Jacob Rees-Mogg speaks slowly and clearly. He has a reputation for expressing clear ideas, some of which are out of kilter with contemporary fashion; notably his strictly orthodox Roman Catholic attitudes to homosexuality and the procreation of children. Yesterday lunchtime he excelled himself in a discussion of the Commons committee report on the Brexit situation on the BBC2 show, the daily politics.
He displayed an astonishing degree of ignorance about the realities of contemporary human aspiration and about the nature of world trade. In his view, the mass of the British people want cheap food and cheap clothes; therefore the UK should open its borders to imports from the countries that can supply the cheapest food and the cheapest clothes.
He did not mention the need to have countervailing exports of British goods and services to other countries, with which to earn the foreign exchange to buy the cheap imports. he did not seem to have any awareness that the countries - like Bangladesh - that are home to the cheapest clothes manufacture have the least capability to pay for the high-tech exports on which the future of the UK depends.
It is a recurrent theme of this blog that the most advanced country, the USA, will never grant to Britain [or to the EU] truly most-favoured access to their domestic market, because they are anxious to nurture their advanced economic sectors: which is best done by enabling their innovating firms to make big enough profits continue with the research and development programmes. Even before Trump, and certainly after Trump, they will be unashamed to prefer US technology, entertainment, financial services and other highly profitable areas of activity. It is part of the American culture to preserve, protect and defend their own firms and their intellectual property.
As the world's second economy, China is notoriously prone to require firms trading into China to share their intellectual assets with Chinese 'partners'. Japan has been closely chauvinistic throughout its modern economic history, and India is developing on similar lines.
Thus, if Brexit Britain went down the route prescribed by Mr Mogg there would be a monumental and rapidly expanding balance-of-payments deficit.
Even more significant, however, is the implicit ignorance shown by Mogg about the pattern of consumer aspirations that has developed all over the world. Yes, the class of hereditary paupers that was created by the Thatcher regime [and subsequently consolidated as part-salaried welfare dependants producing low levels of output per head under Blair, Brown and Cameron-Clegg-May] does want cheap food and clothing. But they also want smart phones, computer games, access to popular music and sports coverage. A major reason why they want cheap food is to have enough money [and access to credit] to buy the high-end products and services that are most fashionable. Such a living standard is accessible to the poorer members of an advanced-economy common market: it is not available on WTO terms to a rapidly-declining economy that is denied access for its exports to the richest countries in the world.
Mogg has revealed to me the extent to which the extreme Brexiteers live in cloud cuckooland.
Showing posts with label hereditary paupers. Show all posts
Showing posts with label hereditary paupers. Show all posts
Saturday, 2 December 2017
Wednesday, 29 November 2017
Selling Newspapers to the Great British Public
The popular taste has again been demonstrated on a massive scale: the upcoming royal wedding has dominated all but one newspaper for the past few days. The Grauinad has equally pandered to its constituency by keeping the news off its front page. The rest of the press has at least had large photoshoots, and some papers have had multipage pull-out supplements. The papers would not do this unless they were sure that the public wanted it.
The recent announcement of a National Industrial Strategy has stimulated rather bored comment from industrial and business correspondents, largely emphasising that there is little new thinking in the large document; and very little new money from the government to give effect to the strategy. One of the saddest aspects of the strategy is that it is an 'industrial' strategy: while above all the UK needs a new Economic Strategy.
The Thatcher era created millions of hereditary paupers who, in the past decade have been steered into low-paid jobs that achieve low productivity while the 'workers' receive subsidies in the form of state benefits to maintain their modest standard of living. This is not a sustainable system - but it is not addressed in the strategy.
Nor does the strategy address the key issues of the century: climate change , the supply and salubrity of water and the availability of food [both on a global scale and in the sad little world of an economically isolated United Kingdom].
No wonder the redtop tabloids have had little time for this latest effusion of governmental thinking-in-the-box.
The recent announcement of a National Industrial Strategy has stimulated rather bored comment from industrial and business correspondents, largely emphasising that there is little new thinking in the large document; and very little new money from the government to give effect to the strategy. One of the saddest aspects of the strategy is that it is an 'industrial' strategy: while above all the UK needs a new Economic Strategy.
The Thatcher era created millions of hereditary paupers who, in the past decade have been steered into low-paid jobs that achieve low productivity while the 'workers' receive subsidies in the form of state benefits to maintain their modest standard of living. This is not a sustainable system - but it is not addressed in the strategy.
Nor does the strategy address the key issues of the century: climate change , the supply and salubrity of water and the availability of food [both on a global scale and in the sad little world of an economically isolated United Kingdom].
No wonder the redtop tabloids have had little time for this latest effusion of governmental thinking-in-the-box.
Tuesday, 18 September 2012
The Implications of the Proposed EADS-BAe Merger
For many centuries there has been a close synergy in successful countries between the most advanced sectors of technology and the military and naval forces of the regime. The Vienna Arsenal and the Woolwich Arsenal in London occupied massive sites which have quite recently been released for development for civil purposes, as the last survivors of the former Austro-Hungarian and British Empires go to their graves. From at least the fifteenth century until after the middle of the twentieth the British Royal Navy maintained a massive onshore infrastructure of dockyards and other facilities, as well as being the predominant customer for cutting-edge ship and weapons design and construction. In the twentieth century the potential of aerial warfare created huge high-tech industries in all the industrialised states at the same time as vast acreages of land were taken up by airfields; and that phase was followed by space programmes; which India and China have now taken up as western European states and the USA have cut back on their defence spending and of space exploration as the burden of 'welfare' has pressed upon national resources.
Britain's attempt to keep a presence in aerospace and naval construction, and to retain at least some advanced weapons technology, was by cobbling together British Aerospace, which added shipyards and became BAe, which is the residual legatee of centuries of public investment in defence supplies. This company has been surprisingly successful in retaining a global market share in many segments of defence procurement. Simultaneously Europe - including the UK - agreed that it could only keep up a presence in global civil aviation by collaboration, hence was created the Franco-Germanic-Hispanic-British consortium called EADS. With their usual short-sightedness, the Brits then sold their 20% holding of EADS; which is now regarded as a eurozone business.
It has recently been proposed that BAe and EADS should merge; with EADS owners holding 60% of the equity in the resulting firm. The biggest drawback to the merger is that BAe is the repository of a massive range of secret material relating to the military resources and plans for both the UK and US governments; and while the US has badgered Britain to integrate with Europe for over half a century, in matters like this the US establishment prefers its close satellite to keep close to the US without strings to the continental European states. The British government has a 'golden share' in BAe [as do the continental governments in EADS] and there will doubtless be a great deal of discussion in secret between the US and UK governments before the deal is allowed. One sure outcome if the merger does go through, is that the now-strong position of BAe as a supplier to the US military and space programmes will be reduced, most likely very severely and very quickly.
Thus the capacity of the wider Europe, including the UK, to remain active in globally important fields of production and research will be lost, precisely when China and India are developing their capability. The spin-offs from research into defence and space technologies, applied to terrestrial consumer products, has been responsible for many very popular product developments and innovations: that torch could soon be abandoned to Asiatic innovators. Europe will only have its Economists and politicians [and its supine electorates] to blame for allowing the catastrophe that is already well-developed to come to maturity. Then Europe will be too poor to build shipyards and aircraft factories, or to test rockets. Militarily as well as technologically Europe will be eclipsed, and the politicians will do nothing to avert the catastrophe because they are fixated on buying the votes of hereditary paupers whilst they purport to be controlling the expansion of the national debt.
Britain's attempt to keep a presence in aerospace and naval construction, and to retain at least some advanced weapons technology, was by cobbling together British Aerospace, which added shipyards and became BAe, which is the residual legatee of centuries of public investment in defence supplies. This company has been surprisingly successful in retaining a global market share in many segments of defence procurement. Simultaneously Europe - including the UK - agreed that it could only keep up a presence in global civil aviation by collaboration, hence was created the Franco-Germanic-Hispanic-British consortium called EADS. With their usual short-sightedness, the Brits then sold their 20% holding of EADS; which is now regarded as a eurozone business.
It has recently been proposed that BAe and EADS should merge; with EADS owners holding 60% of the equity in the resulting firm. The biggest drawback to the merger is that BAe is the repository of a massive range of secret material relating to the military resources and plans for both the UK and US governments; and while the US has badgered Britain to integrate with Europe for over half a century, in matters like this the US establishment prefers its close satellite to keep close to the US without strings to the continental European states. The British government has a 'golden share' in BAe [as do the continental governments in EADS] and there will doubtless be a great deal of discussion in secret between the US and UK governments before the deal is allowed. One sure outcome if the merger does go through, is that the now-strong position of BAe as a supplier to the US military and space programmes will be reduced, most likely very severely and very quickly.
Thus the capacity of the wider Europe, including the UK, to remain active in globally important fields of production and research will be lost, precisely when China and India are developing their capability. The spin-offs from research into defence and space technologies, applied to terrestrial consumer products, has been responsible for many very popular product developments and innovations: that torch could soon be abandoned to Asiatic innovators. Europe will only have its Economists and politicians [and its supine electorates] to blame for allowing the catastrophe that is already well-developed to come to maturity. Then Europe will be too poor to build shipyards and aircraft factories, or to test rockets. Militarily as well as technologically Europe will be eclipsed, and the politicians will do nothing to avert the catastrophe because they are fixated on buying the votes of hereditary paupers whilst they purport to be controlling the expansion of the national debt.
Sunday, 2 September 2012
Fair Enough?
The election campaign in the USA is now in full swing, with unprecedentedly large sums being spent, largely on advertising that is virulently abusive of the candidates, their histories and the probable effect of their policies. The incumbent President carries a heavy burden of blame for the ongoing - relative - stagnation of the US economy; while his challenger carries the double burden of being a Mormon [which most people privately dismiss as a nutty religion] and being rich, with most of his wealth having been gained by his own efforts. The extreme disparity in wealth between the very rich and the poor in the USA is the greatest that it has ever been, certainly since the abolition of slavery. Thus there is a constant call that the rich - and especially any rich men or women who dare to enter politics - should be made to surrender some of their wealth, and/or more of their income, through revised taxation. There is behind this the assertion that this would simply be 'fair'.
In the UK, where a weak coalition government is struggling to achieve any policy consensus that may have a chance of stimulating economic growth, there is an even more strident call from one of the coalition parties [the Liberal democrats] for taxation of the rich to be increased, probably by introducing a wealth tax [sometimes narrowed down to a 'mansion tax'] on the grounds that this would simply be 'fair'.
In Ireland, Spain, Portugal, Italy and Greece, governments have formally agreed to impose highly restrictive policies, which include higher taxation and reduced state borrowing. In these countries there is resentment of those who prospered greatly during the credit bubble years at the start of this century, exacerbated by anger at those who use their guile and their contacts to move money out of the country before it is exposed to the risks of higher taxation and the threat of devaluation if the country is forced out of the eurozone. The rich - and the comfortable, especially senior bureaucrats and politicians - are vilified for their [real or imagined] past depredations against the economy: and the whole farrago of criticism is crystallised in the call "it is not fair".
China has been rocked by a scandal at the centre of which is a party official whose wife had become deeply embroiled with a British businessman who was helping her to move massive sums of money out of China. Both in China and abroad this case is regarded as an example of what has been happening on an heroic scale: officials have protected their families and associates as they have accumulated massive fortunes, and tried to move significant sums to the relative security of foreign banks and assets. For a communist country to permit the emergence of extreme inequality, in direct opposition to the most basic Marxist principles, is hugely embarrassing: and popular feeling can be summarised in the assertion that "this is not fair!"
One could circumvent the globe many times and find similar assertions about the state of society and of the economy in the great majority of countries. But while there is a widespread feeling that the distribution of wealth [and with it, the distribution of power] is 'not fair'; there is no clear and universal model of what would be 'fair'.
The rich can say, with considerable justice, in the UK or in France or in many other countries, that far too much tax is taken already to keep hereditary paupers in comfortable idleness; free to take and to trade in drugs, bootleg alcohol and smuggled cigarettes; and prone to civil disturbance. These people are propitiated because they could have votes; even though a very large proportion of them do not exercise that right, or even register as voters. In the USA the Congress is very careful to keep benefits for able-bodied adults of working age on a temporary basis, so there is a constant pressure on them to seek work; but for the elderly who are 'on Welfare' and potentially for people receiving treatment under 'Obamacare' there is no time limit to their dependency. Thus although the structures are different as between the USA and Western Europe, the underlying issue is very similar. The relatively new aspect to the problem is that the concept of 'fairness' is becoming confounded with the necessary debate about the capacity of the economy [and of the social system, and of the political arrangements that prevail] to tackle the closely related issues of growing public debt and of long-term benefit dependency. People kept by the state are usually not contributing either to economic activity or to taxation of income or of wealth: so it is a fair question for the rich to ask:"where is the fairness in taking more taxation from productive individuals and dissipating it is the perpetuation of idleness?"
This question is ignored by the political charlatans who offer the voters the proposition that it is 'fair' to soak the rich, without questioning the ways in which government money is spent and the efficiency of that spending in promoting development of the real economy. Yet this is the nub of the issue, and that point must properly be drawn into the political debate.
In the UK, where a weak coalition government is struggling to achieve any policy consensus that may have a chance of stimulating economic growth, there is an even more strident call from one of the coalition parties [the Liberal democrats] for taxation of the rich to be increased, probably by introducing a wealth tax [sometimes narrowed down to a 'mansion tax'] on the grounds that this would simply be 'fair'.
In Ireland, Spain, Portugal, Italy and Greece, governments have formally agreed to impose highly restrictive policies, which include higher taxation and reduced state borrowing. In these countries there is resentment of those who prospered greatly during the credit bubble years at the start of this century, exacerbated by anger at those who use their guile and their contacts to move money out of the country before it is exposed to the risks of higher taxation and the threat of devaluation if the country is forced out of the eurozone. The rich - and the comfortable, especially senior bureaucrats and politicians - are vilified for their [real or imagined] past depredations against the economy: and the whole farrago of criticism is crystallised in the call "it is not fair".
China has been rocked by a scandal at the centre of which is a party official whose wife had become deeply embroiled with a British businessman who was helping her to move massive sums of money out of China. Both in China and abroad this case is regarded as an example of what has been happening on an heroic scale: officials have protected their families and associates as they have accumulated massive fortunes, and tried to move significant sums to the relative security of foreign banks and assets. For a communist country to permit the emergence of extreme inequality, in direct opposition to the most basic Marxist principles, is hugely embarrassing: and popular feeling can be summarised in the assertion that "this is not fair!"
One could circumvent the globe many times and find similar assertions about the state of society and of the economy in the great majority of countries. But while there is a widespread feeling that the distribution of wealth [and with it, the distribution of power] is 'not fair'; there is no clear and universal model of what would be 'fair'.
The rich can say, with considerable justice, in the UK or in France or in many other countries, that far too much tax is taken already to keep hereditary paupers in comfortable idleness; free to take and to trade in drugs, bootleg alcohol and smuggled cigarettes; and prone to civil disturbance. These people are propitiated because they could have votes; even though a very large proportion of them do not exercise that right, or even register as voters. In the USA the Congress is very careful to keep benefits for able-bodied adults of working age on a temporary basis, so there is a constant pressure on them to seek work; but for the elderly who are 'on Welfare' and potentially for people receiving treatment under 'Obamacare' there is no time limit to their dependency. Thus although the structures are different as between the USA and Western Europe, the underlying issue is very similar. The relatively new aspect to the problem is that the concept of 'fairness' is becoming confounded with the necessary debate about the capacity of the economy [and of the social system, and of the political arrangements that prevail] to tackle the closely related issues of growing public debt and of long-term benefit dependency. People kept by the state are usually not contributing either to economic activity or to taxation of income or of wealth: so it is a fair question for the rich to ask:"where is the fairness in taking more taxation from productive individuals and dissipating it is the perpetuation of idleness?"
This question is ignored by the political charlatans who offer the voters the proposition that it is 'fair' to soak the rich, without questioning the ways in which government money is spent and the efficiency of that spending in promoting development of the real economy. Yet this is the nub of the issue, and that point must properly be drawn into the political debate.
Wednesday, 21 September 2011
The economic situation is worse than you know
After fourteen months offline this Blog is now again active. During the past year I have completely revised my presentation of the facts about the economy, been cured of prostate cancer and moved to temporary accommodation as I buy a much smaller London flat.
The passage of another year has made it clear that the underlying economic crisis is essentially and fundamentally political. From 1980 to 2008 British politicians welcomed - indeed, gloated about - the casino banking that seemed to be carrying the economy forward as the ongoing destruction of industry was accompanied by sales to aliens of the most valuable intellectual property assets in the country. Taxes on banks and their staff flowed into the Exchequer along with the one-off proceeds of privatisation and North Sea oil revenues - and quickly went out into the growing flood of 'benefits', to remunerating NHS managers and allowing schools to attract the designation 'failing' alongside the contemptuous description as 'sinks'. The Thatcher governments fostered the first generation of a new wave of 'hereditary paupers': a species that had been eradicated in the eighteen-thirties. New labour followed through, expanding the budget and wantonly miscalling massive flows of current spending as 'investment'. The 2010 coalition talk about draconian 'cuts' that shake out as minor reductions in the rate of increase of government spending and of the national debt. They and their advisers are still in cloud-cuckoo land.
In the coming days, the facts and arguments underlying these assertions will be presented, in the context of contemporary events.
The passage of another year has made it clear that the underlying economic crisis is essentially and fundamentally political. From 1980 to 2008 British politicians welcomed - indeed, gloated about - the casino banking that seemed to be carrying the economy forward as the ongoing destruction of industry was accompanied by sales to aliens of the most valuable intellectual property assets in the country. Taxes on banks and their staff flowed into the Exchequer along with the one-off proceeds of privatisation and North Sea oil revenues - and quickly went out into the growing flood of 'benefits', to remunerating NHS managers and allowing schools to attract the designation 'failing' alongside the contemptuous description as 'sinks'. The Thatcher governments fostered the first generation of a new wave of 'hereditary paupers': a species that had been eradicated in the eighteen-thirties. New labour followed through, expanding the budget and wantonly miscalling massive flows of current spending as 'investment'. The 2010 coalition talk about draconian 'cuts' that shake out as minor reductions in the rate of increase of government spending and of the national debt. They and their advisers are still in cloud-cuckoo land.
In the coming days, the facts and arguments underlying these assertions will be presented, in the context of contemporary events.
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