41 4 mins 9 yrs

We have many problems in this Country of ours. If you would allow me a few minutes of your time, I would endeavour to highlight a few; not obviously all, of course, that might take all day.

We could begin with the overburden of the State’s Machinery by which it purports to govern us, and if you check out this spreadsheet, you could begin to understand how much of our cash goes into the ever-open jaws of Government. Just by printing that same spreadsheet out, and then sticking a pin at random, there is much which is surplus, spendthrift or foolish.

We have an employment crisis on our hands, partly the result of ludicrous National and Local Government policies, partly because we are tied into the Eurozone, and there ain’t much business with the bulk of Europe. Too much of our manufacturing has been exported to Asia & China, and once the factories disappear, they never come back. Our expertise and endeavour, in so many areas, has been sold down the river for a song, and the same applies to our Utilities. The profits from our Water and Electricity bases, once our own to use as we saw fit, now disappear towards France and Germany.

Once the Armourer to the world, Great Britain doesn’t even have the capacity to produce ammunition for the rifles of the Army, not that we have so much of that particular human commodity any more, as we are busy getting rid of all the soldiers, and will be dependent upon the Territorials for 30% of Army manpower in two years time. The last tank factory is closing down, we hardly make warships any more, and as for the ludicrous state of play with two aircraft carriers, one of which will probably never sail; and there will be no aircraft to fly off the other one; so we shouldn’t really bother.

Let us turn to mass immigration, now that it is no longer ‘racist’ to even question why some five million people have been allowed to enter our porous borders, and examine why we cannot even get a Government with the balls to state ‘Stop; enough is enough!’? True, the vast majority of migrants wish to work hard and do well by their families; but deep within the five million we have allowed a sinister portion of our enemies to reside in our towns and cities, and they will never stop until they see their beloved Caliphate.

Our very Sovereignty has been handed over to a bunch of bureaucrats in Brussels, and no-one has even bothered to ask us if we mind!  Eighty-odd percent of our Law now emanates from Europe, and once an EU Directive is passed, usually by majority voting, we have to allow and follow those rules, no matter how daft they may be, because we don’t even control how we are governed any more!

The list could go on, and on, but I might bore you. So I will end by highlighting the one thing which has been grasped by influential minds as being a true emergency.

The Council for the Protection of Rural England is proposing a 5p surcharge on supermarket plastic bags, and her friend of  ‘Grumpy Old Women’ fame tries one better and states that charge should be £1.00. Just guess which of the myriad problems will be attacked first!

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41 thoughts on “The Ruling Class’s State of the Nation

  1. Even worse, we will be relying on Chinese state owned firms to build the new nuclear power stations.

    And most of central London is owned by foreign corporations or oligarchs. Needless to add that most of them contribute little or nothing by way of taxes.

  2. True, the vast majority of migrants wish to work hard and do well by their families…

    Really? Where do the 3rd-worlders come from? If they really wished to work hard etc. would their lands of origin e as they are now?

  3. Much of the third world is run by local oligarchs of one kind or another. If you build something it will create problems for you, or the govt or its friends will want a piece of the pie.

    In Egypt for example, the army owns the steel industry. Do you think that they’ll allow someone else to open steel mills or to start a sizable steel fabricator?

    In half the world, capitalism has never been tried. There’s no incentive to work hard for yourself.

  4. I absolutely agree with your reasoning, Phantom.

    But please do not imagine that the UK is totally exempt from this. In your second paragraph, take out the words ‘Egypt’, ‘army’ and ‘steel’, and replace them with ‘UK’, ‘state’ and ‘healthcare’. The sentence still works.

  5. Tom

    No it doesn’t. Privately run heathcare is not banned or restricted at all in the UK.

  6. True, Colm, but as probably 95% of the unseen capital in that market is sucked away by the NHS, it leaves private operators with a vastly reduced market share. It amounts to more or less the same problem which Phantom highlights.

  7. I would also like to point out that “profit” is a two-way thing, it benefits both vendor and customer.

    When Mike says “The profits from our Water and Electricity bases, once our own to use as we saw fit, now disappear towards France and Germany” he is concentrating only upon the profits earned by the energy companies. But this is only one side of the coin. What if those foreign companies are generating energy for UK consumers at a lower price than could be charged by UK companies? Does this not mean that we profit by paying lower energy bills than we would do, if we had to pay less efficient UK companies? Of course it does. It’s a two-way thing. I now have more money left over in my pocket, to spend as I see fit, because I pay a French-owned energy company, than I would have if I had to pay a UK company for that energy.

  8. I now have more money left over in my pocket, to spend as I see fit

    Oh good – and from the size of the UK’s trade deficit, you will spend on something made overseas, and the result is the same.

  9. In half the world, capitalism has never been tried. There’s no incentive to work hard for yourself.

    Absolutely right. Pakistan and Iran are even worse than Egypt. Their military owns at least 25% of the economy and obliterates any competition, sometimes with bullets.

  10. Indeed, one of the most farcial things, I always think, is the operation of the PAYE scheme within the public sector. All those NHS nurses and doctors, receiving payslips stating their “Gross” pay, then going through the motions of “deducting” tax and NI, as if to give the impression that they are “PAYING TAXES”! – When every penny of their pay comes from taxes deducted from private sector business in the first place! What a joke!
    Public sector workers’ payslips ought not be subjected to this needless and pointless, artificial subjection to PAYE. Their payslips should just state “Gross = Net Pay: sourced from taxes from the private sector”.

  11. Allan, what, do you think that I should voluntarily pay more for the things I want? If I want, say, an ink cartridge for my printer, and I go to the shops, and I see two cartridges: one made in the UK, costing £30, and another, made in China costing £20, I should buy the £30 one? You think that helps the economy? It doesn’t. It merely subsidises an uncompetitive business and deprives me of £10.

  12. TT

    Correct, but only if China is not carrying out a trade war by means of an artificially depressed currency. Which of course it has been doing for at least 20 years.

  13. Peter, you’re not wrong there of course, I’m merely disregarding such factors, saying that “all else being equal”, etc.
    But even so, what do (or should) I care? As a participant, my goal is the same as any other player in a marketplace: to gain the maximum outputs for the minimum inputs. Left to ourselves, we’ll all attain maximum profits.

  14. Peter –

    “Correct, but only if China is not carrying out a trade war by means of an artificially depressed currency.”

    If China wants to subsidise our imports and make us richer, then great.

  15. Let’s take a factory which contributes towards our GDP, close it down then open it in China and import its products instead of making them here. In an instant, our GDP is reduced and our balance of payments deteriorates. Moreover, the taxes which had been collected from the activities of the UK-based factory are no longer available, but the taxes have to be levied elsewhere in the UK economy to the detriment of that activity.

    There is no case for destroying our productive sector.

  16. Allan@Aberdeen –

    There are four problems with that.

    1) GDP is a pointless measure. It’s meaningless. Government spending contrinbutes to GDP, so if you want to boost it then have the Bank of England print up a trillion and double GDP.

    2) The problem with the lost taxes is in government spending. It doesn’t have to replace the lost income and it shouldn’t do so.

    3) You again ignore the unseen. You ignore that we are richer if we can import what we want more cheaply than make it here. Again: why do you “import” a toaster from Currys for £30 instead of make it yourself?

    4) Balance of payments is irrelevent to everything. It’s always meaningless and a red herring.

  17. I am no expert on economics but I cannot see how Britons purchasing goods however low proced that are being manufactured abroad can ever be better economically for the UK than purchasing goods whose manufacture and ownership are entirely withing the UK. Surely it is better to spend £20.00 that is supporting someone here than spending £10.00 which will be going abroad ?

  18. Pete – from where would the money which buys the imports come? As for balance of payments being irrelevant, it is the current account of a country. What is your balance of payments? This nonsense about balance of payments being meaningless cropped up a few years ago when it was decided for a group of ‘economists’ that they will say in unison that trade balances don’t matter – the whole point being that multi-nationals could decamp from the UK and US throwing millions out of work whilst the masses are told that losing their jobs is good for the country. Paul Craig Roberts states that:

    http://www.globalresearch.ca/index.php?context=va&aid=32126

    Economists have almost universally confused jobs offshoring with free trade. Economists have even managed to produce “studies” purporting to show that a domestic economy is benefitted by being turned into the GDP of some other country.

    Economists have managed to make this statement even while its absurdity is obvious to what remains of the US manufacturing, industrial, and professional skilled (software engineers, for example) workforce and to the cities and states whose tax bases have been devastated by the movement offshore of US jobs.

    The few economists who have the intelligence to recognize that jobs offshoring is the antithesis of free trade are dismissed as “protectionists.” Economists are so dogmatic about free trade that they have even constructed a folk myth that the rise of the US economy was based on free trade. As Michael Hudson, an economist able to think outside the box has proven, there is not a scrap of evidence in behalf of this folk myth (see America’s Protectionist Takeoff 1815-1914).

  19. Colm –

    Why do you import a £30 toaster from Currys instead of supporting ironmongers and metal dealers by spending £500 on building your own?

  20. Colm,

    “I am no expert on economics but I cannot see how Britons purchasing goods however low proced that are being manufactured abroad can ever be better economically for the UK than purchasing goods whose manufacture and ownership are entirely withing the UK. Surely it is better to spend £20.00 that is supporting someone here than spending £10.00 which will be going abroad ?”

    Me either but which would do better for someone’s home budget –

    1) pay £20 to argos for a watch made in Japan, or
    2) pay pretty much all of your disposable income to your son as he tries and fails to make you an equivalent watch in his bedroom, using bits of toys he buys off his sister and things he finds in the garden?

    According to the protectionist logic the latter is the better option because it keeps it all in the family.

  21. Frank

    Yes I understand that point and I am not arguing in favour of protectionism, I too would be much more in favour of genuine worldwide free trade, but surely if China manipulates or subsidises it’s manufacturing and currency exchanges so that UK factories cannot compete on a level playing field, the damage to our manufacturing industries cannot be healthy for the UK economy.

  22. Colm,

    “surely if China manipulates or subsidises it’s manufacturing and currency exchanges so that UK factories cannot compete on a level playing field, the damage to our manufacturing industries cannot be healthy for the UK economy”

    Well if China devalued its currency to zero and gave us everything for free would that be bad for the UK economy?

  23. I guess not, but only if Britons then chose to spend their surplus incomes on other UK manufactured goods which China wasn’t throwing at us for free.

  24. Pete 1158′, Frank 1203

    Those are not the choices, as even a free trader like myself will say.

    To use Frank’s favorite word then are ” strawman ” arguments.

    And…the Super-cheapie watches haven’t been made in Japan for more than 20 years.

  25. Phantom – yes, those are not serious points of debate. It’s usually the last resort of people who are losing the argument.

  26. Allan and Phantom

    No they’re not strawmen, Pete and I are just drawing the logical implications of your argument.

    If protectionism is good for the nation, why is not good for your county, your city, your village, your street, your home?

    An argument is not like a bus, you cannot get off at your stop.

  27. Allan@Aberdeen –

    “Pete – from where would the money which buys the imports come?”

    By producing whatever it is we produce best, by using our comparative advantages.

    “As for balance of payments being irrelevant, it is the current account of a country.”

    Forget balance of payments. There is nothing – not a thing – in economic theory which states that a country’s wellbeing depends on its exports being equal with its imports.

    Look, we want what foreigners prioduce more cheaply than us. What’s the point of exporting all the time to accumulate foreign exchange? We have to use it to buy whatever they can produce one day anyway.

    The reason why you import an electrician into your home to do the wiring is because it would be grossly inefficient to learn the trade when you can be out earning money in the oil industry. The Chinese are offering to do the wiring cheaply but you want to put well paid careers on hold to do an electrician’s apprenticeship.

  28. If protectionism is good for the nation, why is not good for your county, your city, your village, your street, your home?

    Because your county, your village, your street and your home are part of the nation and the nation is the economic entity upon which your county, your village, your street and your home are dependent. If the national economy fails, so too do the others.

  29. Protectionism is bad policy, but large scale and unfettered free trade with very low wage countries leads to a flattening out of wages across the world over time.

    It is a process very much underway. The Chinese are comparatively richer and good for them, but your auto/textile/ workers in the West are comparatively poorer.

    There are pros and cons to all of this, but the unfettered trade guys tend to totally gloss over the societal and even economic downsides to free trade.

    I see many downsides to it. Its not all wine and roses and cheap Chinese shirts at WalMart. We are not just bean counting consumers, and cash savings is not the only social or economic value.

  30. In his horror movie, Al Gore made the same kind of wild exaggerations as Pete and Frank did above, and it set back the Global Warming Movement for a generation.

    Have a wee bit of perspective, gentlemens.

  31. Allan wrote:

    “Because your county, your village, your street and your home are part of the nation and the nation is the economic entity upon which your county, your village, your street and your home are dependent. If the national economy fails, so too do the others.”

    You didn’t answer the question. Assuming protectionism is good for the nation (your argument), then why stop there? Why would you not “protect” your county, your village, your street and your home the same way?

    Not only did you not answer the question, but you may also have noticed that your nation is part of the world in exactly the same way that your county etc is part of the nation. So if that’s an argument against protectionism at the local level, it’s an argument against protectionism, period.

  32. Phantom –

    “Al Gore made the same kind of wild exaggerations as Pete and Frank did above”

    Our “wild exaggerations” have been standard economic theory since David Ricardo two centuries ago. No really, you’ll hardly find an economist of any school who disagrees. It’s one of the few things which unites them all.

    “but large scale and unfettered free trade with very low wage countries leads to a flattening out of wages across the world over time.”

    Not true. It raises median wages in both countries. I was going to save this for another time, but now is as good a time as any to post this link which I wholeheartedly recommend to you and Allan@Aberdeen. Hold on to your hats while you get a pearl of economic wisdom for free. I particularly recommend the third paragraph:

    Myth 10: Imports from countries where labor is cheap cause unemployment in the United States.

    One of the many problems with this doctrine is that it ignores the question: why are wages low in a foreign country and high in the United States? It starts with these wage rates as ultimate givens, and doesn’t pursue the question why they are what they are. Basically, they are high in the United States because labor productivity is high–because workers here are aided by large amounts of technologically advanced capital equipment. Wage rates are low in many foreign countries because capital equipment is small and technologically primitive. Unaided by much capital, worker productivity is far lower than in the United States. Wage rates in every country are determined by the productivity of the workers in that country. Hence, high wages in the United States are not a standing threat to American prosperity; they are the result of that prosperity.

    But what of certain industries in the U.S. that complain loudly and chronically about the “unfair” competition of products from low-wage countries? Here, we must realize that wages in each country are interconnected from one industry and occupation and region to another. All workers compete with each other, and if wages in industry A are far lower than in other industries, workers–spearheaded by young workers starting their careers–would leave or refuse to enter industry A and move to other firms or industries where the wage rate is higher.

    Wages in the complaining industries, then, are high because they have been bid high by all industries in the United States. If the steel or textile industries in the United States find it difficult to compete with their counterparts abroad, it is not because foreign firms are paying low wages, but because other American industries have bid up American wage rates to such a high level that steel and textile cannot afford to pay. In short, what’s really happening is that steel, textile, and other such firms are using labor inefficiently as compared to other American industries. Tariffs or import quotas to keep inefficient firms or industries in operation hurt everyone, in every country, who is not in that industry. They injure all American consumers by keeping up prices, keeping down quality and competition, and distorting production. A tariff or an import quota is equivalent to chopping up a railroad or destroying an airline for its point is to make international transportation artificially expensive.

    Tariffs and import quotas also injure other, efficient American industries by tying up resources that would otherwise move to more efficient uses. And, in the long run, the tariffs and quotas, like any sort of monopoly privilege conferred by government, are no bonanza even for the firms being protected and subsidized. For, as we have seen in the cases of railroads and airlines, industries enjoying government monopoly (whether through tariffs or regulation) eventually become so inefficient that they lose money anyway, and can only call for more and more bailouts, for a perpetual expanding privileged shelter from free competition.

  33. Pete – this mythical ‘consumer’ whom you wish to provide everything for at the cheapest price possible: what happens when the consumer loses his/her job or has his/her wages reduced to near-penury level? Why do the wages of our workers who are the same people as we are, have to be reduced and their standards of living commensurately reduced in order to enrich the ‘consumer’? Who is this ‘consumer’?

    And whilst Pete and Frank argue about theories, the reality is that more British and American workers are unemployed than can be reported hence the constant redefining of ‘unemployment’ – something like 25% real unemployed, yet that means nothing to the globalists because the mythical ‘consumer’ is paramount. I see for myself that the places in Scottish towns which used to be factories employing people on decent wages and producing goods for home and overseas markets are now closed and have an Asda or Tesco on the site, these supermarkets selling imported garbage, and it is garbage. Trade deficit is debt, and the debt of the US and UK to China is £/$trillions: this is grossly irresponsible.

    Frank at 4.52 was answered by Phantom at 5.02

  34. What is good for the world economy or even for the national economy is not necessarily good for Glasgow or Cleveland.

    And what raises wages for the top earners can lead to vastly less opportunity for the lower 20%. The entry level factory jobs barely exist anymore.

    The extreme social destruction that comes with all of this is partially caused by free trade. There are other causes, but it is one.

  35. Phantom,

    “What is good for the world economy or even for the national economy is not necessarily good for Glasgow or Cleveland.”

    Nobody said it was. Why not answer the question? WHY would it be good at the national level and not at the local level? There must be a reason.

    Allan has told us he imports milk from England ffs. Why? Isn’t that to the detriment of Scotland? This is the from the same guy who wanted to restrict imports of milk to the UK!

    Would we all truly be better off if Apple is forced to manufacture its computers in the USA? Notice btw, that as it is almost all the value goes to Apple, which is in the USA. The same is true of the Casio watches which are no longer manufactured in Japan but are still sold by a Japanese company.

    Today 3 dudes in a garage with an idea for a gizmo can quickly assemble a company to make and sell that thing, because they won’t do it all themselves, they’ll outsource aspects of its design and manufacture to not just China but to people across the world, including locals. They themselves will do the parts they are best at or simply want to. Same with people with an idea for a software service – they won’t build their own data center, they’ll rent it by the hour from Amazon. In Allan’s world these things simply would never happen.

  36. Allan can speak for himself, but I don’t know that he even sees England as a ” foreign ” country anymore than I see Ohio as foreign in any way.

    I don’t concede the point that it is all good at the national level either. I think that it’s more complex than that.

    Almost all the value does go to Apple. Today. But the Chinese are getting a world class education from Apple and Foxconn and Fedex on how to make extremely high value products. They are content to be subcontractors and wage slaves today, but not for very long. There will be Chinese Apples and Samsungs.

  37. Phantom –

    Allan doesn’t see England as a foreign country, but Frank’s point and principle are clear to see: if it makes Britons richer to draw economic boundaries around Briton, replicate those boundaries down and make your county, town, street and household richer.

    What he doesn’t see is that economics doesn’t recognise political boundaries. They’re irrelevent. His arguments are old, discredited, mercantilist arguments.

  38. I think that, once more, Krugman has it largely right

    Though he opposes protectionism, even in this article, he sees what trade between high wage countries and very low wage countries does to the wage of the first, especially those at the shop floor level.

    But for American workers the story is much less positive. In fact, it’s hard to avoid the conclusion that growing U.S. trade with third world countries reduces the real wages of many and perhaps most workers in this country. And that reality makes the politics of trade very difficult.

    ….

    So am I arguing for protectionism? No. Those who think that globalization is always and everywhere a bad thing are wrong. On the contrary, keeping world markets relatively open is crucial to the hopes of billions of people.

    But I am arguing for an end to the finger-wagging, the accusation either of not understanding economics or of kowtowing to special interests that tends to be the editorial response to politicians who express skepticism about the benefits of free-trade agreements.

    World trade is larger than it ever was, and changes in technology and transport have made it really easy to ship even advanced work to low wage places in the blink of an eye. This is still a new thing, with huge social costs.

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