Britain's decline was inevitable.

[cardigankid]

JagLover said:

This thread seems to have the usual manufacturing=good services= bad ethos on PHs.

Seriously what adds more to the economy a Cotton Mill or an R&D centre, international tax advice or banging some metal with a hammer.

What Britain requires is exports which may well be manufactured goods but not necessarily.

Moreover in terms of total manufacturing output we are not doing too badly. It is simply a declining share of the economy and employment due to higher productivity in that sector.

One final question if a manufacturing company subcontracts out it's cleaning, accounting, security etc to specialist firms, has manufacturing employment fallen and service sector employment grown?

There is nothing wrong with service industries but it is misguided to think that you can have a strong service sector if you do not also have significant manufacturing, agricultural and academic bases. It is a matter of balance. If all the money is being generated in China, who, ffs, needs or wants to employ tax advisers based in London, never mind Manchester, Glasgow or Edinburgh. For a period of time we were important as a major consumer of other people's products, now we can't afford them that importance is going to diminish rapidly. If anybody doubts that check the prices on the German Porsche website, and translate them into Pounds Sterling.

I have got an email invitation to a 'networking event' today, no doubt along with half the adult population of Scotland. There is a list of attendees attached - and they are all professionals of one sort or another, recruitment agencies, event organisers, architects, 'business developers' for hotels, financial advisers, and one general purpose wiseguy who just describes himself as a 'consultant'. It is being held in an Aston Martin showroom, so naturally I will go, but only to have an undisturbed poke around the cars. I am sure that they are all great people, but how long do you think we can sustain an economy this way?

What politicians of all colours from Margaret Thatcher to Gordon Brown really meant by a 'service economy' is a strong financial sector, because they have this belief that the City of London can generate enough money to carry the rest of the country, and thereafter it is just a matter of keeping the money going round by taking on more public servants and maintaining spending. That is the sum total of Gordy's economic masterplan. The City cannot nor does it particularly need or want to try. What it does do is fleece the unwise and redistribute the proceeds. Brown, like every socialist politician since the dawn of time, thinks that the solution is to tax the rich more. They always have money, don't they? Of course that means tax the middle classes. I think I can detect the faintest of dawning realisation in that idiot's head that the middle classes have paid all they can, and now the milk cow is dying.

There are good manufacturing companies and good people in Britain, just as AJS said. There always are, but they are being strangled by the interference, excessive overhead and political priorities of our Governments. Since these are elected by the majority who are now subsidy junkies, it is hard to see a way out.

The Romans pulled out of Britain around 400AD. Should that not have taught us something?

Edited by cardigankid on Thursday 19th March 08:06

[shoestring7]

GavinPearson said:

Disco_Dale said:

thehawk said:

Amongst the thousands of companies that have sent work to India/China there are a large percentage that were actually very profitable and/or made good products. The sole reason they sent work to China or India was because they could produce even more profits, even if that meant screwing over thousands of their UK based workers.

I give you exhibit A, Sir James Dyson.
Perfect example of the above. A friend worked for them as a design engineer and was appalled when he sent the manufacturing abroad.

We can make stuff in this country still and we can export it, but we need companies with visionary leadership that see the bigger picture.

If Dyson was really smart he would design his products for automated assembly and not even have to pay foreign workers to assemble the product. He could do it right on his doorstep and make even more money.

If the government was smart they would make the business tax laws encourage that sort of expansion.

That strategy's not really going to create massive UK employment is it? I don't blame Dyson; he needs to compete in his market so has to reduce his production costs. Transferring production to Malaysia (an educated English speaking workforce) was a good decision).

As for tax, I think that Germany is particualar has a corporate tax regime that incents r&d investment and penalises short-termism. If that's the case we could do with some here.

SS7

[cardigankid]

But what happens is the quick buck is what matters, and if it's wrong in the medium and long term perspective, too bad. That is what comes of the total worship of finance we have in UK. Companies are forced to trade beyond their capacity, and ultimately to project profits they cannot actually realise, and every penny is then wrung out of them in income or capital or sale value or break up value, to give to bloody financiers. That's why they have no capital of their own.

And before I get a lecture about efficient allocation of capital, let me point out the bleeding obvious. A company which is not burdened with excessive debt is always going to be more secure and more profitable than one that is. And the money that is secured through share issues is secured at colossal cost.

Finally, and I am sorry if I am back on a hobby horse, but it is all inter-related. The whole attraction of Climate Change to politicians, is that they can tax us more heavily, restrict our freedom, and reduce our standard of living, based on nothing more than claptrap propaganda of which none of us will ever see any physical proof because the supposed timescales are so huge, while preserving their own lifestyles and those of their families, and claim that they are 'saving the planet'. It is the biggest most beautiful fraud in history, if it works, and if you think about it, how else are they going to go forward, having bust the nation with their foolishness and irresponsibility? And none of it, not one penny, is going to help the environment in any way.

We are all going to be peasants again, that is if we stay (and the window of opportunity for leaving is rapidly passing.) Clogs to clogs in fifteen generations, to paraphrase the old saying.

Edited by cardigankid on Thursday 19th March 09:20

[bosscerbera]

Lessons for the west from Asian capitalism

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-...

"Asians will naturally view with caution any western advice on economics, particularly because most Asians believe that the crisis has only vindicated the Asian approach to capitalism."

"The desire for an orderly society is deeply ingrained in the psyche of all Asians, which helps explain why virtually all Asian states hesitated to copy America in deregulating their financial markets."

[derestrictor]

My God, the boy 'kid is truly spouting some of the best stuff seen on PH for years: brilliant.

Semi-O/T, I couldn't help a self-induced bout of apoplexy a couple of days ago when I heard of Bliar's other half's involvement in that class action on behalf of the Merseyside pension fund which was going after Fred the Shred and RBS in the US, effectively on the basis that they (the bank) and Fred knew their investment was in a teetering enterprise and thus, it was all a bit dodgy, etc.

It seemed just a little rich that this bastion of the bourgois intelligentsia whose family were benefitting to a level of post Prime Ministerial uber wealth (way beyond that of Fred's paltry pension pot [not that I approve of that, btw]) now, having effectively championed the presently reviled concept of 'light touch regulation' and by default, during the Bliar tenure, benefitting from the 'bubble' that 'Fred's ilk' effectively concocted - was now happy to suck on his bones, as it were, professionally even though he was without question, an architect of the culture (which her family had cultivated) which had delivered 3 electoral sweeps and by natural default, her own fantastic wealth.

The hypocrisy of this grotesque Islingtonite is just beneath contempt but her worthless leach like existence is in many ways part of 'the swindle' which has seen this country's entrepeneurialism ground to near dust since 1997.

Do as I say, not as I do and all the while, take, take, take.

Seething barely covers it.

[Bing o]

bosscerbera said:

Lessons for the west from Asian capitalism

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-...

"Asians will naturally view with caution any western advice on economics, particularly because most Asians believe that the crisis has only vindicated the Asian approach to capitalism."

"The desire for an orderly society is deeply ingrained in the psyche of all Asians, which helps explain why virtually all Asian states hesitated to copy America in deregulating their financial markets."

I liked this:

"It is telling that, while Y.V. Reddy, India’s former central bank governor, was occasionally vilified by his country’s media for holding back on deregulation, he has now become a national hero. His stance saved India from the worst effects of this crisis. China was equally wary of deregulation. Indeed the Chinese leaders may have understood earlier than most that America was building a house of cards with its reckless creation of derivatives. Gao Xiqing, an adviser to Zhu Rongji, then Chinese premier, said in 2000 that “if you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullst. They are crap. They serve to cheat people.” Mr Gao said all this while Alan Greenspan, as chairman of the US Federal Reserve, was waxing eloquent about the economic value of derivatives."

[RichardD]

bosscerbera said:

Lessons for the west from Asian capitalism

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-...
...

FT.com said:

You have viewed your 30 days allowance of 20 free articles. If you wish to read more, please subscribe.

[bosscerbera]

Bing o said:

bosscerbera said:

Lessons for the west from Asian capitalism

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-...

"Asians will naturally view with caution any western advice on economics, particularly because most Asians believe that the crisis has only vindicated the Asian approach to capitalism."

"The desire for an orderly society is deeply ingrained in the psyche of all Asians, which helps explain why virtually all Asian states hesitated to copy America in deregulating their financial markets."

I liked this:

"It is telling that, while Y.V. Reddy, India’s former central bank governor, was occasionally vilified by his country’s media for holding back on deregulation, he has now become a national hero. His stance saved India from the worst effects of this crisis. China was equally wary of deregulation. Indeed the Chinese leaders may have understood earlier than most that America was building a house of cards with its reckless creation of derivatives. Gao Xiqing, an adviser to Zhu Rongji, then Chinese premier, said in 2000 that “if you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullst. They are crap. They serve to cheat people.” Mr Gao said all this while Alan Greenspan, as chairman of the US Federal Reserve, was waxing eloquent about the economic value of derivatives."

American media STILL sneers at Chinese banking as "inefficient"; casts aspersions about the manner in which capital is distributed; and points out how much more China could have achieved if only they'd deregulate.

[Bing o]

bosscerbera said:

American media STILL sneers at Chinese banking as "inefficient"; casts aspersions about the manner in which capital is distributed; and points out how much more China could have achieved if only they'd deregulate.

Yes, but American media is pants at best. I think we'll see the East emerge out of this stronger than before, and possibly over taking the US in terms of being the dominant global power - they already own most of the resources in Africa.

[thehawk]

Bing o said:

bosscerbera said:

American media STILL sneers at Chinese banking as "inefficient"; casts aspersions about the manner in which capital is distributed; and points out how much more China could have achieved if only they'd deregulate.

Yes, but American media is pants at best. I think we'll see the East emerge out of this stronger than before, and possibly over taking the US in terms of being the dominant global power - they already own most of the resources in Africa.

I was bored one night and started looking at Africa on Google Earth, towns and cities I'd never heard of began to fascinate me and I looked them up as I went along. Nearly everywhere I looked up had sizeable investment and support from China for building new infrastructure - it was almost as if China is economically colonising Africa. Half the places have even got 'Chinatowns' these days.

[cardigankid]

derestrictor said:

The hypocrisy of this grotesque Islingtonite is just beneath contempt ... Do as I say, not as I do and all the while, take, take, take.

Seething barely covers it.

You said it.

What is also ironic is that since her husband's government gave Fred his knighthood I have no doubt that she knows Fred very well, which makes me think that the whole thing is a put up job, though I don't yet quite see the angle.

Just listening to that gravy train swiller 'Lord' Myners it is very clear that the whole lot of them were in an old boys network and all they were interested in was how little money they could give up to provide a 'gesture' to the masses. Same with MP's salaries. Fred Goodwin was near the centre of huge establishment web which I am quite sure was going to see Blair, Brown and many others with a string of prestigious non executive directorships and other appointments after they retired. This kind of greed finished Rome and I do not see how it can fail to finish the UK. There is nothing wrong with capitalism, but what politicians fail to understand is that capitalism, greed, fraud and nepotism are not the same thing.

Incidentally, you don't have to look as far as Asia to see long term approach, financial conservatism and a disciplined attitude to work. Just fly to Frankfurt.

Edited by cardigankid on Thursday 19th March 11:32

[Bing o]

cardigankid said:

Incidentally, you don't have to look as far as Asia to see long term approach, financial conservatism and a disciplined approach to work. Just fly to Frankfurt.

Edited by cardigankid on Thursday 19th March 11:23

Ironic that Winky Mxfknut is trying to tout the Turner Report to the G20, when the BaFin make the FSA look like the school boys that they have been proved to be.

[RichardD]

bosscerbera said:

RichardD said:

bosscerbera said:

...
China is the US's largest creditor. Whose capital?

While the US is in debt to China the dollar belongs to America and if it wants the Fed to "Quantitative ease" a few trillion to pay off debts and devalue the currency and annoy the Chinese - they could.
So ultimately who has the upper hand?!

Now THAT is a great question! The Chinese are as paralysed by it as the Americans. The last thing the Chinese want is their currency to strengthen, particularly against the dollar.

Oh look - the Fed is now printing money to buy US government debt !

Dollar slides after US Fed plan

http://news.bbc.co.uk/1/hi/business/7952319.stm

[derestrictor]

cardigankid said:

derestrictor said:

The hypocrisy of this grotesque Islingtonite is just beneath contempt ... Do as I say, not as I do and all the while, take, take, take.

Seething barely covers it.

You said it.

What is also ironic is that since her husband's government gave Fred his knighthood I have no doubt that she knows Fred very well, which makes me think that the whole thing is a put up job, though I don't yet quite see the angle.

Just listening to that gravy train swiller 'Lord' Myners it is very clear that the whole lot of them were in an old boys network and all they were interested in was how little money they could give up to provide a 'gesture' to the masses. Same with MP's salaries. Fred Goodwin was near the centre of huge establishment web which I am quite sure was going to see Blair, Brown and many others with a string of prestigious non executive directorships and other appointments after they retired. This kind of greed finished Rome and I do not see how it can fail to finish the UK. There is nothing wrong with capitalism, but what politicians fail to understand is that capitalism, greed, fraud and nepotism are not the same thing.

Incidentally, you don't have to look as far as Asia to see long term approach, financial conservatism and a disciplined attitude to work. Just fly to Frankfurt.

Again, spot on.

It's a form on loyalty free, politico-careerist cronyism and yes, it is a self-fulfilling, wanton greed and corruption allowing itself to breed.

These f@ckers are leaches on a massive scale and the Rome analogy is more than a little apt.

[yli]

bosscerbera said:

Bing o said:

bosscerbera said:

Lessons for the west from Asian capitalism

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-...

"Asians will naturally view with caution any western advice on economics, particularly because most Asians believe that the crisis has only vindicated the Asian approach to capitalism."

"The desire for an orderly society is deeply ingrained in the psyche of all Asians, which helps explain why virtually all Asian states hesitated to copy America in deregulating their financial markets."

I liked this:

"It is telling that, while Y.V. Reddy, India’s former central bank governor, was occasionally vilified by his country’s media for holding back on deregulation, he has now become a national hero. His stance saved India from the worst effects of this crisis. China was equally wary of deregulation. Indeed the Chinese leaders may have understood earlier than most that America was building a house of cards with its reckless creation of derivatives. Gao Xiqing, an adviser to Zhu Rongji, then Chinese premier, said in 2000 that “if you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullst. They are crap. They serve to cheat people.” Mr Gao said all this while Alan Greenspan, as chairman of the US Federal Reserve, was waxing eloquent about the economic value of derivatives."

American media STILL sneers at Chinese banking as "inefficient"; casts aspersions about the manner in which capital is distributed; and points out how much more China could have achieved if only they'd deregulate.

Americans actually did make a good point of Chinese banks not being efficient. In 1998 the Chinese government issued RMB270 billion bonds(roughly equivalent to USD34 billion) to raise money for the biggest four Chinese banks to improve their balance sheet. After that RMB1.4 trillion bad loans of those four biggest banks were detached from them and handed to four specially designed insititutions to absorb those bad loans. So Chinese government actually bailed out its four biggest banks 10 years ago, just like what Americans did last year.

[s2art]

yli said:

s2art said:

fido said:

s2art said:

Japan is a democratic society, so just as vulnerable to the whims of popular demand. But the point was that having an education system that emphasised facts and rote learning didnt stop Japan, and therefore will not stop China.

I have to disagree on both points. On the first point, and it is a subtle one, if 'New Labour' were to stay in power for over 50 years [god forbid] would you so easily describe this as a democratic society? Note that Japan has had the same party in power for a similar period. Secondly, I don't think their education system is as rigid as you describe - in fact they have produced many innovations or at least adapted new technologies from the turn of the 20th century .. it's that old myth that Japan simply copies .. though of course it makes sense to 'copy' to start of with, especially if you aren't the first country to industrialise (as with GB or Germany).

Japans education system was rigid during the time they were building their economy at huge speed. Maybe in recent times it may have changed, but that is beside the point.
The debate was whether China, having an equally rigid education system, would fail to compete well. I argue not, and used the example of Japan.

1, What do you mean by saying a rigid education system? Is it really the case that being rigid is incompatible with innovation thinking? Japan, especially post war Japan, has produced quite a few Nobel prize winners in physics, chemistry, medicine and literature. They also gave us walkman, Just In Time logisitics ideas. China, on the other hand, failed to produce anything on that level.

2,A good education system (how to define what a good systerm is may be open to interpretation) is crucial for a sustained economic development. But having a good education system cannot guarantee the economic prosperity. You need other things, like capital, the correct market mechanics, the political situation etc, all those things combined with the education system to realise the development of the economy. China face huge challenges on all those frontiers. No doubt that China has great potential. But to convert the potential into real concrete growth is not that easy. Personally I think China is now in a very critical point. On the one hand it could build the economy like Japan did provided China tackle those challenges well. On the other hand it may end up in trouble if those challenges cannot be resolved.

Now back to original question. My impression of UK is that UK seems to have lost their great ambition that have helped them to be the No. 1 in the past. The nation is not dynamic anymore. No goal to pursue. During the post war period UK missed the opportunity to make the full use of the new industries on which the new economy structure depends: the electronics industry, the telecom industry and the IT industry etc. UK missed the opportunity again and agiain. All you have is financial industry and argubaly the biotech industry. The once leading nation at the industrial revolutionary age disappeared and was replaced by countries that did well in those new industries. To make things worse the traditional industry also failed.

But UK is still way ahead of CHina and India. We still need to work extremely hard to catch you. I think China needs at least fifty years to reach the current position that UK stands provided China can tackle its numerous challenges well.

Actually a lot of the ideas Japan apprently pioneered, such as continuous improvement, JIT etc were developments of Western practices. Ford in particular, although the Japanese (Toyota mainly) improved on them.

You seem to have misunderstood my point. I am saying if Japan could succeed hugely with a fact and rote based education system then so can China. Perhaps a different system could encourage more innovation, but I doubt China will lack innovators anyway.

China has enormous capital it can bring to bear. I am not sure what your point is. Its not going to take 50 years, its happening now.

[AJS-]

bosscerbera said:

Lessons for the west from Asian capitalism

http://www.ft.com/cms/s/0/a9c335e4-13f8-11de-9e32-...

"Asians will naturally view with caution any western advice on economics, particularly because most Asians believe that the crisis has only vindicated the Asian approach to capitalism."

"The desire for an orderly society is deeply ingrained in the psyche of all Asians, which helps explain why virtually all Asian states hesitated to copy America in deregulating their financial markets."

I'd be interested to see how much Asia's apparent preference for saving rather than borrowing is due to purely cultural factors, and how much is do to more tangible causes. If you lose your job in Asia do you get indefinite benefits? Do you get free healthcare? Do you get long term care if you're injured or sick and unable to work? An automatic right to a pension?

I'd guess the answer in most cases is "do you fk!"

Then there's real interest rates (ie set against inflation) which have simply been mismanaged in the UK and the US by hiding rising costs, especially government driven ones, in recent years.

In my experience, rational people are rational people, regardless of whether they're Indian, East Asian, European or American. Certain individuals may be more prone to saving and certain ones will be more prone to borrowing, but on aggregate they will be broadly the same given the same conditions. Explaining it through a cultural preference for order and discipline (traffic in Bangkok!?) is a bit of a cop out, IMO, from facing the real fact that our economy has been mismanaged to a far greater extent than most Asian ones.

[EINSIGN]

Drop a cross section of say 50 people onto a desert island, who would survive...?

[cardigankid]

People in this country have been brought up for several generations now to believe that nothing bad can be allowed to happen to them. In some of these other countries there is considerably more fear of the consequences of poverty due to a closer relationship with reality. It's just another aspect of this sense in Britain that the world owes us a living.

We are in uncharted waters, for sure, and one of the issues being played out is where does the welfare state mentality end up when the money runs out.

[bosscerbera]

cardigankid said:

People in this country have been brought up for several generations now to believe that nothing bad can be allowed to happen to them. In some of these other countries there is considerably more fear of the consequences of poverty due to a closer relationship with reality. It's just another aspect of this sense in Britain that the world owes us a living.

We are in uncharted waters, for sure, and one of the issues being played out is where does the welfare state mentality end up when the money runs out.

The money ran out years ago. The answer is borrow and spend, obviously. We're well placed you know.