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The Search for Growth

Stephanie Flanders | 11:16 UK time, Tuesday, 15 March 2011

If he's like the rest of us, George Osborne is probably thinking about Japan today. But he's also supposed to be thinking about growth. Having spent his first months deciding how to shrink the deficit, the focus of next week's Budget, we're told, will be how to expand the economy.

He's not the only one. It feels like every day I get another invitation to a "high level seminar" or conference on the subject of growth. But where, exactly, does economic growth actually come from? And what, if anything, can governments do to help?

Those are the questions I've tried to answer in a two part series called "The Search for Growth", the first of which will be broadcast on Radio 4 today.

When it comes to growth, politicians have no trouble describing the goal - George Osborne and Business Secretary Vince Cable will each be once again describing their vision of a "new economic model for the UK" in the next few days.

The problem is, we're not starting from a blank sheet. Britain's been in the economic growth business for a long time - you could say we started it, with the industrial revolution from the end of the 18th Century. That is where modern growth, in terms of a fairly continual rate of growth in income per head, really began. Growth before that time had only been "extensive" growth, where growth comes solely through a rising population, and living standards remain broadly the same.

More than 200 years of intensive growth - growth in income per head - has made us one of the richest countries in the world (a fact it's sometimes easy to forget, amidst the gloom). But it's also given us bad habits, and now we have a financial crisis to shake off, and the tightest squeeze in government spending in at least a generation. Understandably, people worry that we will never get back to the growth path we were on.

One thing is clear. When it comes to growth, even small differences can make a big difference to our living standards over time. In the past 40 years our economy has grown by about 2.25% a year, on average. At that rate, living standards double every 30 years. If we grow by 1.25% year instead, it will take 60 years.

Is that what we can now expect? It is one possible path for the UK. But after making these programmes I don't think it's the only one. Around the country, you can find plenty of vibrant businesses, even in supposedly "dying" sectors like shipbuilding, and even in "deeply challenged" regions like the North East.

These firms are creating growth and jobs the same way that growth has always been created - through innovation. Making better stuff, and using fewer resources to do it.

It's true of "high-tech" companies like the British software company, Autonomy, and the high-end fashion label, Burberry, both of whom feature in the programme. But we also spoke to Bury Black Pudding, in an industrial estate in Greater Manchester. It doesn't have a big office in Silicon Valley, or a prime slot in London Fashion Week, but it's doing very nicely indeed.

Growth is happening. In many ways, it would take a very determined government to stop it entirely (though plenty of governments in the past have done their best). But even the success stories also help show why other parts of the economy are not taking part.

Alnmaritec, the boat company that I visited yesterday in Blyth, on the Northumbrian coast, has hired more than 100 people in the past year, most of them former steelworkers and shipbuilders. The company has gone from building £250,000 steel boats to £2m ones in just 3-4 years, and has vessels in its yard destined for China, Angola, and Australia. But it can't get so much as an overdraft from its bank, and it is recruiting naval architects from the rest of the EU because it can't find enough of them here in Britain.

As ever, the Search for Growth is a glass half full, glass half empty kind of story. But there's some pretty interesting stuff in the glass.

Comments

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  • Comment number 1.

    Paul Krugman blogMarch 14 2011:

    "Roger Cohen writes about David Cameron’s new campaign calling for a focus on “emotional prosperity” rather than just financial prosperity. As he notes, it’s easy to be cynical about Cameron’s motives — and I am.
    There’s also the question of what difference it makes. How would policy change if we agreed that happiness, not GDP, is the goal? After all, it’s not as if governments really try to maximize GDP, so why does it matter if we change the thing that they aren’t really targeting anyway?
    And yet, there are cases in which the distinction between financial and emotional prosperity makes a big difference — namely, periods of high unemployment...So are Americans happier? Of course not — in 1999 or 2000 everyone could easily find a job, right now everyone — even the highly educated — faces the prospect of very long-term unemployment if anything goes wrong.
    So what does this say about policy? It says that job creation is urgent, even if it isn’t very productive in terms of GDP. A WPA-type program when you’re in a severe slump is more productive than most people imagine, but even if it isn’t very productive, it can do a lot to help the nation’s overall welfare, simply by putting people to work. And if the debt run up to pay for the program means higher taxes later, so? The monetary cost will have much less negative impact on public welfare than the unemployment that would have happened without that program.
    The irony, of course, is that Cameron is pushing happiness economics even as he pursues an austerity program that will lead to a great deal of misery, above and beyond the lost GDP."

  • Comment number 2.

    So many "plans" have come and gone, so successful (within limits), some the opposite. Growth in my humble opinion, comes from the desire of individuals to "push the envelope" (or in 'Star Trek' language 'to boldly go.....etc). Any government of any colour, has the overarching responsibility to allow entrepreneurs freedom to operate under the umbrella of a simplified and codified system, one which will allow growth, bring benefits to the greater general public as well as themselves. Only by a thorough and comprehensive understanding of what drives people can any government hope to improve the lot of its people. It is not (only) a question of economics but also one of knowing what goes on between the ears.

  • Comment number 3.


    I think consolidation will be the name of the game this year , if we are lucky.

    Oil prices are going to go through the roof in the months to come and inflation will stay high (4 to 6) %.

    Of courses some businesses will grow , but the world economic climate is probably the worst it has been for 30 years.



  • Comment number 4.

    "The search for growth" is the title of Stephanie Flanders' blog.

    Have read it - several times - and am still confused by it, and no wiser from the content. In fact, I'm more confused?

    Furthermore, I am not ashamed to say so.

  • Comment number 5.

    Economic growth in Europe since the 18th century has always been fueled by a cheap, plentiful and increasingly scaleable source of power - slavery, coal, oil - and availability of cheap resources. At best we can sustain our current position with renewables and technology to sustain agricultural output without oil. But this is not possible not without maasive investment in the infrastructure required - rail, renewable power generation (wind, solar), research in improving efficiency of these power supplies - and a strong unity of purpose.

    First we need to remove those working against us progressing in the right direction and at present the biggest barrier is the banking industry. Its strangling our ability to work together. Worse than that, the immense wealth they are creating in a few hands is supporting the industries that are working against sustainable energy.

    It needs to be massively reformed, however painful that will be for all of us.

  • Comment number 6.

    What growth and for whom are questions that I suspect will not be answered in the "Search for Growth". Growth is reduced to a percentage increase in GDP/GNP and even under 2.25% average there is still mass poverty and howls of complaint if taxation/benefits are used to distribute some of the growth to those who otherwise would not have it. Cameron is either naive or pathologically cynical in suggesting we consider 'emotional' growth when he is returning much of public services to the Thirties. Growth is interchangeable with non-stop consumerism or possessive individualism when so much of the quality of life is facilitated by the public economy.

  • Comment number 7.

    Build Houses?

  • Comment number 8.

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

  • Comment number 9.

    Without in any way advocating woolly concepts such as a happiness index I feel the whole question of living standards needs a definition to go with this article.

    In the past 40 years our economy has grown by around 2.25 per cent a year, on average. At that rate, living standards double every 30 years.
    What does this actually mean? Healthier and longer life? Near universal ownership of a fridge? Ability to own two televisions? Affordability of twenty pairs of shoes each?

    Or is it as shallow as a fairly continual rate of growth in income per head because this alone seems fatuous.

  • Comment number 10.

    Should it not be "The Elusive Quest for Growth"?

  • Comment number 11.

    Surely a good starting point in the 'search for growth' would be to concentrate on those things that are preventing it.
    It's widely reported that the banks have become too risk averse and are shying away from lending to SME's at reasonable terms, something which desperately needs to be addressed. But what about the mountains of bureaucracy that Government burden business with. The disjointed 'why fill in one form when five will do' attitude.
    So my suggestion to our Government (remember they work for us), and especially to Vince Cable, is cut the red tape and free businesses up to be enterprising. You never know they might just surprise you.

  • Comment number 12.

    George Osborne is right to think of the UK as being in the same position today as Japan was 20 years ago. Then they allowed house prices to create a totally ussustaianble bubble and they have done nothing about it since.

    The UK must NOT make the Japanese mistake. We have absolutely no excuse to repeat the Japanese error. We MUST de-leverage house (and property) prices for the economy to regain some life, or it will die for a couple of generations (or more), just like the Japanese economy. (However, unlike the Japanese we are not able to manufacture and export anything to save us!)

    Put interest rates up NOW. Force house prices down as a direct aim of policy. Cap personal maximum income. Rescue the homeless. Build new social housing. Finish re-rescuing the banks and building societies from their own folly. Encourage genuine prudential saving and investment, without creating bubbles (this will also rescue the insurance and pensions industry.) In short: rebuild society.

    (Additionally: use the employers taxation system to bear down on long distance commuting. Charge companies extra for employing people who have long distance to commute.)

  • Comment number 13.

    I think we should stop worrying about growth for the moment and concentrate on getting the finances of this country in some sort of order and on a stable footing. Unfortunately such measures will take time to feed into the economy and therfore their impact will possibly not be felt for another 2 to 3 years. Any "growth" measures announced in this budget will be short-term responses and not structural as really required to sustain growth over a period of time. Therefore such measures, if announced, should have a time limit (e.g. no more than 18 months) placed on them. Osbourne should spend more time in the budget signposting the structural changes the Coalition are thinking of to our tax and benefits systems. We know the latter is well under way but our tax system needs a massive overhaul to simiplify it and to reflect our our economy and society now operates.

    By way of example I would like to pick up on two points raised by the two Eds (who said two heads are better than one?) ie., VAT on petrol and banker bonuses.

    In my view Osbourne should keep VAT at 20% on fuel. Instead he should scrap the anomaly that VAT is also assessed on the Fuel Excise Duty (Gordon Brown, when petitioned on this, hid behind some EU directive so as not to do it)and rachet up the duty, to absorb some of the lost VAT revenues, but only to a level that would see an effective 2p/3p per litre drop in fuel prices. This measure would also make it easier to manipulate at the pump prices depending on the market oil price.

    Secondly can we now drop the bankers bonuses "issue"! It is an emotive subject that all political parties have made political capital out of but the fact is that these bonuses did not cause the recession and in magnitude the are a very small part of the economy. To keep flogging this subject is just trading off of peoples' jealousy. Start coming up with worthwhile suggestions to extricate the country from the mess your party got us into instead of playing purile political games.

    Come on George show these two that there is more about this Coalition by announcing some really sensible structural changes that will begin to establish this country's economy on a sound and stable footing

  • Comment number 14.

    It looks like on the one hand we will see a reasonable amount of 'growth' over the coming years, but it will be fairly slow. Large jumps in manufacturing for example are from a very low base. The question is what kind of growth will it be? If it leads, as it looks it will do, to an explosion of minimum wage, part-time low wage jobs then at the same time as the economy is 'growing' the workforce could in fact be getting poorer.
    I think that is the future for the foreseeable.

  • Comment number 15.

    mmm...not sure you can equate 'growth' with 'living standards' in such simplistic terms - as I presume you are trying to do in terms of GDP % increase. And I think it is slightly naive to assume that governments seek 'growth' in order to improve the standard of living of all.
    The problem with the present form of western government (not that any other form has proven better) is that it is still controlled by a wealthy elite that make decisions in the interests of themselves rather than the majority of the people being governed. Their main raison d'etre is to get even richer - hence government's fascination with economic growth... Growth simply equates to a return on equity or investment for the Wealthy Elite controlling most the assets as well as government. The rich invest their money and expect a return - hence continual Growth is required - whether it benefits society or not. Money really does make the World go round.
    Of course the argument goes that with Growth, society will get richer and benefit overall - so whilst the Rich get Richer there are more crumbs for the other 99.9% to live on.....This may be true. But why is it with all this constant growth we have had that there are still so many in the Western World living under the poverty level...why is it decades after it was predicted that technology would decrease the length of the working week, that those lucky enough to have a job are working harder than ever....why is it that we are now suffering mass employment, loss of public services whilst the earnings ratio of the CEO of a company to a regular company worker is now 10 times greater than a few decades ago???
    Even if you put all these issue aside, is it even still true to say that 'Growth' i.e. solely in economic terms, DOES improve Standard of Living? Destroying the environment humans live in would not seem to me to be compatible with 'improving living standards' and 'Growth' as we know seems to involve an awful lot of the former.
    So tell me. Wouldn't most of society prefer a job and regular wage and basic public services over 'Growth'? Because I can't see why 'Growth' is necessary for such things.
    The sooner the general public start to realise that 'Growth' means for the Rich rather than for society at large, the sooner they may vote a government in that DOES seek to improve living standards for all....and this may or not involve economic growth for the Rich....

  • Comment number 16.

    "Sustainable economic growth", the oxymoron. In a world of finite resources the desire for perpetual growth is a bad thing, and has been the elephant in the room for decades, but helpfully is starting to be discussed eg "Prosperity Without Growth".

    The tendency for capitalism to overaccumulate wealth in the hands of the few, has led us to the current situation by progressively reducing spare income to a minimum for most over the last 20-30 years, not helped by inflation, caused by £4billion new dollars being QE into existance every working day (supposedly a stimulas). The solution to the last major crisis, freeing up the banking system and the inevitable explosion in credit/debt is compounding matters. All of this is impovishing everyone except the rich. The result is a drop in consumer demand, and as the growth in the economy is based on consumer demand you will get no growth. Add in the onset of peak oil and a few natural disasters and the fragile nature of capitalism is becoming very exposed. I can see less and less liklihood of reinflating the current economic model as a result. It is not sustainable and therefore is no longer fit for purpose. Removal of our debt based monetary system, and redistribution of wealth will improve customer demand, but it will also also increase the use of finite resources again, which is ultimately not sustainable. We need to start thinking "outside the box".

  • Comment number 17.

    So is the reason we need continuous growth to prevent job losses while the banksters invent wealth out of our taxes and reward themselves for their innovation?

    I don't understand why we ("our" government) are cutting public spending while filling the coffers of the plutocrats with unprecedented salaries. Can someone please explain this for me? Is it open greed or blind greed? I can't decide which.

    If we are cutting education can we just cut economics out the syllabus? Alternatively, if we are raising the threshold of tuition fees - how about a subject based threshold. Zero for engineering and one hundred grand for Economics/Business Studies?

  • Comment number 18.


    I believe you are talking about the wrong person, when you refer to George Osbourne making decisions on

    growth. The city and the banks control the direction and the speed of growth in this country. To think and to

    report otherwise is to deceive ourselves. Until we face this truth, and bypass the government, the people of this

    country can then bring direct pressure on the groups who (in reality ) control the growth and direction

    this country is being taken.To think otherwise ....is to be in denial.

  • Comment number 19.

    'GDP Growth (? Growth is a fairly vague term in itself)' can and probably will be be painfully achieved ... but who will benefit and in what proportions and why?

    Other than credit boom property and credit card activity, 'growth' has tended to be concentrated ... well, you know where

    Only a 'hybrid UK economy' as opposed to an over exposed and parasited market economy stalled with debts, deficits and the highest taxes in the world can restore the perceived benefits of 'growth' to the majority of the UK population.

    The problem is those pulling the levers and policy tools do not seem to understand or have the knowledge or have the slighest interest in radically restructuring the UK economy, which I think is needed to make the UK more productive and have a stronger domestic economy. This applies to all political parties execept perhaps the Green Party (but some of their policies are barking mad and unlikely to get them mainstream electable in the short- medium term?)

    Those that are 'better off' ... 'the haves', establishment and vested interests... have made sure that what sustainable growth is available is available ... is under their control.

    So the question is not only about GDP growth but who should benefit from it and why ... as without that discussion ... the gap between the 'haves' and 'have nots' will probably become wider and with more and more 'have nots'.

    Growth in GDP should mean nothing to the average man or woman in the street ... as is totally remote from their own circumstances.

    What does puzzle me is why the current Chancellor has not revealed the outcome of the BOE's QE experiments ... as he always sounds a bit sceptical about QE ... but one would think that this would be under consideration as a policy tool for the budget ... even if just to say it is not a good idea because... this is what has happened with QE?

  • Comment number 20.

    Okay, growth can come from a mixture of the following:

    Net Bank Lending - not going to happen in the near future, due to banks recapitalising, and over-indebted comsumers, and austerity which will make companies look uncreditworthy.

    Net Exports - not going to happen in the near future, but even when it does, exports ned to be very large to fuel growth on their own, and I doubt that will happen in the next 20 years.

    Domestic Sector Spending - the consumer is still over-indebted, so this is not going to happen soon in enough volume to support growth on its own.

    Government Spending - this can happen whenever the government likes as it is not financially constrained. The government should spend sufficiently to support growth and reduce unemployment. They should do this until the domestic spending has run-down its debt sufficiently to start spending again, and until the banks are able to lend again (this time in a more susainable way). The government is able to run a deficit indefinitely if necessary, and they should develop the political will to do so.

  • Comment number 21.

    Are we now substituting 'growth' for that yet to be defined 'recovery' word?.

    There will always be that UK enterprising nature that started the whole show in the 18th Century. In those days science and engineering and altruistic public administration was the founding fathers of our unchallenged move forwards into our unfortunate war contaminated 20th century and politically incompetent 21st.

    In modern times our political leaders are obsessed with political survival by media manipulation not a sincere grass roots approach to the present and future problems being experienced by our business'. For every business you triumphantly proclaim Stephanie, there are thousands complaining about the financial institutions, political double standards and especially the conduct of the banks, remember those who we taxpayers bailed out, to lend money to business, for business to survive and grow and to protect employment.
    Maybe the next budget will herald in the questioning media and increasingly cynical electorate that 'growth' is the next 'in-word' and economic principle to target. Of course a good starting point would be to do what both governments in the past three years said they would already do, TIGHTER CONTROLS OVER FINANCIAL INSTITUTIONS, EASIER AND MORE FAVOURABLE LENDING TERMS FOR BUSINESS, AND A SENSITIVE AND CAUTIOUS APPROACH TO GOVERNMENT EXPENDITURE CUTS AND FUTURE BORROWINGS.

    I see no reason to change my forecast, 'bumping along the bottom for 2/3 years when a more stable financial and economic will produce a less prosperous UK than was previously experienced in the recent years', the party's over for a long-long time for most of us.

    Entrepeneurs and technology have created growth, politicians understand neither and have a natural tendancy to destroy both.

  • Comment number 22.

    #13

    "Secondly can we now drop the bankers bonuses "issue"! It is an emotive subject that all political parties have made political capital out of but the fact is that these bonuses did not cause the recession and in magnitude the are a very small part of the economy. To keep flogging this subject is just trading off of peoples' jealousy. Start coming up with worthwhile suggestions to extricate the country from the mess your party got us into instead of playing purile political games."

    Its used for political capital because every man and their dog knows the scale of bonuses bankers receive is wrong.

    Its also wrong because it encourages destructive investment habits.

    It has nothing to do with jealousy - this is the argument favoured of bankers because its a trait that drives the greed for unneeded wealth. 90% of right minded people just want a job, a house and a family with enough food on the table and a little left over for a few minor luxuries and some spare time at the weekend and at the end of their working lives.

    Its emotive because people are about to suffer from the huge cuts and others are rolling in extraordinary wealth despite having contributed to their plight.

    As Mr George himself said - he's staggered why people are not more angry.

  • Comment number 23.

    The search for Growth?

    Where did previous growth come from?

    Was it from building ships (and an empire) and extracting it from the rest of the world?
    (And other technological innovations.)

    Wasn't the industrial revolution built on cheap labour?

    And just how are we able to buy 20 pairs of shoes (as Kit Green mentions)?

    How many could we afford if they were made in the UK instead of Taiwan?
    (I have noticed that Tesco can’t sell a BLT sandwich as cheap as a white cotton T-shirt…)

    Is it that we have seen an increase in our living standards at the expense of those we exploit?

    If our factories hadn’t been exported to nations with cheap labour – would we still have seen an increase in our own living standards?

    In order for us to grow - do we need to extract the wealth from someone else?

    Are BRIC nations now growing at developed nations expense?

    Can EVERYONE grow? Can EVERYONE have an export led recovery?

    Or do we look to science and cross our fingers for fusion?

    I don''t have the answers and George Osbourne certainly doesn't!

  • Comment number 24.

    Stephanie Wrote:
    These firms are creating growth and jobs the same way that growth has always been created - through innovation. Making better stuff, and using fewer resources to do it.
    ~~~~~~~~~~~~~
    Oooh. A definition of Growth without any reference to GDP. Is that rare among economists?

    FWIW, in the idyllic saxon village, growth was only possible by spending stored surplus.
    e.g. In 312 BC, left over food from a bumper harvest released some of the people from subsistence farming for long enough that they could invest their efforts in making a plough. This meant there was more food again for many more years to come (sustainable growth.)
    These people could have been employed as "diversity consultants" instead. (Checking that indigenous saxons and immigrant vikings were treated equally.) But that would not have been a good investment of the stored surplus.

    Luckily, in 312 BC, the village elders had more sense than latterly.

    hey ho...back to the mushroom farm. No surplus for me...only debt.

  • Comment number 25.

    The "search for growth" sounds dangerously abstracted away from the problems of
    the real world. Maybe a "search for low unemployment", a "search for scientific
    progress" or a "search for financial security of the ordinary person" would
    focus the minds of our politicians more productively.

  • Comment number 26.

    "Alnmaritec, the shipbuilder that I visited yesterday ... and it is
    recruiting naval architects from the rest of the EU because it can't
    find enough of them here in Britain."

    So after more than a decade of "Education, Education, Education" and more young people going to University and obtaining degrees than ever before in Britain's history we still have a shortage of precisely the highly skilled workers that should be the centrepiece of a high value economy.

    Perhaps all those Gender Studies courses weren't such a great idea after all.

    Oops.

  • Comment number 27.

    "There will always be that UK enterprising nature that started the whole show in the 18th Century. In those days science and engineering and altruistic public administration was the founding fathers of our unchallenged move forwards into our unfortunate war contaminated 20th century and politically incompetent 21st.
    "

    Slavery and colonialism powered those technical advances by providing a market for produce, a cheap supply of resources and an independent slave powered wealth creator. This allowed us to invest in the infrastructure to research the technical advances and make coal power pay for continued growth.

    I think we now have to use our available resources to pay for a new infrastructure that can support our current society and drastically improve the distribution of wealth.

  • Comment number 28.

    This blog which says it is for the UK economy seems mainly to be for self-promotion these days as more and more posts refer us to Stephanie's work elsewhere...

    As to growth as I understand it we are supposed to be discussing the thoughts of politicians and economists most of whom have never had a real job in their lives. Best thing they could do is probably leave the economy alone!

  • Comment number 29.

    #16

    "Sustainable economic growth", the oxymoron. In a world of finite resources the desire for perpetual growth is a bad thing, and has been the elephant in the room for decades, but helpfully is starting to be discussed eg "Prosperity Without Growth".

    ---------------------------------------------------------

    Spot on.

    Growing GDP(or anything) by a certain fixed percentage (of itself) over time leads to an exponential curve.

    (And the only thing we have grown exponentially is the money supply - maybe any increase in GDP means we just aren't measuring inflation properly?)

    Anyway, what economists are really talking about is 'infinite growth' - which is why I think economics is too important to be left to economists!


  • Comment number 30.

    "These people could have been employed as "diversity consultants" instead. (Checking that indigenous saxons and immigrant vikings were treated equally.) But that would not have been a good investment of the stored surplus.

    Luckily, in 312 BC, the village elders had more sense than latterly.
    "

    Presumably they had the sense to make use of the most productive labourers without prejudice. No need for someone to force them to use their common sense.

  • Comment number 31.

    To the original post: there's a big difference between growth in a gold-backed system and growth in a fiat debt-money system. It's the latter that makes growth unattractive, under certain regulatory conditions.

  • Comment number 32.

    #20 Charles Jurcich

    ..is right

  • Comment number 33.

    #26 I think Economics courses were the most destructive subjects - or whatever it is that the banksters used as their path to "nirvana".

    As I say maybe we should be restricting the tuition threshold on certain courses like Engineering and subsidising them centrally. Not only is banking destroying our economy its probably sucking some talented thinkers away from a more productive existence - obviously not those clicking the buy/sell buttons but those who wrote the spreadsheets.

  • Comment number 34.

    #21 wrote "TIGHTER CONTROLS OVER FINANCIAL INSTITUTIONS, EASIER AND MORE FAVOURABLE LENDING TERMS FOR BUSINESS, AND A SENSITIVE AND CAUTIOUS APPROACH TO GOVERNMENT EXPENDITURE CUTS AND FUTURE BORROWINGS"

    Now lets see how this makes sense

    1. Tighter controls on financial institutions: seems reasonable after all we do not want them to make silly loans where there is a high risk of not getting repaid now do we?

    2. More favourable lending terms to business: ok so we do want banks to lend more to customers who have a significant risk of not repaying then.

    3. More cautious approach to govt borrowings: seems reasonable, after all we do not want govt spending like there is no tomorrow and landing our children with anoverwhelming debt

    4. More cautious approach to govt expenditure cuts: Given that govt is in deficit this means you do want govt to continue to spend far more than it earns and so land our children with overwhelming debt.

  • Comment number 35.

    As others have said, the main reason for growth in the last 50 years has been relatively cheap and plentiful fuel supplies and technology. However are we very much richer per head than we were 40 years ago when a young person today pays so much of their income to afford a basic house ? Reform of the banking system is essential, and moving away from a debt based money system. Technology should allow all of us to be very much richer than we were 50 years ago, but large banks and corporations have prevented this. We are in a situation now where our children may have a lower standard of living than us because of the debt legacy, globalisation, export of jobs, and the ending of cheap fuel supplies.

  • Comment number 36.

    31. At 1:50pm on 15 Mar 2011, Oblivion wrote:
    To the original post: there's a big difference between growth in a gold-backed system and growth in a fiat debt-money system. It's the latter that makes growth unattractive, under certain regulatory conditions.
    .......................
    I'm not convinced. Either way you have a debt based monetary system, and this results in debt growing perpetually and compounding as the money supply grows. If you have not read it yet have a read of Steve Keens the Roving Cavaliers of Credit. http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

  • Comment number 37.

    United Dreamer @27

    That 'curates egg', naughty in places Empire you associate with slavery and colonialism is not very different to the way China is presently shaping up;- oppressed domestic labour/slaves and a targetted 3rd world global market/economic empire with cheap goods.

    China, with much assistance from our own UK city slickers, has inflated world commodity prices that are easily offset against their low labour costs as part of their anti-western trade competition war.

    I really dont think we were so nasty, see the whole picture?

  • Comment number 38.

    Ms Flanders wrote:
    When it comes to growth, even small differences can make a big difference to our living standards over time. In the past 40 years our economy has grown by about 2.25% a year, on average. At that rate, living standards double every 30 years. If we grow by 1.25% year instead, it will take 60 years.

    ----------------------------------

    What a fascinating observation.

    So we’re all presumably around 133% better off than we were 40 years ago.

    In 1971 the average price of a house was £5,000.00
    In 1971 average earnings were around £1,000 per annum

    In 2011 the average price of a house is £167,000.00
    In 2011 average earnings are around £23,556.00

    Well our wages buy less of a house than they did in 1971.


    Growth = growth in debt.

  • Comment number 39.

    The Holy Grail of economic growth is rapidly becoming a poor measure of economic benefit to a society.

    Common wisdom suggests that a supposed social benefit derives from increasing consumption resulting from increasing (and better paid) employment, itself driven by higher demand - a virtuous circle. In a non-global world, the worker provides labour and also drives demand for his products by spending his wage.

    In the importing countries of a global economy, society no longer receives the wage that results from consumption because the jobs are in the exporting countries. With a lack of income, consumption and living standards must fall. This is what we can observe in the EU’s southern fringe; people cannot afford to maintain their standard of living without outside funding.

    In the exporting countries, society has to produce more than it can consume; the excess becoming available for export. Incomes and thus domestic consumption have to be kept low enough to ensure that exports are maintained. This effect can be observed in Germany where, despite economic growth, wage restraint depresses domestic demand, poverty is becoming systemic and standards of living are generally declining, particularly among the low-skilled who are most easily substituted by automation or offshore labour. None the less, the economic benefits of exports can be used to fund the importing countries with their negative trade balances – we see the financial support that Germany is providing for the EU’s southern fringe. By contrast GDP growth in India, China and previously in the Tigers where incomes were previously very low, resulted in increasing domestic demand and higher standards of living.

    Neither the society that is importing nor the other that is exporting will benefit in the long run. But both societies can claim growth, at least for a short time (yes, the countries in the EU’s southern fringe reported strong growth until recently).

    Measuring output with GDP is little help when assessing economic success. Increasing GDP is, in itself, no longer automatically of benefit to a society’s well-being in a global world and leads to misleading results. A more useful metric would have to look closer at the benefit to a society than most economists would feel comfortable with. Potentially, a demand-side metric would provide a better guide to the benefit of the economy to society. A proxy such as average disposable income and its distribution within that society might appease economists.

    To measure the sustainability of demand, trade balances could be useful. The closer a trade balance is to zero the greater the sustainability. Punishing EU countries with large trade deficits would be one step forward; punishing EU countries with a trade surplus is the obvious and necessary corollary.

    The ‘Search for Growth’ first needs more helpful definitions. We should define what we want before we start to search otherwise we might find success and still be disappointed – as you appear to be in your article!

  • Comment number 40.

    I don't think governments have the ability to create growth.

    They can only create the conditions for growth. The conditions for growth are low taxation, easy access to capital, minimmum regulation, a small state all of which where in place in the UK before Gordon Brown became Chancellor.

    Now none of these conditions are in place and it will take a long time to recreate these conditions. To be honest at this stage of the game growth is not that important compared to cutting the deficit.

    Cutting the deficit means that in the future the UK does not have to pay as much interest on its debt this stops future taxation from spiralling out of control.

    The other differential should be between sustainable growth and growth based on a unsustainable housing boom. Labour provided over the latter and when the bust came they hd no plan b.

  • Comment number 41.

    If you want a better understanding of economic growth read Luxemburg's Accumulation of Capital.

    http://www.marxists.org/archive/luxemburg/1913/accumulation-capital/index.htm

  • Comment number 42.

    35. At 2:02pm on 15 Mar 2011, simondav wrote:
    ....
    Very good summary. Not all of us are sharing the increased prosperity, just a relative handful.

  • Comment number 43.

    #30. At 1:45pm on 15 Mar 2011, United Dreamer wrote:

    Presumably they had the sense to make use of the most productive labourers without prejudice. No need for someone to force them to use their common sense.
    ~~~~~~~~~~~~~
    In those days "hunger drove the ploughman".

    Anyway, major point was growth is only possible by spending the surplus.
    this can be either a stored surplus (savings) or promised future surplus (loans).

    Spending can be used for investment or consumption.

    Therefore, "Search for Growth" is search for surplus demand and matching that with surplus supply.

    It works perfectly until you create valueless currency and trade that instead of assets.

    Simples.

  • Comment number 44.

    I agree that innovation is the true engine of growth.
    But the question is what we understand for innovation and how we could measure it.
    If we understand productivity (p) as the capacity to transform the elements we have into something useful or valuable in a period of time, to sustain this economic transformation capacity over time we have to develop the necessary knowledge (K) in terms of technology, methodology, organization, etc. It will be easier to transform an economic production system when fewer individuals are involved on it (not considering other attributes like education, commitment, etc.) and thus the number of individuals (m) involved in the economic transformation process is relevant.
    So the knowledge in an economic system is directly proportional to its productivity level and to the amount of individuals involved in the transformation process they do. For simplicity we can agree that those two are the main factors and we have that knowledge is the resultant of the level of production in a period of time and the amount of individuals of the system (K=mp). The analogy with physics could help us to understand this concept of knowledge as a momentum or economic inertia.
    Then if we think that innovation (I) implies the ability to change the production capacity of an economic system over time by increasing the individuals capacities (m) or increasing the economic performance (p) the resultant relation acquires the form (I=d(mp)/dt). This indicates that innovation is the force that triggers economic growth.

  • Comment number 45.

    The Washington concensus is alive and well in George Osborne's thinking.

    This posits the belief that the role of government is to back off and leave the private sector free to get on and make money - this process is driven by innovation and risk taking, which then creates more jobs, more wealth and economic growth, so the best thing government can do to help is to remove regulation, cut taxes and do as little as possible.

    My analysis is that deregulation leads to things like mad cow disease, the credit crisis, thalidomide and the destruction of critical parts of the world's ecology like the rainforest.

    I also see the post-war boom arising from the Marshall Plan which saw the allied governments pumping billions into industry and massively intervening to build the organisations and companies of today.

    I also look at the modern entrepreneur and compare him or her to their predecessors - many are itinerants, moving from place to place to avoid taxes, with no loyalty to any community or society.

    Wall Street and the City seem to be hell bent on extracting every last cent of money from the rest of us through one scam or another, whilst businesses have got into bed with the devil in the shape of the Chinese Communist Party so that they can exploit chinese workers in a way that would seem them castigated if they tried to do it in western countries.

    Meanwhile increasing numbers of Uk workers are unemployed whilst we import vast quantities of goods, services and food which could be produced here.

    Sterling has fallen by about a quarter recently: this has suddenly made our exports competitive, but at the price of a heavy dose of impoprted inflation. Therefore a sensible anti-dumping trade policy of import taxes makes even more sense because it only works one way. Back this up with the government backing import substitution investment and you can begin to see a way to create growth and solve our debt problems.

  • Comment number 46.

    Growth and innovation reflect final demand from consumers.
    A recent FT survey confirmed that businesses put no other factor that creates jobs and/or investment even nearly as high as 'customer demand'.
    The obsession that 'economic analysts' put on production factors over demand is because it's easier to collect data from industrial outputs, rather than disparate customers. It's consumption/sales that creates jobs - not production!
    If we sincerely want to grow our economy, its demand that we need to stimulate. Especially for sectors that already have a growth record: we should 'stick to our knitting'.
    We've been pursuing 'growth strategies' for years that focus on production. We can draw some general conclusions from those.
    1. Subsidies and government incentives for declining regions that 'work' simply distort the location of businesses. Insofar as that distortion locates development far from markets, it usually stimulates less than optimum inefficiencies and ends in failure.
    2. Business successes are usually based on a long-term strategy that earns its loyal customer franchise. Being a long way from markets is usually a major inhibition for success. Which maybe why so much more per capita business investment goes into the over-crowded and overpaid South-East: it's where the customers are most accessible and where experienced personnel are located.
    3. Copying other successes elsewhere is much more effective than spending resources trying to find a unique innovation.
    All of which principles are applied by Warren Buffett: he is sceptical about innovations and looks for well-managed & mature businesses with a secure market. One that has a 'moat' around it.
    We have several 'mature' business sectors with 'moats' around them: inward tourism and academic learning are just two of them. Moreover, both are spread around the UK and are labour and knowledge intensive. Government policy has just raised VAT on in-bound tourism to more than twice our European and N American competitors, and the new Visa policies are turning away full-fee paying university students. Our creative industries have grown strongly, so government policy is to abruptly cut those too.
    The only growth policy the coalition has that is working is 'low price'. We're following the BoE's and previous government policy of a low exchange rate. That makes our prices lower for foreign based customers and discourages spending on imports and foreign holidays. It seems to be working - but is a low exchange rate sustainable?

  • Comment number 47.

    35. At 2:02pm on 15 Mar 2011, simondav wrote:
    As others have said, the main reason for growth in the last 50 years has been relatively cheap and plentiful fuel supplies and technology. However are we very much richer per head than we were 40 years ago when a young person today pays so much of their income to afford a basic house ? Reform of the banking system is essential, and moving away from a debt based money system. Technology should allow all of us to be very much richer than we were 50 years ago, but large banks and corporations have prevented this.
    ====================
    I was around 40 years ago and 50 and, believe me. we are much better off now, at least materially. Back then, at least 50 years ago, few ordinary people could afford a car let alone a house. A colour television was an unusual luxury; land line telephones still a rarity etc. etc. Few people went abroad on holiday.

  • Comment number 48.

    justin150 @34

    What are your saying?

    The outline criteria I selected have been for three years and still are stated as some objectives of ALL the major political parties to deal with the present financial and economic mess, that is the point.

    It is just the depth and duration of the cuts in the public sector that separate the parties.

  • Comment number 49.

    Easy one this, Sophie - simply follow the example of Hong Kong in the 1950's.

    How did they stimulate economic growth - well simple - scrap all taxes for everyone, except for the super-rich (at the time) and certain businesses and the place just, well flourished - as you can see for yourself.

    What more do the Government want than to "look at the evidence". It was after all, a British Government appointee who took this decision!

  • Comment number 50.

    #37

    Coal came with cheap labour (i.e., equivalent of China today, rest of the world today). Slavery came before coal and initiated the wealth creation. Indeed africans were sold as commodities in their own right once the "industry" was established.

    The point is not that we were nasty Geoff Berry, although undoubtedly the kidnap and attendant mass murder was immoral (estimates vary but some 20% were considered to have lost their lives as a result of the trade), its that both technological advancement and growth comes at the expense of a much cheaper resource.

    But to kick it off, we need to spend some of that cheap labour (oil is the cheap power powering our society currently) to both invest in the research of the new technology to make use of sustainable energy effectively and to invest and build the infrastructure so that every level of our society can tap into that resource.

    At present the banking industry in its current guise is working against this aim because it is preventing us using our energy effectively and is actively promoting industries that rely on non-renewables. Indeed speculation on the commodity itself is leading to the dysfunction of society through promotion of hunger in the poorest people.

  • Comment number 51.

    #40
    "The other differential should be between sustainable growth and growth based on a unsustainable housing boom. Labour provided over the latter and when the bust came they hd no plan b.
    "

    The unsustainable housing boom started with Thatcher with right to buy encouraging the sale of the best housing stock at knock down prices and restraining councils from investing income on renewing the housing stock, not under Brown.

  • Comment number 52.

    40 Firey Shandy,
    "The conditions for growth are low taxation, easy access to capital, minimmum regulation..."

    Ah, minimum regulation like the banks had...which caused the financial crisis. Reducing regualtion usually causes corruption and systemic risks.

    "Cutting the deficit means that in the future the UK does not have to pay as much interest on its debt this stops future taxation from spiralling out of control."

    Cutting the government sector deficit simply means that the private sector surplus will be reduced... which in turn reduces demand in the economy, and increases unemployment. Reducing the interest payments on government debts means reduced risk-free interest earnings for people's pension funds - that's where much of the interest payments go!

    "The other differential should be between sustainable growth and growth based on a unsustainable housing boom. Labour provided over the latter and when the bust came they hd no plan b."

    Whether a housing boom, or other unsustainable bank lending, all governments since the 70's have relied on net bank lending for growth, in fact Nigel Lawson started this trend. The only sustainable path for growth is to rely on government spending sufficient to maintain aggregate demand. This is true regardless of the size of government you prefer, as the size of the state is a political / philosophical choice, not an economic one.

  • Comment number 53.

    #46

    "1. Subsidies and government incentives for declining regions that 'work' simply distort the location of businesses. Insofar as that distortion locates development far from markets, it usually stimulates less than optimum inefficiencies and ends in failure.
    "

    I'm not sure if that's the case. Subsidies and grants allow for startup costs to be absorbed and to increase the efficiency of the business to an optimum level (might still not be high enough). It means also that communities and supporting services who are built around the declining industries are not thrown away an expected to relocate with all the attendant societal pressures inflicted on both the remaining and receiving community.

    Of course they need to be reduced over time with the hope that the cost of relocation would prevent the benefitting industries from relocating just to take advantage of minor gains.

    Obviously it would be far better for stability if the industries were home grown, have a commitment to the community and were protected from aggressive mergers and takeovers if they start achieving success.

  • Comment number 54.

    averagejoe

    Yes, read it and agree. Steve Keen has it nail on the head.

    In essence I am agreeing with it: the point about 'growth' I want to make is that nominal rises in income are pretty meaningless unless we look more deeply into what the figures mean.

    Growth may have been down to the fact that since 1971 dollar quantities have exponentially risen.

  • Comment number 55.

    for united dreamer
    what you said is broadly right but the exploitation driven growth haven't stop in 1960 all the contrary by creating the commune agricole policy the Occident knew that's he was going to decimate the paysans of the third world but it was needed in order to eliminate any alternatives propositions (Hegel:if you exploite you take the risk to see one day the slaves changing the situation if you kill the others no problem) so the occident willingly sacrified there natural markets making all growth artificial and based on the currency manipulations and bank aspiring the investmant capital of the rest of the world (Lenine hinted at that when explaining how the financial imperialism will be the ultime stade of the capitalism) now that all things break down i don't see the possibility of any futur growth.It will be a square root crisis until the Chinese impose a new mechanism of world production,do they will be kind with the occident only God know

  • Comment number 56.

    1. Emotional Wealth? A progressive change is social norms of behaviour (e.g. clean up after the dog, don't cut into the car parking queue, value excellence beyond that in sport - have you watched people play public games of dominoes/majong/chess). The evolutionary psychology trap of beign a primate low down a hierarchy is tough to cope with - this will require being able to define one's own hierarchy, but also flatter institutions not just organizations (e.g. the distance between me and the MPC is infinite, I am powerless). Also - one return flight per year without associated taxes - holidays do help!

    2. GDP growth? Open the borders and let in more people.

    3. Productivity? Supply side - reduce greenbelt, planning etc. appreciate educational excellence (look at Singapore's attitude, publish GMAT scores of all MPs, CEOs etc.). Simplify personal and business tax regimes (this supports flexibility). Dump frictions such as stamp duty on moving (flexibility). Give universities the student loan risk. Demand side - online guides to going global, accessibility to factoring.

    4. National accounting for capital assets?

    5. Develop a good non-linear dyanamic model of economy. Well OK this is just for me to feel better, I cannot stop thinking of the following reinforcing loop: real wages down -> quantity demanded down -> spare capacity up -> real wages down.

  • Comment number 57.

    Maybe someone could help me with this question... if Dyson, a British company, heavily invest in a new factory in the far east, and as a result produce a larger output.... then how does this affect our GDP?

    Clearly in this situation the major new jobs created are abroad. Are the worldwide sales of the new product line included in our GDP?

    And what about Honda in Swindon, with cars exported to Europe. How is the GDP allocated between us and the Japanese owners?

    I keep seeing information about business being so confident, yesterday it was reported at a 4 year high. But I wonder how much of this turns into UK jobs and UK profits that end up as UK corporation tax.

  • Comment number 58.

    Whilst UK plc is still capable of some technological innovation, eg Autonomy, ARM, F1 car designers etc, the UK capacity for this has been steadily declining overall. Pfizer R&D on its way out is perhaps the most recent "export" and overall a significant shift of pharma, chemicals and general engineering innovation to elsewhere was happening all through my working life.

    Why ? Basically the political, civil srvice and financial leadership of this country are amongst the most technologically illiterate in the western world. Its no surprise that for example the MOD hasn't run a single substantial project on budget, on time and which actually performs to the required specification probably in my lifetime. It now has a reported £35 Billion hole in its finances and a whole load of projects eg Nimrod which have taken so long to build they were out of date before being delivered. Basically the people doing the procurement have no real insight into the challenges they are asking contractors to fulfill, if they did they would know they were impossible at the cost and timelines they originally agreed. Not that their government "masters" are any better. How many people in cabinet have science or engineering backgrounds of some kind ie actual comprehension of what innovation and manufacturing actually need to operate? Of course none. In fact its arguable that there are none in the Commons at all, certainly not with any actual experience althouhgh I believe two have science or technology degrees. Compared to say Germany where seven "cabinet" members have science and technology PhD's, let alone BSc's, including of course Angela Merkel herself. Now which has the most vibrant industrial base, the UK or German?

    For far too long this country has confined scientists to the labs and has rarely seen them as people to routinely develop by experience in sales, finance, marketing etc during their early careers. Then we hear the complaint that these "boffins" don't understand business - a self fulfilling prophecy brought about by the employers and their selection commitees. Try applying for a marketing job as a new science graduate! The business response is "oh scientists aren't creative" but for some reason possesion of a French degree is qualification enough. Of course none of the people holding those views and doing the recruitment ever went near a lab since GCSE.

    Not surprisingly many graduate students opt for courses which they believe will give them the greatest career opportunities and for 50 years this hasn't been science or engineering.

    Oh , and by the way, I speak as the retired VP of R&D of a major pharmaceutical company.

  • Comment number 59.

    hy United driver you say insustainable housing boom maybe .But what about USA when the price of a house there is roughly the same with a house in UK (around 90%) when you know that the historic trend is 50% you presume that when the correction by the market will came it will be cry and scream there,when here the correction have pass without too much pain.The Labour do very very bad thing but it essentially by saying that they prefer bank jobs than factory jobs (dixit Gordon)and consequently sell the UK with his population and his futur to the bank which care absolutly nothing if it's not immediate profit rather like scavenger

  • Comment number 60.

    What has disgusted me the most is how quickly Greenpeace jumped on the bandwagon, predicting all sorts of dire consequences after the Japanese tragedy, long before any facts were known.
    Is it a fact that the Japanese reactors survived the earthquake, but succumbed to the tsunami? A lesson learnt. Design for both earhquake and tsunami from now on. Don't let this tragedy be an excuse for abandoning nuclear power because the UK needs it. Due to its unpredictability, Wind Power is an illussion. Wave and Tidal Power may be viable alternatives, but they are a long way off. Think of all the old people who will die from hypothermia when the power cuts commence.
    Greenpeace? Pah! They would have the UK return to the middle ages with a population of only 2M, just so long as they were not the serfs.

  • Comment number 61.

    "Cutting the government sector deficit simply means that the private sector surplus will be reduced"

    Oh no it does not. It is wrong on a number of grounds:

    1. That statement assumes that the economy is a closed system where there are only two entities: the public sector and the private sector.

    The real world has this odd concept of globalisation. It is perfectly possible for a single country to run a public sector surplus and a private sector surplus as long as their are investment opportunities elsewhere.

    2. It assumes all surplus are recycled into debt which is simply not true - a private sector surplus coupled with low public sector deficit may simply result in asset or share price inflation

    3. Lumping the private sector together as a single thing when in fact it is incredibly diverse does not make sense. You could equally argue that individual surpluses get recycled into corporate debt.

    In one sense it will be true though. If public sector cuts back its deficit it will employ less people and those people who are made redundant presumeably reduce the private sector surplus because they are now in the private sector but without any income

  • Comment number 62.

    I listened with great interest to the first episode of "The Search for Growth" this morning. So far, its frame of reference is one in which growth is defined in classical terms - i.e. GDP, or per capita income - and is necessarily a good thing. I do hope that, at some point, the series will address the more fundamental question of whether growth - at least as classically defined - can continue indefinitely in a finite world. Common sense, as well as work by WWF, the New Economics Foundation, The Stockholm Research Institute and a long line of eminent economists from Herman Daley to Tim Jackson shows that we are already consuming far more natural resources than the earth can replenish. We depend on these resources for our future wellbeing, and for continued economic success.

    As Stephanie is no doubt aware, even the great economists of bygone eras - including Adam Smith and JM Keynes - did not consider growth to be the end point, but only the means to an end state in which we would have high levels of wellbeing, equitably distributed throughout society. As the NEF and others have shown, wellbeing is not just about the total amount of money in a society (as the interviewee from LSE pointed out), or even levels of individual wealth, but about real outcomes such as learning, social cohesion, equity, pleasant surroundings, happiness, healthy ecosystem services, and so on. The organisations and individuals I have mentioned advocate the inclusion of natural and social capital in national accounting, so that their value and costs are fully recognised.

    This is no longer a fringe agenda, even if it is simply too big and scary for establishment figures to address. When I asked a panel of such figures whether they considered there was ever a limit to classically defined economic growth and, if so, where that limit was, I didn't receive a single intelligible answer. The panel, held at Edelman and chaired by Patience Wheatcroft, included Vince Cable, Jim O'Neill (CEO of Goldman Sachs) and David Blunkett. Afterwards, Patience told me that she had been shocked by the poor answers, and that someone really needed to get a grip on this question. Much of the research work has been done, and some of it has even been commissioned by top politicians, including Cameron and Sarkozy, but my sense is that they just don't know how to respond to that one most fundamental problem of changing the way we measure an economy's success. They think it's all about buying, selling and wasting less stuff (which it is, in part) and ignore the positive messages around innovation, healthier lifestyles and so forth.

    Peter Day has already covered this topic in one of his In Business programmes, but it needs a lot more coverage.

  • Comment number 63.

    Has the improvement in living standards apparently generated by all this "growth" made us all happier.
    It doesn't appear to me that it has.

  • Comment number 64.

    Hi Stephanie

    I know your field is economics, and The Search For Growth is about economic growth, but you surely can't regard economics as hermetically sealed from the rest of the world?

    Have you ever watched the lecture "Arithmetic, Population and Energy"? It is by an emeritus professor of physics, Dr Albert Bartlett, and is simply required viewing - and re-viewing - by everyone, including economists. It is entirely not polemical; it is pure science. Dr Bartlett is not running for office, not trying to sell you anything, not trying to con you. He is doing that noble thing: trying to educate people.

    You can get a free download of the video using this URL:
    http://www.archive.org/details/ArithmeticPopulationAndEnergy

    Please take a serious look, and then come back and convince me that economic growth is anything other than disastrous.

    Also, try to get all your colleagues at the BBC to watch it. We might then get some really intelligent questions put to Messrs Cameron, Osborne, Cable, Milliband, Balls etc.

  • Comment number 65.

    It's popped up again here - the notion that somehow today's borrowings are a burden on future generations. Can we put this to bed now? There are borrowers and lenders today and there will borrowers and lenders in the future...And, provided the borrowed money is invested wisely, this is not a winners and losers game.

    To radically simplify things: suppose we have Peter the lender and Paul the borrower. In year one Peter lends Paul a £100, repayable with interest in four years time, to set up a widget making operation. Paul has, so to speak, lost £100 but Peter has gained £100. Widgets are much in demand and, by the time year four comes round and Paul wants his money back, plus interest, Peter has earned enough from making and selling widgets to repay the loan plus interest - and also has enough surplus to invest in a new widget making machiine without resorting to a loan from Paul.

    So in year four Peter has the burden of a debt to repay but Paul has the benefit of income over and above the original amount loaned in year one. However, since Peter used his borrowed money wisely and invested it for the long term, rather than fritter it away on wine, women and song, he has gained, by year four, a profitable widget making enterprise.

    Take another example - student loans. The Student Loan Company loses the money it lends to students but the students, when at university, benefit from this loaned money. However, in the future, though students who have graduated will carry the debt burden of the loan, the Student Loan Company - and universities too, considering loan repayments are set to become a major source of their income - will benefit from the income these repayments represent and will be able to make loans to new students and assist with general university funding. In addition, although students will later suffer the debt burden of having to pay back their loans, one would hope that, as well as having gained an educated mind with which to view the world, they will have built up some human capital that enables them to benefit themselves, the wider society and earn sufficiently to pay back the loan...

    Of course, how much of a future burden that loan is depends on how well students invest it in their education. This applies to all borrowing. Borrowing is not a burden on future generations because, in those future generations, there are also people reaping the benefits of getting loan repayments with interest. That's not to say that within each generation there may be more of a shift of wealth one way or the other - from lenders to borrowers or vice versa. The only real burden borrowing places on future generations is if it is spent/invested unwisely so that, when the time for repayment comes around, the borrower has got nothing of any lasting substance to show for the loan they have spent.

  • Comment number 66.

    United Dreamer@50

    Nasty is the right word, slavery and the loss of live during transportation was down-right evil, the USA cotton industry and it's links to UK cotton did generate growth in the massive UK textiles industry which was diminished after the Civil War when the UK shifted cotton production to India. To their eternal credit the textile owners and workers in the Lancashire industry opposed USA slavery by refusing to work imports from the Confederacy, a magnificent political gesture which resulted in great hardship in NW England.

    Only a handful of African slaves were imported into the UK during this nasty period in the 19th century and certainly not many people of African or Afro-Carib roots were ever employed in the UK coal mines.

    Whilst I understand where you are coming from, I am not able to relate your cheap labour and coal concept to the renewing of the UK nuclear power generation industry. The last UK government were trying to raise private capital to kick start the nuclear power industry but now we have anti-nuclear idiot #1 Huhne, nothing will change in the immediate future, in particular our industrial energy costs so essential to catalyse the growth that Stephanie's article mentions will continue to increase and making us less competitive and thus impeding our growth.

    We are screwed by our own totally useless politicians, I believe Huhne's and his friends ambitions in the libDumbs green lobby is to stall until the UK imports more energy from the French nuclear industry and thus cementing a permanent dependancy on the EU leading the full political and monetary union.

    Finally the banks, there is an indisputable home for the word 'nasty', I am afraid legislation is required to force the banks to support the governments drive for growth, a less public spirited bunch of spivs never set foot on our soil, let them run off eastwards as they threaten, but nationalise them first.

    Nice talking to you again.

  • Comment number 67.

    `Making better stuff, and using fewer resources to do it.'

    This is the lesson manufacturing learned in the Seventies and Eighties. Your future profits lie in eliminating waste and inefficiency, so you invest in a virtual cyle of self-improvement.

    Financial crises caused by the stupid, the crass and the incompetent do not help this process and do not reassure manufacturers that the candle is worth the struggle.

    I am increasingly seeing our economy as having many parts. Some parts are doing well as they have for the moment cracked the mold of depression and slump. Other parts are getting by despite it all. Whilst the bits most closely connected to the easy days of the boom are suffering and some suffering very badly indeed. This latter applies very much to construction and the public sector.

    I think we are going to have to accept we just won't be able to crack the growth equation in the immediate future for as long as the bubble mentality persists. We have to be realistic and come to terms with the fact that all this debt has damaged us economically, culturally and socially. But we must not allow this millstone to get any heavier.

    However, we do need to start setting plans in motion so that we become capable of growth.

    Government spending needs to be directed at facilitating manufacturing business to grow, to invest and employ. There needs to be purposeful training in marketable skills particularly for the young. Encourage small scale start-ups for the self-employed. New products and new designs need to be encouraged by public competition and awards. What is needed is initiative and a positive can-do mentality.

    This is quite the opposite of the prevailing attitude of doom and gloom. There will be little or no growth for some time but if we set out to encourage green shoots (what a cliche) then they will come through in due course. Ministers need to get busy and put themselves about a bit.

  • Comment number 68.

    The banks are getting more edgy not less so funds will remain a problem. The likelihood of high interest rates overhangs those on a ledge. Its all about confidence and a government which endlessly sells austerity has a problem with stirring up handbag opening.

  • Comment number 69.

    61. At 4:34pm on 15 Mar 2011, Justin150 wrote:
    "Cutting the government sector deficit simply means that the private sector surplus will be reduced"

    Oh no it does not. It is wrong on a number of grounds:
    ______________________________________________________________

    I think you are missing the point.

    For a sovereign currency, the flow of money in that currency is consistent with the the simple National Income Accounting identities.
    I won't go into detail again but GDP = C + G + I + (X-M) and it can also be measured by GDP = C + S + T.
    Take the circular flow of income. Every GSCE economics student learns that leakages = Injections. S + T + M = X + G + I.
    Seperate those into the sectoral balances and
    (G-T) = (S-I) + (M-X)
    The Govt deficit IS the Private sector surplus(net savings) plus the external sector deficit in that currency by definition.
    Conversely by definition A Govt surplus IS a private sector deficit (increased debt)

    I've been banging on for weeks about, how over the last 3 years, people have been paying off debt after 20 years of bingeing and how this is a good thing but this can't happen unless Govt fills the output gap in order to maintain GDP and jobs (nevermind growth).

    A policy of 'paying off the nation's credit card' is patently absurd and history is likely to judge Mr Osborne accordingly.



  • Comment number 70.

    In your programme Stephanie, one of the successful entrepreneurs commented that finding the first 50000 pounds of capital, that an uncle might provide in the US, was the most difficult problem. Often this requires a second mortgage on the entrepreneur's house. Why should someone, who is perhaps a successful academic, want to risk his or her own, and their family's future in this way?

    50000 pounds would be chicken feed for a FTSE 100 company, a small fraction of the CEO's annual bonus. Why are more well established companies not prepared to risk helping to develop innovative ideas? Is it perhaps that they instinctively fear that a new product might undermine the market for their existing products?

  • Comment number 71.

    @36. Averagejoe wrote:

    "Either way you have a debt based monetary system..."

    I don't think that's right , is it? Fiat money doesn't create debt, since it's issued solely by governments, debt-free (it might, of course, cause inflation but that's a different issue).

    A gold-backed currency doesn't either. Its chief virtue is usually seen to reside in its being inherently anti-inflationary (as already noted, a separate issue).

    The debt-based monetary system we have is the consequenbce of government having abdicated to the privately-owned banks the power to issue our debt-currency - and "earn" all the interest on it. This surely is Steve Keen's main argument, unless I've misunderstood his article?

  • Comment number 72.

    #59 Leopold - fair enough I'm not defending Brown or Blair - its not as though they fixed the housing bubble and indeed sustained the City as our primary "industry" and by extension increased our reliance on the growth of property prices. Just saying the dye was set by the previous administration.

    At least labour invested our future wealth in capital programmes (in particular rail projects/Olympics) to start sustaining alternative industries. They didn't really cut the head off the beast though - indeed they gave it respectability.

    The question, the one that undermines real change, is how much power does the government really possess since the largely "big business" owned media seems to drive public opinion, led by our Roop. As soon as they see their nest egg under threat, out come the headlines - no doubt boosted by a few phone taps to undermine the incumbents...

    Its only when events start to hurt so badly, or the extravagences of the main antagonists become unbearably flagrant, that moves people to hit the streets en masse, that the media message is subsumed by the real wishes of the people. Alas.

  • Comment number 73.

    I listened to the broadcast today on R4 and IMO it was/is a very good and interesting programme.

    However, some of the points that are relevant to the UK do I think have to be extrapolated, as I think should include:

    1) The inference that there is only significant growth or much better better business sales opportunities overseas i.e finding new markets... when the biggest market for British business is in the UK ... providing the govt now takes significant action to create the right structure and environemnt for British business to flourish and create British jobs ... for you know who? This seems to be some of what the Chancellor/Coalition govt are saying.

    How about everyone finds the British market first?

    2) Niche businesses providing distinct products with distinct brands to niche markets globally ... well yes ... 'great' ... but how many British businesses can step up to the plate here .. (when many who are doing this in Britain are not even British firms or concerns).

    This sounds great for fancy coats and Black puddings but what about cars, food and stuff that some countries have protectionist measures on ... it sounds to me like the programme avouided the issue of whether the UK should try to compete on the big ticket purchase items better ... cars, whitegoods, electrical etc.

    3) How we spend our money here in the UK is critical to the success or failure of the UK in terms of business success (growth) ... making and producing more in the UK and being careful on what the UK imports would you think be an obvious essntial ingredient for UK growth ... but is this generally understood?

    4) The programme seemed to have a global assumption of our UK business success depended on everything in the UK either having to be exported or imported to the UK ... again ignoring the biggest UK need ... of having a stronger domestic economy where the bulk of British people buy and sell more and more of what they make in Britain, to British people ... and import much less and become much more efficient on international trade.

    To my mind the programme is not tackling the real underlying UK problems with growth ... the lack of capital investment in Britian by our wayward SOFOMT's (some other form of money traders) that are masquerading as 'banks'.

    The programme I think just highlights the existing mindset amongst those who are the 'most business able' (MBA) in Britain (whether British or from overseas) ... that the personal profits and tax issues are to be made by investing overseas and not in the UK ... but the UK is a good time zone base for this as the UK is easy for getting a bank loan and soft on and exposed on foreign trade.

    The 'MBA mindset' is not good for the UK here IN GOVT POLICY TERMS ... as the 'most business able' in Britain see easier and better profits and tax treatment overseas ... and their pursuit of this is results in the overall partial growth syndrome ... the 'grey stuff'.

    The question for the Chancellor and Coalition govt is how the structure and culture of Britain can be improved to get all of the UK more involved in business instead of their policies just enabling the 'MBA's' to, personally, do better overseas.

    IMO, the govt must intervene radically here and change behaviour with VAT and Trade Tax Harmonisation and e.g. aggressive buy British policies etc, fines for supermarkets buying too much foreign food etc ... or the divide between the 'business able' looking after themselves ... and the rest will get worse/greater.

    In other words a true British business focus is needed and not just gimmick policies to assist the British trading 'MBA's' become foreign non-dom billionaires.

  • Comment number 74.

    61 Justin150
    ""Cutting the government sector deficit simply means that the private sector surplus will be reduced"

    Oh no it does not. It is wrong on a number of grounds:"

    I was being a bit sloppy, I usually say the private sector in place of the non-government sector as people understand this better, yet beyond the semantic argument what I said was true as a matter of acounting.

    The Non-Government sector includes the Private Domestic sector, and the External sector. It is legitamate to combine the two because when the external sector exports to us, they obtain our currency in return (overall at least), and this is equivalent to someone in the domestic sector "saving". When the external sector spends our currency, say, buying our exports, it is equivalent to domestic sector spending.

    The three sector balances have to sum to zero (domestic, government, external):

    (I – S) + (G – T) + (X – M) = 0

    The sectoral balances derived are:

    The private domestic balance (I – S) – positive if in deficit, negative if in surplus.
    The Budget Deficit (G – T) – negative if in surplus, positive if in deficit.
    The Current Account balance (X – M) – positive if in surplus, negative if in deficit.
    These balances are usually expressed as a per cent of GDP but that doesn’t alter the accounting rules that they sum to zero, it just means the balance to GDP ratios sum to zero.

    A simplification is to add (I – S) + (X – M) and call it the non-government sector.

    Then you get the basic result that the government balance equals exactly £-for-£ (absolutely or as a per cent of GDP) the non-government balance (the sum of the private domestic and external balances).

    This is also a basic rule derived from the national accounts and has to apply at all times.

  • Comment number 75.

    It is not enough to produce what people want to buy. The point of sale must encourage the buyer. Consider John Lewis and Waitrose. We need that spirit in all UK firms. That might be brought nearer if employees had a share in net profits and had a vote in the election of directors as well as in takeover situations. They might know more than the institutional shareholders as well as more than the individual shareholders. Their voting powers would concentrate the minds of the directors who need to know their workforce. Being brilliant with systems is insufficient: management is about managing people as well as systems. The resulting improvement in attitudes should transform the atmosphere and pride in the work of the company. Shareholders would gain more than the profits they lost to the employees.
    Institutions have too much power when one realises that they are proxy shareholders. Either institutional voting power should be reduced to, say, one tenth or reduced on, say, a logarithmic scale. Shareholders should also have a say in the remuneration of directors so that directors pay more attention to their views. They might then even use them to promote the company or to help to see problems from new angles and facilitate their solution. The current remuneration system for FTSE companies is run by a cosy cartel which is producing dangerous inequalities.
    Alexander Hopkinson-Woolley

  • Comment number 76.

    #65 "However, since Peter used his borrowed money wisely and invested it for the long term, rather than fritter it away on wine, women and song"

    Only one question on this. Where is the incentive to innovate!!!

    Made me recall a George Best quote "I spent 90% of my money on women and drink. The rest I wasted".

  • Comment number 77.

    There is loads of economic growth taking place in the world today but the growth is confined mainly to China and India. With globalisation brought in by the old economies of the "West" mainly to increase profits of big companies by outsourcing manufacturing to East Europe and Asia the lack of growth is inevitable. Also we in the West have shot ourselves in both feet by bringing in endless legislation such as health and safety, employment laws and the biggest business killer of all environmental protection with its higher costs of doing anything physical like making or moving goods. Globalisation means competing with other countries, and that applies to legislation and tax burden on businesses and employees of businesses. Failure to address this difference in costs caused by government means continued decline in our standard of living and the money available to fund public services.

  • Comment number 78.

    27 through to 66. At 5:29pm on 15 Mar 2011, Geoff Berry wrote:

    United Dreamer@50

    Nasty is the right word, slavery and the loss of live during transportation was down-right evil, the USA cotton industry and it's links to UK cotton did generate growth in the massive UK textiles industry which was diminished after the Civil War when the UK shifted cotton production to India.

    .............................

    Britain did not create slavery ... it participated in it like every other country in the world; but Britain (England) was the first country in the world to outlaw slavery (1838)... a full generation before the US Civil War - Is it not better to stop the 'British bashing' and keep on track with the topic ... as some of us will respond when faced with this kind of unnecessary, irrelevant, insulting nonsense?

  • Comment number 79.

    @69 - EconomicsStudent

    I had written a similar rebuttal but can see you have beaten me to it.

    Instead I will simply offer the view that to have everything in surplus, the UK would not only have to turn the existing deficit on its balance of trade into a surplus, it would have to turn it into a huge surplus relative to the public and private sector balances. That's just not going to happen. Ever.

    And for those who struggle with the algebra and arithmetic of the identities you have provided, here's a link to a nice graph showing the three sectoral balances for the USA since 1961 to help visualisation of the relationships, relativities, and magnitudes.

    Which all reminds me that I am regularly detecting a tendency for right wing posters here to refute or ignore the picture of the economy that the national income accounts give us. I suspect this is because the economic reality they present gets in the way of their singular dogmatic and political focus on the public sector deficit. Either that or they really are clueless!

    Either way, I think they need to wisen up or it will be their undoing.

    Regards

  • Comment number 80.

    69 eco student

    Yes, paying down debt reduces activity in the economy. But few seem to understand this. HMGs policy in selling austerity is damaging to the general public who are edgy so sitting on their handbag. It is having a negative multiplier effect. The happiness project is to try and compensate and tell people to be happy, i.e. relaxed. Relax don't do it don't pay down that debt. The banks are seeing the general malaise everyday and things are unlikely to get much better on the lending front. Meanwhile the lack of housebuilding is feeding through as another shortfall in supply and house prices are unlikely to drop significantly over the next 10 years or so. The continued tight mortgage requirements have flattened mortgage issuing.

    I have phoned my local LibDem office and asked for their election manifesto. They said they had sold out, and I said I know, I was just asking for a copy of the manifesto. The next election is going to be interesting with 3 Tory parties of slightly different colours all competing for the same votes. All with middle of the road on their rosettes.

  • Comment number 81.

    Madam Stephanie Great programme on Radio 4, looking forward to the next episode.Spectacular job done, u r the best. Please keep it up.

  • Comment number 82.

    #66 Geoff Berry

    My point, poorly made, was that the wealth generated by the slave trade and the working of slaves on the plantations, together with the use of cheap resources from the colonies kickstarted the transfer of wealth creation to the early automated industries. Slaves being the initial "cheap power".

    This transfer then allowed the new cheap power (coal) to power the engines of commerce. However, coal relied on cheap labour (not the free labour of slavery) - I was equating this to the current situation in China as opposed to slavery.

    Coal then was overtaken by oil as the new cheap power in the generation of wealth.

    We are now in a position to to harness a sustainable and renewable power source in wind, sun, tidal, wave, hydro but we need to use the available cheap power to develop sufficient generators and power distribution infrastructure while retaining the use of oil for key industries (food produce and shipments).

    Nuclear power may tide us over to cover a temporary shortfall prior to full reliance on sustainable alternatives but Uranium will run out fairly rapidly and the infrastructure needs to be invested in now.

    However, in the meantime, we cannot sustain the wealth creation model propagated by the banking industry. It needs to be dumped.

  • Comment number 83.

    @45. richard bunning:

    I agree broadly with your analysis but I would offer a slightly different slant on it.

    Your succinct summary of the Washington Consensus left out what I see as its fulcrum, on which the rest turns. Finance. The ideology is dedicated to installing financiers as a class in the dominant position in society - permanently. If anyone doubts this, all they need do is look at the change which has actually taken place in the American and British societies over the last 40 years. Just look and see who it is who actually rules them today, whilst bearing in mind that money buys power.

    There was never the slightest objective justification for the stranglehold the managements and their chief acolytes in these corporations were permitted to secure over all the other stakeholders. It was a smash-and-grab raid, based on nothing but sheer gall and driven by unrestrained greed. It could never have succeeded if the commanding heights of the political system hadn't already been infiltrated

    That was the end and aim of deregulation. Naked plunder was camouflaged with the fig-leaf of "trickle-down economics", now utterly discredited (but it served its tactical propaganda purpose meanwhile).

    Since this is where I believe the fundamental cause for our present discontents lies it's where I believe we need to start to bring about the changes which are needed. So long as we permit this parasitic class to dominate over us nothing will get any better. The first absolute essential is fundamental reform of our monetary and banking institutions.

  • Comment number 84.

    #78 - I'm not Britain bashing nautonier. I'm making the point that there is a central tenet of wealth creation and that is the availability of cheap power and resources. And slaves were the original cheap power.

    That's not to say that neither Britain nor the other half dozen nations who partook of the trade are not guilty of the gross inhumanity of slavery. They all clearly are but that was not my point. A distraction maybe but I will always add the moral caveat.

  • Comment number 85.

    One thing that would curb growth would be penal tax rates or arbitrary salary caps. Good to see that Will Hutton has rejected this absurd idea.

  • Comment number 86.

    #80 Arthur Daley

    I am glad to see someone drawing attention to this happiness project.

    At University I was taught that investment - or any spending decision, really - is always something best conducted in a depressed state of mind. Seemed like good sense then and it seems like good sense now. But evidently not to a Government seeking to deflect attention from rising inflation and rising unemployment.

  • Comment number 87.

    80. At 6:52pm on 15 Mar 2011, Arthur Daley wrote:
    I have phoned my local LibDem office and asked for their election manifesto. They said they had sold out, and I said I know, I was just asking for a copy of the manifesto.


    Classic ! Can I nick that one?

  • Comment number 88.

    #80

    "I have phoned my local LibDem office and asked for their election manifesto. They said they had sold out, and I said I know, I was just asking for a copy of the manifesto."

    :)

  • Comment number 89.

    79 mr scotty

    Excellent link you beamed up there Scotty. It starts with consumers and it has to end with consumers and walking around beating consumers over the head with a frying pan and switching of the housing market is less than helpful. Unless of course you think that in due course throwing the right switches will suddenly warm things up near to an election and that currently everything can be blamed on Gordy Brown. I seem to recall a handbook written by a geezer called Machiavelli that said the best thing to do was to be nice n brutal at the start as everything thereafter is rosey. Can't remember if I met him and sold him a motor or if I liberated his little book from somewhere.

  • Comment number 90.

    86. At 7:29pm on 15 Mar 2011, misery_index

    Investment best when depressed - Yes Marvin the Paranoid Android told me this as well. Its a well known problem with all gamblers who make bad decisions when on feeling too positive. Never good to feel too positive about risk. Strange how salesmen never produce graphs that go downwards.

  • Comment number 91.

    84. At 7:15pm on 15 Mar 2011, United Dreamer wrote:

    #78 - I'm not Britain bashing nautonier. I'm making the point that there is a central tenet of wealth creation and that is the availability of cheap power and resources. And slaves were the original cheap power.

    That's not to say that neither Britain nor the other half dozen nations who partook of the trade are not guilty of the gross inhumanity of slavery. They all clearly are but that was not my point. A distraction maybe but I will always add the moral caveat.

    .............

    Well, you could have fooled me ... Can you name any country in the world that did not practice slavery in 1838 or earlier, or pehaps the rest, (more than half a dozen countries,for sure) ... Were all too busy eating each other?

    Many in Britain were not 'free-men' until the 18th or even 19th century and nearly all the low born population were by 'tied', at birth, to the manorial estates. That is why many went to the New World to be 'free' and some of 'the many' kept slaves, it would appear, as was the international culture and mindset of some of the land-owners, at that time.

  • Comment number 92.

    79. At 6:50pm on 15 Mar 2011, mr_scotty

    Just checked the link. Fantastic. I had no idea that such an article, graph had appeared in the FT. That just about justifies the subsciption although the majority of economists on it still talk nonsense.

  • Comment number 93.

    Well I can guess what is pretty much going to happen in my market sector and it is nothing new. I blame the charities and all of those do-gooders that go around telling everyone to stop eating for two weeks and think of all the other starving people in the third world that have nothing at all to live on. When you know what's coming next and it’s that way of keeping a tidy little nest egg on the side in the run up to this April fool’s Day. And I see a big 500 days going up in smoke with a big gap in the final bill of that all important live wire connection, without a 13AMP fuse fitted as standard so keep calm and you won’t even miss it you lazy pikers!

  • Comment number 94.

    82. At 7:01pm on 15 Mar 2011, United Dreamer wrote:
    This transfer then allowed the new cheap power (coal) to power the engines of commerce. However, coal relied on cheap labour (not the free labour of slavery)
    ==========================
    I don't think that slaves provide free labour: they have to be bought and then fed and housed.
    Also slavery is a very old-established phenomenon - remember who built the pyramids. It was not invented by the British, Spanish, Portugese, Arabs etc. who started buying slaves form Africa in the 16/17th century. Many who were on the losing side in the English Civil War were sent to the West Indies and sold as slaves. In fact serfdom in Europe in the Middle Ages was very close to slavery as has already been pointed out and was not abolished in Russia until well into the 19th century. So we are probably all descended from slaves.

  • Comment number 95.

    Economic growth? To that end we'd need an economy. The best way to have some economy is to regulate away all those who confuse economy with making money by means of printing it, speculation, betrayal, robbery or combinations of such offences. Honestly, apart from all the existing debt that will make any asking for growth look like a bad joke for the next 15 years or so, the biggest obstacle for growth is that there are now so many people who don't even understand what economy is. Some probably even still believe that it is selling houses to one another...

  • Comment number 96.

    7. At 12:22pm on 15 Mar 2011, willhay99 wrote:
    Build Houses?

    Will my friend, you have hit the proverbial nail on the napper, they will not build houses because the banks will not let them. The banks own most of the property in the UK,if you build more they will devalue, the false economy in all it's glory. People must stop borrowing money and buying over priced property, that's the real revolution, sit tight and suffocate the usurers,

  • Comment number 97.

    One of the reasons that slavery was abolished late in 1860's in some States of the USA, was only because of improvements in steam engine technology and because the slave populations had become too large (Hispaniola concerns)+ US Civil War. The USA must take responsibility for all that themselves.
    Brazil had large scale slavery until 1920's (even 1930's by some references) and parts of Africa still have 'slaves/serfs'... well, into 2011?

  • Comment number 98.

    I’ve heard mentioned: ‘The engine of growth’

    What is the engine of growth?

    The family perhaps, the mums and dads out there endeavouring to provide for the next generation?

    Consider your own life, what was done for you, or what you would hope to do for those who come after you.

    The engine of growth………. Described by many but understood by few.

  • Comment number 99.

    I know what you want, you want a Store Card, yes a card that does everything don't you. Who has the patent number for the iStore_jar?

    Get your iii's for £1 per Qtr.

  • Comment number 100.

    94 another eng

    Basically virtually everybody in Europe is descended from Charlemagne 742 814. Over 10 percent of Asia is descended from Temujin aka Ghengis Khan. I believe virtually all of the Egyptian population is descended from one of the Pharaohs who had 800 wives, can't remember his name off hand. All busy men who did not practise withdrawal in battle.

    Slavery is still with us though. I doubt being a slave was or is much fun.

    The issue as usual is not who invented something but who industrialised it. A notable few countries excelled at this dark deed.

 

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