As the FT has reported this morning:
Ed Miliband will on Tuesday call for a government-backed “Made in Britain” mark to insert more patriotism into British economic policy, as all three parties attempt to convince a conference of industrialists of their commitment to UK manufacturing,reports the FT. Mr Miliband is trying to persuade employers that Labour is serious about helping business, although his call for patriotic branding of UK goods may rekindle memories of Harold Wilson's “I'm Backing Britain” campaign in the 1960s.
I welcome this.
I'm unashamedly local in my outlook.
I believe that the free flow of capital is harmful - and has impoverished billions of people.
I believe that green means reducing wasteful energy spent on transport.
And I happen to think Ricardo did not get comparative advantage right: he forgot the forgot the fact that physical capital is not mobile, and nor are many people. Therefore there does not to be allowance for that 'stickiness' in world trade.
The debate on what is and is not appropriate in trade is only now really beginning. What I do know is that the idea that it's a free for all is profoundly wrong. Good for Ed Miliband for recognising that.
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Have you come across the New Deal ‘Blue Eagle’ – well worth a refloat: http://en.wikipedia.org/wiki/Blue_Eagle
Not often I get the chance to agree with Ed but he is entirely right on this. What would also be helpful is massive global taxes on things that cannot be produced locally (the main item being electrical goods) to encourage a repairing culture that could provide huge job opportunities for the currently unskilled young.
The irony is that we travel to places like France and Spain and Italy and comment of how they have kept their regional identity and do not see that this is a model we could be following, rather than the soulless corporatisation in the US model.
Grow your own, make your own and buy local. That way leads to a more engaged and fulfilling life, though I accept it is not viable for far too many people at the moment.
Except that most electronics are “don’t work: throw-away”
Most of the complex, and slightly-less-complex electronics are machine-constructed, and repair is extremely problematic EVEN IF the parts are available.
Even washing machines feature large scale integration of electronics.
Grow your own: Nice if you can afford the cost, and I don’t mean seeds….Most people work long hours, and many work weekends.
Working in the city and commuting costs upwards of £3000 per year in transport, and three hours per day in travelling. Not much time for grow-your-own. Good idea though. Tried it. Tesco veg were much less costly. And in any case, there is a layby veggie vendor a few miles down the road at weekends !
Not much point responding to this as it will get lost in the blog, though the points I make are important.
Don’t you think spending £3,000 a year and three hours a day commuting and having an economy that encourages (or even allows) “don’t work: throw-away” is part of the problem? If Tesco can sell veg for less than you can grow them doesn’t that make you wonder how and at what hidden cost to the environment?
In Brave New World one of the phrases was “ending is better than mending”: and that was an intelligent person imagining a future drained of all human values. Our life gets value through being involved in the immediate environment.
@JohnM, you raise an important issue: commuting. It is the sign of a dysfunctional economic system that people cannot afford to live near where they work. If we had a sensible property tax (LVT) the value of residential land, which is mostly lightly taxed, would fall in relation to commercial land, which is not. In effect you would be buying the bricks and mortar and renting the land. The selling price of land would tend to zero so house prices and mortgages would be affordable.
Everyone would then be paying the tax out of income, including those who have paid off their mortgage and are now, like myself) living (too?) comfortably on a pension. It would require a fairly long transitional period with reliefs but at the end of the exercise the land/property market would function correctly. Locations where higher relative remunerations are available would have higher land values (as they do now) and those higher salaries would pay for the higher LVT on the houses.
Commuting is a very big issue which needs to be addressed for the sake of the planet, if nothing else.
The problem is that there’s no such thing as ‘Britain’!
Perhaps it should be extended to the service industry as well and only given to those businesses who do not outsource work to cheap labour markets. Accountants could start things moving.
EU labour laws.
The main area for outsourcing for accountants is Asia.
The headline refers to the days of the sixties. Unfortunatly, I am old enough to remember the sixties and the seventies when similar patriotic calls were made.
There was only one problem. Most manufactured goods from the UK were crap. While Germany was producing the initial VW golf and Japan the Datsun Cherry, we churned out rustbuckets like the Austin Allegro, the Morris Marina and the Austin Princess. Even Jaguars had a poor reputation. As one journalist observed “if you want to keep a Jaguar on the road, you need to own two”
The truth is that you have to produce goods of quality at a price that people are prepared to pay. If you can do that you do not have to rely on patriotic fervour to keep your industry going – the quality will do that for you.
PS
Germany sells BMWs. Mercedes, Porches, VWs etc. all over the world. They sell because, as I said, they are goods of quality that people are prepared to buy. They do not need Angela Merkel appealing to the fatherland to keep them going.
And some of those BMWs are made here
As are Nissans
Your hypothesis does not work
Try to live now – not in a time warp
But those BMWs and Nissans are only produced here because of the free flow of capital, something you decry in the blog. You can’t have it both ways.
D Kane is absolutely spot on: if British manufacturing was good enough we wouldn’t need any of this silly Buy British exhortations.
We can chose what inward flows we want when we have regualted capital
We would not turn these down
You’re wrng
The Japanese have no problem making cars in the North East and the Midlands.
Of course, the great advantage that the Japanese and Germans share is that they don’t have to suffer UK private-sector management and the culture that supports it. That’s what killed manufacturing & engineering in the ’60s & ’70s. Engineering conglomerates were transformed into banks where rate of return on capital was more important than product development. Since then, the high exchange rate (kept high for the City) has eroded what’s left.
The only solution is Socialism: give workers control of the capital.
Instead of going to banks, the Quantitative Easing needs to be long-term investment in manufacturing co-ops.
Sounds familiar to me!
And workable
Hmm. I thought the principle of comparative advantage depended on the relative immobility of at least some forms of capital. If capital is always completely mobile, comparative advantage is impossible. Ricardo, from “On the principles of Political Economy and Taxation”:
” … if capital freely flowed towards those countries where it could be most profitably employed, there could be no difference in the rate of profit, and no other difference in the real or labour price of commodities, than the additional quantity of labour required to convey them to the various markets where they were to be sold.”
Yes – but then he also assumes it can be written off without actual cost when comparative advantage changes
That may have been possible once
It has massive implications now