To appreciate the problem, you have to see what the economy really is, and what it’s for. In statistical terms it is the total value of the goods and services produced by all of the people in the country. But it’s more than that; it is a collection of all of our jobs taken together, all of our work taken together. Our economy is the collective value of our efforts as a people, a nation. The outcomes are supposed to feed us and clothe us, to provide healthcare and many other things. But our economy is also supposed to allow us to contribute to a collective effort to develop and improve living standards for everyone. It is supposed to be “Our” economy!
Not only do we not produce as a country the things that we need to survive. We also do not give our people the opportunity to contribute to their own existence. The government tell us that UK unemployment stands at 2.6m people a dubiously low figure. The TUC’s alternative count is over 6m people and rising, meaning that over 16% of UK people of working age are not able to contribute to their own standard of living. Unfortunately however, wherever the true figure lies, that isn’t even half the story. According to the UK government’s own figures over 13m working people exist on less that 60% of the average income, and more than 7m people (again in work) in 3.6m households live in extreme financial stress unable to feed themselves and their families at the end of each month.
The Political Lies
The political right, and the right wing press would no doubt tell us that this is because the unemployed are lazy, they won’t work hard enough. Lest we forget however that France have a maximum 35 hour working week and the average real income over the channel is still a third higher than ours. In Holland people work among the shortest working week in Europe and yet their average income is 50% higher than in the UK. This is not about effort unless everyone in The West is lazy, this is about the way we allow our economy to operate.
The UK economy is now service based (services account for 74% of GDP and rising) with virtually no primary industries such as farming (7%) or manufacturing industries which together now account for only 11% of UK GDP having steadily fallen from 22% in 1990 and considerably over 30% in the 1970’s. We have all noticed and much has been written about corporations outsourcing jobs to cheaper countries, and the vacuum has been filled with low skilled, low paying service sector jobs. Perversely we even have an industry which specialises in outsourcing UK jobs and employs directly or indirectly 3.1m people to do it. 10% of the UK workforce are dedicated to taking away jobs from British people.
Through the media we are constantly told that economic growth is the only way to improve standards of living, and yet we choose to send our work elsewhere. In contrast, let’s look at current successful economies. The undisputed engine room of the world’s economy is now China, and they will shortly become the largest economy in the world too. The secret of their success has been export led growth, a reliance on improving skills and maximising output as opposed to paying people in other countries to do it for them. For evidence of this witness the fact that China produces 20% of the world’s manufactured goods already. Despite this, and while the west continues to languish in austerity-fuelled recessions, the Chinese government have recently announced £800bn of further government spending in an economy experiencing over 7% growth.
This is an even more serious threat than it sounds and not just for Britain. The western world relies on China for its manufactured goods, just as it does on Africa and South America for cheap agricultural produce. As these economies grow (and they are growing at astounding rates) their currencies will increase in value and our imported goods will cost much more money as a result. The Chinese Yuan has increased in value by 40% over the last ten years meaning that goods from China now cost 40% more. Very soon this means an end to cheap consumer goods and food. Of even more concern than this is the fact that we do not have the skills to produce these things ourselves anymore and so we will have to pay higher prices or go without. We have relied on other people to produce things for us for so long, that we couldn’t do it now if we wanted to - or even if we had to…
The Mortgage on Our Futures
What this means then is that over the last 40 years we have profited from the fact that people in developing countries have a very low standard of living and have been prepared to provide both our luxuries and our necessities at extremely low prices. We have profited from the poverty and the misery of others, and sold our souls to do so. But it is not only us that will have to pay the price when the tide turns, it is our children and our children’s children. We are leaving the next generation with an economy they cannot contribute to beyond low paid, low skilled service sector jobs - regardless of how they perform in education. Just as worryingly though, we are leaving them without the skills or the infrastructure that they will need to provide for themselves. Instead they will be doing anything from tracking the stock market to serving drinks, as we slowly forget how to grow food, catch fish, mine for minerals, make things or generally satisfy our basic survival needs.
The ‘Sale of The West’ is real in that we have sold our infrastructure and our independence for a few cheap distractions and the illusion of progress. But with these we have also sold the aspirations of our children and their very ability to provide for their own needs. We have mortgaged the future of our countries and it’s almost time to start the repayments!