George Galloway, a former Labour member of the British parliament, has spend the past decade establishing his new Respect party which seeks pacifist and Muslim votes against wars on Islamic countries. He won an election in east London but left the seat to be retaken by Labour in 2010 when a majority of his Bengali supporters were snatched back to their former voting pattern by the complex of tribal networks to which they are susceptible. Galloway transferred his primary efforts to the ethnically different people from the northern parts of the Indian sub-continent who have colonised the former mill towns on both sides of the Pennines. There is a good chance that those populations will be less amenable to recapture by Labour. While the voting in recent by-elections has been only 30% of the roll, yesterday in Bradford West 51% turned out. In round numbers, 18,000 voted for Galloway, 8,000 for the [Asian] Labour candidate, 2,000 for the Conservatives and 1,000 for the LibDems: Galloway's vote exceeded that of all the established parties altogether.
The political class will spend the next week pretending that the Bradford by-Election result that was announced announced this morning was utterly unimportant. In a couple of weeks, when their pollsters and focus-group technicians report back on the new questions [those their masters had not cared to ask previously] that are raised by the Galloway result, they will find that there is elation among the mass of immigrants who voted for Galloway feeling that they have been patronised and mollified with benefits for decades. They will also report new pressure on the Asians who remained Labour voters to reconsider their position, and despair among the ethnic British who have been coaxed and bullied by patronising politicians who have suppressed discussion about immigration and the benefits bonanza.
These are not trends that the government are capable of understanding. The leading cabinet ministers simply do now know that in addition to the massive Greggs chain of bakers' shops is a mass of well-loved local bakeries and well-used garage forecourts where hot pies and pasties have for generations provided modest refreshment for millions. They are uncomprehending of the fuss that has been created by their decison to levy Value-Added-Tax of 20% to the prices of hot pies and pasties. They have no comprehension of the social structure and daily habits of their fellow-countrymen. There may well be some 'sleeper' in the Treasury who advocated the pasty-tax in full awareness of the probable impact on the popular press and the mass of voters. The nauseating scene of Gordon Brown's mass welcome to the Treasury by its Grauniadista denizens should have been sufficient warning for the Tories when they returned in 2010 to beware of a coven of socialists. But the major political issue is the incomprehension of the future Sir George Osborne Bt, the craven eurorat Clegg and the Etonian Prime Minister. The pasty tax had no influence on the Bradford West election: but it did enhance the gulf between the government and the people; which is a completely outre way was also George Galloway's charge against the political establishment.
The Labour opposition is almost equally composed of 'intellectual' life-long would-be politicians, most of whom are as remote from the mass of the electorate as the similarly clad people on the government benches. They go through puerile rituals to make themselves seem - in their own conceits - to have speech patterns not unlike some of the lower orders; but examples like the fake-fishwife utterances of a shadow treasury minister [who spent years as a Bank of England official] produce only ridicule. Those like the Labour leader, Ed Milliband, who cannot even affect working-class accents equally fail to display the sort of articulateness that makes Galloway so devastating.
Galloway has exposed eighteen thousand of a million-plus Asian Muslims in Britain to the euphoria of defeating the political establishment. There are at least fifty seats that could fall to the Respect Party unless the indigenous British, with Hindus, Sikhs, Afros and EU immigrants can unite in voting for single candidates: the emergence of another party or network, with the primary object of stopping Respect, is highly probable.Unable to influence Respect, the established parties would bend all their efforts to denigrating and obstructing that new movement; with the result that in some places the new group will fail and in other places the established parties will be eliminated.
British politics suddenly got more exciting, more dangerous, and more likely to be followed by increasing cohorts of Islamic colonists and by those who become scared by the Muslims' new militancy all over Europe.
Nobody predicted this: one can search in vain for any hint in the press [up to and including early editions of March 30 newspapers] that Galloway's victory was even a remote possibility. I was not even aware that he was a candidate. But I live in the parliamentary constituency for which he formerly sat as MP: I recognise his intellect, his speaking ability and his political agility. He has changed British and world politics, and anyone who tries to ignore the fact will come to rue that day.
Friday, 30 March 2012
Wednesday, 28 March 2012
Human Choice
A new book called Poor Economics - dealing with economic choices by the poor - has been published by an academic who works in the USA and has his ancestry in a new-emergent economy. The text unconsciously encapsulates a clear vindication of my concept of ik: the idea that people allocate any discretionary expenditure that they can afford on buying quons - copyrighted and trade-mark-protected entertainment, branded goods and services and other consumer experiences on which a charge could be levied for enjoying access to the input of intellectual property that makes the 'good' desirable to those who buy or hire it. Give a desperately poor person [who has just enough consumption to survive] a few extra pennies and she or he is more likely to to try to broaden their range of consumer experiences by accessing some ik than they are to buy more of the food that makes up their daily diet.
This behaviour is not what typical Grauniad readers expect, and it is 'irrational' in terms of formal Economics; but it is what the evidence clearly shows. It is also the basis on which governments [from the earliest human societies] have taxed transactions in markets. While income taxes are fashionably considered 'fair' in the degenerate cisatlantic democracies, History shows that expenditure taxes come closest to being 'discretionary' in that people opt to buy things even though they know that in doing so they are paying a tax [indeed, the majority of the price of cigarettes, alcoholic drinks and motor fuel is tax in many countries]. People are more likely to opt not to earn more taxable income than they are to refuse to purchase highly desired items because of the tax imposed on the transaction.
This experience shows clearly the irrationality of formal Economics, as it has been developed since the eighteen-sixties. Economics as presented in universities and in advice to governments is not based on evidence - it is based on assumptions as to what an ideal or 'perfect' economy might look like. The aim of Economists is to make human life conform to their models: which is a fundamentally inhumane objective. There is no reason for surprise that Economics solutions to real-world issues do not 'work'. The alternative has existed for longer than Economics has been in existence: the science of Political Economy was well-developed, and realistic, well before the pioneers of modern Economics decided to create their own academic dreamland. Lord Keynes - who never bothered with a doctorate in Economics and never held a professorial chair - was deeply learned in Political Economy, and although he was loyal to the memory of his teachers [his father, John Neville Keynes and the family friend Alfred Marshall] his work was anything but mainstream Economics: which is why Economists have so imperfectly understood it, and why so many of them have tried to push it out of consideration
My simple objective is the restore Political Economy as a science that is relevant to the human condition, and perhaps to .take some aspects of the science a small step forwards. Anyone interested in this question should open the link from this blog to my text PPE: Personal Political Economy.
This behaviour is not what typical Grauniad readers expect, and it is 'irrational' in terms of formal Economics; but it is what the evidence clearly shows. It is also the basis on which governments [from the earliest human societies] have taxed transactions in markets. While income taxes are fashionably considered 'fair' in the degenerate cisatlantic democracies, History shows that expenditure taxes come closest to being 'discretionary' in that people opt to buy things even though they know that in doing so they are paying a tax [indeed, the majority of the price of cigarettes, alcoholic drinks and motor fuel is tax in many countries]. People are more likely to opt not to earn more taxable income than they are to refuse to purchase highly desired items because of the tax imposed on the transaction.
This experience shows clearly the irrationality of formal Economics, as it has been developed since the eighteen-sixties. Economics as presented in universities and in advice to governments is not based on evidence - it is based on assumptions as to what an ideal or 'perfect' economy might look like. The aim of Economists is to make human life conform to their models: which is a fundamentally inhumane objective. There is no reason for surprise that Economics solutions to real-world issues do not 'work'. The alternative has existed for longer than Economics has been in existence: the science of Political Economy was well-developed, and realistic, well before the pioneers of modern Economics decided to create their own academic dreamland. Lord Keynes - who never bothered with a doctorate in Economics and never held a professorial chair - was deeply learned in Political Economy, and although he was loyal to the memory of his teachers [his father, John Neville Keynes and the family friend Alfred Marshall] his work was anything but mainstream Economics: which is why Economists have so imperfectly understood it, and why so many of them have tried to push it out of consideration
My simple objective is the restore Political Economy as a science that is relevant to the human condition, and perhaps to .take some aspects of the science a small step forwards. Anyone interested in this question should open the link from this blog to my text PPE: Personal Political Economy.
Tuesday, 27 March 2012
The Nasty Party: With Extra Twists
Today is the day when the coalition government - in a very evidently Conservative initiative - recasts by Decree the Planning Regulations in England and Wales. Most detailed rules are swept away, procedures are simplified, and a 'presumption' is to be made in favour of allowing changes in rural areas which are shown to be 'sustainable developments'. 'Sustainable' means different things to different people in different contexts, and can be so broadly defined as to be meaningless even before the concepts are moulded for specific cases by clever lawyers. Local 'communities' are supposed to have a clear voice on developments in their areas, but the new principle of favouring building work that can be claimed to conduce to economic development will make it pretty easy to override Nimby [not in my back yard!] objectors.
Britain's economic future depends heavily on tourism; and one of the major assets that the country has inherited is the legendary green countryside. The picture is under threat currently from drought: nobody dreams of 'England's brown and pleasant land'; but an equal threat is the construction of inept industrial plant, factory farms and housing estates in [or close to] beauty spots. Britain is so small, and already so widely a wasteland of sites abandoned by industry, that the conservation of the great asset is a high priority in the majority view of the native population. The Conservatives promised that the NHS would be 'safe' with them, and have set about disrupting it: the countryside is the next target of the urbanised nasties who have captured the party from its landed grandees. Natural Conservatives will be the most outraged by the potential consequences of the planning policy. The nasties believe that natural Conservatives have no other party to vote for, and are afraid of Labour [as well as contemptuous of the LibDems]: so the core Conservative vote is still taken for granted. This new planning policy, which is quintessentially nasty, could well mark the tipping point where the Conservative Party alienates its natural support and enters a decline similar to that of the Liberals in the nineteen twenties. These things happen very quickly: and the nasties may just have set the mechanism in train.
Britain's economic future depends heavily on tourism; and one of the major assets that the country has inherited is the legendary green countryside. The picture is under threat currently from drought: nobody dreams of 'England's brown and pleasant land'; but an equal threat is the construction of inept industrial plant, factory farms and housing estates in [or close to] beauty spots. Britain is so small, and already so widely a wasteland of sites abandoned by industry, that the conservation of the great asset is a high priority in the majority view of the native population. The Conservatives promised that the NHS would be 'safe' with them, and have set about disrupting it: the countryside is the next target of the urbanised nasties who have captured the party from its landed grandees. Natural Conservatives will be the most outraged by the potential consequences of the planning policy. The nasties believe that natural Conservatives have no other party to vote for, and are afraid of Labour [as well as contemptuous of the LibDems]: so the core Conservative vote is still taken for granted. This new planning policy, which is quintessentially nasty, could well mark the tipping point where the Conservative Party alienates its natural support and enters a decline similar to that of the Liberals in the nineteen twenties. These things happen very quickly: and the nasties may just have set the mechanism in train.
Monday, 26 March 2012
Boxed Patents
One of the good things that the Gordon Brown government did in the UK was partially to recognise that the economy has no hope of getting out of the hole that the political class has made for it unless the state recognises and rewards the creation of 'intellectual property'. Unsurprisingly, they did not understand the simple basic nature of ik, as explained in my PPE [see link from this site], but this was a step on the road to rational management of the most important of national resources.
Under the coalition the grasping hand of the Treasury has been allowed to influence the deign of the concept for protecting British intellectual property, and consequently the government announced their intention to create a 'patent box' . Under this category a company [or possibly a high-net-worth individual] would be able to secure a patent, and to implement it into production, and get tax exemptions and reductions at various stages in the process. The 2010 Coalition government declared that they would implement the plan and a few companies, including Glaxo, entered discussion with the government about using the process. Glaxo planned to extend their UK factories under a Box agreement specifically to exploit a new product for which it was in process of securing a patent. The company announced its decision to invest in the UK on Budget Day 2012 [as featured in the previous Post here], to accommodate the squalid spin doctoring of sad politicians who would seek any propaganda point in the absence of evidence of real economic progress. In this case, there was real potential in the investment. But [as already noted] the Patent Box is not the only inducement to locate industrial plant in the UK. British labour is becoming relatively cheaper as Chinese workers begin to enjoy consumerism with larger wages, and the tax system in the UK is becoming a little less oppressive. UK and EU Labour law and the omnipresent intrusion of inept and officious 'health and safety' regulations are still deterrents to investment, especially in physical production. But steps are being taken in the right direction, albeit they are hesitant and indecisive.
The bigger issue that is disclosed by the Glaxo announcement is that safeguarding intellectual property is becoming the most important consideration of companies in the global economy: and while the US government has become obsessive about China's 'theft' of such property the EU and European governments have still not grasped the heart of this issue. The leading British ministry, BIS, has focussed on reducing the period between the filing of a patent application and the manufacture of the product; which is a good thing if it can be achieved while maintaining the secret.
But the entire positive story is yet to be told: that Brits, including Glaxo research teams, are unusually fecund in producing both patentable inventions and marketable concepts. The world's leading advertising agents are British, and several of the world's best-known and highest-regarded brands are British: yet a major feature of British business is the sad fact that while ideas continue to bubble up, and patents are registered, there is a dearth of funding to develop products fast enough. Firms are sold in their infancy, usually to foreign owners who then reap the rewards for developing the product and its marketplace. To concentrate exclusively on implementing patents is to miss the point.
New patents can improve existing brands, or can be the basis for a new creation of brand value. The establishment of a new brand partly depends on marketing, partly on spontaneous shifts in fashion, partly on consumers' incomes increasing enough to embrace the new consumer experience in addition to the existing standard of living. Investment must be made, often over a series of years, in the development of brand reputation as well as in the technicalities of material manufacture. Investment in systems patents and copyrights, brand-names and trademarks, is needed: these aspects can be more costly than the technical patents that are embodied in a material patent. The total suite of investments is needed to build a brand; otherwise patent-owners who are discouraged from developing their firms and their brands by lack of investments will still be tempted to cash-in their assets and sell the firm and its intellectual property to be developed in foreign hands. The British government needs to move a lot further to meet the need!
Under the coalition the grasping hand of the Treasury has been allowed to influence the deign of the concept for protecting British intellectual property, and consequently the government announced their intention to create a 'patent box' . Under this category a company [or possibly a high-net-worth individual] would be able to secure a patent, and to implement it into production, and get tax exemptions and reductions at various stages in the process. The 2010 Coalition government declared that they would implement the plan and a few companies, including Glaxo, entered discussion with the government about using the process. Glaxo planned to extend their UK factories under a Box agreement specifically to exploit a new product for which it was in process of securing a patent. The company announced its decision to invest in the UK on Budget Day 2012 [as featured in the previous Post here], to accommodate the squalid spin doctoring of sad politicians who would seek any propaganda point in the absence of evidence of real economic progress. In this case, there was real potential in the investment. But [as already noted] the Patent Box is not the only inducement to locate industrial plant in the UK. British labour is becoming relatively cheaper as Chinese workers begin to enjoy consumerism with larger wages, and the tax system in the UK is becoming a little less oppressive. UK and EU Labour law and the omnipresent intrusion of inept and officious 'health and safety' regulations are still deterrents to investment, especially in physical production. But steps are being taken in the right direction, albeit they are hesitant and indecisive.
The bigger issue that is disclosed by the Glaxo announcement is that safeguarding intellectual property is becoming the most important consideration of companies in the global economy: and while the US government has become obsessive about China's 'theft' of such property the EU and European governments have still not grasped the heart of this issue. The leading British ministry, BIS, has focussed on reducing the period between the filing of a patent application and the manufacture of the product; which is a good thing if it can be achieved while maintaining the secret.
But the entire positive story is yet to be told: that Brits, including Glaxo research teams, are unusually fecund in producing both patentable inventions and marketable concepts. The world's leading advertising agents are British, and several of the world's best-known and highest-regarded brands are British: yet a major feature of British business is the sad fact that while ideas continue to bubble up, and patents are registered, there is a dearth of funding to develop products fast enough. Firms are sold in their infancy, usually to foreign owners who then reap the rewards for developing the product and its marketplace. To concentrate exclusively on implementing patents is to miss the point.
New patents can improve existing brands, or can be the basis for a new creation of brand value. The establishment of a new brand partly depends on marketing, partly on spontaneous shifts in fashion, partly on consumers' incomes increasing enough to embrace the new consumer experience in addition to the existing standard of living. Investment must be made, often over a series of years, in the development of brand reputation as well as in the technicalities of material manufacture. Investment in systems patents and copyrights, brand-names and trademarks, is needed: these aspects can be more costly than the technical patents that are embodied in a material patent. The total suite of investments is needed to build a brand; otherwise patent-owners who are discouraged from developing their firms and their brands by lack of investments will still be tempted to cash-in their assets and sell the firm and its intellectual property to be developed in foreign hands. The British government needs to move a lot further to meet the need!
Friday, 23 March 2012
Mismanaging News
George Osborne has committed a major gaffe in public relations, by describing his biggest tax 'raid' in this year's Budget as a mere simplification of the tax system. The resentment that this has set in train will mature slowly, and be disastrous for the man's image and for his party. Meanwhile, in the twenty-four hours since he made the cock-up he has resorted to an item of crude propaganda. In the tradition of Potemkin, Stalin and Putin, his sycophants have arranged with Glaxo Smithkline to announce their decision to extend factories in the UK on Budget Day, and even to say that decisions in the Budget were favourable to the decision. Osborne touted his sneer around the TV and radio studios to extol the great investment, and suggest that it was vastly more important than the granny tax.
The company's plans must have been in train for many months. It would have been outrageously improper if the Treasury had shared their plans for setting rates of corporation tax with the company over that period. The actual reasons for the Glaxo decision British manufacturing is becoming 'affordable' again to international companies, as has been evident over many months past in the motor and fashion industries. The company owns sites and has infrastructure with skilled staff around the UK. It will be easier and possibly cheaper to invest in the UK, with or without tinkering the tax system. One can speculate what inducement was offered to the company to arrange its announcement to coincide with Budget Day, but it was probably trivial.
Osborne used the same trick a few weeks earlier, when he grabbed for his own publicity machine the announcement that a Chinese Wealth Fund was buying a block of shares in Thames Water. This transaction had been arranged as a business deal over some months but the announcement was arranged to coincide with the Chancellor's 'triumphant' return from a nugatory visit to China. There was no correlation between the visit and the deal: the announcement was crude propaganda. Such are the standards and practices that impress the current crop of puerile politicians: indeed a country gets the government that it deserves!
The company's plans must have been in train for many months. It would have been outrageously improper if the Treasury had shared their plans for setting rates of corporation tax with the company over that period. The actual reasons for the Glaxo decision British manufacturing is becoming 'affordable' again to international companies, as has been evident over many months past in the motor and fashion industries. The company owns sites and has infrastructure with skilled staff around the UK. It will be easier and possibly cheaper to invest in the UK, with or without tinkering the tax system. One can speculate what inducement was offered to the company to arrange its announcement to coincide with Budget Day, but it was probably trivial.
Osborne used the same trick a few weeks earlier, when he grabbed for his own publicity machine the announcement that a Chinese Wealth Fund was buying a block of shares in Thames Water. This transaction had been arranged as a business deal over some months but the announcement was arranged to coincide with the Chancellor's 'triumphant' return from a nugatory visit to China. There was no correlation between the visit and the deal: the announcement was crude propaganda. Such are the standards and practices that impress the current crop of puerile politicians: indeed a country gets the government that it deserves!
Thursday, 22 March 2012
Osborne Bashes the Old and Threatens the Future
George Osborne, the British Finance Minister, yesterday performed the annual ritual of presenting a plan of spending and taxation [known as the Budget] and the Labour opposition joined in the ritual by quibbling about the data that were presented. None of the lead speakers in the discussion has ever held a job in the 'real economy' for a significant number of years, and all the performers read statements that were prepared by teams of script writers and Economists.
The hallmark of the Budget was the expressed intention that all the concessions that were made to taxpayers were compensated by equivalent increases in other taxes. An increase in state retirement pensions was offset by a reduction in tax reliefs for millions of pensioners. The Liberal Democrats' cherished policy of increasing the level of income that is exempt from income tax was offset by cuts in benefits and tax credits, and by raised taxes on fuel, cigarettes and alcohol: they were shown even more than previously to be totemistic twerps as they boasted of their 'great achievement'. The star of the day, Osborne, again showed the depth of his nervousness by exaggerating his swagger and by the reedy edge that worsens his always-sneery voice: the more cock-sure he looked, the more his voice betrayed the fact that he was well beyond his comfort zone. His minders had clearly not recognised that critics and opponents would set together proposed tax reliefs for the rich and increased taxes, diminished benefits and reduced tax reliefs for the relatively poor. The elaborate game of balancing gains and losses for each income decile that so pleases the inner circle means nothing to the electorate at large.
Osborne presented a 'tidying' of taxation that turned out [only after examining the supporting documents that were published the same day] to be the biggest tax grab in the Budget: his misjudgement in trying to introduce the new grab from pensioners as a mere administrative detail will haunt him. Alongside his support for the ruinous Health and Social Care Act and the leading role he has taken in the government's campaign to undermine the protection of the cherished countryside he has probably done enough to bring down the government at the next election. The sooner the coalition government collapses, the fresher will be the public memory of Osborne's duplicity and silliness and the more certain will be the public repudiation of both coalition parties. Labour are a shambles, and they will fail spectacularly as a government: but they are 'not this lot' and that is all that is needed to return them to power.
The British newspapers today bash the 'granny tax' but recognise that much more important news is happening outside little Britain in their features on the siege in Toulouse [France] where a confessed killer is holed-up in a flat after exacerbating racial tensions and affecting the volatile mood of Israelis. Analysts of Britain will recognise that the Budget does nothing to accelerate the reduction of the endemic deficit on state spending and nothing that will significantly foster economic growth. For the last two years Osborne's 'austerity' programme has encouraged international investors to continue supporting British government debt: yesterday's Budget brought forward the date when analysts will stress the precariousness of the government and the probability that an early election will open the gates to chaos. This tragic inevitability is made one significant step more certain by Osborne's performance yesterday.
The hallmark of the Budget was the expressed intention that all the concessions that were made to taxpayers were compensated by equivalent increases in other taxes. An increase in state retirement pensions was offset by a reduction in tax reliefs for millions of pensioners. The Liberal Democrats' cherished policy of increasing the level of income that is exempt from income tax was offset by cuts in benefits and tax credits, and by raised taxes on fuel, cigarettes and alcohol: they were shown even more than previously to be totemistic twerps as they boasted of their 'great achievement'. The star of the day, Osborne, again showed the depth of his nervousness by exaggerating his swagger and by the reedy edge that worsens his always-sneery voice: the more cock-sure he looked, the more his voice betrayed the fact that he was well beyond his comfort zone. His minders had clearly not recognised that critics and opponents would set together proposed tax reliefs for the rich and increased taxes, diminished benefits and reduced tax reliefs for the relatively poor. The elaborate game of balancing gains and losses for each income decile that so pleases the inner circle means nothing to the electorate at large.
Osborne presented a 'tidying' of taxation that turned out [only after examining the supporting documents that were published the same day] to be the biggest tax grab in the Budget: his misjudgement in trying to introduce the new grab from pensioners as a mere administrative detail will haunt him. Alongside his support for the ruinous Health and Social Care Act and the leading role he has taken in the government's campaign to undermine the protection of the cherished countryside he has probably done enough to bring down the government at the next election. The sooner the coalition government collapses, the fresher will be the public memory of Osborne's duplicity and silliness and the more certain will be the public repudiation of both coalition parties. Labour are a shambles, and they will fail spectacularly as a government: but they are 'not this lot' and that is all that is needed to return them to power.
The British newspapers today bash the 'granny tax' but recognise that much more important news is happening outside little Britain in their features on the siege in Toulouse [France] where a confessed killer is holed-up in a flat after exacerbating racial tensions and affecting the volatile mood of Israelis. Analysts of Britain will recognise that the Budget does nothing to accelerate the reduction of the endemic deficit on state spending and nothing that will significantly foster economic growth. For the last two years Osborne's 'austerity' programme has encouraged international investors to continue supporting British government debt: yesterday's Budget brought forward the date when analysts will stress the precariousness of the government and the probability that an early election will open the gates to chaos. This tragic inevitability is made one significant step more certain by Osborne's performance yesterday.
Wednesday, 21 March 2012
National versus Local Pay Rates: Part Two
More millions of migrant Chinese are moving into the cities, where they accept low-paid jobs in terms of the average incomes of residents of that city. Migrants leave behind their homes, their parents, often their partner and their child; because they see no chance of entering the consumer economy in their native villages. In the city the 'lucky' migrants get jobs requiring seventy hours a week attendance, often in repetitive but meticulous tasks. They get low wages - even by the standards of that city - and they sleep in cramped and unhealthy conditions The gain that comes from such pain is that they are able to buy some desired consumer goods: and on their rare, brief visits home they can take commodities - including rare western-branded [possibly fake] items which would never otherwise break in to the constricted economy of their home villages. Many migrants are inspired by the hope of being able to bring enough money back to the village to rebuild the house, and take on more farmland or start a business there: some achieve that, but the majority come to accept the alternative aspiration to bring their partners into the city - or to marry somebody met in the city - and aspire to own an apartment. Some learn business acumen and acquire the requisite technical ability to rise within the company that has employed them, others can branch out into their own businesses and have the chance to build fortunes; though the 'shadow banks' that are the only source of capital available to many such people to accelerate the growth of the business often bleed them dry or capture their businesses.
The geographical mobility of people within the country and the openness of the economy to entrepreneurial success that characterise contemporary China were strongly approved in Britain from the days of Dick Whittington [Mayor of London in 1397, and of London and Calais simultaneously in 1407] to the nineteen fifties. The proto-statisticians Petty and Graunt [1668] demonstrated [in their Observations of the Bills of Mortality] that many more people died than were born in London, inferring that the dynamic growth of the City as the hub of trade for the whole country depended absolutely on immigration. Many of the migrants lived short and deprived lives ending in an early death: but always some prospered hugely and their stories attracted others to try their luck. Social mobility increased with rising prosperity and in the eighteenth century exceptional individuals were able to implement inventions and create world-beating businesses: great names from the era include Wedgwood, Boulton and Arkwright who built their businesses well away from London [though they marketed their products through London and relied on the system of patents that was administered from the capital]. The nineteenth century was the great era of innovative industrial capitalism, but even now exceptional individuals like Sir James Dyson demonstrate that the route is still open to high-quality graduates: though it is now much constricted by the dominant alliance of rotten politics and degenerate education.
When was the turning-point? When and how was the long-prevalent dynamic spirit extracted from the British economy? It seems to me that the narrow defeat of the radically reformist Labour government in 1951 foreshadowed the catastrophic events by which - over the next half century - the British economic and social systems were set in reverse.
The king who had supported Churchill and triumphed over huge personal stresses died early in 1952 and he was succeeded by his young daughter, Princess Elizabeth. The new Queen's reign began with the anomalous near-octogenarian Winston Churchill as Prime Minister. He was a deeply ambiguous character who had been an enthusiastic member of the most radical government that the country had ever had, between 1906 and 1914, when the Liberal majority in the House of Commons [with lukewarm support from the few Labour MPs] introduced pensions for citizens over seventy, unemployment insurance and medical insurance for the working man, and the widespread grant of cash benefits - rather than automatic committal to the workhouse - for the [economically] 'impotent poor'. Despite this radicalism, Churchill as Home Secretary was blamed for soldiers shooting striking miners in South Wales, earning the lifelong enmity of a core cohort of trade unionists and contributing to their determination to create their own political party - Labour - on the assumption that the Liberals were not to be trusted. Labour precipitated the dramatic decline of the Liberals' electoral support after the First World War, bolstered by the radicalism of many women who had been given votes for the first time. Churchill accepted Stanley Baldwin's invitation to change sides in the Commons and became the Chancellor of the Exchequer. The subsequent collapse of Baldwin's government in 1929 put Churchill out of office, as a member of the Conservative party where he was little trusted and not widely liked. In exceptional circumstances he emerged as Prime Minister of a coalition government in 1940, and that government laid the plans for a post-war welfare state to which he declared his own adherence. Labour won the 1945 election by a landslide, notwithstanding the personal popularity of Churchill who had been appointed officially as Conservative Party leader, and the Labour government combined the introduction of the welfare state with a major programme of nationalisation of basic industries and utilities, that the Conservatives vigorously opposed.
Churchill's 1951 government inherited the nationalised industries and the new National Health Service, and took on the military burdens of the Korean War and other overseas campaigns to arrest the spread of communism. Finances were very tight; wartime rationing and price control over many consumer goods was retained. The huge loan that had been provided by the USA to help postwar reconstruction had largely been dissipated to alleviate austerity: imports of American films, stockings and cosmetics soaked up dollars that had been intended for machine tools and farming machinery. A balance of payments deficit continued and it was clear to Conservative political strategists that they could only win elections by offering people a rising standard of consumption of branded goods, without rationing, in combination with the welfare state. This huge support for consumption rather than production would obviously make the negative balance of trade worse. Churchill was followed by his long-standing 'heir apparent' Anthony Eden who collapsed under the stress of the Americans' repudiation of Britain's 'intervention' in Egypt - the Suez Campaign. The next Conservative leader was at the extreme 'left' of the party, a millionaire supporter of the welfare state, Harold Macmillan. He won the 1959 election by promising to develop both the Health Service and the rise of consumerism: and he could point to his track record as Housing Minister. Wartime bombing and demographic change had meant that by 1950 the country needed at least a couple of million new homes to provide the population with what every family regarded as a basic necessity, and in the early 'fifties Macmillan had led a ministerial team that pushed through the tangle of planning laws and supply controls to orchestrate the amazing achievement of building more than 300,000 homes each year [something the present government dare not even aspire to].
Macmillan's election slogan - You've never had it so good! - both reflected the mood of the times and was simply true: most voters had never previously had so much social security, health support and access to consumer experiences: television, record players, fitted carpets, bathrooms, constant hot water [and, in more households each year, central heating], washing machines, cars and even holidays in Spain. The concept was embedded into electoral politics, that the Labour Party could only beat the Conservatives if they could convince voters that they would enable people to retain their gains in standard of living and, in addition, that a Labour government would provide improving health, social and educational services. By 1960 it was clear that the policy of encouraging consumption [especially as a growing minority of the population were maintained n benefits that were set at levels that allowed a 'reasonable' living standard] was causing government spending to increase; in some years at the cost of increasing the national debt. The balance of payments steadily got worse. The Labour leader, Harold Wilson, captured the principle that the economy had to grow quite spectacularly if the delusional consumerist state was to be maintained: how was the necessary productivity boost to be achieved? His answer was to enlist pure and applied science: wealth was to be generated by the 'white heat of technology'. On this slogan, with the electors displaying widespread boredom with the Conservative government, Labour narrowly won the 1964 election. A larger majority was obtained in a snap election two years later, even though it was becoming apparent that technology was not a magic force: so the government turned to the old socialist idea of comprehensive economic planning.
By the late 'sixties the policy of plenty combined with worsening balance of payments was producing rising prices. The trade unions began a round of strikes, that made nonsense of the targets that had been set in the National Economic Plan. The government party depended on the financial support of the unions, whose leaders were increasingly at odds with the government. The government tried to control the situation by legislation and became factionalised: in 1970 they lost power to a superficially renovated Conservative party which quickly lost control of labour relations as inflation increased: then inflation was stimulated further by a huge increase in the global price of oil.
By 1970 it was inescapable that the way in which the two 'parties of government' competed by offering the population better and better living standards without requiring commensurate increases in real national earnings was undermining the economy. Rising inflation of prices was being met by increasing demands for more wages, in which the trades unions were usually successful. The declining Wilson government divided into acrimonious factions in the late 'sixties, in response to a paper - In Place of Strife - adopted by the Secretary of State for employment matters, Barbara Castle, which would have subjected pay demands to government oversight and to the possibility of a veto. It was thus a deeply divided Labour Party that lost the election of 1970; ceding power to Edward Heath's supposedly 'technocratic' Conservatives, who had no satisfactory understanding of the fundamental problem that had been embedded on the economy. The Tories quickly superseded Labour as 'the worst-ever government': and the sad saga of the 'seventies will from the next episode in this series of blogs on National Versus Local Pay Rates.
The geographical mobility of people within the country and the openness of the economy to entrepreneurial success that characterise contemporary China were strongly approved in Britain from the days of Dick Whittington [Mayor of London in 1397, and of London and Calais simultaneously in 1407] to the nineteen fifties. The proto-statisticians Petty and Graunt [1668] demonstrated [in their Observations of the Bills of Mortality] that many more people died than were born in London, inferring that the dynamic growth of the City as the hub of trade for the whole country depended absolutely on immigration. Many of the migrants lived short and deprived lives ending in an early death: but always some prospered hugely and their stories attracted others to try their luck. Social mobility increased with rising prosperity and in the eighteenth century exceptional individuals were able to implement inventions and create world-beating businesses: great names from the era include Wedgwood, Boulton and Arkwright who built their businesses well away from London [though they marketed their products through London and relied on the system of patents that was administered from the capital]. The nineteenth century was the great era of innovative industrial capitalism, but even now exceptional individuals like Sir James Dyson demonstrate that the route is still open to high-quality graduates: though it is now much constricted by the dominant alliance of rotten politics and degenerate education.
When was the turning-point? When and how was the long-prevalent dynamic spirit extracted from the British economy? It seems to me that the narrow defeat of the radically reformist Labour government in 1951 foreshadowed the catastrophic events by which - over the next half century - the British economic and social systems were set in reverse.
The king who had supported Churchill and triumphed over huge personal stresses died early in 1952 and he was succeeded by his young daughter, Princess Elizabeth. The new Queen's reign began with the anomalous near-octogenarian Winston Churchill as Prime Minister. He was a deeply ambiguous character who had been an enthusiastic member of the most radical government that the country had ever had, between 1906 and 1914, when the Liberal majority in the House of Commons [with lukewarm support from the few Labour MPs] introduced pensions for citizens over seventy, unemployment insurance and medical insurance for the working man, and the widespread grant of cash benefits - rather than automatic committal to the workhouse - for the [economically] 'impotent poor'. Despite this radicalism, Churchill as Home Secretary was blamed for soldiers shooting striking miners in South Wales, earning the lifelong enmity of a core cohort of trade unionists and contributing to their determination to create their own political party - Labour - on the assumption that the Liberals were not to be trusted. Labour precipitated the dramatic decline of the Liberals' electoral support after the First World War, bolstered by the radicalism of many women who had been given votes for the first time. Churchill accepted Stanley Baldwin's invitation to change sides in the Commons and became the Chancellor of the Exchequer. The subsequent collapse of Baldwin's government in 1929 put Churchill out of office, as a member of the Conservative party where he was little trusted and not widely liked. In exceptional circumstances he emerged as Prime Minister of a coalition government in 1940, and that government laid the plans for a post-war welfare state to which he declared his own adherence. Labour won the 1945 election by a landslide, notwithstanding the personal popularity of Churchill who had been appointed officially as Conservative Party leader, and the Labour government combined the introduction of the welfare state with a major programme of nationalisation of basic industries and utilities, that the Conservatives vigorously opposed.
Churchill's 1951 government inherited the nationalised industries and the new National Health Service, and took on the military burdens of the Korean War and other overseas campaigns to arrest the spread of communism. Finances were very tight; wartime rationing and price control over many consumer goods was retained. The huge loan that had been provided by the USA to help postwar reconstruction had largely been dissipated to alleviate austerity: imports of American films, stockings and cosmetics soaked up dollars that had been intended for machine tools and farming machinery. A balance of payments deficit continued and it was clear to Conservative political strategists that they could only win elections by offering people a rising standard of consumption of branded goods, without rationing, in combination with the welfare state. This huge support for consumption rather than production would obviously make the negative balance of trade worse. Churchill was followed by his long-standing 'heir apparent' Anthony Eden who collapsed under the stress of the Americans' repudiation of Britain's 'intervention' in Egypt - the Suez Campaign. The next Conservative leader was at the extreme 'left' of the party, a millionaire supporter of the welfare state, Harold Macmillan. He won the 1959 election by promising to develop both the Health Service and the rise of consumerism: and he could point to his track record as Housing Minister. Wartime bombing and demographic change had meant that by 1950 the country needed at least a couple of million new homes to provide the population with what every family regarded as a basic necessity, and in the early 'fifties Macmillan had led a ministerial team that pushed through the tangle of planning laws and supply controls to orchestrate the amazing achievement of building more than 300,000 homes each year [something the present government dare not even aspire to].
Macmillan's election slogan - You've never had it so good! - both reflected the mood of the times and was simply true: most voters had never previously had so much social security, health support and access to consumer experiences: television, record players, fitted carpets, bathrooms, constant hot water [and, in more households each year, central heating], washing machines, cars and even holidays in Spain. The concept was embedded into electoral politics, that the Labour Party could only beat the Conservatives if they could convince voters that they would enable people to retain their gains in standard of living and, in addition, that a Labour government would provide improving health, social and educational services. By 1960 it was clear that the policy of encouraging consumption [especially as a growing minority of the population were maintained n benefits that were set at levels that allowed a 'reasonable' living standard] was causing government spending to increase; in some years at the cost of increasing the national debt. The balance of payments steadily got worse. The Labour leader, Harold Wilson, captured the principle that the economy had to grow quite spectacularly if the delusional consumerist state was to be maintained: how was the necessary productivity boost to be achieved? His answer was to enlist pure and applied science: wealth was to be generated by the 'white heat of technology'. On this slogan, with the electors displaying widespread boredom with the Conservative government, Labour narrowly won the 1964 election. A larger majority was obtained in a snap election two years later, even though it was becoming apparent that technology was not a magic force: so the government turned to the old socialist idea of comprehensive economic planning.
By the late 'sixties the policy of plenty combined with worsening balance of payments was producing rising prices. The trade unions began a round of strikes, that made nonsense of the targets that had been set in the National Economic Plan. The government party depended on the financial support of the unions, whose leaders were increasingly at odds with the government. The government tried to control the situation by legislation and became factionalised: in 1970 they lost power to a superficially renovated Conservative party which quickly lost control of labour relations as inflation increased: then inflation was stimulated further by a huge increase in the global price of oil.
By 1970 it was inescapable that the way in which the two 'parties of government' competed by offering the population better and better living standards without requiring commensurate increases in real national earnings was undermining the economy. Rising inflation of prices was being met by increasing demands for more wages, in which the trades unions were usually successful. The declining Wilson government divided into acrimonious factions in the late 'sixties, in response to a paper - In Place of Strife - adopted by the Secretary of State for employment matters, Barbara Castle, which would have subjected pay demands to government oversight and to the possibility of a veto. It was thus a deeply divided Labour Party that lost the election of 1970; ceding power to Edward Heath's supposedly 'technocratic' Conservatives, who had no satisfactory understanding of the fundamental problem that had been embedded on the economy. The Tories quickly superseded Labour as 'the worst-ever government': and the sad saga of the 'seventies will from the next episode in this series of blogs on National Versus Local Pay Rates.
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