Wednesday, 28 September 2011

Britain's World Status:

A real problem in Britain today is definitely how we view ourselves, on one hand we view ourselves as the pragmatic defenders of liberty, the ones who helped see of the Nazi's then quietly began to dismantle our empire as the Americans took over. In the modern sense we tend to be very negative about our own chances to become something better, we think we suck at making and doing everything, we think we have a terrible government system and that we are all lazy and useless, thing is all of this is totally contrived and wrong, yet i think it explains a lot about our society today.

The first part is fairly obvious, it makes quite a few people a lot more racist than need be and makes it very hard to apologies for unanswered crimes against many cultures, i mean i do think the Empire did have some good qualities for the time, they tended to export liberal ideas about equality before the law and strong private property laws that were initially well received in places like India where people were used to having there property spontaneously taken by local dignitaries. But at the same time there is the stuff like the tens of millions starved to death in India to keep up the price of certain exports, or the whole half the population dying out in Ireland due to no aid relief that the country has never recovered from (8 million to 3 million in the space of about 5 years, and you wonder why republicans are a tad sensitive about you taking the piss out of there accent.) Also, it builds an idolized idea about the state of our society back when, which gives more unneeded fire for conservative rhetoric.

Still the second is the one that most irks me day in day out. The idea that we can't make anything firstly makes me annoyed because it tends to be blamed on the Unions, who granted played there part wiggling the growth figures but were ultimately a small part of the problem, secondly it makes me annoyed because it tends to come from a position of no idea about how we relate to other countries, so here is some British econ history done very briefly, and some stuff about free trade. All stats are rough estimates.

So firstly, in 1948 Britain was actually looking like it was going to be the golden boy of Europe in terms of growth figures, its industry was back on track, its debts kept under control from post war inflation and austerity measures imposed by the Atlee government, the NHS provided the grounds for a healthy workforce and generally things were going relatively smoothly, until conservatives got in. Now its not that conservatives are bad with economics (though its a part) but due to a trade union system that had little central control and very militant grass roots there were a lot of pointless, and disruptive union actions, it was also very political as it was felt that England had modernized and the old class privilege had eroded, they were now citizens not servants. A larger part of the problem was that there was a government in that had no scope for what to do with the half finished plan the Labour party had set out with, they were aversion to fights with the Unions, so Unions often got their way, but worst of all, was that they had no idea what to do with the nationalized industries, let alone the rest of the economy. This is the big issue because what was needed at the time was a serious industrial plan to bring the economy upwards faster, Germany did this by managing the unions, keeping wages low but with a social security safety net while giving incentives to small business's, the Netherlands nationalized their finance and used it to pump money into the other services and France nationalized industry to pump government investment into it.

This was the key problem, for while the Netherlands, Germany and France all soured in growth throughout the 50's and on wards, the British and the Irish were the only ones to not meet their growth targets (Ireland because they initially focused on creating a land owning small farmer ideal for its people and failed). This is a systemic issue with our country, we tend not to directly invest in our industry at all, Ted Heath bought shares in company's, Labour nationalized services but didn't do much else to them. This was alright while there was little inter country trading but when the barriers went down we did suffer, we didn't need to suffer in the way Thatcher led us to, but the system did need resolving, it still does, and it revolves around actually working with the Unions and founding a proper plan for investment into our industries.

Secondly is about free trade, now a lot of people tend to think China has us horrifically outprices, and if you think of it in terms of wages then you would probably be right, you can't really compare 25p an hour to £6.40 that is i think roughly our minimum wage. But in industry wages only account for about 5% of the total cost of running a secondary industry. The main money is in the 100 million or so to set up a factory, the millions in getting the machinery and buying the stock afterwards, the cost for line workers is tiny so even a big gap is ultimately a small part of the issue, this is why we loose business but the Germans still have a lot of it. This brings me back to my point about planning and investment, it isn't hard to beat wage competition if we invest in our industries, and by that i mean the government collects tax money and directly invests it in infrastructure and the companies themselves, get them better machinery and they will be able to stay ahead of the Chinese undercutting them.

Of course, we may not even want that with our many other business ventures in the services and high tech fields.

What i am trying to point out is that England isn't in some deep seated decline, nor is it hopelessly doomed to be devoured by the Asian giants, our problems are real and achievable and they don't exist in the over-romanticized lessaiz faire system we had before the 20th century.

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