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Sunday, 26 August 2012

The Sale of The West

For the first time in its long history, Great Britain is no longer self-sufficient. For example, we now import over 40% of our food, and according to ‘Food Matters’ this figure is rising.  Indeed, comparatively speaking we no longer actually produce much of anything at all. We have sold the future of our children and our grandchildren for the benefit of a few cheap consumer goods and an annual holiday abroad.
 
Hijacked Economy
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.
 
Outsourcing
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!

12 comments:

  1. Interesting and intuitively I buy your conclusions. But would you post the sources of your figures? (e.g. 10% of UK workforce devoted to offshoring jobs). I'd hate to get involved in a heated argument on the basis of these figures and then be unable to say where they came from apart from "a blog I read".

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  2. Would I be right in thinking that China has the same low skill, low wage workers as in the UK. , but have channelled their out put into manufacturing, while Maggie effectively closed our manufacturing industry down. The profits in China, I presume go to the ruling capitalist elite, as they do here. So the added value of the yuan doesn't impinge on the standard of living of the workers. I feel the elephant in the room is the capitalist system both here and in China. Also I don't see how growth can be continuously maintained in a finite world. Perhaps you may be willing to expand on the some of this in your next blog.

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  3. Great blog but you have to aware of shifting sands as China is not doing so well as we move into the next stage of a deep depression.

    China Stocks Drop To Fresh Post-2009 Lows Following Plunge In Industrial Company Profits

    Bloomberg reports, was that Chinese industrial companies’ profits fell in July by the most this year, a government report showed today, adding to evidence the nation’s economic slowdown is deepening. Income dropped 5.4 percent last month from a year earlier to 366.8 billion yuan ($57.7 billion), the fourth straight decline, National Bureau of Statistics data today showed

    http://www.zerohedge.com/news/china-stocks-drop-fresh-post-2009-lows-following-plunge-industrial-company-profits

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    1. But that's not enough is it? The drop in the 'number of yuan' is not, in itself, necessarily bad for the Chinese. If the Yuan can buy more (having increased in value by that claimed 40% over ten years [sources, anyone?]) then who cares if there are fewer involved? What was the dollar figure from a year earler, Mr Bloomberg?

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  4. Considering that the UK had to import lots of its food from overseas until fairly recently, and that a core reason for joining the EU was food security - I have some difficulties with the initial statement.

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  5. There is a danger in denouncing any particular dogma whether western capitalism or eastern post-communism with any linear cause and effect type relationships. There is a whole world of scientific debate, theory and socio-psychological thinking, writing and evidence going back over a century that societal evolution is always complex.

    Sustainable societies in any dogma must be autopoietic. They are made up of, and produce what they are made up of and produce. In other words you cannot create a sustainable community or society unless the total "outcome" of their endeavors is balanced as "ingoes" that invest in that society. The butcher buys his bread from the baker. The growth only economic dogma is a fundamental attribution error. You can't survive if the societal capital is hovered up and moved somewhere else, like for example to a few bankers in the Cayman Islands!

    With today's new connected world, I am able to give my money to the bloke who produced the thing I want. The rich have created a black market for money and we need to reclaim it for the working man, where it belongs.

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    1. You can't survive if the societal capital is hovered up and moved somewhere else, like for example to a few bankers in the Cayman Islands!

      I think you'll find it's a bit more complicated than that. What do you expect people to do when the capital is - as is going on right now - being hoovered up out of local economies by large corporations? Just give up and stop eating and breathing (and pooping)? Of course they don't. They go on. Capital is not a requirement for life.

      Admittedly some do starve, some do die - and you can legitimately blame capitalism for that - but that's in extremis and such conditions don't, can't, persist for longer than a generation or so.

      Sooner or later the ones getting fat at the expense of the majority would end up being strung up on lampposts. Your 'new connected world' is probably the first time in human history where this need not actually happen. Ordinary people need their own economy, and this is - as you have pointed out - now a possibility. Let the rich babies keep their state-sanctioned fairy dust - it'll do them no good in the long run. But it will be a painful transition for the rest of us.

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  6. The only way forward is to cut the stock market parasites out of the equation, it wont be easy but we could forge a new " Common Wealth " economy out of the wreckage of the now almost inevitable Euro implosion if politicians are prepared to relinquish their respective quasi-religions !

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  7. erm yeah, I totally agree with almost all of this, but the conclusion really, who is this 'we' that sold our infrastructure and our independence, and why did they do it? I think it had more to do with the powers that be making huge profits from it.

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    1. It was the Corporate Nazi stock market parasites who sold our sovereignty to the highest Corporate Multinational Cartel bidder all under the guise of the EU Fourth Reich project. Now they expect the poorest of UK population to pay for a Corporate Nazi welfare state to support share prices on the FTSE and Wall St, the only sane answer to our financial problems is to default on all the fraudulent derivatives they have sold !

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  8. Very nicely explained. The only way that outsourcing could possibly be worthwhile is if all the people doing the jobs here could be doing something that would be more beneficial to our economy. Given that this has clearly not happened, outsourcing has to result in essentially what you describe. We pay people in another country to do jobs that could be done here and those who are left here are under-employed. Some will benefit - the investors in the companies that outsource and those who can afford to buy the cheaper goods - but our economy as a whole almost certainly has to suffer.

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