Anti-strike laws not ruled out ahead of union summit (UK)

[Simon_Jester]

They already surbordinated themselves to the Americans by tagging along for Iraq and Afghanistan and many other military operations. Honestly, the UK hasn't gotten around to figure their place in Europe and America because they are torn between the Eurocentrists and the steadfastly "all things British". They haven't figured that out for the last few decades and I doubt tehy will any time soon barring a seismic change in leadership.

You seem to want to have it both ways.

On the one hand, you implicitly criticize the British for 'tagging along' with the Americans. On the other hand, you explicitly criticize the British for wanting a military establishment that would make them independent of the Americans. Because without carriers, their only choices are "depend on the Americans" or "military isolationism." By military isolationism, I mean the denial that there can be military problems anywhere in the world beyond your immediate borders that might require you to do something significant about them.

Many nations around the world choose military isolationism, because it's cheaper than power projection. The problem is that unless your nation is an autarky, military isolationism only works so long as someone out there is keeping the sea lanes open and the global economic climate favorable for whatever trade you need.

Britain does not have the choice of being an autarky. This limits them to choosing between having a military capable of looking after their own commerce and their own friends, and trusting someone else to do it for them. That "someone else" is inevitably going to be America.

So if it isn't in Britain's interests to be dependent on America, they do need a capability to look after themselves in a military sense. Otherwise, every time they face a crisis that demands a military response, it's likely that all they can do is holler for the nearest US carrier battlegroup.

Now, that's a legitimate strategic choice for them to make if they want to. But you don't get to have it both ways. You can't condemn the British both for being strategically dependent on America and for seeking a military capability that lets them be strategically independent of America.

[Guardsman Bass]

You people are in denial. You are no longer in any position to do serious power projection. France? Please. They can barely service their current carrier and they have a far more diverse and stable economy than the UK's. Brazil? Theirs are hunking old Brit crap. Italy? Those are largely used as helicopter carriers. They can hardly do any serious power projection. Honestly, face it. The days of the British empire were over for 5 damn decades and the UK economy hasn't been adapting well enough.

It's not about "keeping the British empire", it's about meeting actual commitments, like, say, the Falklands.

Industrial unravelling in the UK is already going full-steam ahead, from what I gathered. We'll see if the myth of "post-industrial economy" will live up to reality.

Britain's economy (and the economies of most of the Developed World) are already Service Sector dominated, so we're already in a "post-industrial economy".

[Fingolfin_Noldor]

They already surbordinated themselves to the Americans by tagging along for Iraq and Afghanistan and many other military operations. Honestly, the UK hasn't gotten around to figure their place in Europe and America because they are torn between the Eurocentrists and the steadfastly "all things British". They haven't figured that out for the last few decades and I doubt tehy will any time soon barring a seismic change in leadership.

You seem to want to have it both ways.

On the one hand, you implicitly criticize the British for 'tagging along' with the Americans. On the other hand, you explicitly criticize the British for wanting a military establishment that would make them independent of the Americans. Because without carriers, their only choices are "depend on the Americans" or "military isolationism." By military isolationism, I mean the denial that there can be military problems anywhere in the world beyond your immediate borders that might require you to do something significant about them.

Many nations around the world choose military isolationism, because it's cheaper than power projection. The problem is that unless your nation is an autarky, military isolationism only works so long as someone out there is keeping the sea lanes open and the global economic climate favorable for whatever trade you need.

Britain does not have the choice of being an autarky. This limits them to choosing between having a military capable of looking after their own commerce and their own friends, and trusting someone else to do it for them. That "someone else" is inevitably going to be America.

So if it isn't in Britain's interests to be dependent on America, they do need a capability to look after themselves in a military sense. Otherwise, every time they face a crisis that demands a military response, it's likely that all they can do is holler for the nearest US carrier battlegroup.

Now, that's a legitimate strategic choice for them to make if they want to. But you don't get to have it both ways. You can't condemn the British both for being strategically dependent on America and for seeking a military capability that lets them be strategically independent of America.

Or they could align themselves with Europe, which is the point I'm making with the tug of war between the Euro-centrics and the "all things British" lot. The former would prefer to align British interests with Europe, while the latter would prefer to align themselves with America.

And strategic independence? What strategic independence? The UK is in no position to go it alone anymore. They have to align with someone. There is no more room for gunboat diplomacy or whatever.

As it is, the British can at best maintain one carrier out at sea, and this is also limited by the fact that they have only so many escorts to do so. Not least the carrier is not cheap upfront. But then again, if they want to bankrupt themselves or throw their people down the gutter, be my guest. As it is, the UK's place in Science is declining and their universities are far cry from their hey days anyway.

It's not about "keeping the British empire", it's about meeting actual commitments, like, say, the Falklands.

You call that a commitment? I am more under the impression they are holding onto the Falklands to spite the Argentinians.

[Bluewolf]

You call that a commitment? I am more under the impression they are holding onto the Falklands to spite the Argentinians.

Yes I am sure that those 3000 people would enjoy being given away to Argentina. It's not as if they want to stay with the UK.

Jesus christ, I am not for carriers and even that sounded stupid as hell to me.

[aerius]

The London financial industry provides approximately two million jobs with the highest average salary of any industry sector. At any financial institution there are thousands of support staff to every hundred traders or ten executives/fund managers. It is in fact one of the few major supporting pillars for 'middle class' income.

I hardly see how this changes the equation. It created lots of bubble jobs for wealthy finance personnel. Which... got cut down during the banking crisis. As for finance being 'pillar' of the economy, sure, continue that way. Industrial unravelling in the UK is already going full-steam ahead, from what I gathered. We'll see if the myth of "post-industrial economy" will live up to reality.

Yup. What people don't understand is that the financial industry is by nature a parasitic industry, every dollar which is "earned" by the financials is actually a dollar which is stolen from the rest of the economy. It does not create wealth, it just moves it from one place to another. On top of that you're taking money from actual productive sectors and concentrating it in the financials where it isn't productive. I just looked up the numbers for the UK, the financials there make up 15% of their GDP vs. about 10% for the US and 6% for Germany. You can't run an durable economy based on stealing shit from other people, eventually you run out of things to steal.

[Simon_Jester]

Industrial unravelling in the UK is already going full-steam ahead, from what I gathered. We'll see if the myth of "post-industrial economy" will live up to reality.

Britain's economy (and the economies of most of the Developed World) are already Service Sector dominated, so we're already in a "post-industrial economy".

Stas's argument isn't that a 'post-industral' economy can't exist, it's that it's incorrectly named. "Post-industrial" implies a stable state in which the economy contains little or no industry relative to its size, and Stas is arguing that such an economy is not stable and cannot survive except by continually borrowing money or burning through its capital.

Or they could align themselves with Europe, which is the point I'm making with the tug of war between the Euro-centrics and the "all things British" lot. The former would prefer to align British interests with Europe, while the latter would prefer to align themselves with America.

And strategic independence? What strategic independence? The UK is in no position to go it alone anymore. They have to align with someone. There is no more room for gunboat diplomacy or whatever.

If Europe has no carriers (and equivalent shortfalls in other power-projection areas like air transport), it greatly limits their ability to influence global events, even acting jointly.

Even if Britain fully embraces a role as a member of the EU, it is still logical for them to retain power projection capabilities; of the European nations they are one of the ones most qualified to do so on behalf of the overall European community.

If no one does this, Europe will find itself permanently locked in the position of subordinate alliance with America, at least until America is itself no longer capable of power projection. Because whenever Europe has some interest that requires the use of force... they'll wind up having to shout for the nearest US carrier battlegroup. Unless we're looking at a future of pure, unadulterated pacifism, Europe cannot free itself from dependency on the US without a military capable of more than just territorial defense.

[Guardsman Bass]

Stas is arguing that such an economy is not stable and cannot survive except by continually borrowing money or burning through its capital.

Which is a bunch of nonsense. Do services not generate economic output?

[aerius]

Stas is arguing that such an economy is not stable and cannot survive except by continually borrowing money or burning through its capital.

Which is a bunch of nonsense. Do services not generate economic output?

A services sector can't survive by itself. Someone needs to grow, mine, or build the stuff that the service sector sells & services. A country going to a pure service economy depends on other countries to do all the dirty work for it, if every country goes to a pure service economy then everyone is fucked.

[TC27]

I find it funny how stupid people think we either have to be an imperial power or not have a military at all.

As an Island nation with no hostile neighbours but with overwhelming dependancy on sea trade and many far flung interests building the carriers is a entirely logical step and can easily be afforded within our modest defense budget if we choose to prioritise it (and compentely manage the costs ). They will make us a useful member of any US/European alliance and conduct modest independant operations if we choose.

[Zaune]

If no one does this, Europe will find itself permanently locked in the position of subordinate alliance with America, at least until America is itself no longer capable of power projection. Because whenever Europe has some interest that requires the use of force... they'll wind up having to shout for the nearest US carrier battlegroup. Unless we're looking at a future of pure, unadulterated pacifism, Europe cannot free itself from dependency on the US without a military capable of more than just territorial defense.

I'd go a step further that, and suggest that Europe should start looking at the US itself as a potentially very unfriendly rival.

[Big Orange]

Britain's problem is that we haven't got a really coherent strategy and the MoD is full of clowns who outnumber the frontline infantry, crewmembers, and pilots by a large margin. We shouldn't be punching above our own weight and wasting time in a unconquerable cul-de-sac like Afghanistan, but at the same time we shouldn't be wasting precious resources on one aircraft carrier too many and systematically fucking up the Nimrod programme.

The London financial industry provides approximately two million jobs with the highest average salary of any industry sector. At any financial institution there are thousands of support staff to every hundred traders or ten executives/fund managers. It is in fact one of the few major supporting pillars for 'middle class' income.

Much of that is funny money that has been malinvested in an unsustainable property bubble (exacerbated by a housing supply bottleneck that's been left to narrow by both the Tories and Labour alike) instead of being put into other more sustainable and beneficial sectors of the economy like manufacturing, agriculture, education, transport, utilities, R&D, etc.

And the upper echelons of giant international banks like RBS repay their gratitude to their medium to low ranking tax paying minions by firing thousands of them.

Tory voters by attempting to sell off UK public forests for a packet of bollocks.

Are you serious? The article you linked to states the exact opposite; it describes how Labour was selling off forests outright to fund their insane civil service beurecracy expansions, while the Conservatives want to end that policy and replaced it with leases and limited lumber rights only.

Having scrutinized the article again I'll certainly agree with you that the Labourtards are little better than the Torytards, both different sides of the same coin in the last two decades (centre-right corporate cronies), but the whole scheme is harebrained to begin with and I'll oppose any politician who goes through with it what ever his/her tie colour. And the public sector got so big in the first place since the mid to late 1990s, because it was a band aid applied by Labour to the post industrial regions laid to waste by the Torytards in the 1980s and early to mid 1990s. And while the public sector developed efficiency and money vanishing problems of its own, at least they provided more money and services to the general community than the City seems to do.

And unions of today aren't like the militant unions of the 1970s who launched strikes that badly affected millions, people don't seem to be so easily fooled this time round and an elite is running into trouble once the middle class starts to violently turn on them...

[Guardsman Bass]

Stas is arguing that such an economy is not stable and cannot survive except by continually borrowing money or burning through its capital.

Which is a bunch of nonsense. Do services not generate economic output?

A services sector can't survive by itself. Someone needs to grow, mine, or build the stuff that the service sector sells & services. A country going to a pure service economy depends on other countries to do all the dirty work for it, if every country goes to a pure service economy then everyone is fucked.

That's why not every country is going to go to a pure-services sector, if any of them outside of small countries do.

Besides, "someone needs to grow, mine, or build the stuff" does not equal that being a significant sector of the economy. Agriculture is an insignificant part of American economic output, yet we aren't exactly lacking in food. I could definitely see that happening with most of the manufacturing sector.

We shouldn't be punching above our own weight and wasting time in a unconquerable cul-de-sac like Afghanistan,

That's what gets me about the aircraft carriers. They'd be much easier to afford if the British government wasn't burning their resources doing a COIN mission in Afghanistan.

[Starglider]

I hardly see how this changes the equation. It created lots of bubble jobs for wealthy finance personnel. Which... got cut down during the banking crisis.

And mostly came back afterwards. This is missing the point though; the UK did not spend a disproportionate amount on bailing out its banks, compared to the US, Ireland, Spain, Japan in the early 90s or indeed any first world nation hit by a serious financial crisis. I personally disagree with the bank bailouts on general principle, but practically the UK could not have taken a stand here without getting slaughtered in international trade. The trend setters here are the US government, the US Federal Reserve and to a somewhat lesser extent the ECB and Bank of Japan. Address the decisions of those institutions, who had a genuine choice, rather than the BoE.

As for finance being 'pillar' of the economy, sure, continue that way. Industrial unravelling in the UK is already going full-steam ahead, from what I gathered.

Allowing all of the banks to fail and comitting the ~850 billion of borrowed money to industrial subidies was never even an option. Reasons include; financial crash causing destruction of the government's credit rating and ability to borrow in the first place, crash of the single largest tax generator in the UK (the City of London) destroying the tax base, EU and WTO rules against subsidy on that scale, hyperinflation destroying the currency, total freeze-up of lending causing more small business failures than you could prop up etc etc. Realistically the UK could have allowed partial failures, done more nationalisation into resolution funds, and spent perhaps 300 billion on subsidies. Much as I'd like to have done just that and spent all the money on 80 GW of nuclear generation capacity, the sector wouldn't have been able to absorb the funds even if it was even vaguely possible politically. Still, 50 Bn of nuclear + 250 Bn of R&D, training, tooling modernisation and infrastructure modernisation would have been nice. Of course what actually happened, in most Western countries, was mass institutional panic that was skillfully taken advantage of by a variety of ultra-wealthy interests to channel money into too-big-to-fail-banks.

We'll see if the myth of "post-industrial economy" will live up to reality.

The UK more than anywhere else will gain nothing by active destruction of the financial sector. Conversely, the UK more than anywhere else can direct inward investment into productive capacity without affecting the wellbeing (and tax production) of the financial sector. This is because the UK financial sector disproportionately deals in handling money from other countries.

Cutting on social spending is not going to remedy the problem.

Of course cutting social spending is not going to remedy the jobs problem. What it is going to do is prevent total inability to pay entitlements later. It is already too late for Ireland and several European countries where the state has raided private pension funds to support state finances (i.e. bailouts, benefits and bloated public sectors). Pensioners there are now certain to be reduced to poverty though no fault of their own; of course the US and the UK are likely to be forced into doing this fairly soon as well.

You people are in denial. You are no longer in any position to do serious power projection. France? Please. They can barely service their current carrier and they have a far more diverse and stable economy than the UK's. Brazil? Theirs are hunking old Brit crap. Italy? Those are largely used as helicopter carriers. They can hardly do any serious power projection. Honestly, face it. The days of the British empire were over for 5 damn decades and the UK economy hasn't been adapting well enough.

Ok, we have established that the UK, Brazil, Italy, France and Thailand are not allowed to have aircraft carriers, by your edict. How about Russia? Only a little larger than the UK and France combined, but a smaller military budget than either, is it fair to say that the Admiral Kuznetsov is as ridiculous as the Charles de Gaulle? India? Smaller military budget than Italy even, the Viraat is even more obsolete than the São Paulo, massive poor population they should be spending the money on benefits for...

So who are you going to let have aircraft carriers? Is it ok for China to have them or are you just an unabashed USA hyperpower booster?

You call that a commitment? I am more under the impression they are holding onto the Falklands to spite the Argentinians.

Of course, the nation's geopolitical strategy is based on 'spite', what else could it be.

Yup. What people don't understand is that the financial industry is by nature a parasitic industry, every dollar which is "earned" by the financials is actually a dollar which is stolen from the rest of the economy. It does not create wealth, it just moves it from one place to another. On top of that you're taking money from actual productive sectors and concentrating it in the financials where it isn't productive. I just looked up the numbers for the UK, the financials there make up 15% of their GDP vs. about 10% for the US and 6% for Germany. You can't run an durable economy based on stealing shit from other people, eventually you run out of things to steal.

That is broadly correct; I would say that a basic level of financial sophistication does actually earn money by improving overall efficiency, but that's a level far below where we are now (1-2% GDP perhaps). As with thermodynamics though, this is only true for a closed system. The UK financial industry is exceptionally globalised, the vast majority of the capital invested does not come from the UK itself. As such the UK finance sector sucks sucks more money out of the rest of the world economy than its own, and the rest of the UK probably sees a net gain. After all the massively bloated public sectors in the north of England and particularly Scotland are largely supported by taxation of London and the Thames Valley.

It's true that that money that should have gone to supporting industry rather than diversity inspectors, wellness councillors and health and safety muppets. The basic problem there was that Thatcher broke the industrial sector unions (only after they'd already killed about half of British industry), but not the civil service ones. As a result when Labour got back into power and went on their inevitable massive unsustainable spending spree, it was the civil service unions calling the shots and NHS middle managers that got the money.

Yes it would be nice if the UK joined an integrated European defence force, and could reasonable specialise in things like blue-water naval capacity. No I won't support it until the EU (a) stops becoming a massive black-hole of pointless beurecracy and public-sector waste that puts the UK civil service to shame and (b) stops being primarily a French 'force all of Europe to be our bitches and pay for our subsidies' program.

Which is a bunch of nonsense. Do services not generate economic output?

Ironically this argument is identical to raving Lolbertarians who scream that 'government activity is always parasitic, it can never generate any kind of value' (see plenty of those on ZeroHedge).

A services sector can't survive by itself. Someone needs to grow, mine, or build the stuff that the service sector sells & services. A country going to a pure service economy depends on other countries to do all the dirty work for it, if every country goes to a pure service economy then everyone is fucked.

I don't think there's any danger of the later. The problem is more that the idea that countries can specialise almost solely in tertiary vs primary and secondary sector activities is a globalist one. It has all the inherent problems of globalism in encouraging a race to the bottom, increasing vulnerability to wars (trade and real), relying on cheap energy etc etc. The benefits outweighed the costs for at least the first couple of decades, but that may no longer be the case.

Much of that is funny money that has been malinvested in an unsustainable property bubble (exacerbated by a housing supply bottleneck that's been left to narrow by both the Tories and Labour alike) instead of being put into other more sustainable and beneficial sectors of the economy like manufacturing, agriculture, education, transport, utilities, R&D, etc.

I agree but that's the choices people have made as private individuals as to where to invest their earnings, not the industry itself. In any case what exactly do you think these people should have done? Buy shares in UK companies? Shares looked unattractive after two global stock market crashes in the 2000s, and in any case buying shares doesn't directly aid companies unless it's a primary purchase. Buy bonds? Buy gilts (UK government bonds), even if it supports an even higher national debt? Do you own any of those? Can you say that you invested your capital into 'sustainable and benefical sectors of the national economy'?

As I've said, the main action I think should be taken is specifically incentivising people to do so. Personally I am holding most of my capital in property and precious metals specifically because of the lack of incentives of this kind.

[K. A. Pital]

Stas is arguing that such an economy is not stable and cannot survive except by continually borrowing money or burning through its capital.

Which is a bunch of nonsense. Do services not generate economic output?

Industry is built upon agriculture, services are built upon industry. It's either a small, but efficient industrial base which can provide the massive services superstructure, or it's an outsourced industrial base in some Third World nation. In any case this is not "post-industrial". We observe the shift from agriculture-dominated economy to industrial economy and we can see that it is characterized by a massive technological shift as well; and industrial technology and processes then convert the agricultural sector into agricultural industry.

On the other hand, "services" do not change the technology of producing things and do not transform the industry into some sort of "super-industry". They're just an additional structure for rich nations.

There's one way for a "post-industrial" economy to truly exist - if you think you can fully depend on someone else doing all the dirty industrial job so that you can have only services forever. But be aware - sometimes the one who's doing the dirty job no longer wants to be in that position and starts changing the terms and prices for industrial products.

Economic output and importance are different things. We've come to judge things by how much money they can make. This actually led us to the current crisis - when people said: "Look, these banks doing these operations are making so much money, generating so much economic output! No way this can be a bubble or a fraud or a Ponzi scheme, no sir! Genuine prosperity!"

[Big Orange]

As I've said, the main action I think should be taken is specifically incentivising people to do so. Personally I am holding most of my capital in property and precious metals specifically because of the lack of incentives of this kind.

Which was why Gordon Brown was a right numpty when he flogged off Britain's gold reserve when it was at a low value at the time.

And there are powerful, wealthy people who today and in the past who have decried "de-industrialisation", fiat currency circulated by the City of London and Wall Street, and Globalization.

Here's the late Sir James Goldsmith who way back in 1994 tore NAFTA a new one:



And this what PIMCO manager, Bill Gross, has to say about the banking driven economy:

Fifty years ago, the highest paid and most prestigious professions were that of a doctor or a 707 airline pilot who flew the “golden” route from Los Angeles to Honolulu. Today the yellow brick road begins on Wall Street or the City. Aside from supernova innovators such as Steve Jobs or Mark Zuckerberg, the money is made from securitizing things instead of booting and rebuilding America….Almost a quarter of the 400 wealthiest people on Forbes annual richest list make their money from money, whereas only 8% could make that claim in its first issue in 1982, and probably close to 0% when I first read my economic primer in 1966.

Having been part of this process and even a member of the rogue’s gallery itself, I know one thing for sure: This is not God’s work – it has the unmistakable odor of Mammon. PIMCO, while Mammonesque, is a company to be proud of. I can say with confidence that there are very few clients who have not benefited from our investment management over the years. Some of the rest of this industry, however, I’m not so sure of: rating agencies that perpetually fail at commonsensical quality judgments, bankers that make loans to subterranean credits and then extend the beggar’s bowl for themselves, and 80% of active money managers that underperform the market. As a profession we have failed miserably at our primary function – the efficient and productive allocation of capital.

Link

[J]

I hardly see how this changes the equation. It created lots of bubble jobs for wealthy finance personnel. Which... got cut down during the banking crisis.

And mostly came back afterwards. This is missing the point though; the UK did not spend a disproportionate amount on bailing out its banks, compared to the US, Ireland, Spain, Japan in the early 90s or indeed any first world nation hit by a serious financial crisis.

Oh really?

Excerpt:

The UK Government’s recent bailout of struggling financial giants Royal Bank of Scotland and Lloyds TSB looks set to add between £1 trillion and £1.5 trillion to national debt, figures out today have revealed.

More shocking still, this colossal intervention represents the equivalent of between 70% and 100% of Britain’s GDP (gross domestic product).

This is in the same ballpark as the US banking bailouts.

I would say that a basic level of financial sophistication does actually earn money by improving overall efficiency, but that's a level far below where we are now (1-2% GDP perhaps). As with thermodynamics though, this is only true for a closed system. The UK financial industry is exceptionally globalised, the vast majority of the capital invested does not come from the UK itself. As such the UK finance sector sucks sucks more money out of the rest of the world economy than its own, and the rest of the UK probably sees a net gain. After all the massively bloated public sectors in the north of England and particularly Scotland are largely supported by taxation of London and the Thames Valley.

It is indeed globalized...which means you're just stealing from someone else and you have a larger pool of wealth to suck dry. You get to play the vampire squid game a little longer before the host runs out of blood and then you're same boat, worse, actually. Problem is when you're pilfering from everyone else the system at home becomes even more bloated & unsustainable than if the theft was limited to the home country alone, in the short to medium run you will indeed become wealthier. Unfortunately when the hosts are sucked dry the unsustainable overhang is also a lot worse as is the crash.

[Guardsman Bass]

Stas is arguing that such an economy is not stable and cannot survive except by continually borrowing money or burning through its capital.

Which is a bunch of nonsense. Do services not generate economic output?

Industry is built upon agriculture, services are built upon industry. It's either a small, but efficient industrial base which can provide the massive services superstructure, or it's an outsourced industrial base in some Third World nation. In any case this is not "post-industrial". We observe the shift from agriculture-dominated economy to industrial economy and we can see that it is characterized by a massive technological shift as well; and industrial technology and processes then convert the agricultural sector into agricultural industry.

That doesn't change my point about it being both irrelevant in terms of the size of the overall economy. And since when does "post-industrial" mean the total absence of any and all manufacturing?

On the other hand, "services" do not change the technology of producing things and do not transform the industry into some sort of "super-industry". They're just an additional structure for rich nations.

So? All that means is that you need production to occur somewhere. It doesn't have to be a major part of your economy in terms of economic output and size - again, see agriculture.

[Starglider]

And this what PIMCO manager, Bill Gross, has to say about the banking driven economy:

I agree that there has been a brain drain into finance. In the UK this is somewhat understandable because finance really was the only large scale profitable export industry that could absorb the talent. In general though it is definitely the rise of a global parastical class, of which most lawyers and a significant chunk of the healthcare industry are also part.

Again though you aren't going to get these people working on productive enterprises by destroying jobs in the financial industry. In the UK for example the venture capital industry is virtually dead, angel investors networks are much reduced (since the 1990s) and government start-up grants are restricted to a few designated areas e.g. 'eco tech' (and small and very badly managed). If you want people starting new companies to develop technology and actually make things, you have to make it possible for those ventures to get seed capital. I have plenty of personal familiarity with this, I found it virtually impossible to raise capital for commercialising new technology since 2004 or so (when the last of the hot money went to real estate instead). The only business plan that has really been successful is reworked the technology (AI software) into something we can sell to financial companies.

Of course if you think venture capital is evil and wrong and 'part of the problem', because it is technically part of the financial sector, then you will be lack the tools to solve this problem and will just have to sit stewing in your government housing dreaming fevered dreams of communist revolution.

This is in the same ballpark as the US banking bailouts.

That's what I said; the UK bailout was foolish and unfortunate, but no more so than most comparable nations.

It is indeed globalized...which means you're just stealing from someone else and you have a larger pool of wealth to suck dry. You get to play the vampire squid game a little longer before the host runs out of blood and then you're same boat, worse, actually.

Arguably in the shitstorm that's building staying standing a little longer than our neighbours is the best we can hope for.

[Teebs]

What about corporate tax?

Sorry about the delay responding, I've been a bit busy. US corporate tax rates appear to be higher, but given the wide range of exceptions and such that seem to apply a better measure would probably be the proportion of GDP obtained in receipts from corporation tax and that I haven't been able to find.

[Starglider]

Regarding Stas's whining about too many luxury homes in London;

Investors Treat London Luxury Homes Like Gold: Chart of the Day
London luxury homes act more as a haven for wealth than other types of real estate and have more in common with gold, according to Savills Plc.

The CHART OF THE DAY shows how the number of sales of central London homes costing more than 5 million pounds ($8 million) follows a similar pattern as the three-month percentage change in gold prices.

“It’s as much about storing wealth as it is about real- estate investment -- the way that gold behaves,” said Yolande Barnes, head of residential research at the London-based property broker.

Overseas investors currently account for 60 percent of buyers of high-end homes in central London compared with about 40 percent in 2009, Savills estimates. Russians are the biggest group, with 20 percent of all purchases.

Prime residential properties in the city appreciated by about almost 5 percent last year, Savills estimates. Average values for homes across the U.K. dropped 3.4 percent, according to an index released on Jan. 10 by Halifax, the mortgage-lending arm of Lloyds Banking Group Plc.

i.e. this isn't a consumptive behavior, it's a reallocation of assets. Certainly it's a bubble but so what when it's restricted to the ultra-high-end. Virtually none of the working population of London could afford these properties anyway, even back in the 90s, and most people will probably be happy to see this latest bubble pops and destroy a small fraction of various parasite's net worth. In the mean time it is providing some much needed counter-cylical work for the construction industry.

[K. A. Pital]

That doesn't change my point about it being both irrelevant in terms of the size of the overall economy. And since when does "post-industrial" mean the total absence of any and all manufacturing?

What is "size of the economy"? The economy as presented in monetary equivalent - dollars or whatnot? You might know that something can be grossly overvalued in monetary terms, like Lehman Brothers being larger than the economy of Kazakhstan but, in fact, being worth dick.

So? All that means is that you need production to occur somewhere. It doesn't have to be a major part of your economy in terms of economic output and size - again, see agriculture.

I already said that production occuring elsewhere is a problem. As for agriculture - I don't understand, what's that, deaf speaking to a blind? You completely ignore my point - agriculture became so small because when industrialization happened, agriculture was also industrialized and simply became part of industry. The whole term "agricultural industry" was born that day. And as it became less labour-intensive, it became a small part of the overall industry.

On the other hand, services did not fundamentally impact industry and make it more efficient or less-labour intensive. In essence, in the first place we're talking about a technological leap which converted agriculture into a tiny part of industry by making it more efficient. In the other example, we're talking about a layer of services that grew upon industry without making it more efficient. Industry makes industry more efficient, if anything, not services.

So the mechanism behind the changes in economic prorportions and labour distribution is different.

[Guardsman Bass]

That doesn't change my point about it being both irrelevant in terms of the size of the overall economy. And since when does "post-industrial" mean the total absence of any and all manufacturing?

What is "size of the economy"? The economy as presented in monetary equivalent - dollars or whatnot? You might know that something can be grossly overvalued in monetary terms, like Lehman Brothers being larger than the economy of Kazakhstan but, in fact, being worth dick.

I'm looking at both GDP and employment.

So? All that means is that you need production to occur somewhere. It doesn't have to be a major part of your economy in terms of economic output and size - again, see agriculture.

I already said that production occuring elsewhere is a problem. As for agriculture - I don't understand, what's that, deaf speaking to a blind? You completely ignore my point - agriculture became so small because when industrialization happened, agriculture was also industrialized and simply became part of industry. The whole term "agricultural industry" was born that day. And as it became less labour-intensive, it became a small part of the overall industry.

And you continue to miss my point, which was that agriculture shrank to a minuscule portion of a developed country's economy in terms of employment and GDP, yet we haven't exactly run into catastrophe or are in danger of running out of food. The same thing could happen to industry, mostly through productivity increases that reduce the percentage of the population that is needed to produce manufactured goods.

On the other hand, services did not fundamentally impact industry and make it more efficient or less-labour intensive. In essence, in the first place we're talking about a technological leap which converted agriculture into a tiny part of industry by making it more efficient. In the other example, we're talking about a layer of services that grew upon industry without making it more efficient. Industry makes industry more efficient, if anything, not services.

I honestly don't see what point you're trying to make here. I never said that industry makes the service sector more efficient, just that an efficient and productive industrial sector need not be a significant portion of the economy in terms of GDP and employment to adequately meet demands for goods. Nor does it need to be a significant portion of the economy for that country to have high living standards, since most of the developed nations have been characterized by Service Sector economies for decades.

[Starglider]

The whole notion that services are inherently less important than manufacturing became bullshit in the mid 20th century anyway, with the rise of consumerism. A large fraction of physical production is now toys, gadgets and junk that people don't really need, and numerous services including healthcare, pensions and insurance are more important. In fact I think most people would say that the ability to pay for a haircut is more essential than the ability to buy an Ipad, even though the former is 'service sector' and the later is 'manufacturing sector'.

A internal+external marginal utility system, with the former part based on something like Maslow's heirarchy of needs and the later on an economic and ecological impact model, is a far more rational and nuanced way to approach this. Unsurprisingly this is exactly what the more enlightened economists are working on.

[K. A. Pital]

The whole notion that services are inherently less important than manufacturing became bullshit in the mid 20th century anyway, with the rise of consumerism. A large fraction of physical production is now toys, gadgets and junk that people don't really need

Are you saying this is something the current system deserves credit for, or that this is some sort of unchangeable state of economy that is to be preserved, like some exhibit of human idiocy? An economy that devotes a large share of GDP of the most developed nations to making bullshit people don't really need? "Serving" them with bullshit they don't really need? Or are you saying this is sustainable and displays a good example of sound economic development?

...numerous services including healthcare, pensions and insurance are more important.

Than what? Insurance is more important than making stuff? Since when? As for healthcare and pensions, neither of that can really exist without a robust underlying industry. Healthcare is especially out of league here - without modern medical industrial machinery it wouldn't even exist.

A internal+external marginal utility system, with the former part based on something like Maslow's heirarchy of needs and the later on an economic and ecological impact model, is a far more rational and nuanced way to approach this. Unsurprisingly this is exactly what the more enlightened economists are working on.

Please, what does the invocation of Maslow or personal views of the short-sighted, pathetic soccer moms humans made into a monkey, the so-called "His Majesty the Consumer" (like your example above, where a haircut is more important than, say, a state program of making thermonuclear plants) have to do with a "rational and nuanced approach"? That's glorifying apishness and human idiocy, that's saying human stupidity and short-sightedness should be catered to, like fat babies should be given more chocolate.

And you continue to miss my point, which was that agriculture shrank to a minuscule portion of a developed country's economy in terms of employment and GDP, yet we haven't exactly run into catastrophe or are in danger of running out of food. The same thing could happen to industry, mostly through productivity increases that reduce the percentage of the population that is needed to produce manufactured goods.

Productivity increases that shrunk agriculture were created by industry - THE industry. Machines and tools, yadda yadda, fertilizer, HYCultivars, massive mechanized farms, eventually everything that we know as the Green Revolution. Services do not have such an impact on industry. There are no fundamental productivity increases from having barbers on every street corner or having hordes of worthless "consultants" advising you this and than. A thermonuclear plant is a fundamental breakthrough. A thousand barbershops and a dozen Lehman Brothers are just a huge stack of cards built upon a rusty foundation.

I never said that industry makes the service sector more efficient, just that an efficient and productive industrial sector need not be a significant portion of the economy in terms of GDP and employment to adequately meet demands for goods.

Indeed. Except the industry is nowhere near that level of efficiency right now. How many First World economies are capable of sustaining their economic position, employment and life standard AND their huge, bloated "services sector" without all those dirty industries in the Third and Second world? I bet if we would try to build an economic model of a shock wherein outsourced manufacturing just vanishes or suffers a horrific hit, the First World would crash and burn before I can properly celebrate this Chinese New Year.

[Guardsman Bass]

Services do not have such an impact on industry.

I don't care about the impact of the Service Sector on industry - I care about its impact on living standards. And I've yet to see that moving towards a Service Sector-dominated economy (something that has happened in virtually every developed nation) has had a negative effect on living standards.

How many First World economies are capable of sustaining their economic position, employment and life standard AND their huge, bloated "services sector" without all those dirty industries in the Third and Second world?

So what? Are you arguing that trade is bad, since this is a consequence of trade? Would you rather we go back to autarkic economies with only domestic industries, regardless of the hit to living standards and efficiency?