Opinon: the unchallenged global free market

[Millennium3]

You can view the page at http://www.democracyforum.co.uk/cont...al-free-market

[angelman]

I pointed out in my article concerning the minimum wage that the seeking out of the cheapest labour by the global corporations has left a large slice of our unskilled and semi-skilled labour force facing an extremely uncertain future – this uncertainty is bound to effect other areas of the workforce as the under developed East are increasingly able to supply relatively cheap labour in the more skilled jobs, perhaps best demonstrated recently by Vince Cable’s declared desire to open up the UK to immigrants from India.

What we need in this country is to get the manufacturing sector back up and running. I find it crazy that I can only buy nail clippers from China. Radios, computers, televisions etc from some Tiger. Cloths. This and that. Pretty much everything. So it comes down to price. Surely it would be better to offer incentives to manufacturers than continue with such a crazy balance of payments deficit. I will confess to not knowing what limitations the EU would impose, but I am sure that the rate of corporation tax could be set appropriately low to encourage manufacturing and employ the unskilled and semi-skilled.

However, if Vince Cable's desire plays out, then it really would be rather a waste of time to open up manufacturing. Immigration controls would have to be in place in order that local labour is not under cut by immigrant labour who are more prepared to work for the minimum wage.

Clearly whilst we are trapped in the global free market, the UK, whose oil production is low and whose untapped reserves are difficult to extract, will be at the mercy of these rapidly changing forces. Free of this market we would be able to manage all of our resources in a regularized fashion which would give our children and our children’s children a far greater degree of security even if we were obliged to accept a lower standard of living – which will be the end result whether we take these matters into our own hands or not.

The danger of remaining in the center of the turmoil of the free market is that we will have little or no say on where we end up, we will be at the mercy of forces which are too powerful to control by any UK government.

I agree that a certain amount of control should be taken back, but it is now all too late. We have signed our "freedom" away to Brussels and have to work within their framework. Now I am no lover of the EU, but isn't it be better for us to pool our resources within the EU and compete on the world stage via the world's biggest economy (that is taking the EU as a single entity)? While we have little control on the world market, we have a lot more within the EU. What we would need to do is take back control from the EU or ideally, try and return to the EEC, although I realise that this will never happen. And that to me is one of the problems we will face in the coming decade or so. Britain will compete best with the EU but the social(ist) aspect of it will mean that it will never be accepted in this country.

[angelman]

PS - with an ever expanding EU, admitting poor(er) countries, our influence gets ever diluted and we expose ourselves to the same problems as are found on the global free market. Workers from the poorest part of the EU will take the minimum wage jobs more easily than "locals". For one, as they are not setting up a permanent residence and often have living arrangements more in tune with student backpackers, their overheads are so much lower and mean that they can "afford" to take such low paid jobs for the short time that they are in this country.

[Millennium3]

What we need in this country is to get the manufacturing sector back up and running. I find it crazy that I can only buy nail clippers from China. Radios, computers, televisions etc from some Tiger. Cloths. This and that. Pretty much everything. So it comes down to price. Surely it would be better to offer incentives to manufacturers than continue with such a crazy balance of payments deficit. I will confess to not knowing what limitations the EU would impose, but I am sure that the rate of corporation tax could be set appropriately low to encourage manufacturing and employ the unskilled and semi-skilled.

Reducing or scrapping the minimum wage and finding a mechanism to pay those earning below a minimum hourly rate the difference must be an improvement on having high unemployment and the prospect of vast numbers facing indefinite unemployment. This would help to reduce our imports and improve our Balance of Trade deficit and would be cheaper than having to pay unemployment benefit to these people.

Unfortunately the Tories would have difficulty introducing such a measure [bashing the lowest paid] and Labour could not because the Unions would not allow it.

[Alan Wood]

Millenium,

What a timely and prescient piece of work. Vernon Coleman's book on Peak Oil is very interesting too. There are other threads on this forum talking about the Chinese hoarding of rare elements, the loss of Britain's competitive edge through lack of investment in R&D. The rise of bureaucracy to replace production. What a mess Britain has contrived for itself. But can the earth's resources cope with its soaring population? I think not!

I also recall my chief engineer asking me to examine marginal pricing and of course the globalists benefit by buying from a source of cheap labour who can mass produce for a global market and sell into that market. The joke is that Britain was desperate to break into the European market so joined the EEC and found that the Germans were better at selling to us, and now Sarkozy now wants to put up tariff barriers to keep out cheap Asian goods.

In a global economy Britain is in a poorer position than for many years; it is lagging behind in technological development, its unit costs of production cannot compete with the Far East, its oil and gas reserves are severely depleted, it has sold off national assets, it is overborrowed, it is carrying too many public sector pensioners (lile me), it is carrying too many older and incapacitated people who have too low a pension provision & there are too many asylum seekers not working.

I agree, Millenium, that things are looking grim (my words). In my lifetime we have had an unprecedented increase in our standard of living, but I fear that we are not best placed to compete in the world market in the immediate future. The globalists are unlikely to use our savings to invest in Britain unless we develop many more innovative products for sale overseas. The Con/Lib coalition government has made a start in cutting internal consumption but I fear that whilst we are shackled by EU social and market policies European governments will reign over a sharp decline in living standards.

[Millennium3]

Alan, thanks for your comments.

In truth the only real solution is for nations to be self sufficient for their vital needs - certainly this should be their aim otherwise they could, and many will, be at the mercy of a ruthless global market which will demand chilling services for essential goods.

The appalling predicament now being faced by Ireland is likely to be the lot of a number of EU nations who cannot pay their debts. The best option for young Irish men and women is to leave! Ireland is likely to have to sell every remaining asset held by the government - no doubt much of the land will end up in foreign ownership. Economic war has the same end as conventional war, but without the violence.

70% of goods and services consumed by the French are supplied by French businesses - this is why they were able to recover from recession quickly. The French are nationalistic, they generally buy French goods even if they are more expensive or of poorer quality than foreign goods. It is a pity the Brits do not share the same patriotism.

[Tim the plumber]

Reducing or scrapping the minimum wage and finding a mechanism to pay those earning below a minimum hourly rate the difference must be an improvement on having high unemployment and the prospect of vast numbers facing indefinite unemployment. This would help to reduce our imports and improve our Balance of Trade deficit and would be cheaper than having to pay unemployment benefit to these people.

Unfortunately the Tories would have difficulty introducing such a measure [bashing the lowest paid] and Labour could not because the Unions would not allow it.

How about giving ecerone a basic income of say £3000 per year and then taxing all earnings at whatever percentage is required, 30%? Thus all earnings are beneficial and the road from dole to work is easy rather than almost imposable as it is at the moment.

Obviously if you are earning a decent wage then the initiial basic income would just set the level at which you start paying tax, £10,000.

Should cost a little more for the first month or two then when the currently unemployed are all doing lots of flexable work and in the ecconomy the cost will evaporate.

[Millennium3]

There must be a system whereby a significant number of jobs would remain in or be attracted to the UK if the minimum wage were scrapped [I think your system would impact too heavily on some groups] - as you say, if unemployment could be drastically reduced by this method [with top ups] - it would be beneficial.

Over time, wage rates would probably increase because with very few unemployed, there would be greater competition for workers. The large numbers now unemployed puts pressure on those in work - employers know they can fill most most of their jobs easily so they can they can be tougher on their existing staff.

[angelman]

M3, focusing on one industry, what about CAP? I was reading this http://www.cepr.org/pubs/policyinsig...yInsight13.pdf and was mulling over whether it was time to scrap CAP or not as it is the biggest cost to the EU. Scrapping it would open up our farmers to the unchallenged free market. Consumers wouldn't necessarily benefit from cheaper European food, as the farmers would be forced to raise prices to cover for the loss of subsidies, or face going out of business. It would also allow for cheaper foreign imports to come in even more than they do now.

However with announcements of a plan for an 8,000 strong dairy in Lincs (‘Battery’ dairy of 8,000 cows sparks protests - Times Online), intensive farming might be the answer, but with a huge social impact as small holdings disappear. Even then our economies of scale, especially for cereals, would no where near compete with other countries.

[Millennium3]

I guess you are a free-marketeer A. I do believe the minimum wage should be scrapped, with some benefit used to keep actual income at the same level, so as to avoid mass unemployment and the import of huge quantities of goods being imported which we could make ourselves - our Balance of Trade is far from balanced. However, if you read the rest of the article, you will see this would be just a measure to help keep us solvent in the short & medium term - Peak Oil is going to severely restrict global capacity to shift goods around the world, so to conserve oil, production and use are best kept as close as possible. So Peak oil really requires protectionism.

More efficient food production will be required to feed the hungry - oil is used to great extent in agro farming - oil which may not be available. I think we have very significant changes ahead, those nations which act first will be those which survive.