Discussion
No doubt you have read the musings of Mark Carney,a fine example of stating the blooming obvious.
However apart from highlighting the obvious "problems" that globalisation has caused he's light on solutions.
So what is an antidote to relieve those problems caused by globalisation ?
An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
However apart from highlighting the obvious "problems" that globalisation has caused he's light on solutions.
So what is an antidote to relieve those problems caused by globalisation ?
An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
Wow this could be an interesting thread
For me too many people in "power" and in "industry" are driven by the bottom Dollar
So if China can make it cheaper delivered there is a greater profit - shut down the local manufacturer and ship it it - job jobbed
The points on which there is little reflection by those consumed by the might dollar is - The tax on the extra profit the company makes doesn't compensate for the loss of tax (from the workers who no longer work) or the cost of financial support for those same workers who cannot find alternative employment.
Trouble is how to go backwards whilst still going forwards........
For me too many people in "power" and in "industry" are driven by the bottom Dollar
So if China can make it cheaper delivered there is a greater profit - shut down the local manufacturer and ship it it - job jobbed
The points on which there is little reflection by those consumed by the might dollar is - The tax on the extra profit the company makes doesn't compensate for the loss of tax (from the workers who no longer work) or the cost of financial support for those same workers who cannot find alternative employment.
Trouble is how to go backwards whilst still going forwards........
I recall reading a report on just this subject around a year or so ago. It covered the drift of manufacturing from west to east and the west becoming gradually more poor as the developing countries became richer, in other words a transfer of wealth from west to east.
It projected out for wage equalisation around 2060 when the world would then be moving in accord, with an equal distribution of wealth (on a nation basis) across the globe.
Of course projections are really just guesses and the things assumed to make the projection have to occur for the projection to come true.
Plus a lot of turmoil can happen in forty years!
Then we have the threat from our robot friends, as per Mark Carney in the news this morning. Middle class jobs such as accountancy and the legal profession are under threat too, just like manufacturing.
I'm not sure there is an answer, protectionism has other downsides. I guess it will just run its course!
It projected out for wage equalisation around 2060 when the world would then be moving in accord, with an equal distribution of wealth (on a nation basis) across the globe.
Of course projections are really just guesses and the things assumed to make the projection have to occur for the projection to come true.
Plus a lot of turmoil can happen in forty years!
Then we have the threat from our robot friends, as per Mark Carney in the news this morning. Middle class jobs such as accountancy and the legal profession are under threat too, just like manufacturing.
I'm not sure there is an answer, protectionism has other downsides. I guess it will just run its course!
It is a fact that Corporations are obliged to return the best profitable results for their shareholders.
Therefore if the best profits are obtained by sourcing in China,India etc. that is where the jobs go.
In a way we are facing problems similar to that which existed in the times of the Industrial revolution where people were losing jobs as the new technology took over whilst the Luddites fought a losing battle to maintain the status quo.
It was thought that by First World economies keeping at the forefront of technical evolution they would maintain their edge but that doesn't solve the problem of job outsourcing.
As an example I give you Dyson who at first made great play that his products were made in the UK but then decided it was more important to maintain and increase profitability by moving production offshore.
Unless we are prepared to spend a lot more for our products or Corporations are obliged to become philanthropic it's a bit of a conundrum.
Therefore if the best profits are obtained by sourcing in China,India etc. that is where the jobs go.
In a way we are facing problems similar to that which existed in the times of the Industrial revolution where people were losing jobs as the new technology took over whilst the Luddites fought a losing battle to maintain the status quo.
It was thought that by First World economies keeping at the forefront of technical evolution they would maintain their edge but that doesn't solve the problem of job outsourcing.
As an example I give you Dyson who at first made great play that his products were made in the UK but then decided it was more important to maintain and increase profitability by moving production offshore.
Unless we are prepared to spend a lot more for our products or Corporations are obliged to become philanthropic it's a bit of a conundrum.
I do find there's an element of scaremongering in this. Not for the first time, I see that accountancy is one of the professions under threat. Whilst I am sure developments in computing will automate some functions, I think we are still a long way off from a situation where the profession is under threat. My own experience (in sizeable organisations) is that IT systems in general are full of bugs or not really fit for purpose, the accounting aspects of these systems require a significant amount of human input to correct.
Back in the 90's the talk was all about a paperless office, but that has yet to materialise (and in some cases there is probably more paperwork).
Back in the 90's the talk was all about a paperless office, but that has yet to materialise (and in some cases there is probably more paperwork).
B'stard Child said:
Wow this could be an interesting thread
For me too many people in "power" and in "industry" are driven by the bottom Dollar
So if China can make it cheaper delivered there is a greater profit - shut down the local manufacturer and ship it it - job jobbed
The points on which there is little reflection by those consumed by the might dollar is - The tax on the extra profit the company makes doesn't compensate for the loss of tax (from the workers who no longer work) or the cost of financial support for those same workers who cannot find alternative employment.
Trouble is how to go backwards whilst still going forwards........
But the advantage is that we can buy stuff more cheaply. A manufacturer that can buy cheap steel is going to stay in business longer than one who can't. So suggesting more trade means more unemployment is extremely simplistic. In the long run producing everything where it's cheapest makes everyone better off.For me too many people in "power" and in "industry" are driven by the bottom Dollar
So if China can make it cheaper delivered there is a greater profit - shut down the local manufacturer and ship it it - job jobbed
The points on which there is little reflection by those consumed by the might dollar is - The tax on the extra profit the company makes doesn't compensate for the loss of tax (from the workers who no longer work) or the cost of financial support for those same workers who cannot find alternative employment.
Trouble is how to go backwards whilst still going forwards........
Dr Jekyll said:
B'stard Child said:
Wow this could be an interesting thread
For me too many people in "power" and in "industry" are driven by the bottom Dollar
So if China can make it cheaper delivered there is a greater profit - shut down the local manufacturer and ship it it - job jobbed
The points on which there is little reflection by those consumed by the might dollar is - The tax on the extra profit the company makes doesn't compensate for the loss of tax (from the workers who no longer work) or the cost of financial support for those same workers who cannot find alternative employment.
Trouble is how to go backwards whilst still going forwards........
But the advantage is that we can buy stuff more cheaply. A manufacturer that can buy cheap steel is going to stay in business longer than one who can't. So suggesting more trade means more unemployment is extremely simplistic. In the long run producing everything where it's cheapest makes everyone better off.For me too many people in "power" and in "industry" are driven by the bottom Dollar
So if China can make it cheaper delivered there is a greater profit - shut down the local manufacturer and ship it it - job jobbed
The points on which there is little reflection by those consumed by the might dollar is - The tax on the extra profit the company makes doesn't compensate for the loss of tax (from the workers who no longer work) or the cost of financial support for those same workers who cannot find alternative employment.
Trouble is how to go backwards whilst still going forwards........
However seriously - what good is cheap stuff if your only income is via state support or if you are barely making enough to pay the bills let alone but good stuff made cheaply.
The process of globalisation is going to lead to an increasing state burden (both unemployment and income support) - Someone in another post suggested that the country may well have to accept that paying people to do nothing is the future.....
That forgets one thing - there is an element of pride in earning a wage. There is no pride element in receiving state handouts in whatever form (it's an easy life sitting on the couch watching daytime TV eating cheesey wotsits but it doesn't mean it's *fulfilling)
* seriously you'd have to eat a lot of cheesey wotsits
avinalarf said:
It was thought that by First World economies keeping at the forefront of technical evolution they would maintain their edge but that doesn't solve the problem of job outsourcing.
As an example I give you Dyson who at first made great play that his products were made in the UK but then decided it was more important to maintain and increase profitability by moving production offshore.
And since that date I have refused to purchase another Dyson product - it's pointless protest but one I'm going to continue regardless.As an example I give you Dyson who at first made great play that his products were made in the UK but then decided it was more important to maintain and increase profitability by moving production offshore.
avinalarf said:
Unless we are prepared to spend a lot more for our products or Corporations are obliged to become philanthropic it's a bit of a conundrum.
Until we reach the point where the people who they want to buy products are unable to afford them - then they have no sales and a stock issue.Just like the expectation is that the Government should work for all - Corporations may need to think a little further than the bottom line.
Dr Jekyll said:
But the advantage is that we can buy stuff more cheaply. A manufacturer that can buy cheap steel is going to stay in business longer than one who can't. So suggesting more trade means more unemployment is extremely simplistic. In the long run producing everything where it's cheapest makes everyone better off.
No it doesn't.You can't buy much if you haven't got a job,or a decent pay rise in 10 years,when your job has been outsourced or your on a zero rate contract.
In my industry,clothing ,prices on products are the same as 30 years ago.
The God of consumerism has raised expectations ,when do we want it,we want it NOW.
The mantras of responsibility and prudence are sacrificed to profit and desire,most of the profit going to relative few.
For example....It annoys me that the low wages paid by many companies means that peeps have to get tax credits and other benefits to live a life.
Tax credits that you and I contribute to in our taxes from our hard earned.
We really do need a radicle overhaul of our economy and an important part of this is our approach to globalisation.
If for example the EU had been set up as a group of similar advanced economies eg.Germany,France,Scandanavia,Holland
U.K.(maybe Italy) it would have provided a platform for us to thrive economically with the benefit of scale and provide worthwhile and well paid jobs for their workforce.
Instead it was fraudulently expanded to include countries with completely disparate economies and thus became a mini globalisation with its apparent problems.
This was exacerbated by the ridiculous unmanaged freedom of movement that enabled companies to import cheap labour.
I understand that ageing populations and the lack of certain skills means that there should be controlled free movement,but far better that we equip our current population and youngsters with those skills required.
Maybe a second tier of countries of weaker economies would worked,which in time could have been incorporated.
Edited by avinalarf on Tuesday 6th December 13:46
avinalarf said:
So what is an antidote to relieve those problems caused by globalisation ?
An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
No I think there is a happy medium that can be followed.An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
The two side to me are that total protectionism means high prices, lower standards of living, slower economic development etc. The total free market/zero tariffs globalisation option means a reduction of prices and a short term (several decades) boom in living standards whilst simultaneously gutting industries especially in countries with higher standards of living, leading to long term decline and lower standards of living for the majority.
Currently my feeling that what is ideal is as free market as possible on the nation state level (offset effects of tariffs on standard of living as far as possible - low or zero taxes on production, small government), whilst using broadly as small tariffs as possible to maintain balanced trade (and maybe fund the government). I also think there are certain industries that we should view as our core competencies that we must maintain in-house. Those are probably roughly our defence forces and energy production. We should be designing and building our own war ships and planes (and the rest) and also our own nuclear reactors (or whatever energy source we decide is best) rather than off-shoring the job to the Chinese or anyone else.
avinalarf said:
As an example I give you Dyson who at first made great play that his products were made in the UK but then decided it was more important to maintain and increase profitability by moving production offshore.
If I remember correctly Dyson kept production in the UK while he could charge the premium UK labour cost over Far Eastern Labour as he still had all the patents protecting the Cyclone system. Once he gave up protecting the patents as it became a drag on the bottom line to do so and he was competing against everybody else making a Cyclone clone for less than he was he had no choice but to move the manufacturing process abroad or go bust as people rarely pay a premium for UK made if they have to.Any system that you replace globalisation will be exploited by big business, there is too much money to be made taking and making advantages others won't.
hyphen said:
avinalarf said:
It is a fact that Corporations are obliged to return the best profitable results for their shareholders.
I'd put it more along the lines of the directors of the company obliged to do what is best for the long-term success of the company.CEO's paid inflated salaries for mundane results and shareholders expecting ever increasing dividends at the expense of long term company investment in both infrastructure,technology and the well being of its workforce.
Dr Jekyll said:
But the advantage is that we can buy stuff more cheaply. A manufacturer that can buy cheap steel is going to stay in business longer than one who can't. So suggesting more trade means more unemployment is extremely simplistic. In the long run producing everything where it's cheapest makes everyone better off.
How so?The cost of housing is a massive factor that affects individual wealth and standards of living in general. Cheap labour in the East is fine for manufacturers producing goods but sooner or later those workers will realise that the wealth distribution is unfair. For this reason Brexit featured immigration as a major reason to control cheap labour, too late.
Esseesse said:
avinalarf said:
So what is an antidote to relieve those problems caused by globalisation ?
An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
No I think there is a happy medium that can be followed.An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
The two side to me are that total protectionism means high prices, lower standards of living, slower economic development etc. The total free market/zero tariffs globalisation option means a reduction of prices and a short term (several decades) boom in living standards whilst simultaneously gutting industries especially in countries with higher standards of living, leading to long term decline and lower standards of living for the majority.
Currently my feeling that what is ideal is as free market as possible on the nation state level (offset effects of tariffs on standard of living as far as possible - low or zero taxes on production, small government), whilst using broadly as small tariffs as possible to maintain balanced trade (and maybe fund the government). I also think there are certain industries that we should view as our core competencies that we must maintain in-house. Those are probably roughly our defence forces and energy production. We should be designing and building our own war ships and planes (and the rest) and also our own nuclear reactors (or whatever energy source we decide is best) rather than off-shoring the job to the Chinese or anyone else.
I'm also quite anti this perception that competition in the market place is good too - actually to re-phrase I'm against trying to create competition in a marketplace where very little exists but where the needs of the marketplace are covered by the existing contracts and negotiation process.
I worked for a company many years ago that had 90% of the UK market for a medical device and a small but useful chunk of the Northern European market - it employed around 200 people. The 10% of the UK was made up from European competition/suppliers nibbling at the edges of the business. The market place was happy with the prices and the quality of the product. We were able to re-act to unexpected demand and the logistics costs were minimal - good example of small manufacturing. Having a sister plant in Europe also meant that if in the event of a manufacturing issue or component supply an alternative source of approved devices could take up the slack under the same company umbrella.
The regulatory/government body wasn't happy with a near monopoly so informed the company that from X year they would only be able to supply a maximum of 50% of the market - the other 50% would be supplied by European suppliers and product from Australia.
Approx 75 people accordingly lost their jobs and the manufacturing base was restructured to accommodate the lost volume - there was no opportunity to grow the business in Europe from a UK base because of the sister plant in Europe.
The Australian products were hit by logistical issues of supply and also a number of quality issues so around a year later the regulatory body were asking for an increased output for a short term period - skilled people lost weren't coming back for that. So there were costs associated with training new people. Once the quality and logistical issues with the Australian alternative were resolved it was back to 50%.
The sister plant in Europe that was also facing similar volume issues and was also committed to a high level of capital expenditure on automation so with two plants with high operating costs v the volumes one was closed. It was the UK plant - all the remaining staff lost their jobs and the manufacturing was centralised in the Europe Plant.
You know that expression about putting all your eggs in one basket.......
B'stard Child said:
Esseesse said:
avinalarf said:
So what is an antidote to relieve those problems caused by globalisation ?
An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
No I think there is a happy medium that can be followed.An obvious answer is protectionism,along the lines that the Donald proposes,but isn't that a bit defeatist ?
So any ideas ?
The two side to me are that total protectionism means high prices, lower standards of living, slower economic development etc. The total free market/zero tariffs globalisation option means a reduction of prices and a short term (several decades) boom in living standards whilst simultaneously gutting industries especially in countries with higher standards of living, leading to long term decline and lower standards of living for the majority.
Currently my feeling that what is ideal is as free market as possible on the nation state level (offset effects of tariffs on standard of living as far as possible - low or zero taxes on production, small government), whilst using broadly as small tariffs as possible to maintain balanced trade (and maybe fund the government). I also think there are certain industries that we should view as our core competencies that we must maintain in-house. Those are probably roughly our defence forces and energy production. We should be designing and building our own war ships and planes (and the rest) and also our own nuclear reactors (or whatever energy source we decide is best) rather than off-shoring the job to the Chinese or anyone else.
B'stard Child said:
The regulatory/government body wasn't happy with a near monopoly so informed the company that from X year they would only be able to supply a maximum of 50% of the market - the other 50% would be supplied by European suppliers and product from Australia.
I used to have the probably common thinking that monopolies = bad and should probably be broken up. However my position has changed a bit on this recently, and conveniently falls into my normal thinking that government intervention = bad. That is because in a free market if you're able to maintain a monopoly you must be providing very good value for money - so so what. If a monopoly is taking the piss it won't last long.Globalisation and free markets might mean cheap products in UK shops, but unless the UK competes in the international market our consumers won't have the funds to buy said goods, no matter how cheap.
There's no real answer to globalisation imo, the UK isn't going to go back to making products for the same price as overseas suppliers, and the UK consumer is used to buying 5 pairs of socks for a couple of quid from Primark. As one example, clothes today are cheaper than when I was a teenager, and I'm in my mid-fifties.
There's no real answer to globalisation imo, the UK isn't going to go back to making products for the same price as overseas suppliers, and the UK consumer is used to buying 5 pairs of socks for a couple of quid from Primark. As one example, clothes today are cheaper than when I was a teenager, and I'm in my mid-fifties.
Esseesse said:
B'stard Child said:
The regulatory/government body wasn't happy with a near monopoly so informed the company that from X year they would only be able to supply a maximum of 50% of the market - the other 50% would be supplied by European suppliers and product from Australia.
I used to have the probably common thinking that monopolies = bad and should probably be broken up. However my position has changed a bit on this recently, and conveniently falls into my normal thinking that government intervention = bad. That is because in a free market if you're able to maintain a monopoly you must be providing very good value for money - so so what. If a monopoly is taking the piss it won't last long.The terrible thing for me was that they were prepared to pay 50% more to buy the Australian products in order to break up what they believed was a monopoly. Seriously where is the logic in that!!!
The action caused a chain reaction which ended up with the closure of the UK manufacturing base to reduce costs and centralise in Europe because a plant which had for years been a very viable operation had been impacted but something that wasn't even good value for the market place.
From 2012 (I think)
Still pretty much on the money.
https://www.youtube.com/watch?v=mwnb8YgSgxo
There is a large (96 page) pdf by John Moynihan / PA Consulting somewhere in the internet - just cannot find it.
Still pretty much on the money.
https://www.youtube.com/watch?v=mwnb8YgSgxo
There is a large (96 page) pdf by John Moynihan / PA Consulting somewhere in the internet - just cannot find it.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff