C_steam

Thanks. I've just ordered Hazlitts book from Amazon.

Tom Collier

C_Steam, first point; do you mean world wide for us or the rest of the world. If the former, I agree. I agree with your point Paul about it being not our business what occurs in the suppliers nation.

One thing that bothers me with UKIP is the number of people who are not seemingly content with British withdrawal from the EU but want its destruction and revel in reports of imminent collapse. This is the specifically Tory obsession with continental affairs of the worst kind. EU collapse is neither needed nor realistic in the foreseeable future and it would rob us of making a positive case for Britain. Whatever happens, it is likely that most of continental Europe will opt for social bureacracy over the so called anglo saxon model so why waste your breath?

History is full of different economies trading. It happened between the US and USSR in the 1930s and throughout the world during the cold war. My hypothesis is that Britain is a natural world trading power which would benefit from unilaterally reducing tarriff. This is in contrast to the US and EU who tend to be periodically protectionist and will only initiate tarriff reduction in concert with a weaker economy. However, centre right parties which advocated free trade collapsed throughout the West at the end of the Cold War for various reasons. In Britiain we still suffer from the Thatcherite atomising of society. Thatcher didn`t go for free trade, she stayed in the EU, crushed the unions, sold off national industries (with some successes some failures) and, having preached monetarism reflated the economy in 1987-88. Regardless of view, post poll tax, it has been hard to use the term independently of a largely unpopular legacy. Read Galbraith for an interesting but largely non economics version of how the term capitalism gave way to enterprise and then finally to free market. Capitalism it seems was too harsh and developed a definition based on duality to socialism.

In the 1900s the Liberal Party was both a doctinaire party of free trade and also built an embryonic welfare state by introducing NI and pensions. Victorian type poverty was becoming less acceptable. But most of the working poor suffered not from low wages but insecurity. Dockers could make good money in a busy spell and then be laid off. The different stages of life (pre children, post children, old age) was termed the poverty cycle. But when the Tories tried to promote protectionism for the white empire against rising rival economies they were roundly beaten in the 1906 General Election. The poor liked the surplus of cheap imports that the late Victorian age had brought that made living cheap. The Liberals argued that even if other countries protected industries, this would breed non competitiveness and thus opportunities for the British. See "how mumbo jumbo conquered the world" (can`t remember the author off hand, sorry) for how globalisation occured quicker then than now in these less confident times. From 1870 farming in the UK went INTO phpbb_steep decline until the two wars as we imported. Country estates were expensive, non profit making luxuries for owners whose real business interests lay elsewhere.

I think it is essential today to use freer trade to reduce costs of living. Farming does need some subsidy for national security but not price maintainence. The capacity to produce need to be kept alive. I posted elsewhere on why i think the state should control the arms industry.

Nationalisation is seen as anti free market (though free trade is slightly different, here symantics become important). I think thepresumption should be against state involvement. However, where there are natural monopolies which cannot be allowed to fail and are being heavily subsidised by the state, eg the railways and utilities I would see nationalisation as a solution. Public private partnerships seem perfectly designed for state bureaucracy and corporate bureaucracy. Bureaucracy does exist as a problem in both public and private sectors though, under New Labour this emanates from mad policies of government, though again, it is sometimes hard to see the chicken and the egg.

With regard to protecting manufacturing, I don`t know. I`ll look at Paul`s recommended book, see if it helps. We need more industries where work is both plentiful and useful. It need not be manufacturing (though as Paul says we do have some of that) and as I have said I favour unilaterally reducing protection, not the other way, as I think Britain would benefit more from cheaper stuff to anything else.

C_steam

I meant the first. I don't know a lot about economics but when I considered a thread talking about 'free trade' and contrasted that to the decline of manufacturing and farming in the UK, together with orders for ships etc going oversea's I wondered what the overall impact of the UK adopting 'free trade' actually would be.

I need to read the book, but I think UKIP needs to be very careful how it uses the words 'free trade' if adopted as a future detail policy, perhaps it isn't something (arguably) that is right for all aspects of our industries and services, although i suspect Paul may have a differing view - perhaps you can't pick and choose by sector.

Paul Birch

I agree. However, I think many of those people may be hoping for an EU collapse not for its own sake but in order that we can get out of the EU.

That's a little unfair. The failed privatisation of the railways was post-Thatcher. And the return to over-spending was due to the increasing power of the "wets", which she was unable to contain.

That's not quite correct. Free market is the correct and traditional term. The word Capitalism was invented (or reinvented) by Marx as a term of abuse. Properly, a capitalist is not "one who advocates a free market" but "one who contributes capital to an endeavour". Any form of economy that employs capital is therefore capitalism, including communism. There are many forms of capitalism, such as State Capitalism or Rhenish Capitalism, that are anything but free market. That is why free marketeers traditionally avoid the word. "Free enterprise" was however used as a stand-in for "free market" when the socialists had made market itself a dirty word (to the point at which Star Trek ludicrously envisaged a moneyless economy and openly sneered at our primitivism in using money and market economics).

It's not essential. At best foreign trade can only add a few percent to our national product; it makes us a little better off, so free trade is definitely worth having, but it's not of overwhelming importance. Creating an internal free market is much more important, not a mere few percent, but orders of magnitude difference in our economic growth rate and standard of living.

I understand the argument, but it's mistaken. At most there might be a case for storing a year's emergency food reserve. Beyond that subsidy or intervention is quite unnecessary, and indeed harmful: a free economy could easily boost food production even from the absurd extreme of nil to full supply within a year, for peanuts - no more than a few percent of national product. In any case, as I have pointed out repeatedly, domestic production of food has a general comparative advantage over foreign production, due to the cost of transport and distribution; it is highly improbable that a free market economy would cease to produce enough food to feed itself in an emergency.

Tom Collier

We would be foolish to rely on the EU`s collapse to save us. As we keep saying ourselves, it is primarily a political project, NOT an economic one. Thus it would take tremendous strain unless political objectives change.

Regarding Mrs. Thatcher, I am sceptical. She did not understand the harmfulness of the EU, did she really understand monetarism? I understand all PMs are influenced by others in cabinat. But I think she did like power too.

Thankyou for your point about the terms, capitalism, free market, not forgetting the flashy, laissez faire! Fascinating about Star trek.

Okay, freer trade may not be essential. But a cheaper cost of living for most people is essential, however it is achieved! I think the EU denying us extra-european trade is significant.

I think you have a point about stockpiling. One year`s supply might not be a bad idea, for food and other basics. It seemed to take us a long time to feed ourselves in WW2 but maybe now with better technology. Yes, WW2 had no free trade, but suely the Land Army were trying.

Paul Birch

I agree, but we can't blame people for grasping at straws.

Well, I don't know, but I suspect that she did understood both (whatever she says now).

It's not a matter of being influenced so much as not having absolute authority; in the late eighties Mrs Thatcher lacked the political power to overrule the wets; and even in the early eighties she lacked the political power to overrule the europhiles.

In WWII there was no free market. One of the worst blunders was the introduction of rationing; this blocked the normal market adjustments (price rises) that would otherwise have elicited a surge in domestic production and in private blockade running by foreign vessels. Propaganda posters just don't have the same clout as the prospect of enormous profits. Rationing also cost a lot to administer, diverting valuable resources from the main war effort. It may have added as much as a year to the war.

nyorks-patriot

The fact Third World nations would rather grow cash crops like Sugar and Coffee is the reason they have so many famines and so much starvation.
Free Trade Encourages this.

Free Trade equals Death.

nyorks-patriot

Free trade especially with nations of whom we can’t possibly compete is an anathema to Conservative thought.
Its pure 19th century Liberalism.

nyorks-patriot

Well said!

nyorks-patriot

China will eventually be the richest country in the world through its use of Protectionism, Nationalisation and General Corporatist economic policy.
Much like it built Japan and Sweden up till the 1980's when they too engaged in the crazy policies of privatisation and free trade.