making things compounds, and the push behind it keeps getting stronger, because the tools are improving faster than they did, as software and now AI spread into more of the economy. You won’t see that in the official productivity figures yet.¹⁴ With the target fixed at 2%, the bigger the fall technology would deliver, the bigger the offset needed to cancel it. That’s why each rescue is bigger than the last, from hundreds of billions of dollars of government spending and bond-buying in 2008 to trillions in 2020.¹⁵ Between 2000 and early 2018 the world added roughly 185 trillion dollars of debt to buy about 46 trillion of growth.¹⁶ The bigger the dose, the bigger the transfer, the more distortion leaks into daily life, and the worse everything feels. Your instinct that “it wasn’t like this” isn’t memory playing tricks.

And there’s a modern amplifier. When an app is free, you’re the product, so even your idle attention is being farmed and sold, and that traces back to the same money, because cheap money and ad models are what made those platforms giant. That completes the feeling that every single interaction now has an angle.

Greed, wars, and supply shocks can’t explain it

Corporate greed is the popular answer, and it fails a simple test. Greed is nothing new, so the wanting isn’t what changed. What people point at when they say greed is margins [the profit on each sale], and margins did change, so the question is what let them widen.¹⁷ What changed is the restraint. In an honest system, a greedy firm that overcharges gets undercut by a hungrier rival. Cheap credit and inflated asset values protect the firms already in place from that discipline, so the greedy get shielded instead of competed away. That’s the rescued bank. That’s the competitor bought with cheap credit. Wars and supply shocks are real too, but a shock moves prices for a year or two. It can’t explain a fifty-year slide in what a pound buys while production got radically more efficient.¹⁸ What runs underneath all of it is the expanding money. It has been there the whole time, and it grows with each decade.

And the clearest sign that the pound price is telling you mostly about the pound, not about the house, is what happens when you measure in a money nobody can create more of. Over the multi-year windows so far, most prices have fallen in bitcoin. A house that cost around 300 bitcoin fell to a small fraction of that within a few years, even as its pound price climbed. Same house, different ruler. The whole of that fall is bitcoin buying more as adoption grew, not the house getting cheaper to make. In pounds the house was moving the other way, working against the fall rather than causing it, so read the direction, not the size. The gains from better tools are real, they’re just being absorbed before they reach you.

Inside the scramble

The scam feeling is accurate perception. It’s what a slowly debasing unit feels like from the inside. Everyone scrambling, and the scramble indistinguishable from universal dishonesty. The reason I ended up at bitcoin is that it’s the first money whose whole future supply is fixed and published in advance, which anyone can check by running the software, so it’s the first ruler that can’t be stretched, for as long as it stays decentralised and secure.¹⁹ In that unit the whole picture inverts. Prices fall, saving works, patience pays.

But the core answer stands on its own. It’s not that everyone became a crook. The money everyone is forced to use rewards crook-like behaviour, and people respond to rewards. One scam, not a million. Fix the money layer at its base, and most of the little ones lose their reason to exist.