Once upon a time the UK was the biggest exporter of capital to the world.
Don't get me wrong, the foundations of the wealth which provided some of that capital that we exported was not honourable, desirable, or replicable. That was because, as a matter of fact, much of the capital that the UK exported to its Empire and other countries beyond its reach – like the countries of South America where British capital built so many railways - was the consequence of straightforward exploitation. That was either of slaves, or of the planet, or of British people. I have no desire to return to any such situation.
I could not, however, but think of this when I noted Keir Starmer in the role of Oliver Twist yesterday, begging the world for just a little bit more inward investment into this country. We do, of course, need it because any capital that we now have is entirely dedicated to the speculative purposes of the City of London, and even he must have noticed that this creates no jobs of any real worth for our economy as a whole.
I am, of course, aware that the word great in Great Britain refers to its geography and not it status, but I could not help but think yesterday about how far we have fallen, and how unnecessarily so. When, in the 1970s, North Sea oil was discovered and there was remarkably little awareness of the cost to the planet of exploiting it, the proceeds from that windfall could have been directed by Margaret Thatcher's government to the creation of new economic wealth for the UK. Instead, she dedicated it to the economic destruction of this country.
I am not saying there were no reasons for economic reform in the 1980s. Coal was clearly not our future by then. Modernisation of many industries was obviously necessary. But, Thatcher never tried industrial reorganisation. Instead, she and Ronald Reagan delivered what was called capital account liberalisation of the world's financial markets so that money could flow unhindered to tax havens and cross international borders so that goods and services could be acquired at the least possible cost, whatever the social or economic consequences.
She might have unfettered the City of London to exploit that situation, but the consequences were seen throughout the UK. From the valleys of South Wales, left bereft of purpose, to the empty factories of northern England, to the lost opportunities of generations who would not, could not, and should not have had reason to ‘get on yer bike', as Norman Tebbit said they should, that cost was enormous.
Starmer would never have admitted it, but he really was the glove puppet of Thatcher's ghost when speaking at his investment conference. It was her legacy, to which he is as much dedicated as Tony Blair ever was, that required that he put out the begging bowl. That legacy is a broken country whose sole apparent purpose is to undertake transactions of dubious economic worth to record profits that lack any real substance and which benefit few but an elite in our society.
Perhaps as tellingly, it is not the UK government that is short of funds in this country. It can create whatever sums are needed to undertake the many vital tasks that this country requires that it fulfil. The entities without money in the UK are our private sector organisations, bereft of ideas, a lack and capital, and without leadership that has any clue how to create value added. Starmer should have said that. But if he had he would have made clear why investing here is not a good idea. We are in a hopeless mess, and it is all because we were in the forefront of neoliberalism. We have paid a very high a price for that.
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Well said. Someone needs to take a chainsaw to this whole farrago. Democratically of course, but severe action is needed. Stop doing things that don’t add value, unleash those that do.
What scares me is the thought that perhaps ‘Big Money’ has become so powerful that this Government is now the furthest Left that could be allowed to be elected in Britain.
It’s humiliating….. our Transport Secretary calls out “hire and fire” (being made illegal under new legislation) by P&O only to be slapped down when its owner DP World (foreign government controlled) threatens to withdraw investment.
We seem perfectly content to have infrastructure being government owned… as long as it is a foreign government.
More generally, why do we trumpet the “success” of attracting foreign investment? Ultimately, it drains money/resources from the country as profits are repatriated. Whether a project can be delivered does not depend on money. Keynes said “anything we can actually do, we can afford to do” and this is true whoever finances the project. If it is worth doing it is worth doing with our own money – either private or government.
Agreed
It was demeaning Richard.
And no mention of BREXIT, no mention of austerity, just a willingness to be taken advantage of because of laziness, cowardice and corruption.
Sickening – but hey, I remain in my mind satisfied at least that I did not vote for any of this because they have lived up to my lack of expectations.
Didnt New Zealand get into trouble some years ago after selling off its family silver and then finding that the amount of foreign exchange it needed to allow the profits to be repatriated adversely affected its exchange rate.
Why are we so desperate for inward investment?
Granted, it brings new thinking, new ways of doing things, and innovation. All of which is good. But why are we despair for foreign cash?
In order to spend that money in the UK, to invest it, they have to exchange their foreign currency for sterling. The total amount of sterling remains the same with or without inward investment.
If there is no increase in sterling through inward investment then, clearly, we already have all the money we need within the UK. What’s stopping us investing irrespective of inward investment?
A genuine question. I’ve often read that capitalism drives innovation, but that has always seemed an empty mantra to me, as it’s never evidenced, and much innovation seems linked to government funded R&D which is then captured by the private sector (tech, drugs and so on). I wonder if “inward investment drives innovation” is just another rhetorical justification for what others are noting here, which is that investment always wants more back than is put in. Maybe we should call it “outvestment” or “takevestment” instead. To get back to my question, did you have particular innovations in mind, as I can’t think of any that have come from inward investment, and buying up UK infrastructure isn’t creating something novel, and I can’t see much by way of innovation in capitalism, we seem to be in a stagnant world over ever-intensifying self-similarity, the pinnacle of which being currently AI, which is damaging education, creativity, journalism, law, the arts and so on. I’m aware that the rate of invention is falling and what is invented, because of the incentives focuses on monetising rather than human wellbeing (surveillance tech does well). It would be interesting to separate those innovations that support and those that undermine the welfare of human and other life. I imagine the result might be dispiriting.
Marianna Mazzucato is the person to look at for answers on this.
She will confirm your suspicions.
Didn’t we have ‘inward investment’ as regards selling off water and other things and look at that mess.Profits and huge salaries paid out whilst they poison our environment? Failure to invest in upgrading the systems and suchlike because of greed and lack of responsibility.
Also Starmer says he wants to get rid of red tape and regulation but didn’t such behaviour lead to the Grenfell
tragedy?Let people make money with no sense of responsibility.
This arrogant man wants to create awful low paid jobs, such as by enlarging airports etc, which many don’t want to do and where people are treated poorly.
I am glad I didn’t vote for this bunch of self-serving politicians and guessed they would behave poorly.
I worry that Reform may do well in the next election because Starmer is so useless and Labour are fools if they don’t introduce PR as they could lose their ‘Majority’ and will keep a reasonable amount of power if PR is in force.
I don’t want to see Reform anywhere near power though I think their idea of two thousand pound tax free threshold is a good idea.
Sadly politicians never learn and a majority seems to destroy their common sense and any humility they may have.
‘Inward investment’ = can’t be arsed to invest or raise money internally and take any political risks = outward profits
This moving risk onto any supplier has been around since Adam was a lad. Both sides know what is going on.
I think that this is nicely set up so that tax breaks etc., are done deliberately so there is hardly any risk to the politicians and the ‘inward investors’ somehow get their money back through paying less tax and offshoring etc.
And if it all goes t*ts up, just ignore it and say nothing – like they have done with our water
It was so telling when R4 eagerly lapped up what the boss of Eli Lilly said – that we were such a small market compared with EU and US, so we had to offer ‘something special’ .
Of course the interviewer ddnt come back with – if we rejoined the single market would it help?
We have the disaster of foreign ‘investors’ in water and energy – but the commentators woudnt dare raise this.
Oliver Twist indeed.
What have we sunk to.
I heard a Republican American commentator today on radio say that, although the economic numbers are quite good, Kamala Harris is not benefitting. Voters do not ‘feel’ the economy is working well for them. I suspect the reason for that is that all the numbers show is that neoliberalism has worked so well for its sponsors, it has ensured all the benefit from the economy is efficiently hoovered up in corporate profits and bonuses, leaving Main Street with nothing at all. We may concluded this will go on as long as they can ‘get away with it’. In Britain Keir Starmer and Rachel Reeves are cheerleaders. This is what our very own Road to Serfdom looks like.
Agreed
When will people wake up?
Don’t forget the everlasting damage to Scotland. The only oil producing country in the world world which is far, far, far poorer because of Westminster dead hand of government.