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Tax Research UK Blog is written by Richard Murphy unless otherwise stated and published by Tax Research LLP under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
Design by Andy Moyle
This is why I’d like to stay in the EU and for there to be a union (in some more equitable form) in the UK. Honestly – this is something we really need to be aware of. As world resources get harder to find and as the environment degrades we need co-operation more than ever before. It scares me to death to be honest.
Comparative advantage had been a dead duck long before Smith and Riccardo. It is painfully obvious the winner is the state opting to make weapons on behalf of all the others. Athens pulled this one off with its navy. This is very old news and what’s scary is so few know.
This is a really incisive summary and I agree wholeheatedly with @PSR too.
Pilgrim Slight Return says:
“This is why I’d like to stay in the EU ….”
Which is what Scotland voted for.
“……and for there to be a union (in some more equitable form) in the UK. ”
Which Scotland has given-up expecting. A good while ago. The Brexit process and complete hogging by the Westminster, London-centric Tory Party to the exclusion of all other regional, and national, interests has made that very plain indeed.
Well – you know what they say about giving up on anything?
No pressure brought to bear = No change.
I’ve learnt lots of things on this blog but the thing I’ve seen the most of (as evidenced by the noble Professor who runs it) is the effectiveness of persistence.
Nil illegitimum carborundum
As they say
Errrrrrrr ……. you wot?
Pardon?
PSR –
“Don’t let those of questionable parentage grind you down”
🙂
Well put and explains another red herring that the city sold the politicians. Humans tend to move to new suppliers when prices are 20% lower although there is a drag with corporations due to the entire network of people employees schools social networks etc. London is the great third city of Europe and culturally etc we will not lose out much to Moscow or Istanbul.
The looser regulation and light touch risk a loss of credibility as the vested interests push their interests too far.
Sounds a bit like the notion of compulsory voting of shares by institutions would make things better but actually made the situation worse and the 60% that didn’t know or bother now tick the compliance box in favour of management thus outweighing the active engaged voting by the 40% that responsibly exercised control.
A simple scary message, somewhat marred by the accompanying cheery jingle. Makes it sound as though there is nothing to worry about. There is plenty!
Robert Kuttner wonders if “democracy can survive global capitalism”, in his book of the same name. He suggests globalisation, which has really meant developed nations outsourcing to wherever is cheapest, where capitalism is unencumbered by inconveniences like regulation, worker protection, decent wages, corporate taxation and so on, has not only undermined the social compact at home (the USA in his case) but has also imported low standards, much lower than now accepted in the US and UK, which have themselves made a bonfire of many regulatory standards and pushed wages to the bottom.
‘The economist Dani Rodrik put it well: “Democracies have the right to protect their social arrangements. And when this right clashes with the requirements of the global economy, it is the latter that should give way.” Government needs to explicitly assert its right to prevent global laissez-faire forces from undermining its capacity to devise and broker a decent social compact at home.’
Globalisation sounds so progressive, but much of it is simply predatory capitalism. Perhaps it’s time to reverse some of this. When I was a (small) farmer I was frequently incensed by the unfair competition where UK farmers were expected to produce food to higher standards of animal welfare than some stuff that was imported. After Brexit, this is only going to get worse. (yes, as an item in today’s Guardian informs us, when we import US foodstuffs we’ll be able to enjoy, maggots, rat hair and excrement, but only to very low levels of course)
in 1986 Dr Deming wrote a book (Out of the Crisis) urging the USA to follow Japan and make quality their goal, i.e. right first time and continuous improvement. In 1993 in his book, The New Economics, published posthumously, the Preface contained a paragraph stating ” We have been taught by economists that competition will solve our problems. Actually we now see that competition is destructive.” Throughout the book he rails against the competitive paradigm, and in his lectures in the late eighties.
I asked him what had happened. He said he had finally found out that in the West the axiomatic role of competition in the minds of politicians and top managers had prevented the optimisation of industry. In his 90’s he was frantic about this epistemological distortion and literally gave up his life to change it, running conferences in a wheelchair with an oxygen tank attached until he died at 93.
So, I am heartened by this discourse, but fear it is too late.
John Carlisle
Thank you John. I thought I was the only person here who had read Deming. He was a genius and spot on the money.
In the book ‘The Puritan Gift’ (Kenneth & William Hopper, 2009, I.B Tauris) in Chapter 16 ‘Dr Deming Rides to the Rescue – and Fails’ the Hoppers sum up Deming’s efforts to improve US industry from 1980 to 1993 like this (p. 242):
“Deming was a kind of American Protestant Don Quixote who broke the wooden lance of Quality on the heavily fortified windmill of share holder value'”.
I do not think that the Hoppers are trying to denigrate the great man John – it’s just that they are putting across just how badly understood the effects of creeping financialisation of US industry were at the time – that the sands were rapidly moving under the great industrialists feet like Deming (and Peter Drucker – another hero of mine along with Russell Ackoff).
BTW it was Peter Drucker who said “The CEO is an American invention. There is no real counterpart…………….in the management of any country” – indicating how pervasive destructive US business thinking and practice is around the world.
How weird. I was just checking with The Puritan Gift to see if I could another dimension on Deming and the USA for my comment. No luck, but a great example on pp 204 and 205 as to how the economists/advisors stuffed up the rate of capital (re) investment in the 60’s and 70’s because the did not understand the depreciation allowance calculations.
I met William about ten years ago at a Deming conference. He was a lovely, humble man -full of wisdom.
By the way, to your “wot”? Richard is merely borrowing from Horace, or perhaps Catulus, to soften his bad language, i.e. don’t let the bastards grind you down.
Thanks for that John – alas I only went to a bog standard comprehensive and never did Latin. The inferiority complex as a result is palpable.
People like Deming and many a company manager have been bamboozled by the Finance sector who to my mind anyway have just asset stripped where ever they have gone.
It can only be described as an anti-industrial policy in my view.
The Puritan Gift (I read it in 2009) was one of my first introductions to what was happening in industry and to bring it up to date in the UK may I recommend Tom Brown’s ‘Tragedy & Challenge’ which focuses on the UK situation and comes more a less to the same conclusions.
Pilgrim
Thanks. Just ordered Tom Brown, which I know will just confirm my theory that the big microeconomic problem we have in the UK is the management system – whether it is production, services or public and cultural sectors. But it will give me evidence, which helps my blog https://sheffieldview.org/, otherwise known as “mad management”.
I will leave the macroeconomics to the really brainy economists like Richard and Steve Keene.
You’re welcome John.
All I would suggest is that you can marry up yourself what is needed at the junction or crossover between micro and macro policy areas. The two are meant to work together. Don’t limit yourself.
My view is that the State sets the scene for the micro environment with the suitable macro policies it creates.
Some questions that might help;
What should the Government role in labour and management relations be? And why? What are the benefits?
Are current laws and regulation of investment fair or do they favour investors too much and discriminate against employees (including management) and Boards and nation states? What can sovereign Governments do to address any imbalance of power?
Where should Government concentrate any tax breaks or tax reductions – on the industrial or the financial sectors? And when?
With regard to pensions, is the requirement to maintain the value of the pension fund at any cost too narrowly focused?
To ensure the delivery of intended policy outcomes, what is the best route by which a Government can invest its currency – through a national bank or through the private sector? Or both? And how?
Thanks for the link – I’ll take a look.
Pilgrim, I would add this rider to your list of questions: Every policy statement must be accompanied by a plan for the implementation, signed by the responsible politician.