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Two labour markets

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Stephanie Flanders | 14:25 UK time, Wednesday, 15 July 2009

Economic news comes in shades of grey - not black and white. Today's unemployment numbers are a case in point.

If you're interested in hearing both sides of the story on the broader economy right now, you might like to watch Flanders vs Flanders (below). There you get two economics editors for the price of one - we're all about value for money at Stephanomics.

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The 281,000 rise in the broadest measure of unemployment is a shock to analysts who were looking for about half that amount. By that measure, there are now more than 750,000 more people out of work in the UK than when the recession began last spring, and the rate of increase has been accelerating since the autumn.

Much attention has focused on the discrepancy between that large rise in the broad, ILO (International Labour Organisation) measure of joblessness and the narrower claimant count, which rose by far less than expected in June - by under 24,000.

The ONS points out that the claimant count figure is more recent. If you compare like with like, the rise in the people claiming jobseeker's allowance between March and May (the months covered by the wider measure), was 226,000*, not far off the other figure.

Should we get excited about the difference between the two figures? I suspect the answer is no.

If the relative gap between the two numbers had grown in the past year, that would suggest that a rising proportion of the unemployed were either not eligible for jobseeker's allowance or simply deciding not to claim. That, in turn, might have told you something about the kind of people that have been losing their jobs.

You can't get the means-tested jobseeker's allowance if you have savings or household income about a certain level, though there is still the contribution-based benefit if you've made enough National Insurance contributions. Even if eligible, a lot of middle class people might not bother to claim.

However, the opposite appears to be true - a year ago, about half of the unemployed were claiming jobseeker's allowance. Now the figure is nearly two-thirds.

That is not so surprising. Because, as the latest figures underline once again, this has not been a white collar recession. Since last March, employment in manufacturing has fallen by 6.7% - more than twice as much as any other sector. For comparison, there's been a 2.8% fall in the the numbers employed in "finance and business services".

The fact that the recession has hit manufacturing so hard probably explains why one other widespread prediction has not turned out to be true. Women have not so far been worse hit by this recession - or if they have, it is in ways that are not captured by official statistics.

Female employment fell by 0.8% in the year to March. The number of men in work fell by more than twice as much - 2% - in the same period. (To state the obvious, these are percentage figures, so you can't say it's because there are a smaller number of women who work.)

I'm not surprised by those figures either. After all, this is a recession concentrated on manufacturing, property, and financial services - all sectors in which men outnumber women (by three to one in the case of manufacturing).

The number of jobs in "education, health and public administration" has actually risen by 2.1 % in the past year. There, women outnumber men by more than two to one.

It's interesting to note that number of part-time jobs has risen slightly in the past year, as the number of full-time jobs has fallen. But that is an exclusively male story - there's been a 5.7% rise in the number of men in part-time work, against a slight fall in the part-time jobs for women That's consistent with this idea that firms are trying to cut costs without laying off workers.

There is one commonly held view that finds further confirmation in this new data: British-born workers have borne the brunt of this recession so far.

In the first three months of 2009, there were roughly 3.8 million people in work in the UK who were born overseas, slightly more than a year before. Over the same period, the number of British-born workers with jobs fell by 451,000. The numbers are slightly different if you separate by nationality rather than birthplace, but the story is the same.

This is a difficult and important issue which I want to look at in more detail in a future blog. Suffice to say it will be interesting to see how the mainstream politicians handle it if this tale of two labour markets continues through to the election.

*Update, 16:34: In the interests of precision, the ONS has pointed out the 226,000 figure is not strictly the rise in the claimant count between March and May; it's the rise between the three month average for December to February and the three month average for March to May.

Comments

  • Comment number 1.

    It is a disgrace that a Labour Government has done so little to support our manufacturing industry in stark contrast to the finance and banking sector. This is the sharp message of the job picture.

    In addition I do not see much analysis of the effects of the 'lag' of joblessness on slowing or reversing the recovery. It is not so much the actual job losses that is critical but the near universal fear of loss particularly in the private sector that precipitates degraded T&C's and much caution in spending.

    Not much chance of expeorting £10 DVD players to China I suspect!

  • Comment number 2.

    for a moment there I thought the Flanders in the red blouse was Peston in drag, as the Flanders on the left spoke in the same roller coaster monologue, but then I spotted the special effects and you wore a black jacket on the right, George Lucas must have been in charge of the special effects there :)

    Getting back to your blog, in much the same way the government had a the preferred way of showing inflation compared with the previous preferred method,to show their results in a more positive light, no matter what method you use for unemployment, the bottom line is people are still losing their jobs, and if they have not, they have taken a pay cut or freeze, unless you work for Goldman Sachs or the likes.

    You can vox box more people but they will only parrot what they read and hear from the media, because they dont know, they trusted everyone to do the right thing.
    It is only now that some folk( not withstanding those who already knew) are now realising its been , has been and always will be a great big swindle.

  • Comment number 3.

    Spin this any way - but it is still RECESSION without ANY sign of improvement. As for stats, forget them - out of date and utterly uselEss. This country is broke, the taxpayers are in hock for BILLIONS, future generations as yet unborn will be paying for the Clowns so called legacy. PlEASE tell the truth - it does not hurt, the UK is BROKE.

  • Comment number 4.

    A good example of the mess we are in is the ordering of 7,000 wind turbines from China, Denmark and Germany. Yet a british company that supplied wind turbines to the US, based on the Isle of Wight is closing down tomorrow shedding 600 jobs.

    The specification of the turbines are different but the UK government refused financial help so the British plant could make the necessary modifications to fulfill the order. When it comes to manufacturing this Government will do whatever it takes, to destroy the UK industrial base especially if it is a cutting edge.

    I think the brown mantra is... british jobs for Europe, China, Africa, the moon...

  • Comment number 5.

    All seems to reflect the shift from manufacturing to service industries over the past twenty or so years. Shipbuilders to telephone sanitizers. Interesting how the impact on financial services has been minimum, but of course they have a situation where the taxpayers have provided salaries and play-money (Job Holders Allowance)for them to pretend they are making some contribution, this of course has been supported by the host of economist who have pontificated on the meaning of money. You may wish to pass some of this information on to the government as it is not apparent where they plan to take all of this, except for shoring up financial services employment and economic consulting.

  • Comment number 6.

    If it keeps going up this fast for another few months we will be in danger of getting to the levels of unemployment of Thatchers "boom years" . Scary.

  • Comment number 7.

    My own experience suggests that the reason for the difference between ILO measure unemployment (high) and claimant count (low) is indeed that people are losing their jobs but not claiming benefits.

    I work in the City of London and personally know, maybe, 15-20 people that have lost their jobs. They work for a mixture of banks, asset managers, law firms, brokerages etc etc. As fas as I am aware, not one of them is claiming benefits. There are two reasons for this: first, middle class "pride" that they can get through their entire adult "working" lives without being a burden on the state. Second, that the amounts available on benefits are such a small proportion of their outgoings that it makes almost no difference to them anyway. Most of these people will have monthly rent bills of £1200 - £2000 so claiming £60 a week in Jobseeker's allowance hardly helps anyway.

    My friends are variously:

    (i) Running down their savings, while looking for a new job. I would say that about half have found a new job; Some have partners still in work so they can continue to "get by" but with much reduced household income (two incomes down to one);
    (ii) For those without two household incomes and who don't wish to run down their savings at the rate required to live in London, the options are to put their belongings in storage and take off on world travels (only available if no kids) or move (back) in with relatives.

    Most of these people are coping in one way or another. The really big point for UK plc is that the loss of income for the people concerned is going to have an absolutely huge effect on the tax take. Most of these people were paying tens of thousands a year in tax before they lost their jobs. Since the gap cannot be filled by borrowing, the only solution is to slash public spending (i.e. greatly reduce the size of government) and hope that by doing so we clear the way for the private (wealth-creating) sector to revive and start creating jobs and wealth again.

  • Comment number 8.

    I believe both the unemployment figures and the claimant count are underestimated and that those trying to claim employment support allowance are equally underestimated.

    My reasons are simple, personal experience and that of people I speak to, tends to suggest that the DOE are making strenuous efforts to make sure that as few people as possible are eligible, and those that are will be put off by the difficulty in claiming a pittance.

  • Comment number 9.

    The lag between unemployed count and claimants is simply due to fiscal drag in the means testing. The allowable savings threshold has not been updated by inflation, meaning even relatively small amounts of savings prevent you from claiming.

    Given that, due to Brown's house price bubble, savings are more vital than ever to get on to the property ladder, there are more and more unemployed people who are having to spend their deposits before the government will help them.

  • Comment number 10.

    It's all a bit sad.

    The government has little interest in - certainly no demonstratable nderstanding of business.

    While employment levels plunge, the Mini Miliband spouts about 250,000 new jobs being created in a "low carbon" environment. At the same time, a British comany, building wind-turbine blades (part of a rather rediculous rush to build windmills - where's Don Quixote when you need him?) is about to go out of business.

    The only joined-up thing you notice within central government is the bog roll...

  • Comment number 11.

    We keep hearing about green shoots and that the rate of decline is slowing and that things are bottoming out.....and then you get figures like this come out.
    Circumstances will not get better until there is an improvement in confidence. There will be no improvement in confidence with this Government as it is at the moment in charge. There needs to be an election to give a mandate to deal with the economy where it is at the moment, then we may start to see investment and growth return.

  • Comment number 12.

    Can any figure being produced by one of this government departments be relied on ? I think not, they may not be falsifying the figures but given their record with this kind of information, at least a bit of tweaking will no doubt have taken place. Being out of work in this government's view isn't just a matter of not having a job, it seems to depend on several other unspecified factors which can change at random and when required by circumstances.The greatest worry however is the fact that as unemployment rises and the date of payback of the massive debt Brown and his fellow incompetents have given the country approaches, there will be very few people actually working and paying tax to foot the bill. Adding the Nu Lab benefit army to the unfortunates who have now become unemployed through no fault of their own , there must now be somewhere around 5-6 million people who are taking a share of a diminishing tax return to the treasury.

  • Comment number 13.

    Headline Unemployment & JSA claimant figures are meaningless without considering the parallel changes in "Education and Support Allowance" (as Incapacity Benefit is now known) and other out-of-work sickness benefits. In the last few weeks, inner city GPs like me have been under huge pressure from JobCentres to 'sign-off' people who were previously on JSA. I wonder why.

  • Comment number 14.

    @ 4 they also closed the wind turbine factory near campbeltown, after loads of money being invested in it http://www.computescotland.com/1586.php
    the parent company like so many too the money got their foot in the door then did a runner pulling production back to Denmark

  • Comment number 15.

    Why do the media delight in always giving half a story? Or maybe its journalists are just to young to be able to compare with previous recessions. In the last recession and I am old enough to remember, things were very scary indeed, we had double digit inflation, rising month on month, in fact something things were going up on a weekly basis. We had 14% interest rates on our mortgages and there were 4.5 million people unemployed at its height. They were seriously scary times, we had four young children and everyone in my husbands office was permanently on 1 months notice!!!
    Why do we not get comparisons with other EU Countries or other Worldwide economies. We are in a global market after all, so this should all be seen in perspective.

    For people unemployed the present situation is dire and the problem needs to be addressed with urgency and action not words being bleated out day after day by politicians point scoring.
    I am not interested in any of their rhetoric, in times of crisis we need everyone to be pulling in the same direction not self centered, self interest tittle tattle. We can all do the talking that is the easy bit!!

    There is so much that needs doing in this Country, so much dereliction, so why not employ people to improve their own neighbourhoods, maybe we could get pride back into our environment, maybe communities would cooperate and work together. Maybe they would care for it and look after it better if they had worked on it?
    Why not bring in conscription for all young people, not military but to work in the community like they do in Germany?

    It just needs someone with vision and sadly there is no-one in Parliament of that statue.

  • Comment number 16.

    I agree with many of these posts (e.g. 3,4,5,10,11,12) ...

    And if you want yet more examples of government spin, misleading figures, great big 'swindles' ... and evidence that there's far worse still to come, then take a look at this post too ... http://poweromics.blogspot.com/2009/07/more-spin-than-science.html

    Million's of new jobs eh? ... yet we are still only scraping the surface ... so I think we'll need some tissues soon (and lots more loo roll too) ...


  • Comment number 17.

    "Why not bring in conscription for all young people, not military but to work in the community like they do in Germany?"

    I bet you think that if this is brought in, then YOU wouldn't be affected by it. The only people who advocate bringing back National Service are those who would be too old to join.

    I wouldn't mind a National Service, but EVERY SINGLE PERSON in the UK would have to do it, unless they did the original one, which stopped in 1960. Would you agree to that?

  • Comment number 18.

    My god, look at how badly the markets have taken this news...not. If you look at the synopsis for the days trading in London it says 'Investors were buoyed by the earnings reports from Goldman Sachs and Intel,taking this as an indicator that the recovery might be on the way' Two things to note, neither of these companies is British and Unemployment Figures aren't deemed worthy of even a cursory mention. Unfortunately, as I have pointed out before, the numbers of people out of work barely register in an economists worldview unless they are utterly appalling, say 25 percent or so. Otherwise job losses are seen as a good thing in most sectors as it is taken as a sign of cost-cutting and reduced pension liabilities (where they exist). Thats why Britain was said to be booming in 1985 despite the destruction of most heavy industry and 4 million (officially) unemployed..

    On a side issue I followed the link to the announcement of the closing down of the wind farm around Campbeltown, the company is Danish and were looking for the Govt to grant them a licence to build 300 more wind turbines along the west coast of Scotland, presumably that licence has been refused, therefore the company is shutting down. A fit of pique or a sound business judgement? Perhaps the British government isn't aware that foreign companies have no compunction about upping sticks and leaving if they don't get what they want, although they have had enough experience of it by now to have learnt this harsh lesson.

  • Comment number 19.

    So, of 2.38 m people unemployed 1.56m are claiming benefits - I wonder to what extent the claimant count lags whilst blue and white collar savings are paying off debt. What worries me is that of the 281,000 increase since the three months to February 2009 95,000 are between the ages of 18-24. How many of the 528,000 unemployed for more than 12 months are from this age group?

    What also worries me lots is the average annual wage growth rates whlist the private sector is taking a drubbing. Note that the PUBLIC sector towers nicely above the rest at 3.5% including bonuses. Look forward to you posting on that as well as the demise of our youth and overseas workers.

  • Comment number 20.

    I have no problem with everyone doing their bit. My son-in law is German and it never did him any harm. He worked in an old persons home whilst studying for his degree. Some people could opt for community service in the Uk whilst others could do their work overseas. When people retire they too could do something.
    No-one is ever too old to make a contribution and whilst it would help open the eyes of young people that they too can contribute to the World around them, it would also stop people talking about the older generation as some alien being, as we have seen in the media over the past few days!! Its funny but from commentators speak over the past few days you wouldn't think they ever thought they will get old too!! Its as if its something that will happen to other people!!

    In Norway they build retirement homes on complexes that include preschool groups, a cafe & hairdressers etc, which are used by the local community. The knowledge the older generation have is passed on, as they help in the preschool imparting skills they have leant during their lifetime, which benefits the younger generation but also values the older generation too.
    there is so much we can learn from our European neighbours, no idea why we are so intent on being so blinkered as if we have all the answers.

  • Comment number 21.

    It would be interesting to know the split between private and public sector job losses.

    My guess is that the private sector is bearing the significant proportion of this. The same private sector that will be completely impoverished with their pension provision. This timebomb just keeps ticking.

    The public sector pensions need immediate reform, a gargantuan amount of money can be saved if their pensions are reformed. A significant portion of this saved money can be redistributed towards providing support for private sector job creation.

  • Comment number 22.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 23.

    What about the number of people working on reduced time, the ones that used to work full-time, around 40 hours per week who are now working just three days a week therefore suffering a 40% decrease in earnings, these people are not shown anywhere.

  • Comment number 24.

    Unemployment statistics ceased long go to be a factual statement of those available for work, but who are unable to secure work. Indeed I wonder if it ever has been? It has always been a political club to beat those we have charged with managing our economy. It is thus always a subject for manipulation. Does one trust the compilers of the figures? - on balance less and less so - and that is a pity. The ONS has been a weapon of political information management for well over a decade several decades - every since the 'is he/she one of us?' test was applied.

    I have always preferred the ILO basis to other definitions. Nevertheless unemployment is a valid input into measuring economic performance. The massive problem at present is that only one from of employment is protected above all other and that is banking. This will be catastrophic for the Nation as a whole.

    We need steps to be taken to minimise unemployment and I cannot think that advocating a maximum wage should not be part of this. Is it not better to have ten or twenty people employed rather than one banker (or head of the BBC) Surely it would be economically better to employ five real journalists rather than one Boris Johnson? Or are we so stupid that we can be persuaded that celebrity is so vital to the Nation that real people don't matter? A maximum wage would prevent Boris Johnson describing his wage of 250,000 GBP per half day as chicken feed!!!! The man is a disgrace and, if there was a way, he should be impeached and tarred and feathered for such an answer. Can our legal system not find some legitimate and legal way to send him to prison! But he is a real Tory, just like the rest of them in both parties and well protected by his newspapers and the system!

  • Comment number 25.

    Further to #23 - there have been a lot of companies recently, big and small, asking employees to work for free or part-time or to take unpaid holiday or even a year off at 25% of income. This does 'retain' skilled workers while cutting costs for the company in a recession, and on the whole I think thats a good thing (there's no other jobs for these people to go to). But I wonder who really picks up the bill - 25% income is not enough to live on but too much to claim benefits - unless all these folk are claiming tax credits - in which case, the tax payer is obliquely subsidising all these industries.
    What really strikes me though is, as stated by MidlandsView (23) is that these people don't appear anywhere in the stats. If the "281,000 rise... is a shock to analysts who were looking for about half that amount", what would the figure have been if workers hadn't agreed to take a year off or work a 3-day week?
    In other words, as bad as these figures are, they may be masking something far worse.

  • Comment number 26.

    Unemployment numbers have been fiddled ruthlessly for a number of years. More recently the scope of this fiddling has been extended outwards. Companies getting people to work for free, take sabbaticals, work shorter hours and so forth.

    It would be very surprising if anyone now has any idea as to the magnitude of the systemic fiddling that has occurred. This will likely have all kinds of implications for estimates of future tax receipts, GDP estimates and other economic forecasts.

    Oh we what a tangled web we weave...

  • Comment number 27.

    Hey there GORDY 3,000,000 by XMAS plus 2,700,000 on INCAPACITY BENEFIT

    nulabour MUST ALL BE SO PROUD?

    LABOUR ISNT WORKING AGAIN?? THAT 30 YEAR cycle!! WELL DONE GORDY!!!!

  • Comment number 28.

    regarding timetoponder 15 and 20 and 26---- the telling line for me anyway in 15 wasn't the National service line... picked apart by someone later...but the 'we need someone of vision' line..THAT is what is lacking and we all know it.

    Regarding 26 armagediontimes (shouldn't that be armageddontimes?)...this post makes my main point for me--- that 'the unemployment rate' is one of those things that are totemic, and the media love to cling to, even when the thing is past its sell by date.

    For sure it lets media professionals 'guide' the dimwits watching and reading (i.e. us) ...but as post 26 points out...how relevant in presenting the WHOLE picture is it?

    Re..NOT a white collar recession.... to give an example...

    IF the white collar service industries sack 10% of the workforce the unemployment rate would probably be instantly doubled, and we'd have a white collar recession of tsunami wave proportions drowning the swell of the blue collar recession.

    However if lots of people in lovely offices around the country just take a wage freeze and then (as is now happening) a little 5%(therabouts) across the board cut 'so none of us lose our job'; and a bit of 'no overtime' maybe the odd 4 day week...we have no lost jobs at all...but the economy still has the identical 10% hit in terms of tax take and spending power reductions.

    The historical perspective on the times we are living through leads one to believe 'we' must get poorer... and we are, litle by little.

    281,000 is terrible, and is really far beyond the power of spin, yet, if salary caps and reductions are as widespread as I feel; it isn't the whole story bad as it is.... it's not 1933 or 1947 or 1974 or 1990 its 2009, the data slice tyhat used to tell the whole story doesn't quite do that any more.

    (You always know when the spin offensive is real and when it isn't.. real spin is Gordon or Mandy or one or two others... faux spin is a junior minister, who MIGHT survive the fusilade of ridicule..or might not..no matter either way as these lower caste Govt spinners are expendable....that's why they get the missions they get, that's how we know that (to paraphrase what they used to say in the air force before defence cuts presumably)'Confidence is NOT high' back at the HQ bunker.

    Personally I feel that its better for people to take salary cuts etc than slice out entire jobs...BUT it shouldn't be allowed to be a fact that the Govt can use to obfuscate the truth---as timetoponder said we need people with vision...and we need a view not wilfully obscured by ANY smoke screens, wilful or otherwise...

  • Comment number 29.

    John_from_Hendon (#24) "We need steps to be taken to minimise unemployment and I cannot think that advocating a maximum wage should not be part of this."

    The UK (and USA/EU) needs to a) reduce immigration and b) reduce the birth rate in the lower half of the ability distribution whilst 'incentivising' females in the upper half of the distribution to have children earlier (and more of them) as we have a skills problem. The upper half group also needs to be selected on for high conscientiousness instead of narcissism, which used to be what interviewing was largely about. Eugenics always was, and always will be, a very good idea. Those who fight it and promote 'liberalism', tend to perish, albeit slowly.

    Only long term strategies will work, as the PRC has been practising positive eugenics since at least 1995, via its legislation and they are the competition.

  • Comment number 30.

    " regarding timetoponder 15 and 20 and 26---- the telling line for me anyway in 15 wasn't the National service line... picked apart by someone later...but the 'we need someone of vision' line..THAT is what is lacking and we all know it."

    Agreed and agree with timetoponder. Money might be a tool for trade to help the little people go about their business, but to the bankers and the politicians money is a tool for social control. It offers big macroeconomic levers for them to pull. When that machine breaks down, people lose faith in the systems in place, start to lose faith in leadership, and look for alternatives.

    That's when politicians start to look at alternative ways to mobilise society. New leaders emerge with strong visions, wars start, people get sent to the moon.

  • Comment number 31.

    Talking to yourself is the first sign of......... On that we can probably agree.

    Two Ms Flanders though? I approve for the first time on double bookkeeping. lol

  • Comment number 32.

    Would also like to praise the article. I like how it plainly states the numbers, shows the evidence, valuable information. I much prefer this kind of economics article to the ones about political debates for example.

  • Comment number 33.

    #29. JadedJean wrote:

    "The UK (and USA/EU) needs to a) reduce immigration and b) reduce the birth rate in the lower half of the ability distribution whilst 'incentivising' females in the upper half of the distribution to have children earlier (and more of them) as we have a skills problem. The upper half group also needs to be selected on for high conscientiousness instead of narcissism, which used to be what interviewing was largely about. Eugenics always was, and always will be, a very good idea. Those who fight it and promote 'liberalism', tend to perish, albeit slowly. "

    Sorry WRONG!

    See Singapore... Didn't work, and many (mainly intelligent women) rebelled and refused to be persuaded to attend the compulsory 'mating' parties organised by the state. Your policy failed and if not totally dropped has been quietly sidelined.

    Real people will never do what you propose...

    Your solutions are not "economic", My solution of a maximum wage addressed a different issue and could at least be implemented your eugenic solutions can't be without enforced insemination! Which is ridiculous (except in Afghanistan where women are treated as possessions and slaves and where female education is prohibited (by the regime we are currently supporting!)

  • Comment number 34.

    The basic problem was identified long ago, decades ago, and most explicitly by the real founder of Behavioural Economics, Richard Herrnstein (behavioural Economics studies the control of behaviour by contingencies of reinforcement aka value). US domestic policy tried to deal with these data once the trends were highlighted in the cohort data, some say under the influence of Charles Murray (who was listened dto by the Conservatives over there and here in the 80s/90s, but perhaps not carefully enough - I'm not sure I agree with him incidentally, he's at the AEI...).

    But we know what the problem is, it's just that the solution is incompatible with populist neo-liberal values. This does not mean that we can not project where things are going sadly.

  • Comment number 35.

    John_from_Hendon (#33) "Sorry WRONG!"

    Try to learn.

    "See Singapore... Didn't work, and many (mainly intelligent women) rebelled and refused to be persuaded to attend the compulsory 'mating' parties organised by the state. Your policy failed and if not totally dropped has been quietly sidelined."

    I have referred to the Singapore example seveal times in the past few years in order to highlight why liberal-democracies East and West are not working if one looks at the critical variable of fitness long-term. Singapore does indeed have the same problem that we in Europe have, as does HK, S Korea and Japan. The example I cite for how to make it work is the PRC which is socialist, as you would know if you read my posts carefully, followed the links, stopped being 'argumentative' and tried to learn instead of arguing from ignorance for impossible to implement policies within liberal-democracies. The problem is liberal-democracy per se. This is what the Germans saw in the 1920s/30s.

  • Comment number 36.

    No.33. John_from_Hendon

    We could give high powered career women tax incentives to have babies. For instance, the State would pay for all child care and reduce the income tax rate for high flying mothers from 40% to 30% for child one and then to 20% for child two and 10% for child three..........

    Think carrot and not stick.

  • Comment number 37.

    #29, JJ

    By the way, I was asking around some more about behaviour in CZ prior to the revolution. The way it worked, apparently, was that women graduated and at the earliest opportunity got a family underway (apparently sometimes the women would get a family started before starting univeristy). Under socialism the waiting lists for properties were prioritised in favour of those who were expecting children and developing a family.

    After the revolution of course there was the problem of financing properties.

    It seems to me the property market in both systems has a lot to do with the kind of indicators you are looking at.

  • Comment number 38.

    "...in the lower half of the ability distribution whilst 'incentivising' females in the upper half ..."

    ...and there is the heart of the matter. Irrespective of one's observations of ecconomic or demographic trends and the problems one sees, there is always the need to do something about it.

    Surely you would all agree that this 'doing something about it' would benefit everyone if it was done in a scientific, testable, measurable, repeatable, predictable way? We are talking about social engineering.

    There is little point in putting faith in algorithms like democratic elections, monetarism, certain specific policies, and so on, without some real understanding of how societies work. Isn't it amazing that governments put forward 'solutions' like QE, complain that they do not know if these solutions will work, and then complain that even if it did, we might not be able to know it? Is that competence? Is the American answer to everything "the markets will fix it" enough?

    Only in the good times.

    I would like to see, also from you JJ, exactly how this incentivisation would work. Or rather, the process of arriving at the right set of incentives, including evidence, method of execution, rationale, testing etc... I would like to see an example of a solution, with an explanation of why the particular process or method would work, how it differs from the anarchy of today


  • Comment number 39.

    #24 John_from_Hendon A msximum wage is all but impossible to enforce. There are so many escape avenues available - pension contributions/enhancements, expenses, provision of goods (company cars and/or company drivers), relocation payments, signing bonuses, retention payments, the list is almost endless.

    Some of these payments can actually serve an economic purpose. For example if a company is slated for closure you need someone to hang around and close it down. People that know they are going to lose their job need to be incentivised to maybe turn down other work to finish off what they are doing.

    Democracy, a long ago abandoned concept, may actually serve a more effective purpose than law and regulation.

    Your example of a journalist is interesting. Journalists range from people who merely rewrite official press releases and report verbatim the thoughts of the powerful, through to proper investigative journalists like Robert Fisk. The jobs that these people do are not comparable - and yet they both fall under the umbrella of "journalist"

  • Comment number 40.

    MrTweedy (#36) That's more or less what the Singapore government tried from the 60s through 90s. It didn't work, on the Chinese population...
    In fact, revealingly, the intelligentsia referred to the government as 'fascist'....but that's youth... As you probably know, Singapore is squeeky clean some say 'robotic' - basically a good place to live, it just isn't breeding well, nor is its model, HK.

    The problem that one has to deal with isn't what (young) people (and especially female) think and want etc when young, but what's best for them as a whole in the long run, based on both empirical evidence and experience. It's the age-old problem of course. Many older females (and I mean in their late 30s and early 40s on) will agree with the analysis I've presented, but point to how contingencies in liberal-democracies seemed to give them little choice, which takes us back to the tails point. When this point was emphasised (before the above article which I just cite for convenience) it came from analysis if reliable population level data on academic attainment at 7, 11 nd 14 ie SATs, and whilst the shape of the two distributions had been known for decades, for some reason, the full import had not really sunk in. Perhaps the influence of political correctness, which as I keep saying, perniciously serves the venal interests of those out to make money at the expense of others.

  • Comment number 41.

    FrankSz (#37) "Under socialism the waiting lists for properties were prioritised in favour of those who were expecting children and developing a family."

    Thanks for that. It's prety much what I expected. It would be interesting to know if they had explictly designed it that way for the reasons I give, as the basic problem has been known about for nearly a century, it just became clearer as more data became available. The converse is effectively demographic suicide, or warfare, depending on how one views it. That people don't like the message isn't really the issue, we know that, always have. There's clearly a very high price to pay for short term hedonism, and good governance, like good parenting, is only cruel to be kind.


  • Comment number 42.

    #41

    At the moment it's a bit anecdotal. I will try and see if I can find more about this policy, if it was a policy at all, if it was a perceived policy, an official one or not.

    One thing that has occurred to me several time is that IT and telecoms of today's standard should open up doorways for political structures. For example, online democratic control of macroeconomic controllers like income tax level (not something I would necessarily be for or against, just an example). It occurs to me that good models of human societies might not be necessary, so long as feedback from implementation of policy is comprehensive and fast...

  • Comment number 43.

    FrankSz (#38) "would like to see, also from you JJ, exactly how this incentivisation would work. Or rather, the process of arriving at the right set of incentives, including evidence, method of execution, rationale, testing etc... I would like to see an example of a solution, with an explanation of why the particular process or method would work, how it differs from the anarchy of today"

    First look at the PRC, and even though it is difficult for many to contemplate, look at the birth rate in Germany after WWI and ask yourself what Lebensborn was really all about. It will help if you bracket the post war, liberal-democratic propaganda which predictably tends dominate the web. Just focus in the demographic problem which Germany was dealing with, and remember, eugenics is a British term, coined by Francis Galton in response to dysgenics, and accepted as common sense by the founding fathers of modern statistical testing like Pearson, Fisher (and sound economics - Keynes). Free-marketeers, unsurprisingly if you think about it, invest heavily in depicting these people as baby-eating mad-men, I suggest, presumably because they are seen as very bad for their bubble-consumerism ;-)

  • Comment number 44.

    Lebensborn was a terrible mistake: They should have chosen Moravian and Slovakian women instead of Nordic ones.

  • Comment number 45.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 46.

    "They should have chosen Moravian and Slovakian women instead of Nordic ones."

    From what you say, they got round to it in the end, just in a rather subtle way perhaps?

    I suspect the Nordic bit is largely spin/propaganda. Iranians are Aryans (the Germans gave them the name), and the Italians aren't Nordic. Nor are the Japanese. The opposition was all about opposition to an economic system which was at odds with another group's favoured international 'free-market liberal-democracy/anarchism. It's still going on today. Now the evil doers are (largely) Shia Muslims or Socialists in the case of N Korea, PRC, who don't worship usury and are thus 'bad for their economy'.

  • Comment number 47.

    #46

    I'd still like to see an application of behavioural psychology/economics towards a proposal to incentivising women in upper brackets of capability to have more kids. What would you propose, or what kind of process would you propose.

    I have always felt that a problem with both democracy and 'free markets' is the tendency to aim at the lowest common denominator. You just need to look at MTV trash as an example of how popular entertainment is marketed at a minority of stupidly predictable consumers. However, let's hear proposals for alternatives, or improvements.

    I don't yet see why 'democracy' should be automatically discounted. As I've mentioned before, I don't think that democracies are really all that democratic, and with new communications technologies we should be able to put different, new systems of government in place.



  • Comment number 48.

    #46

    I think the Slovakian/Moravian ones got the Germans. The Czechs/Slovaks usually end up persuading their less enlightened Western counterparts away from the rat race...

  • Comment number 49.

    FrabkSz (#47) "I'd still like to see an application of behavioural psychology/economics towards a proposal to incentivising women in upper brackets of capability to have more kids."

    The point I've repeatedly made to John_from_Hendon (evidently to no public avail so far) and others is that nothing better reveals someone's impoverished grasp of the contingencies which control behaviour than for them to repeatedly go looking for morality in a whore-house.

  • Comment number 50.

    Stephanie
    two tax years ago I earned £33,one tax year ago this fell to £19.5 and since then to around £320 per month. My wife is employed so it is not worth my while signing on. Many many of my self employed friends are in the same position. We are effectively unemployed, living on our savings.
    If you ask me for a guesstimate of 'real' unemployment in this country I would put at one million above the current totals after counting peoplke like me. Why dont you investigate?

  • Comment number 51.

    JJ (various)

    Yet again your appeal to the advantages of eugenics puts you completely beyond the pale. Your schemes are those of the failed fools of the nineteenth century. Get real and live in this World where we have at least nominal gender equality!

    The ethical and moral morass that you live in is despicable and abhorrent to everyone else, although by your demonstrated objurgate persistence indicated that you are beyond reason and logic - still less economics which is what we are generally talking about here!

  • Comment number 52.

    #39. armagediontimes wrote:

    "A maximum wage is all but impossible to enforce"

    So is any law and you can always use that argument. However, the inland revenue does insist upon a tax return from everyone. Just enforce a 100 percent tax about the maximum income. Benefits in kind are all reportable to the revenue and are taxed.

    True the tax red book is far too large and should be slimmed down dramatically to close most of the loopholes. Indeed I think a general clause making it an offence to run a business to provide schemes of tax avoidance punishable by imprisonment might help. (Fining is no use as money is something these advisers are not short of) Similarly for being caught paying salaries to anyone that breaks their maximum pay ceiling should be punishable by imprisonment this would include all sources of income worldwide. Draconian, but it might just work!

  • Comment number 53.

    #52 John_from_Hendon. No man, that is not true. There is a law against murder and that is very easy to enforce.

    The problem with money is that you have an entire industry devoted to defining the difference between tax evasion and tax avoidance. You do not tend to get such a vast ancillary industry associated with killing people.

    Anyway, everyone has their own personal boat to row. I´ve taken jobs on short term contracts in some very some very dodgy places, but sometimes being paid out of the UK. Why would anyone want to do these kind of jobs unless were going to get a lot of cash out of it. You get no pension, no corporate benefits, interference with family and social relationships, no job security, and often only limited personal security. You go to some faraway place and maybe you don´t know how long the job will last, so you can´t apply for another job which all but guarantees a period of unemployment. Job and finish, and its goodbye mate, you can get a cab in the street. Great!! and you think that is the same as sitting in some government office having people worry that you might burn yourself if you make your own cup of tea.

    Crazy idea.

  • Comment number 54.

    John_from_Hendon (#51) "Yet again your appeal to the advantages of eugenics puts you completely beyond the pale. Your schemes are those of the failed fools of the nineteenth century. Get real and live in this World where we have at least nominal gender equality!"

    Put aside your emotive rhetoric and hyperbole for a few minutes and do both yourself and the rest of us a big favour by reading this UNESCO link, and this one from Steve Jones on Artcile II of the ECHR (long befoe ratification of Lisbon which enshrines free-market business practices in the EU and this weakens our Parliamentary regulation), and try to grasp that what I've been describing is what is happening by omission i.e to our disadvantage (evidently beyond your comprehension, no doubt because of the effective aversive emotional conditioning/propaganda which you've been subjected to like so many others), and that there are those who would be more than happy to have you and others normal people continue to behave the way that you do in their own, free-market, deregulating, venal, interests.

    This will require you to do some serious thinking about what you currently don't understand about the control of human behaviour (and thinking), which to date you are clearly reluctant to do for reasons of 'face', as the Chinese call it. This snare has been cleverly set for decades if I am right. Try it just as a counterfactual.

  • Comment number 55.

    John_from_Hendon (#52) Passing laws is not the answer. Here's why.

    Try to take on board that there is something useful for you to learn here.

  • Comment number 56.

    #55. JadedJean wrote:

    "John_from_Hendon (#52) Passing laws is not the answer. Here's why.

    Try to take on board that there is something useful for you to learn here."

    What utter rubbish! You rant at interminable length about not being able to do anything and/or lets enforce eugenics - you cannot be serious, or have ever been serious, with any of your contributions if you believe in the total nihilism that you espouse as there is an obvious contradiction between bothering to write anything on these blogs and, believing that nothing can be done!

    If you truly believe that nothing can be done why write anything! Your internal contradictions are so huge that I wonder if you will not immediately cease to exist because you have yet again been found out (to quote Oscar Wild "Bunbury - quite exploded and ceased to exist" (quote not quite correct) - You are yet again, through the vehicle of your own statements quite exposed as an AI automaton with a fundamentally flawed basic raison d'etre!

  • Comment number 57.

    #53. armagediontimes wrote:

    Admitting deliberately breaking the law. Just because you break the law does not mean that there should be no laws!

  • Comment number 58.

    John_from_hendon (#56) "If you truly believe that nothing can be done why write anything! Your internal contradictions are so huge that I wonder if you will not immediately cease to exist because you have yet again been found out (to quote Oscar Wild "Bunbury - quite exploded and ceased to exist" (quote not quite correct) - You are yet again, through the vehicle of your own statements quite exposed as an AI automaton with a fundamentally flawed basic raison d'etre!"

    Pardon?

  • Comment number 59.

    #57 John_from_Hendon. Just so there is no misunderstanding the only law I have broken is your hypothetical income restriction law.

    If you managed to get your postulated law passed, all you find is that a bunch of rich parasites would relocate to somewhere where they have different laws, and a lot of other people would step back and leave people like you to have a go at picking up the dirty end of the stick.

    The last time I looked you could walk around Hendon safe in the knowledge that you are highly unlikely to step on a land mine. Or maybe things have changed.

  • Comment number 60.

    Here's an interesting question that circumscribes all the above topics: If a woman who is desperate to have children decides to get pregnant, but in the knowledge that her children will inherit a disease, disability and/or disfigurement from her (or the voluntarily chosen father I suppose), should she be prosecuted for the intentional, planned infliction of suffering on the child for her own self interest?

    Discuss....

  • Comment number 61.

    John_from_Hendon Michael Howard and very (empirically based) experienced Home Office advice.

    What's being substantively being said in the above post? This is not an 'academic' question. We do know what can, and can not be done. It takes time to teach some people this. In fact, even they used to be carefully selected. Today, alas, many more burn out/get depressed trying to do the impossible because of poor selection/recruitment.

  • Comment number 62.

    #61 Jadedjean. Donthca know the British Crime Survey is out - crime is down!!!

  • Comment number 63.

    Watriller observes "It is a disgrace that a Labour Government has done so little to support our manufacturing industry in stark contrast to the finance and banking sector. This is the sharp message of the job picture".

    Not true!

    Reality is that the Labour Government has confiscated three banks because their outrageous gambling brought ruin upon themselves: Northern Rock, Alliance & Leicester and Bradford & Bingley. Two other banks have had vast amounts of their shareholders savings confiscated too: taxpayers will soon own 84% of RBS shares and 62% of Lloyds. All of which are taxpayers' assets that will be sold off - we're told - in tranches over the next Parliament and beyond. Those cheap assets will help pay off a very large part of current deficits and may make substantial profits too.

    Contrast that policy with the support given to manufacturing. The extra credit injected into bank lending, the car scrappage scheme that supports steel-making, engineering and motor retailers amongst many others. Most of that is straight-forward subsidy. Which is entirely appropriate.

    The way the media paints it, the cash was handed over to Banks for nowt. But that's only because those scribblers' spin makes a more outrageous story even when it's not true. Fortunately hardly any benefit flows to them as readers switch from newspapers and journalists' lay-offs are now aplenty. Especially amongst those who've claimed that 'the banks' were bailed-out. Try asking the Banks' shareholders who've lost their money - they have a different tale to tell!!

  • Comment number 64.

    #63 leftilkley - Good to see that you have no intetnion of allowing facts to stand in the way of your polemic.

    Alliance and Leicester had nothing to do with the government. Its shareholders voted to sell the company to Banco Santander on terms that must have been acceptable to them.

    Bradford and Bingley and Northern Rock were both irreedeemably insolvent and were nationalised, no confiscation of anything by anyone. So shareholders lost their money - big wow, they did not exactly exercise appropriate governance of the companies that they owned.

    Lloyds were OK until their shareholders voted to acquire HBOS. Their shareholders decided that it was a waste of time performing Due Diligence on HBOS, so they got whaty was coming to them. Or rather they didn´t, since without government intervention both HBOS and Lloyds would have been bust with the shareholders receiving nothing at all.

    RBS Shareholders decided to subscribe to a GBP 12 billion rights issue. No one forced them to take these rights up. RBS also bust, shareholders should have lost everything, but didn´t solely as a consequence of taxpayer munificence.

    There is no evidence at all to suggest that the taxpayer will make any money at all on the garbage bank shares that it owns. They may or may not make money - but there is no evidence, and so therefore the taxpayer has just taken a giant unquantifiable punt.

    Still, why bother with facts and a basic understanding of the risk/reward profile of being a shareholder when you can spin instead.

  • Comment number 65.

    #58. JadedJean grumbled about being shown to be logically inconsistent by writing that nothing can be done yet seeking to oppose all action by taking a nihilist stance in all that he/she writes.

    I stick to my point: which is: what is the point in writing or proposing or opposing anything if all that is written, proposed or opposed is that nothing can be written, proposed or opposed? That is JJ's nihilist stance is a void expression.

  • Comment number 66.

    #59. armagediontimes wrote:

    "leave people like you to have a go at picking up the dirty end of the stick"

    They do already! So no change there then!

    Are you claiming to be free of, or above, the results of the way that we as a Nation have organised our economy?

  • Comment number 67.

    #63 leftilkley,

    Wow! what are you taking? I want some!! What an alternative view.

  • Comment number 68.

    John_from_Hendon (#65) "I stick to my point: which is: what is the point in writing or proposing or opposing anything if all that is written, proposed or opposed is that nothing can be written, proposed or opposed? That is JJ's nihilist stance is a void expression."

    You only appear ask questions, in fact, you don't listen to the answers. What sort fo person does that?

    In doing so, you show a) everyone (including yourself) that you a) are unable/unwilling to comprehend any position at odds with your own b) that you resort to abuse/invecive to try to coerce others into accepting your positin even when that's demonstably untenable given the empirical evidence (here, the anarchistic system which comprises liberal-democracy).

    Reading your posts, you do not appear to be able to discern the difference between normative and positive statements. I suggest you follow the advice which I gave several others, and try reading Two Dogmas of Empiricism whilst applying The Principle of Charity as there is nothing nihilistic in my posts, you just appear to be unfamiliar with Behaviour Analysis (aka Radical Behaviourism/Evidential Behaviourism). Try to entertain the idea that your emotive responses are just the consequence of some of your core constructs (dogmas), which you tacitly assume to be be true, being productively questioned. Who knows, you might find yourself thinking and posting along different lines. Would that be such a bad thing given the current conditions?

  • Comment number 69.

    armagediontimes (#62) "#61 Jadedjean. Donthca know the British Crime Survey is out - crime is down!!!"

    It's a victim survery with a sample of 50,000. It has its problems. ;-)

  • Comment number 70.

    #68

    Actually I wouldn't recommend reading "the 2 dogmas..." because it is not very good. Essentially, the author appeals to a god or deity to grant existential substance to infinite sets of 'things' in an absolute domain, in the hope that this may simplify evaluation of sentence truths through ease of recognition of equivalent terms.

    The author fails to comprehend that the intension (the property or set of properties that can be said to be true of a 'thing') is what underlies the extension (the set of all things for which an intension's properties are true), so the extension can only lie in the domain of the subjective, or some 'intersubjective' communally agreed domain.

    Thank you for your attention. Please continue the dance.

  • Comment number 71.

    So what was the conclusion of the debate?

    Are there any logical action items?

    How should we develop Britain's competitive advantage (unique selling points) in the global marketplace? The primary aim is to reduce unemployment in the UK........and our government debt.

    Do council houses for socialists help? Surely, we've have those already.....

  • Comment number 72.

    #71

    Why should Britain strive towards giving other countries competitive disadvantages in this global market place? Is this what is really needed?





  • Comment number 73.

    FrankSz (#70) "The author fails to comprehend that the intension (the property or set of properties that can be said to be true of a 'thing') is what underlies the extension (the set of all things for which an intension's properties are true), so the extension can only lie in the domain of the subjective, or some 'intersubjective' communally agreed domain."

    Silly old Quine or still uncomprehending FrankSz?

    What you're describing is Methodological Solipsism. This was something which Carnap had tried to develop on the basis of Principia Mathematica (which had its roots in Frege and Peano), but gave up on as untenable after his Aufbau in 1928. Quine played a major part in that by highlighting what was logically problematic with the intensional.

    Just because it is now known that the intensional is no basis upon which to reliably construct our knowledge of the world, does not mean that many people don't do precisely this in practice. That's why Cognitive 'Science' attempted to study this beaviour as 'folk psychology' from the 70s onwards, and why some think it is grounds for therapy. It's the study of a modus vivendi in the absence of training in the appropriate sciences one might say. It's the study of judgement under conditions of uncertainty (and to a lesser extent, risk) which we are all condemned to in some areas and to some degree. This requires some careful thought.

    I suggest you put your humility cap on ;-)

  • Comment number 74.

    #71

    There is one thing that could be done from a grass roots level that could increase in popularity: Social Lending. There are some websites that have doing this for years, and quite successful. People with savings on dedicated social networking type sites invest in projects. These projects are usually small businesses looking for a bit of credit to lubricate their cashflow machinery. The credit seekers describe their business, get ratings, etc. The creditors can get to vet them in more detail.

    This kind of model focuses on the 'real economy' and undermines bank lending. It also gives those with savings the feeling that they are directly involved in assisting the [local] economy.

    This is the kind of thing that is not getting any press because it undermines the banks, which are fragile. Well, let us recommend this model to our friends, start an online venture in social lending, and promote it's anti-deflationary effect (savers benefit society).

    Who knows, it could develop into a force that rivals the banks, encourages real economy investment, help eliminate asset bubbles, reduce unemployment and so on.

  • Comment number 75.

    #73

    Well, with great humility, I humbly and respectfully draw your attention to what seems to be a small problem with the approach: that the extension depends entirely on the intension, thus not actually helping anything.

    If Lois Lane means "the property of Lois-Lane-ness", and Clarke Kent is a term that means "the property of Clarke-Kent-ness" then these two terms are used intensionally. It is the case that Lois Lane may or may not equate to Clarke Kent depending on who or what is evaluating the properties of any input data. (That is, input data may result in Lois-Lane-ness and Clarke-Kent-ness both evaluating to true for a particular identified 'shape')

    The extension of the term 'Clarke Kent' is "The set of all things for which Clarke-Kent-ness is true". Am I right? (Please don't feel scared at this point to say no - and offer a correction. I won't bite.) So, clearly, not much has changed.

    Whether or not the term Clarke Kent is equivalent with the term Lois Lane (extensionally) depends on the point of view. Am I missing something?

  • Comment number 76.

    FrankSz

    In an ideal world I agree with you. I prefer co-operation rather than competition. I would happily accept the 3 day week for all workers, and share the wealth out across the world.

    However, I doubt this will come to pass.
    Unfortunately, I think that Britain actually lags behind many countries in the world, and that we do need to improve our competitive advantage. I am worried that British unemployment will end up being permanently high compared to Germany, Japan, Korea, USA, China, India, etc...
    As the recession eases, I think those countries may pick up faster than Britain.

    Regarding Social Lending; it is already very effective in developing countries. It is suited more to small projects, and it runs on "my word is my bond", which is a very admirable strategy. Unfortunately, the rise of liberal individualism in Britain means that ideas of trust and honour are not so strong as they once were.

  • Comment number 77.

    FrankSz (#75) "Am I missing something?"

    Yes. Watch the video links.

  • Comment number 78.

    #76

    The social network sites dedicated to social lending add value by rating, vetting, etc. Public reputations, ebay style, lead to a more democratic process of evaluation of credit-worthiness. It is not as simple as my word is my bond. It is a concrete proposal for a way forward. As long as interest rates are low, risk low, and a focus on the real economy is maintained, it is a step towards a democratic, decentralised system made possible by high communications technology.

  • Comment number 79.

    Post 74, 76 and 78 - this a great conversation - and I agree with the points made ...

    It also highlights the fact that the internet (or more accurately communications / information technology) will eventually change everything ... including banking, communities and politics ... it's just most people haven't realised this yet (or done anything about it yet) ...

    Government's / banks / media etc will also already be making plans to resist this, and try to undermine / restrict such developments, but the Genie is out the bottle and it'll be very difficult to put back ... !

  • Comment number 80.

    No.78. FrankSz wrote:
    "a more democratic process of evaluation of credit-worthiness"

    Speaking as someone who makes credit decisions on a daily basis, I say that a business or person is credit worthy up to a specific limit. The limit is fixed according to my attitude to risk, my current risk portfolio, my current level of business and my ability to absorb any bad debts which may arise, coupled with the customer's specific financial situation and ability to pay to terms.

    A "democratic process of credit evaluation" is not something that fits with my method of working. It sounds more of a slogan (rhetoric) rather than anything concrete......

  • Comment number 81.

    #79

    Agreed - this is something that can be done. It is something that can be promoted, easily. It could change things significantly.

    #80
    The concrete proposal is the business model, and its promotion.

    Let us all take concrete steps to promote the following:
    http://www.money-rates.com/sociallending.htm

  • Comment number 82.

    Interesting reading one or two of the comments about markets. Selling DVD players to China caught my thoughts particulalrly and this is why: Both China and India are growing despite the global downturn and their Middle classes continue to grow at a rate of knots. Demand for high quality, luxury, lifestyle goods will hence grow and most of these are developed over here(the so called west). My company, Sonneteer, makes such things for example.

    Also, recently, we were costing up a new product for production and one of sub contractors insisted on getting part of the quote subbed out to China. So we compared this with another supplier based in the UK and landed cost actually turned out to be the same. On top of the fact they are less than an hours drive away, in the same time zone, and speak English means the choice is a no brainer. We had decided to make everything in the UK anyway, but it was interesting to find out that the cost argument already means making it here. This will happen more and more as long as we encourage R&D to stay here and we continue to develop and make the quality products here.
    In our particular case its luxury 'sexy' hi-fi and area which Britain has a traditional reputationonce akin to Swiss watches. If this can be harnessed in all similar areas of engineering and manufacturing then we have a solid bases to take advantage of these growing economies and at the same time winning the cost as well as the quality argument. it also means keeping and developing the skills and expertise right here.

    This is a solid basis to build an economy and if we see it by looking far enough ahead(and it's really not that far to look really) then we can thrive.

 

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