From the archives: 15 months on, has anything changed in global economics?

I posted this piece on May 23rd 2010. In the light of yesterday’s stream of banalities from Ben Bernanke, I have seen and heard nothing in the interim to change my mind.

Tomorrow, I’ll be offering an analysis of Ben in the Wyoming Hole. But in the meantime, you might find this interesting reading.

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ANALYSIS: The last thing capitalism needs is a new orthodoxy.

Capitalism has lost touch with its consumers.
The only way it will solve this is by getting bourses
out of the way.

Pimco’s Bill Gross tried to sum up capitalism’s problem recently at a New York meeting of Mammon’s biggest brains. He said:

“The Republican orthodoxy of lowering taxes is broken. The Keynesian orthodoxy of government spending is broken. What we really need is some new kind of orthodoxy.”

Mr Gross is a little late in asking for this (some of us have been doing it since 2004, and better folks than me for much longer). But nevertheless, his honesty is a refreshing change from the mix of compulsive mantras and third-grade insults one normally gets from corporate America – or most other places for that matter – whenever you dare to suggest reform.

I’m not sure we need an orthodoxy at all. The trouble with orthodoxies is, they’re fine until something or somebody unorthodox comes along. Creativity thrives on unorthodox thinking – and if there’s one thing capitalism hasn’t had for nearly forty years now, it’s creativity. Capitalist thinking keeps on revisiting old ideas, and burning creative people at the stake. In this sense, it is very little different to the Spanish Inquisition – in which an unorthodox, anti-cruelty religion thought it could advance its cause through the cruel enforcement of orthodoxy. There’s a gag about orthodoxymoron in there, but I can’t be bothered: it’s Saturday and I’ve just been mowing the lawn in 32 degrees of heat.

I’ve felt for a few years now that linear thinking about ‘the next stage of capitalism’ isn’t going to cut it. I’m also double-dog certain that no politician is likely to come up with the answer, because they’ve all convinced themselves that philosophy is dead. People who spout that sort of piffle really mean, “I’m bereft of ideas”.

If I were one of those captains of the big league meetings organised in the Algonquin twice a year to shoot the breeze on this sort of stuff, I hope I’d have the nerve to suggest two things: first, enumerate what the problems of capitalism are; and second, look at what’s changed since capitalism was invented. Then you might understand why you’ve lost the plot.

I’d list its truly serious problems in question form as follows:

1. How can capitalism be made to work without the need for everyone and everything to be in debt all the time?
2. How can capitalism get itself some new methods of raising money that don’t involve all of us having to deal with vulgar barrow-boys and gentleman safecrackers?
3. Is capitalism capable of seeing that committed, onboard shareholders are likely to make better partners than investment banks, hedge funds, neurotic assurance providers and governments?
4. Can capitalism think up some more planetarily safe goals than materials rape, atmospheric muck, mass production and private profit?
5. How can capitalism thrive in a balanced, happy society and vibrant culture – without causing people, marriages, banking systems and computers to have breakdowns?

You may detect some doubts about capitalism per se in all that, but if so you shouldn’t mistake that for my membership of other clubs ranging from dictatorial command economies through to tree-dwelling communes that recycle their farts for the common weal. I’m trying to look forward here – hence my second point about what’s changed since capitalism got off the ground, and began to walk on all fours.

The system which inspired the one we have now started as a servant of agrarian needs. People had sheep, and the wool had to be knitted into clothing. They had wheat that needed to be gathered. They had horses needing carts. And as the population grew, all these things had to become more efficient. So other people made spinning machines, mechanical harvesters and traps for ponies. They built places called manufactories, they employed people there, and they moved from subsistence to surplus -that is, making lots of capital. With this achieved, they used the capital to improve and expand.

The key thing to note here is that while the population was growing, there was no overpopulation. There were also no consumer goods sectors, cars, retail parks, hedge funds, welfare systems, housing markets, international banks or insurance providers. There was a small stock market, and one or two investment banks usually run by people called Rothschild. And there was no tradition of We Must All Have Loads of Money.

This epoch (from the mid eighteenth century onwards in the brand-new United Kingdom) also had many things we don’t have. These included a vicious penal system, grinding poverty, aristocrats with the money to back up their power, almost universal marriage, a house in the country because that was where they lived, and a religion that preached salvation in the next world rather than great wealth in this one.

The Sun headline is that finance existed for the system (not the other way round), most people were in touch with the land, there were no populatory or ecological problems….and the vast majority of citizens were content with their lot. None of these rules apply today, but – after several failed attempts to replace it – capitalism is still around.

What I’m suggesting is that the five searching questions I enumerated earlier show that capitalism has made the fatal mistake of those who fail to succeed under that very system: it has lost sight of its market, and its competitors’ innovations.

It hasn’t noticed that its consumers can no longer afford to consume. That excuses about dysfunction financial institutions will no longer wash. That small businesses and staff-owned concerns produce higher productivity, lower employee churn and clearer leadership cultures. That water is scarce, and can’t be left in private hands if those private hands are usually in the till. That carbon economies don’t seem to be a good idea. That there’s a hole in the ozone layer bigger than Australia. And that Mammon’s materialism has helped produce a society where abuse of booze, obesity, divorce, feckless fatherhood, confused children, dying communities and credit cards can no longer be dismissed as a bit of letting off steam plus a naughty knee-trembler away from home come Friday night.

To be equable for a minute, it’s worth pointing out that the Labour Party, most of the political class and pretty well all the media (with one or two admirable exceptions) haven’t worked this out either. But that observation isn’t going to put butter on the parsnips: the fact remains that free-market capitalism, under which we sell more and more to people with less and less, is a system doomed to failure, likely to evoke the very social unrest it avoids, and in need of some very seriously unorthodox thinking.

Ironically, the good news is that contemporary capitalist structures are mutually interdependent. This has also been the bad news since 2007, but for serious reformers it is in my view a blessing: remove the core daft idea, and a lot of other stupid practices will disappear with it.

A good example of this is the principle of remote shareholders in plc’s, whose aims are often antithetical to those of the company. Discourage them, and you almost immediately remove the need for analysts, demands for 25% year-on-year growth, bullying employer practices, and the existence of insurance providers as major players on the world’s bourses.

I believe that public quotation – and the spurious ‘services’ that go with it – are at the heart of capitalism’s disease as a system: the existence of risk is replaced by the demand for reward. The sensible approach to marketing in an ecologically dangerous environment is replaced by the desire to flood the market with crap that breaks down within a year, and thus requires replacement and recycling. Take public quotation out of the equation – or better, give it a far smaller share of the money-raising market – and the mass production/higher profit obsession goes with it.

The system’s internal illogic centres chiefly on debt-fuelled consumption, but this too stems from the need to give the bourse men targets. In a sane world, if you have a recession, the management takes a profit holiday, looks closely at its employee/product line configuration, and waits until people have money again – by which time (hopefully) the marketing folks have studied what this changed consumer needs, rather than just what he or she say they want.

Perhaps the one thing most out of step with human and planetary needs is globalism. The very fact that we are told daily it must be the future is the best guarantee that it won’t be. But without a system based hugely on bourse-raised finance (and the inbred, intrabank trading lunacy that goes with it) the globalist argument – flimsy as it is anyway – implodes.

There is no bottom line in this analysis; but there is a starting point, and it’s this: look at more diverse, community-based and motivating models of company ownership. Get the workforce into a new capitalist form that offers them reward for hard work and ingenuity. Rely less on bourses. And stop the crazy domino-globalism in the banking system.

The world is not a community – any more (as we’re seeing right now) than Europe is a Union. People relate to manageable pack-sizes, and the communities they crave are dying because retailers got into a City-fuelled pissing contest. Move on from bourse-dominated capitalism, and a whole raft of other problems will start to get solved along the way.

20 thoughts on “From the archives: 15 months on, has anything changed in global economics?

  1. Much food for thought here, John, but perhaps I could encourage you to drop a few of your worries.

    First, the hole in the ozone layer seems to be no problem at all. A British Arctic/Antarctic scientist noted in the 1950s that thin patches came and went. Nothing to do with CFCs then, so not now; and the thin patches are still seen to come and go. An artificial scare from the start.

    Global warming: people who look into this with open minds find the hypothesis entirely unconvincing, and unsupported by evidence sufficient to promote the hypothesis to theory status. I for one believed the story because the newspapers proclaimed it for years. Then, for a little while I was able to lift my head from work, recall what I knew of the history of Earth’s climate, do a little research, and finish up laughing at myself for being so gullible.

    As for water, the H2O molecule is pretty sturdy. Its availability varies in time and space, but it is all there, susceptible to intelligent management.

    How to fix Capitalism? A vast and complex question – science seems to be so much easier if one is wary of rent-seeking frauds. Come to think of it, fixing capitalism may need the same starting point, and this is much more important than imagined environmental catastrophes – though if you hear of a coming Ice Age, you are welcome to wake me up.

    Best wishes to all here.

    • Hmmm, I have lurked here for many months, but feel a reply is necessary to this comment as no one else has answered.

      Ozone – It wouldn’t have reduced becasue we stopped filling millions of fridges with CFCs and then destroying those fridges and unwittingly releasing it? CFC reduction is/was a success, just for a change.

      Global warming: Wrong. It’s happening. Slowly for sure – doesn’t matter (for this comment) what’s causing it – but it’s happening and it is a short, mid and long term threat.
      The past performance of climates is not a good guide to future performance when you change the chemical make up of that climate.

      Water: Sure, it’s still here, on the planet, but like the atmosphere it’s make up is changing. It’s getting contaminated, polluted and used for the wrong purposes. The storage aquifers, in some regions are severely depleted, some have an expected life of less than 30 years… Still feeling confident of your children’s water supply?

      Capitalism (or economic growth based capitalism) – is busted. We have a desired exponential 3%+ growth line trying to go up the graph paper and and exponential MINUS 2% cheap energy depletion line going down the graph paper. Modern capitalists and politicians are trying to say that these two lines cross at some point. Well, draw it yourself and find that point.

      Money is currently broken. The debt numbers are too big, jubilee/forgiveness/default must follow. Debts in the region of 10s, leading to 100s of Trillions are too big to ever be repaid at interest (and compound interest too!). “What can’t be paid, won’t be paid” it’s that simple.

      Fixing it: Practical/vocational education. Re-localisation. Leading to: more jobs (not so hi-tech). better food (not so varied at times), more community (not so global). If generally we (countries/humans) don’t do this slowly and voluntarily, it will come anyway, but rapidly but with associated adjustment violence.

      “The coming ice-age”. It was never a scientific theory, it was a couple of speculative papers latched onto by the popular press. Scientists never forecast an ice-age in the near future.

      Try watching a series of videos on YouTube called “potholer54 debunks”.

      • “Global warming: Wrong. It’s happening. Slowly for sure – doesn’t matter (for this comment) what’s causing it – but it’s happening and it is a short, mid and long term threat.
        The past performance of climates is not a good guide to future performance when you change the chemical make up of that climate.”

        Oh hell I’ve been sucked into the GW thing again. Each time I promise myself I won’t be, but heyho, here goes.

        Can’t assess the expertise of the contributor because he hasn’t given his qualifications. Mine are easy, I’m not an expert, I’m just another poor dumb sod trying to make what he can of all the experts who are currently formed up into at least two opposing camps and all claiming that they are right and that everyone else is not only wrong but borderline Neanderthol.

        So given that people like, Piers Corbyn who is the only person I know of who has been accurately predicting, long range, the weather all over the world for the last two years to my personal excperience are on one side versus people like Anthony Blair, ex PM of the Uk and general (proven) liar and very possibly worse, on the other, I have to go with the old maxim: assess the assessor.

        On that basis, I am prerparing for temperatures to decline rather than increase and will have no complaints if the opposite happens. I’ve done what the layman has to, judged on the who and not the what.

        As to your “Scientists never forecast an ice-age in the near future. ” I suppose we are just going to have to accept that I don’t any longer have any idea what someone has to do to qualify as being a ‘scientist’ let alone an expert.

      • @Jwoo
        I know I shouldn’t start this either but as you say ho, hum…
        Qualifications: Same as yours. Dumb sod assessing the “argument”.

        But that word “argument” is the first problem, As far as I read in the reports and assessments that are publicised – there is no argument, instead there is (No lookup done) approximately 98% of “climate scientists” from various main , sub and related fields on one side and some 2% Neanderthals (your term) on the other.

        To pivot your assessment of the validity of the consensus/argument around Tony Blair… well …

        “I’ve done what the layman has to, judged on the who and not the what.”

        Being a layman does not stop you reading, looking at graphs, assessing data and observing temperature records – the web is a fantastic source of data from official & reliable sources. Then forming your own opinion. I mean Tony Blair is politician – not a climate observer/scientists or even an amateur! Piers Corbyn- yup serious guy, even qualifications, but he may have just got lucky for a while no? Let’s judge his 30 year record when we have it eh?

        Ice-age prediction (the myth of):

        http://www.realclimate.org/index.php/archives/2005/01/the-global-cooling-myth/

        as examples.

      • @Timbo614.

        Now you’ve made me feel guilty Timbo because I’ve managed to give you completely the wrong end of the stick when I was just trying (and failing ) to be concise.

        Trust me, my brain hurts from research on the web etc.

        Two things:

        “But that word “argument” is the first problem, As far as I read in the reports and assessments that are publicised – there is no argument, instead there is (No lookup done) approximately 98% of “climate scientists” from various main , sub and related fields on one side and some 2% Neanderthals (your term) on the other. ”

        That is my first problem. If you visit websites such as ClimateRealists.com you will find numerous and I mean numerous sources for ‘experts’ of all sorts of disciplines claiming that the figures produced by the pro lobby to claim the figure of 98% was flawed (some say fraudulent) in two important regards. The first that the question was posed in a misleading way and the answer interpreted in the same way and secondly, that any scientist wanting funding has to suscribe to the AnthroGWTheory, or they don’t get any. Add to that the very obvious dishonesty with what has been going on with data such as reducing the number of temperature recording sensors (apparently admitted in published E Mails) and the reliance on computer generated models (an absurdity churning out the results of whatever and however doctored the information input is ) then we are entitled to ask questions.

        As far as I can tell the only response is name calling.

        Now the reason I mentioned Blair and Corbyn ( he may have got lucky but it is unfortunate that the Met Office can’t match his luck with their multi million pound computers) is to try succinctly to illustrate the ‘vested interests’ each side represents.

        Blair wants power and money, scientists supporting AGW want funding, the likes of Corbyn want, what exactly?

        If it smells like a pig, looks like a pig and lives in a stye, is it a pig? Who knows but I’ll taker a wild guess and it appears come down differently from yourself. Ain’t life grand?

      • @BT
        My solutions – I’m not sure that there are complete global solutions. I also doubt that wars over resources would be a solution either, it would just use up the resources quicker.

        Given the current overall situations here in the UK, mainland Europe and the US, many of which our esteemed host eloquently observes and opines on, and given the deterioration of our society, community and habitat generally it seems apparent that something, somewhere, is going to break within my lifetime(and I’m 58). What breaks first will probably control or act as a catalyst for where and when the solutions start getting worked out.

        My personal opinion (preference?) is that the financial system will break first, it also seems the system most strained. Because even though that would simultaneously break many other things and would bring about a potentially dangerous situation. The immediate effects of broken banks can be mitigated by governments. Obviously nationalisations would occur so that governments could keep the actual continent/countries running (wages, benefits, cash machines, cheque processing, credit card network, international payments etc,) But these are only the mechanics of the banking world. The other world, the casino capitalism part would collapse overnight. The bourses would go the same way, as would trillions in CDxxx(choose your acronym) which of course would leave a heck of a mess in savings, pensions etc. Many peoples “wealth” would disappear overnight, including that of the super-rich.

        The upside of this banking crisis/collapse and complete nationalisation would be the realisation by the general populace of many countries that whole thing of the trillions of “owed” dollars/euros/pounds was but an illusion. All the banks are now penniless (as they have been for while) and consequently so are most the countries they reside(d) in, so now all those billions and trillions of claims are worthless too. Further “we” the populations now “own” the remains of them, so on the debt side we now owe ourselves. Which is of course a stupid situation.

        I believe that because such a monumental banking collapse would lead to such huge losses of everyone’s savings and pensions etc that it would of necessity lead to the jubilation of the remaining private debtors who now essentially owe themselves. Then we can start all over again fairly secure in the knowledge that this situation would never be allowed to develop again in the foreseeable future (one would hope!).

        So my first solution: An Intelligent government(oxymoron?) would give banks as much rope as they need to hang themselves. Then pick up the pieces.

        Which would probably lead to solution 2: The end of, or at least the stalling of globalisation and the reassessment of how we do business with each other.

        After the this supposed “catastrophe” we would all wake up the next morning to realise that the sun is up, the air is still breathable and by our own largesse (by proxy) most things, the important things, are still working after a fashion. Food is still growing all over the planet and we need to shift it around pronto before it starts going off. International agreements (possibly without money changing hands immediately) would be worked out. Speculation in food might become a crime, ending another pointless capitalist/opportunist game. But don’t look for any luxury imports too fast, food and energy would be the priority and that is what would be prioritised. Communities would of necessity work together, and might find they like it! A return sanity one might call it. Capitalism would of course survive all this, but I think it would undergo radical change.

        Well, you asked :) Now you can tear it apart…

      • @Timbo614: You may want the financial system to break first. Well, it already has partly broken due to being allowed by Mr Brown to take part in the global casino. If it completely broke then expect the economy to nosedive immediately because like it or not, the banking system is the artery of our economy which moves all the money around to pay bills, make loans to business and pay interest on our savings etc etc. Take all that away and you don’t have an economy for more than about 24hrs. From then on your nation seizes up and poverty takes hold.
        The solution is to apply effective regulatory oversight over the financial industry to avoid/prevent abuse by its operators.

        The idea that nationalisation of the banks will solve anything is laughable.
        I know of no nationalised industry that has ever operated in the public interest.
        Before he was thrown out of office, Gordon Brown floated the idea of creating another quango where disgruntled “borrowers”could go to if they were refused a loan by their bank and the quango would adjudicate on the matter. If it agreed with the borrower then the bank would be forced to make the loan. Does any sane person really believe that a Brown quango would have better judgement than a bank? It would have become yet another giant socialist slush fund with hoardes of Labour-luvvies being given unsafe loans which eventually would be backep up by the taxpayer. It was Brown madness, but then he is a Marxist so it’s to be expected.

  2. I for one think that until the idea of Globalisation is knocked completely on the head there can be no change. Trading blocks are bad news too as they do not allow countries from protecting themselves from the greed of Global corporations whose only motive is maximising profit and (at the expence of) no local responsability.
    Capitalism is a good model when working locally – but Globally it is destructive. Offshoring (and the like) has become the watchword of the day for Global corporations who care nothing for the local economies they wish to dominate. Take over and cartel forming cannot be resisted in a Global aspect. None of which are good in a capitalist model.
    Where you have close to slave labour in a production market it is impossible to compete for countries which have an established goal of a reasonable standard for all.
    I can see no answer unless trade barriers become the norm, encouraging local employment to avoid tariffs making foreign products more expensive to produce than locally produced. Thus enforcing companies to make the trade off between production locally (or services provided) or competitive companies springing up to replace their goods. It may be that copyright and patent law needs reforming to encourage this, though compelled Licencing of Patents may be an answer (with fairness overseen).
    Whatever happens, there can be no growth along with sustained living standards unless something big happens to the ‘Corporate greed’ model which is where we are, as opposed to a much cleaner Capitalism. In countries where living standards are low, there can be no improvement unless their low wages are substantially increased. Under the Globalist model however, the people running the show will just move production elsewhere to avoid higher wage costs. Globalist benefits no-one long term unless you are part of the higher eschelons and gaining more than ‘fair return’ on the backs of everyone else involved. Taxpayers included.

    • Abandoning globalisation would immediately and seriously adversely affect consumers by going over to protectionism thru import taxes.

      In the short term (perhaps even long term) that would mean a massive reduction in the range of goods available in British shops because we don’t make or grow much stuff these days and people would not pay the high prices of imported goods (unwilling or unable to). It also means the price of British goods would increase due to reduced competition, and the quality probably lower over time (if not immediately) because R&D investment would be reduced (why invest in R&D when you have no serious competition?).

      Several specific products come to mind where Brits would feel seriously aggrieved by high import taxes: motor cars. If the price of your VW/Audi or BMW/MB went up by (say) 25-30% overnight due to import taxes, how would you feel about that? How about the cost of a home PC going up by 30% overnight?

      I’ve just spent three months in Brazil where import taxes are rampant by their socialist government. It may increase local employment but consumers are being screwed left, right and centre. Locally made cars are virtual junk by comparison to what we get from Germany but the prices are high relative to local wages and technology is way backward.

      • Yes – I realise the downside – but it isn’t all about cheap goods. It is about social responsability and local employment, bringing back ‘making things’ !

        If the price of my BMW went up like that then I would expect a UK company to start up and produce something I would buy for less which is the whole point or BMW to produce in the UK thus socially supporting the UK market with jobs.

        The thing is you do not need tarrifs on everything – raw materials for iinstance which can then be turned into value added goods which can then be sold in the home market and abroad by negotiating trade deals which satisfy both markets. Before the WTO things pretty much worked this way and the greed of corporates was less.

        Don’t get me wrong – I have no problem with people starting a business and making themselves wealthy in the process. But social responsability needs to go hand in hand by providing jobs and therefore cash to be spent in the local community – encouraging more business.

      • Well I’ve started so…
        @Bankrupt Taxpayer
        “Abandoning globalisation would immediately and seriously adversely affect consumers”

        But only short term. As pointed out by MorningStar. The short term pain would be worth it for job and underlying local prosperity gain, surely?

        If it stopped consumers buying stuff with a designed in lifetime from the far east that would also be a good thing. If it stopped consumers buying instant plastic garbage from the same sources that too would be a good thing. If it stopped the madness of thousands of container ships traversing half the globe to bring them this stuff, that is then buried in landfills, surely that would be a global good.

        In the recent past, during the industrial “commoditisation” of nearly everything consumers, (I hate that word), consumers were unaware of the quality that could be achieved even cheaply if is was desired by manufacturers. We know now that “quality” can be done and at a reasonable price. We all know that goods that don’t wear out quickly can be made. We also know that they do wear out because the industrialists want us to buy another newer shinier one. But that’s all they are newer, shinier but just as short lived.

        Also a couple of newsflashes: Personal computers have gone up by 20-30% recently. Energy has gone up 10-20% overnight recently. Sugar has gone up in the region of 50%, bread the same. The price rises are happening anyway – and that’s because we are in a global market, where world events and world-wide speculators control our prices and the contents of our stomachs!

        Simultaneously “customer service” (why don’t they call in “Consumer Service”?) has gone from patchy to almost universally atrocious. All modernisation and technology has achieved is billions of hours of customers wanting “service”, waiting on phone lines listening to muzak and paying for the pleasure. Again all it has achieved is a shift of costs & time to the consumer.

        “In Brazil Consumers are being screwed left, right and centre” – and in the UK/Europe? What’s new?

      • @Timbo614: “But only short term. As pointed out by MorningStar. The short term pain would be worth it for job and underlying local prosperity gain, surely?”

        “Short term?” How soon will it be before I can buy home-grown bananas?
        Note: I will not compromise on this! You must tell me!
        “Short term pain w/b worth it?” That’s surely a subjective view. No?
        “Underlying prosperity gain?” Sorry, you’ve lost me.

        There may be differences between peoples’ understandings of what globalisation means. To me it essentially means the global trade of goods/foodstuffs that go on, the exchange/transfer of labour costs that it sometimes requires and the movement of capital/investment required to finance it all.

        If anybody wants to argue that a lot of globalisation activities go on that are surplus to these processes, they’ll not find any arguments from me and I’d welcome a reduction in them; it wouldn’t adversely affect global trade proper. But if anybody wants to end global trade of goods/foodstuffs, IMHO that is madness and unacceptable…it would affect national consumers and also the prosperity of whole nations because we buy goods/foodstuffs from developing nations to help their economies in the same way we buy German cars because of quality, resulting from the huge R&D investments they make. And if we stopped all global trade, how would people in (say) Brazil connect to the Internet? because they don’t really have an indigenous IT industry worth a shag.
        Perhaps you think they shouldn’t have access to IT?

        Bottom line: there are a lot of global activities that go on which are daft and wasteful to human/natural resources but that is not a reason to end it, rather a reason to make it more efficient and beneficial.

  3. BMW already has manufacturing plants around the world. Ditto VW/Audi, MB and a fair number of French/Jap/US car manufacturers, which helps local employment (but rarely product quality IME). But seen thru the eyes of the parent nation’s citizens that is “offshoring”…something that they dislike, and those against globalisation frequently complain about. A Catch 22 methinks.
    And as sure as eggs are eggs, if BMW opened up a plant in the UK, it would not produce the quality products we see from Germany and would be at risk of being disrupted by trade union commies like British Leyland was in the 1970s. The best we could produce in that era was the Morris Marina and Austin Allegro! Urgh! And look what happened to our white-goods industry: ruined by poor product design/low reliability/low quality/high prices and trade union disputes.

    I stayed with a friend of over 20yrs in Brazil who has spent a lot of time in the UK. His standard mantra is “Brazilian goods are complete crap but very expensive”…and he’s absolutely right. Even Brazilian made VWs, Chevrolets, Fords et al are simply not up to the quality standard but locals are obliged to buy them because imported cars carry very high import taxes (over 35%) and are prohibitively expensive, quite deliberately.

    I can certainly accept that some aspects of globalisation need looking at very closely – particularly product dumping and creative tax accounting that occurs. But Britsh consumers would be very unhappy to find imported goods hit with import taxes and other protectionist measures.

    • They do not coomplain too much about the increased costs of CAP protectionist products ? Besides, there would be no need to have a tariff on say – bananas – because they could not be grown here.
      The lousy production standards of the past which led to the downward quality and therefore destruction of many UK industries had many causes but it was mainly greed ! Cheap manufacture expensive labour was the combined policy of both the unions and the management. But this happened most once the competition was eroded through nationalisation. Rolls Royce was never part of the nationalisation, had and still has a name for quality, reliability and excellent service. Thus it has survived though not in UK ownership due to Globalist takeover policies. Globalism encourages cartels and ‘golf course agreements’ and destroys the capitalist model of competition and quality. Cartels stitch up everyone except the top eschelons of the companies involved.
      Take for example the ‘travel companies’ in this country. The 2 largest (yes I know about the parents companies involved) have taken over all of the others between them (whatever happened to the monopolies commission ?) who have developed the same business model with slight (I would say agreed) differences. They both now charge handsomely for all the extras, reduce the services and charge much much more (though vaguely similar when extras are balanced) than it costs to put a holiday together yourself (many people rely on the ‘package model’ for various reasons). This along with the falling prices of hotel stays globally where tourism is a major aspect of various economies should see the costs falling – but the ‘golf course’ cartel keeps increasing prices. Both could corner the market by reducing profit per room/person but neither do so it is logical that some sort of ‘agreement’ has been reached. At the same time – rather than have cheaper available holidays – both decreased the amount of holidays available in order to ratchet up the price which has in effect stifled the ‘late deals’ market. Any competition would be rapidly taken over to prevent a different ‘business model’ gaining any sort of growing market share.
      This is a pet subject as my parents ‘need’ the package system and are being (I think) swindled out of their life savings for Corporate profit. I could have written pages of essay but time and space are a limiting factor.

      • I sort of agree with your examples of abuse by cartels etc.
        We see the same thing happening in the US by Microsoft etc and we see many other examples.
        But I do not see any of them as justification to end globalisation, rather better to apply ‘effective regulatory oversight’ to prevent the abuses, discourage casino capitalism and help to ensure that multinationals (and everybody else) behave more responsibly. As always, the roadblock to a better world are venal and incompetent politicians with agendas.

  4. @BT @ 6:01

    I knew I shouldn’t have started this I’m probably not smart enough.

    “How soon will it be before I can buy home-grown bananas?
    Note: I will not compromise on this! You must tell me!

    I doubt you’ll ever buy a home grown banana without some expensive and increasingly-expensive-to-heat greenhouses. They are tropical generally but I’d be pretty confident there is one growing somewhere in the UK:) But that’s not your point is it.

    Many starving people on this planet have possibly never seen a banana even though they live on one of the continents that produces them for your culinary delight. Some banana farmers have had their land “stolen” by western interests/capitalists and scrape an existence these days growing your breakfast banana. Exploitation and virtual slavery/serfdom is rife in the countries that produce your banana and many other foodstuffs, some that you seem to deem it your right to eat. What’s would be wrong with an English apple in its place? Don’t then tell me that banana farmers starve, I don’t buy that as a consequence. Bananas would still get sold and bought without the west’s interference and profit margin.

    Short term pain.
    “That’s surely a subjective view.”

    Everything is subjective to a point. It’s an additional problem with society too – sacrifices are never to be made “I want my banana now, now and yesterdays and tomorrows”.

    ““Underlying prosperity gain?” Sorry, you’ve lost me.”

    Not all prosperity can be measured in money terms. Take our current crop of dissatisfied youngsters. Finding them something constructive and rewarding to do would go a long way to helping their, and consequently our, overall prosperity

    By the end if your post you have almost destroyed your own objection to mine.

    If “global”isation works so well, why are 1 billion of of 6 starving globally?

    (Sorry, but I’m out of time!).

    • “But that’s not your point is it.” True. My point is that global trade (globalisation) is essential to the well being of most countries and if we ended it there would be massive dislocation to economies to the point of collapse. Think: starving millions. Think: Britain’s energy imports.

      At the same time, I see benefits from taking a close look at the casino capitalism transactions that go on involving currencies & stock markets and to discourage a lot of them (by regulatory oversight not taxation). But the single biggest problem in getting this mess sorted are venal politicians. Recall that Gordon Brown actually gave speeches during his hey-day which encouraged Britain’s financial institutions to be involved in the global casino, partly because of the tax revenues they produced for him to throw about and partly to support his claim that he’d abolished boom and bust. ho ho. A few people even think Brown destroyed the UK economy deliberately because he hates the English and it justified more Big Govt controls. Since he’s never been held to account for his grotesque mismanagement , we’re unlikely to ever know.

      There’s plenty of room to improve globalisation and remove the abuses, but not to end it unless you want to return to the stoneage.

      I won’t comment on the rest of your thoughts as they seem to be socialist bleeding-heart utopian stuff, not practical solutions :-)

      • @BT
        “socialist bleeding-heart utopian stuff” definitely not,I was on my second Guinness by then :) and had been writing for over 2 hours (“readable prose”, if it is that ,does not flow from my keyboard easily) – and they were parting shots as in a conversation in the pub. Ho, hum.

        Still those things do need addressing eventually, the imbalance in the world is currently startling. The US of course is much to blame and consequently they have their own set of problems coming home to roost. But we (the UK and prior empire) are to blame for setting up systems like that in the first place the rest of the west has just taken it too far – the exploitation that is.
        So something must be done, unless you are actually prepared to watch a lot of people starve when there is actually enough food for all?

        You are of course spot on with the politicians, because that is all they are period. They are not leaders, they are not thinkers, they are not forward looking, they don’t even seem to have any modern economists, they are simply the continuation of a world-weary British establishment. They seem to think along the lines of “Hey, we are the British government. That’s good! We are in charge of an established, ex-empire wielding world power. What can go wrong?” Poor delusional popularity seeking fools.They talk a sort of talk, then U-turn even on that when there is the slightest clamour of disapproval.
        I only voted for them because it was obvious that the current Gov’t was F****d and had to go – so it may as well be decisive. Poor delusional me! My preferred option would have been “none of the above”.

        To say I’m disappointed in the current gov’t would be an understatement and Obama too, expected good things from him, but he too is a bankers man.

        To sum up, I’m convinced that the banking/financial crises is not something that governments & countries, let alone individuals can overcome with out another bigger crash that exposes the whole crumbling empty-shell ponzi-driven edifice for what it really is and wakes people up to how this broken and out of control system is very, very bad for the whole world at a critical time. It is not the place or purpose of national government to bail out banks, it is not their role in things. Governments the world over, have meddled in things beyond any realistic hope of their control, and have done so at their (and our) peril.
        I have only studied this since crash 1 and from that reading/study it is obvious that we are breaking the fundamental rules of our own capitalist system where banks are concerned by not allowing bankruptcy to occur. If we don’t allow bank bankruptcy it will to go on until there is nothing left that is not owned by banks – countries, continents, the planet. And they will still want the planet to pay the interest. By doing what? Finding another planet?

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