What's The Way Forward?

[SarahBell]

At the moment the UK seems to lack the manufacturing base we need to get out of the mess.

Can we ever compete with manufacturing or are those days gone?

Is there an answer?

[Reluctant Heretic]

At the moment the UK seems to lack the manufacturing base we need to get out of the mess.

Can we ever compete with manufacturing or are those days gone?

Is there an answer?

I've never understood the Tory line that if you destroy the public sector the private sector will spontaneously grow to fill its place.

[Fromage Frais]

If you reduce taxes proportionatly then it is like a "stimulus package" for small businesses.

However reduced public sector and high taxes seems like a rum old scenario.

[tallguy]

At the moment the UK seems to lack the manufacturing base we need to get out of the mess.

Can we ever compete with manufacturing or are those days gone?

Is there an answer?

We do indeed lack the manufacturing base. Consequently, we can not compete with manufacturing and those days are gone. This situation arises for two reasons. Firstly, we have no significant raw resources left of our own and, secondly, we no longer posess the military might to steal them from others. There is no answer for the people. For the ruling class, there is always facism.

Unless we, the people, wake up and do something about it of course.

I won't be holding my breath.

Edited December 14, 2010 by tallguy

[Toto deVeer]

At the moment the UK seems to lack the manufacturing base we need to get out of the mess.

Can we ever compete with manufacturing or are those days gone?

Is there an answer?

What scares me at the moment is the global conflagration of extreme wealth with almost fanatical political ideology. You see it with the Tories in the UK, and all political parties in the US. The upper echelons of global power appear to be living within a simmering cauldron of anarchy, each battling for ideological supremacy, and it is threatening civilisation.

We have to forget about ideologies, for the moment, and find a way to take back control of money. That is first and foremost. And manufacturing is important, but it is not the whole answer. Look at China. Here's the GDP breakdown (according to Chanos) 60% related to construction, 35% related to consumption, 5% related to exports. Consumption in China has dropped from 40% to 35% during the last 10 years.

Edited December 14, 2010 by Toto deVeer

[OnlyMe]

What scares me at the moment is the global conflagration of extreme wealth with almost fanatical political ideology. You see it with the Tories in the UK, and all political parties in the US. The upper echelons of global power appear to be living within a simmering cauldron of anarchy, each battling for ideological supremacy, and it is threatening civilisation.

Extreme earnigns differntials and concentraton of wealth = death to conumption economy. The debt hid this and allowed the distortions to grow furter, the bailouts and handing the population the bill in inflation - the final act.

[(Blizzard)]

What scares me at the moment is the global conflagration of extreme wealth with almost fanatical political ideology. You see it with the Tories in the UK, and all political parties in the US.

Yes, me too. Especially American politics, which is terrifying.

Anyway the answer to the question is simple: replace income taxes and consumption taxes with a land value tax.

Costs here are too high, because we all have to pay for the landlords and other parasites, and we have to pay for roads and schools on top of that.

[pilchardthecat]

The only ideology in european politics is the federalism at all costs mantra.

Domestically i don't see any ideology. All i see is greed and pragmatism.

The UK could use a little ideology right now. Or at least some principled leadership.

[Olebrum]

Serious reform of Finance Capital and Banking.

[Van]

There is no easy way out. You can't expunge the excesses without taking pain.

I do agree with the path this government is taking - cutting the wasteful public sectors, lowering the debt and stopping the rediculous state handouts that grew out of control under nulab. Despite its critics, this is a radical government that is prepared to make unpopular decisions. Cameron & Osborne may go down as one of the best things to happen to Britain for many decades.

People will always find new jobs or they will make jobs for themselves, but the debt won't pay back by itself.

[Toto deVeer]

The only ideology in european politics is the federalism at all costs mantra.

Domestically i don't see any ideology. All i see is greed and pragmatism.

The UK could use a little ideology right now. Or at least some principled leadership.

Oh I think that there is a strong ideology behind the Tory party and to some extent the Lib Dems to privatise everything possible as fast as they can...

The last days of Labour just seemed to be about looting the public purse...

[Toto deVeer]

Depends what you manufacturer. Tangible products or Intangible products?

The UK as are most western economimes are highly geared towards the export of intangible products like Software and if you look at the trend these intangible products are increasing and continue to account for an ever increasing stream of revenue.

Just remember what Bernie Sanders alluded to in his recent 124 page filibuster speech: In China, Walmart only sells Chinese products...

[Riedquat]

I saw some figures (sorry, can't remember where) suggesting that UK manufacturing hasn't fallen as much as everyone seems to think. It's just not terribly visible because it's efficient enough to not require a large workforce (and most of it is probably foreign-owned).

[Dorkins]

The way forward is to allow the cost of living to fall relative to wages.

Lower house prices and rents.

Lower taxes.

Deleveraging across all sectors, so eventually less of current income will go to debt servicing.

Unfortunately the people with power benefit from the way things are, and there are a lot of idiots in the rest of the population who think expensive housing makes them rich and will go along with policies to keep it that way.

In the end though, the gap between wages and the cost of living will bring the system down, voluntarily or not. You can't get three pints from a two pint pot. Could be cuts-HPC-deflation, could be printing-hyperinflation, it's anybody's guess.

[Guest_FaFa!_*]

At the moment the UK seems to lack the manufacturing base we need to get out of the mess.

Can we ever compete with manufacturing or are those days gone?

Is there an answer?

We don't make ipods. However we are one of the largest manufacturing countries in the world and are world leading in pharmaceuticals and weaponry. Our problem is that we do not have any visible brands such as Boeing, Microsoft or Sony but we supply many component parts in their products (one recent unfortunate example would be the Rolls Royce engines on the latest Boeing)

[Riedquat]

Exactly. Everyone has heard of Intel or AMD for example but who has heard of ARM? In Cambridge?

Me, but that's because I used to use Acorn computers a fair bit, and they originally designed the ARM for their new computer because they didn't like any of the others around at the time. Funny how they eventually went down the drain but the processor went from strength to strength.

However, ARM doesn't count as a UK manufacturer. ARM design CPUs but don't make them, that gets licenced out. They certainly count as a success though.

[Guest_FaFa!_*]

Me, but that's because I used to use Acorn computers a fair bit, and they originally designed the ARM for their new computer because they didn't like any of the others around at the time. Funny how they eventually went down the drain but the processor went from strength to strength.

However, ARM doesn't count as a UK manufacturer. ARM design CPUs but don't make them, that gets licenced out. They certainly count as a success though.

Does Apple count as a US manufacturer?

The real key, presumably, is how much of the money Apple makes ends up in the US

[ralphmalph]

Osbourne or his minions at the Treasury have spotted the problem, which was G Brown taxing anything that had a pulse.

So if you look at the dominant chips in tablets, ipods, mobiles, etc then they are ARM (CPU), Wolson (Sound), Imagination Technologies (Grpahics) CSR (bluetooth) all British, all world leaders only problem none of them manufacture in the UK. Why, because the costs are too high and the regulation too heavy.

So Osbourne has proposed that companies that design in the UK and then Manufacture here will pay 10% corp tax, whereas those that just design here will pay full corp tax. This is a good move in my view and should offset the higher cost of making stuff here. Now lets just cut a swathe through the H&S laws.

Edited December 14, 2010 by ralphmalph

[Dorkins]

So Osbourne has proposed that companies that design in the UK and then Manufacture here will pay 10% corp tax, whereas those that just design here will pay full corp tax.

Great, now we just need to employ an army of bureaucrats to go around the country peering through windows and filling in forms to make sure nobody is manufacturing ten tablet PCs in Sunderland and the other 100,000 in Shenzhen, or importing 99% finished product and then sticking in the final screw and calling that manufacturing, and we get to have lots of lovely court cases and tens of thousands of hours of legal advice, and yet more kinks and perverse incentives in the system.

[chris25]

I saw some figures (sorry, can't remember where) suggesting that UK manufacturing hasn't fallen as much as everyone seems to think. It's just not terribly visible because it's efficient enough to not require a large workforce (and most of it is probably foreign-owned).

I have been told, that the official UK manufacturing output stats are complete con, because they account for goods made abroad by British companies.

For instance James Dyson may be turning over £millions and adding nicely to the manufacturing stats but he doesn't manufacturer a single thing in Britain.

Therefore all the employment and economic benefits of manufacturing in the UK do not exist in this case study. Sure a couple of shareholders get a bit of dosh, but their money only goes into ponzi schemes, and doesn't keep anyone employed.

[sammysnake]

After the war, Bankrupt economies relied heavily on manufacturing to emerge prosperous.

Look no further than Japan. The USA gave Japan a market in which to deal with, they even gave Japan the technology, a major success until of course they realised they were better than the US at both building products and making money.

Japan achieved exactly what they aimed for before the war started. A free trading agreement. If only the West dealt with the underlining fact...

We had the Marshall plan of course.But at the moment there's a problem isn't there. There's no one to bail us out with real currency or technology

No ones trusts banks, politicians or corporations. There's no real finance to resurrect the failed ******** economies of the west.

Personally I can see us moving to a world currency, sure you would still have trade tarriffs etc but there would be an enormous boost in world trade. People really would start to make things again. Workshops would open up in the west again.

No more currency exchanges, no more hedge funds on currency. The implications would be huge, but would provide the kick up the **** we all need

[tallguy]

After the war, Bankrupt economies relied heavily on manufacturing to emerge prosperous.

Look no further than Japan. The USA gave Japan a market in which to deal with, they even gave Japan the technology, a major success until of course they realised they were better than the US at both building products and making money.

Japan achieved exactly what they aimed for before the war started. A free trading agreement. If only the West dealt with the underlining fact...

We had the Marshall plan of course.But at the moment there's a problem isn't there. There's no one to bail us out with real currency or technology

No ones trusts banks, politicians or corporations. There's no real finance to resurrect the failed ******** economies of the west.

Personally I can see us moving to a world currency, sure you would still have trade tarriffs etc but there would be an enormous boost in world trade. People really would start to make things again. Workshops would open up in the west again.

No more currency exchanges, no more hedge funds on currency. The implications would be huge, but would provide the kick up the **** we all need

The problem is not money.

The problem is not credit.

The problem is that we do not have enough resources to meet demand.

Everything else; the credit bubble, the financial crisis, the economic contraction....they are all symptoms of the above.

Fiddling with the symptoms does not address the cause.

Too many people, not enough stuff.......

[ralphmalph]

Great, now we just need to employ an army of bureaucrats to go around the country peering through windows and filling in forms to make sure nobody is manufacturing ten tablet PCs in Sunderland and the other 100,000 in Shenzhen, or importing 99% finished product and then sticking in the final screw and calling that manufacturing, and we get to have lots of lovely court cases and tens of thousands of hours of legal advice, and yet more kinks and perverse incentives in the system.

How much of a BMW do you think BMW manufacture as oppose to assemble?

[wonderpup]

Domestically i don't see any ideology. All i see is greed and pragmatism.

They seem to be running with the neo liberal globalisation/trickledown fantasy at present- despite the spectacular train wreck this has now become- it's as if they have all been in suspended animation for the last five years, have suddenly woken up and are busily following the plans they laid out in 2005, oblivious to the fact that reality has altered.

It turns out that funnelling all the wealth upwards does not bring about economic nirvana for all after all- it just sucks all the juice out of the economy and crashes the system. No doubt this reality will filter through to them sometime in the year 2015.

Until it does we can look forward to more attempts to transform every conceivable human activity into a 'market' and more starry eyed claims that any attempt to inhibit the financial sector's looting of the state will be impossible without harming the 'economy'- whatever that might be in their tiny shallow minds.