BS: Economic Truth

Subject: BS: Economic Truth
From: folk1e
Date: 05 Feb 07 - 07:24 PM

I have been working round Manchester U.K. and the number of new buildings is realy amazing! This got me thinking, the city was built on heavy industry yet all of the new buildings are of service industry or housing! How little does a country have to produce (in hard merchandice) to sustain growth? It seems to me that unless you actualy produce some goods the same money will circulate throughout the economy causing inflation! Or am I having a blond moment?

Subject: RE: BS: Economic Truth
From: kendall
Date: 05 Feb 07 - 07:33 PM

I've wondered the same thing. How can a country that has no manufacturing base survive? Flipping each others burgers don't do it.

Subject: RE: BS: Economic Truth
From: Bainbo
Date: 05 Feb 07 - 07:36 PM

It's not just you, folk1e. I live in an area which, until just a few years ago, really, was dominated by shipyards and coal mines. Now it's call centres.

I know times change, and nothing can stay the same - but, honestly. How fragile is that? That industry's only guaranteed until the rate relief on the offices dries up, or we're undercut by Bangalore.

My wife and I have been racking our brains to think what Britain does produce any more. We think there's a couple of shoe factories somewhere (though even Doc Martens are made in Indonesia now), woollen mills in the Scottish borders, and some foreign-owned car plants. (Flippin' foreigners. They come over here, they give us jobs ...).

But you're right. We still appear to be prosperous. And we can't work out how Mr Brown has managed this particularly clever trick.

Subject: RE: BS: Economic Truth
From: folk1e
Date: 05 Feb 07 - 07:41 PM

One of the only things we seem to "produce" is animation.
I had to go to Cosgrove House and Danger Mouse seemed to be O.K.

Subject: RE: BS: Economic Truth
From: artbrooks
Date: 05 Feb 07 - 07:47 PM

Well, its kind of like the old story of the three guys stuck in a hole who got rich trading hats back and forth...

Inflation isn't a problem unless there is an actually scarcity of goods and people start competing with each other to buy them. There really isn't any need, considering that we are all part of the global economy, for any particular nation or region within a nation to produce hard goods. All will be well as long as the country that does so is willing to accept YOUR currency for what they produce. The problem appears when YOU don't produce anything, or offer any services, that they want to spend that money on. Of course, in the US we have solved that problem by selling bonds to the Chinese, etc., so that they will eventually own the country anyway.

Subject: RE: BS: Economic Truth
From: folk1e
Date: 05 Feb 07 - 07:56 PM

Inflation was a problem in Germany in the 30's!
It just means that everyone is playing "catch up with me" with everyone lagging further behind!
Ask the first time buyers (of houses) in the U.K. about inflation!

Subject: RE: BS: Economic Truth
From: artbrooks
Date: 05 Feb 07 - 08:08 PM

Actually, the inflation problem ("hyperinflation") in Germany was a post-war phenomena of the early 1920s, and it was entirely because nobody (including the Germans) would accept the old German mark in payment for anything. This was ended with the introduction of a new mark in, I think, 1924-5. By the 1930s, the Germans were producing LOTS of hard goods (tanks and bullets).

Subject: RE: BS: Economic Truth
From: GUEST,Eekonamist
Date: 05 Feb 07 - 09:11 PM

The U.K. produces money. The City of London (square mile area in the city), is the center of the global fiat money industry. That's the main reason why the U.K. is a have rather than a have not. You folks ought to demand your FULL share of your wealth. You'd all be billionaires.

Subject: RE: BS: Economic Truth
From: Rapparee
Date: 05 Feb 07 - 09:48 PM

I look at it this way:

China and India have begun to flex their manufacturing muscle.

By 2010 India will have rear-ended China in the production of engineers, etc. -- the "hard" fields, the fields needed to produce things. NOT business degrees, not liberal arts -- the sciences and engineering. They won't go to war over it, because both of them will carve up the global pie and there will be money to go around. The US, of course, will react like it did to Sputnik and throw money around in all directions, hoping that mere money will give the US the "lead" again in those fields. The UK will follow suit, but in a lower key.

By 2015 the world will be on the start of a post-petroleum society. But the technology needed will come from China and India, both of which may very well have manned orbiting space stations. By 2020 the US and the UK will no longer be powers to be reckoned with -- the Middle East and Africa will both be under the influence of India and China (it's starting already).

By 2030, India and China will both have lunar colonies and manufacturing facilities at L-5 points.

I wouldn't be at all surprised if by 2050 China and India merged into one huge nation-state. But, since I'll be 105 then I probably won't really care very much....

Subject: RE: BS: Economic Truth
From: Amos
Date: 05 Feb 07 - 11:09 PM

England sells services outside England. For example, the Baroness Symons is   friends with Lynn Cheney in the US and tells her what she ought to have her husband Dick make George Bush do. This is a valuable service.

A

Subject: RE: BS: Economic Truth
From: Ebbie
Date: 06 Feb 07 - 07:42 PM

Yeah, Amos. You know how the Brits are. :)

Subject: RE: BS: Economic Truth
From: autolycus
Date: 07 Feb 07 - 03:07 PM

Apparently,when thinking of UK exports,to consider goods only is to ignore more than half of British exports.
   
   The bulk of British income is from services,especially banking,insurance and other financial services,and some other services like hi-tech and music (one of our biggest earners.

   More down to Thatcher than Brown. She was the one to kill off a lot of British industry.






       Ivor

Subject: RE: BS: Economic Truth
From: Scrump
Date: 07 Feb 07 - 03:39 PM

No-one seems to be worried about the UK economy being a house of cards.

More and more service industry jobs are being "offshored", and more and more people are getting deeper and deeper into personal debt, partly because of property prices going through the roof.

The next recession, when (not if) it arrives, will make those of the early 1980s and the early 1990s seem like the proverbial vicarage tea party.

We be doomed, doomed!

Subject: RE: BS: Economic Truth
From: autolycus
Date: 08 Feb 07 - 02:40 AM

Energy prices are coming down.

    We're saved,we're saved.






       Ivor

Subject: RE: BS: Economic Truth
From: Grab
Date: 08 Feb 07 - 09:29 AM

More down to Thatcher than Brown. She was the one to kill off a lot of British industry.

"Kill off" by not subsiding the unprofitable ones out of taxpayers' money. So we pay twice over, once for their overpriced, low-quality products, and again for higher taxes. Oh joy.

Let's be honest here, who really thought British Leyland was worth saving? Anyone? Do I hear a big "hell no"? (If I didn't, I damn well should have.) They were producing stuff that was unreliable, performed worse than the competition, was poorly designed and was made by shoddy workmen who didn't care that they're turning out crap. Add to that the unions who ensured that you couldn't do anything about the crap workmen or reorganise to get better productivity, and the country gets what it deserves, I'm afraid.

Yes, Britain is doing little physical manufacturing. But it's doing an absolute shitload of design work and intellectual-capital stuff - cars, phones, software, buildings, etc, etc - and that's where we as a country are making money these days.

Graham.

Subject: RE: BS: Economic Truth
From: GUEST,pattyClink
Date: 08 Feb 07 - 02:25 PM

Just wanted to echo what was said earlier. England is a giant center for banking. Not sure that's a terrible thing, your country has already learned to survive in a world where the big production is done elsewhere. USAers are in for a nasty generation of adjustment to such.

Subject: RE: BS: Economic Truth
From: Richard Bridge
Date: 08 Feb 07 - 05:46 PM

The big problem with the few things England and the rest of Britain (but mostly the city) still do is the Wimbledon effect. World class arena, all the top players are foreigh - and taking most of their winnings away.

There is only so long that we can glean the crumbs from their tables, get paid to wipe their arses, and use that money to buy the bread made from the corn we don't grow.

Yes, British Leyland was worth saving. Now we buy cars from foreigners. Who makes the money?

Yes, coal mining was worth saving. Now we buy coal from foreigners. Who makes the money?

When it gets cold, who shuts the pipelines? Who makes the money?

When we make the films - who owns the rights and who makes the money (clue, some still post here)?

Software? Don't make me laugh.

Computer hardware? Ditto.

Brand values? Yeah right.

House of cards is right.

Subject: RE: BS: Economic Truth
From: folk1e
Date: 09 Feb 07 - 04:02 PM

Thanks Richard, that was the point I am worried about!
Anyone remember when we had a "made in U.K." badge on things?
Having a cutting edge technological advantage only benifits you if you can do something with it (like USA did to Russia in the space race)

Subject: RE: BS: Economic Truth
From: autolycus
Date: 10 Feb 07 - 02:26 PM

And yet we in GB are described as having the 4th or 5th most powerful economy in the world.

   




      Ivor

Subject: RE: BS: Economic Truth
From: Richard Bridge
Date: 10 Feb 07 - 03:44 PM

But we don't own any of it.....

Subject: RE: BS: Economic Truth
From: McGrath of Harlow
Date: 10 Feb 07 - 04:33 PM

The idea that there's going to be a permanent living made from "financial services" and stuff like that because other people in other parts of the world aren't going to be able to do that is a very temporary illusion which is already evaporating.

"sustain growth" It isn't going to be about "sustaining growth", it's going to be about surviving (touch wood). A hi-tech, but at the same time a subsistance economy.

Subject: RE: BS: Economic Truth
From: Peace
Date: 10 Feb 07 - 05:05 PM

'"sustain growth"'

That is THE lie about economics. Even a child knows that when you have no more water in the glass, it's gonna be a thirsty time.

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 10 Feb 07 - 06:29 PM

Anybody remember "Limits to growth"?

You should really read "Play Little Victims" by Kenneth Cook (Hardcover - Jun 1978)

Subject: RE: BS: Economic Truth
From: Richard Bridge
Date: 11 Feb 07 - 03:35 AM

Nope. Tell us about it.

Subject: RE: BS: Economic Truth
From: autolycus
Date: 11 Feb 07 - 05:36 AM

I remember seeing it about.

    I think the idea is that the resources of our planet are,a priori,finite.

    I don't know whether 'Limits to Growth' made the point that capitalism assumes infinite growth.

    As the song had it,

      "Something's gotter give,something's gotter give,
    something's gotter give."


   Capitalism is going to continue trying to square that circle by analogy with a Heath Robinson machine that has to get increasingly contorted to do the simplest thing.






          Ivor

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 11 Feb 07 - 07:37 AM

"'Limits to Growth' made the point that capitalism assumes infinite growth."

Been a while since I read it. Out of that era grew the concept of ZPG - Zero Population Growth. China certainly took it seriously enough to forbid more than 2 children per family.

Capitalism firstly assumes infinite resources, including 'suckers'.

Subject: RE: BS: Economic Truth
From: folk1e
Date: 11 Feb 07 - 02:33 PM

It reminds me of an episode or "Red Dwarf" !
The whole economy of earth was sustained by someone leaving a light on before going on a long trip! The light was using a resource and the power company kept on supplying and billing the guy who was away, sending him regular bills .... which he never got so didn't pay .... causing the power company to issue legal procedings ...... thereby generating the sum total of planet earth's wealth!
Amazing how thought provoking these cheap Sci-fi's can be!

Subject: RE: BS: Economic Truth
From: McGrath of Harlow
Date: 12 Feb 07 - 01:38 PM

Unpaid debts count as a resource. They can even be bought and sold.

Subject: RE: BS: Economic Truth
From: autolycus
Date: 12 Feb 07 - 02:32 PM

Foolestroupe,you misquote me by omission. Please re-read my post.

   Also,can you say more about your last sentence,which is a vague one.


   Thanks






       Ivor

Subject: RE: BS: Economic Truth
From: GUEST,petr
Date: 12 Feb 07 - 02:36 PM

re: financial services -
already a number of financial services are being outsourced to India
such as accounting etc. so I wouldnt count on it.

read Jared Diamonds Collapse, it has a lot to say about sustainability,
right now the way the whole western world standard of living is not sustainable.

our economy is based on constant growth - ie if youre not growing
its bad, at the same time the system does not account for 'externalities' ie. overfishing, deforestation, pollution of water and air, not to mention green house gases.

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 12 Feb 07 - 06:44 PM

Capitalism assumes

1) raw materials will never run out
2) the market for processed goods is infinite
3) 2 implies that there will always be some sucker to buy the junk - just how many refrigerators does one person need?
4) if the market is saturated, then you make the products last less time....
5) you can then flog the more shoddy product to suckers more often as it wears out faster...
60 all this broken stuff can be dumped - and the size of the dump is infinite...

Subject: RE: BS: Economic Truth
From: McGrath of Harlow
Date: 12 Feb 07 - 07:05 PM

It's basically like pyramid selling in the long run.

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 12 Feb 07 - 07:09 PM

4a) If the market is saturated, brainwash the market that they REALLY need something else.

Subject: RE: BS: Economic Truth
From: autolycus
Date: 13 Feb 07 - 02:44 AM

Thanks.

    All that's a bit Westerncentric.


    Capitalism's latest solutions to its problems are China,India and the Iraq war,never mind mobile phones and the latest technology generally.

    Then it'll be Africa and anywhere else that's not yet properly into consumerism.






      Ivor

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 13 Feb 07 - 05:03 AM

China and India are following teh Capitalist/Consumerist model rather closely - just look at the stats for growth of motorised vehicles.

Subject: RE: BS: Economic Truth
From: Grab
Date: 13 Feb 07 - 05:42 AM

Yes, coal mining was worth saving. Now we buy coal from foreigners. Who makes the money?

Say it cost British Steel £500 to extract a ton of iron ore, and £100 for a US mine (for a comparable amount of iron out). And say it cost British Coal £1000 for the coal to smelt the iron ore, whereas a US strip-mine would cost £200. Then the same amount of steel would cost five times as much if produced in the UK as produced in the US.

You could make this work if you wanted - but only by going the North Korea route and banning all imports from abroad. The moment you get imports from abroad, the vastly cheaper cost of raw materials shows up how much it's costing you to dig this stuff out.

To continue the same argument, we should maintain cotton plantations in the UK too for our clothing. OK, they'd need to go under vast greenhouses, and they'd take huge quantities of water and heating, so the simple cotton T-shirt you'd buy down the market would probably cost you a hundred quid. But we'd be self-sufficient, and that's the important thing, right?

Yes, British Leyland was worth saving. Now we buy cars from foreigners. Who makes the money?

Who "made" money on BL? The government spent a bloody fortune trying to prop them up, because they made a loss for ages! Why? Because what they were selling was unmitigated crap. What was the effect of the government propping them up? They assumed they had a right to exist and continued to churn out even shoddier cars at even higher prices, ignoring any thought of efficiency or build quality, until no-one in their right mind would buy one and the cost to keep the whole crumbling pile aloft was too much. A house of cards? I give you BL as the classic, all-time example.

Graham.

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 13 Feb 07 - 06:47 AM

"Yes, coal mining was worth saving. Now we buy coal from foreigners. Who makes the money? - etc SNIP"

Well eventually their coal will run out, and will get more expensive...

"maintain cotton plantations in the UK .... etc SNIP"

Well, we Aussies are currently going thru arguments about growing cotton and rice in Aus - we are running out of water you see - driest continent in the world, and all that... we are exporting most of the cotton and rice, and we shut down our clothes making industry decades ago anyway...

Subject: RE: BS: Economic Truth
From: McGrath of Harlow
Date: 13 Feb 07 - 06:55 AM

Cotton isn't the only fruit. Linen, wool and hemp all do reasonably well in our climate in England. Though of course "our climate" isn't something we can take as permanent, even in the fairly short run.

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 13 Feb 07 - 07:06 AM

Grapes for wine were once grown in England.

Subject: RE: BS: Economic Truth
From: Scrump
Date: 13 Feb 07 - 08:00 AM

Grapes for wine were once grown in England.

Er... they still are, unless global warming has put a stop to it?

Subject: RE: BS: Economic Truth
From: Bunnahabhain
Date: 13 Feb 07 - 08:01 AM

Of course in the long run, and assuming we don't manage to wipe ourselves out beforehand, then fairly much every country will get to similar level of development, so people will demand wages of similar levels. There's no incentive to shift the factory to China if the workers want much the same wages, and the pollution controls are as tough as the West.

It might still be a house of cards, but it wouldn't be sitting on such an unstable base.





BTW Foolestroupe, grapes for wine are currently grown for wine in England, and in increasing amounts.

Subject: RE: BS: Economic Truth
From: Scrump
Date: 13 Feb 07 - 09:39 AM

Linen, wool and hemp all do reasonably well in our climate in England.

Maybe we should grow more hemp then, and we can all stop worrying about the economy and the climate #-}

Subject: RE: BS: Economic Truth
From: McGrath of Harlow
Date: 13 Feb 07 - 10:42 AM

"Hemp, Natures Perfect Plant"

"Industrial hemp is an incredible resource. Hemp is harvested for its fibers for hemp clothing and seeds for hemp oil. With a relatively short growth cycle of 100-120 days, it is an efficient and economical crop for farmers to grow, however, industrial hemp cannot be commercially grown in the United States because it is erroneously confounded with marijuana. In fact, industrial hemp and marijuana are different breeds of Cannabis sativa. Smoking large amounts of hemp flowers can produce a headache but not a high!"

Subject: RE: BS: Economic Truth
From: Scrump
Date: 13 Feb 07 - 10:44 AM

Smoking large amounts of hemp flowers can produce a headache but not a high!

Sounds a bit like keg beer to me :-(

Subject: RE: BS: Economic Truth
From: autolycus
Date: 13 Feb 07 - 12:10 PM

Nobody here is meeting the crunch question head-on.

   We live on a planet of finite resources.

   Capitalism assumes growth for ever.

   Aren't those two FACTS irreconcilable?






       Ivor

Subject: RE: BS: Economic Truth
From: folk1e
Date: 13 Feb 07 - 08:06 PM

what happens when the "capitalists" start selling ideas?
Define infinite!
In the models above it just means it is bigger than needed at the present time!

Subject: RE: BS: Economic Truth
From: The Fooles Troupe
Date: 13 Feb 07 - 08:06 PM

Totally.

But greedy powerful bastards won't admit it - at least just yet - they want to make their own pile first....

Subject: RE: BS: Economic Truth
From: McGrath of Harlow
Date: 13 Feb 07 - 08:24 PM

Aren't those two FACTS irreconcilable?

Of course they are.

But the bigger crunch question is, what happens when it all breaks down.

Subject: RE: BS: Economic Truth
From: autolycus
Date: 14 Feb 07 - 03:24 AM

Exactly.






       Ivor

Subject: RE: BS: Economic Truth
From: folk1e
Date: 14 Feb 07 - 03:29 AM

Just a thaught exercise here .....
China increases it's industrial base to supply most of european goods.
The good people of europe slap an "environment tax" on ALL goods, suddenly Chinese goods are dearer, creating a niech for local "clean" local products! The Chinese economy cannot respond quickly to this and so a new industry is born!