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Wednesday, 6 February 2019

Britain's competitive advantage

I've been trying to find learned economic opinion on which of two events has had the greater effect in Britain's economic renaissance since around 1970 - the US coming off the Bretton-Woods gold standard in 1971, or our joining the EEC in 1973. And which now leaves us more vulnerable to the winds of change blowing around the globe.

One might characterise the past fifty years as a period of change from internationalism to globalism. Bretton-Woods was internationalist, and its institution the IMF was at its inception a body charged with the regulation of relationships between national capital. However, that has undergone a fundamental change. Under an internationalist system of trade, goods are mobile whilst capital lives at home; once the change came to a globalist system under which capital was also mobile, all the old structures began to crumble. We have a globalist IMF intent on the disintegration of nationality, aided by a globalist UN and a Federast EU busy destroying European national identity.

In a remarkable prescient essay published in 1999, before globalism really began to bite, Herman E Daly wrote;
Since there can be only one whole, only one unity with reference to which parts are integrated, it follows that global economic integration logically implies national economic disintegration. By disintegration I do not mean that the productive plant of each country is annihilated, but rather that its parts are torn out of their national context (dis-integrated), in order to be re-integrated into the new whole, the globalized economy. As the saying goes, to make an omelette you have to break some eggs. The disintegration of the national egg is necessary to integrate the global omelette.
Daly also foresaw the social tensions created during the past two decades that have given us Trump, Brexit and the Gilets jaunes;
  .. globalization implies the abrogation of another social contract. that is the implicit agreement between labor and capital over how to divide up the value that they jointly add to raw materials. That agreement has been reached nationally, not internationally. It was not reached by economic theory, but through generations of national debate, elections, strikes, lockouts, court decisions, and violent conflicts. That agreement, in countries like the United States, on which national community and industrial peace depend, was basically that the internal division between labor and capital will be more equal than the world average. That agreement is of course being repudiated in the interests of global integration. That is a very poor trade
 He also foresaw the Elephant and the birth of the ├╝ber-elite of the global 1%;
The economic integration of any high-wage country with an overpopulated world is bound to lower wages and raise returns to capital, widening the gap between labor and capital toward the more unequal world distribution.
The UK is Europe's second largest economy, with a preponderance towards services and intangibles. Germany, Europe's largest economy, is based unequivocally upon manufacturing. Which is now more vulnerable to global change? Which has greater agility with which to meet the challenges of the new?

Daly's observations on the effects of globalism on our military capacity, our ability to defend our nation and protect our people, are also of great concern;
But what about the military proper? What precisely are they going to defend in a globalized world? The globe is not under threat of invasion. Do we imagine that national boundaries will long retain any political or cultural significance once their economic significance is gone?
.... No doubt it is considerations such as these that lead some people to favor globalization. It is good, in their view, precisely because it makes the national military obsolete. Given the destruction and waste wrought by national militaries it is hard not to have some sympathy with this position. But while globalization seems to make national militaries obsolete, it does not remove the need for appeal to force. Laws, contracts and property rights still must exist and be enforced, even if they are global rather than national. Economic inequality and class conflict grow as the old national social contract between capital and labor dissolves along with the power of nations to guarantee it. Do the globalizers envisage a global government to enforce global laws with a global police force? Or do we, to avoid really big government, follow the privatization and deregulation model all the way, letting the military evolve into private Pinkerton guards hired by each global corporation to protect its property and enforce its contracts? Global corporate feudalism?

I know that we have not arrived at this point yet. But make no mistake about the fact that globalization is being pushed hard by powerful transnational corporations, and that the weakening of the nation is part of the agenda. Conversion of the national military into a corporate police force is consistent with such an agenda. Maybe globalization will stop before it completely disintegrates nations. But who or what will stop it? Might the nationalism, or even patriotism, of the military provide a barrier? So far it has not.
These issues are all now in the balance. The push-back against globalism by the grown-ups  has started and I am happy to count myself amongst the resistance. Anti-globalism is no longer a naive excuse for youthful agit-prop and overturning rubbish bins in central London, but a fight for national survival.

25 comments:

rapscallion said...

Anonymous @ 08:04

Why a 2nd Referendum? Did you not take any notice the first time around?
Suck it up loser.

. . . and a comment from the Grauniad. Aww Bless

Anonymous said...

Thought provoking, thank you Raedwald for that.

jim said...

Interesting article. Not totally disinterested though, globalisation looks bad news for his home town USA. Re-shoring Donald says, business moves to Vietnam and India instead. Then Daly's bottom line points to consuming less and becoming more self-sufficient. Lord let me be chaste - but not yet. Never a popular prescription and not likely to be taken up.

I see the dangers but I doubt our present leaders can or want to do much, all are puny compared to the consistent power and pressure of money and they/we love it so much and need it so much as well. National politicians are stuck with their own electoral microscopes whilst commerce has a broader sweep and no concern for elections or electorates.

Concern over globalisation can be turned into a stick with which to beat the wicked old EU, a handy stick for the UK centric. But I rather like the EU, it seems to be a useful advance along the political pathway - overlord, warlord, king, emperor, prime minister, president. I like our Parliament having someone breathing down their necks, they need it. I don't think president or prime-minister is the end of the line so far as political development is concerned, we need to go a bit further.

Another viewpoint related to the effects of globalisation and Britain's position along that path is found at http://speri.dept.shef.ac.uk/2019/01/29/is-britain-undeveloping-before-our-eyes-part-i/
A bit lefty for some maybe but it points to the problems globalisation and London centric policies have brought us. Come say August when most of the Brexit ructions are over (I hope) our brilliant parliamentarians might just start to realise that Brexit had nothing to do with the real problem.

Anonymous said...

No, I don't want a second referendum for exactly the reasons described in the article.

And also, if you hate the EU, then the only way that you will be able to damage it further is by staying inside it. That was my point.

The EU will shortly be rid of this offshore, niggardly, cynical, backward-looking, little, Tory-ukip irrelevance, and it will be worlds the better for it.

Stand by to take TTIP-on-steroids up the 'arris.

Mark said...

Anon, so we hate the EU and want to destroy it? Best way is to stay inside and let it set all our laws, regulations, control our trade etc etc. Then when we achieve our aims and it descends into anarchy and war we will be smugly sitting right in the middle of it.

For Cliff's sake!

We don't need to destroy the EU as it seems to be doing quite a good job itself. That's our point. If they think they can make a single unitary state out of such disparate and divergent components, well, best of luck!

Why do you have such a raging hatred for this (I presume your) country? You're projecting AGAIN.

Anonymous said...

But that is the wrong "we", Mark.

Farage and the like are servants to unaccountable, right-wing, billionaire, globalist, US supremacists, who hoped to use the UK and its exit to destroy the EU, whatever it did to the UK and its people.

I read nothing here whatsoever, to convince me that Raedweld is other than slyly on the same ticket either, whatever he says.

Raedwald said...

The post is about globalism vs internationalism Anon 12.50

Please stick to the topic and spare us your paranoid delusions.

Mark said...

Anon, why specifically do you think this?

The Donald has only been pres since November 2016 (er, like after the referendum). During the referendum king Barack I was hardly campaigning for us to leave. And don't forget, Hitler's clitoris was expected to succeed so this right wing billionaire US einzatzgruppen must have literally just sprung up out the ground (Soros, of course, has no influence whatsoever)

The EU just doesn't work that's just applying Occam's razor.

Anonymous said...

*Evidence*, that's why, Mark.

You won't get anything much more globalist or unaccountable than the IEA, and it is basically running this what-now-passes-for-a-country, as it did during Thatcher's time.

Mark said...

Anon, so the EU is a bastion against globalism then?

Anonymous said...

No, who said that it was?

But powerful unions of smaller countries are far better able to resist big nations acting on behalf of global capital -such as the US's TTIP foray - than are lone ones.

Mark said...

Anon, you have been for the last Cliff knows how many posts.

The Euro - with ambitions to become a major reserve currency - not "global capital"? Greece got a seeing to the like which hadn't been seen in Europe since a certain corporal had to exit Russia in a hurry. It's been forced to sell its very soul damn nearly to - global capital (and I'm sure they won't be the last).

The EU doesn't protect nations, it destroys them.

Anonymous said...

Oh, so Greece's problems stem from the EU, and not from a curious kind of socialism, combined with not collecting the taxes to pay for it, did it?

Thatcher's governments centralised and brought in the Poll Tax to stop LAs doing that. Do you think that the EU should too?

John Brown said...

The biggest danger to the planet is massive uncontrolled population increase.

Anonymous said...

But the good news keeps coming.

Tusk's cheery words were heartwarming.

Bitcoin and crypto take another big step lower.

And: "An Ifop opinion poll published on Wednesday showed Macron’s approval rating surging from 23% in December to 34% in February."

Dave_G said...


Opinion polls only give the opinions of the pollsters. As the French people demonstrating againsst Macron and his policies how they think Macron is performing....

Raed's post hit the nail squarely - right down to the EU's proposed creation of an army - not for defense against external aggressors (they actually invite them in) but to stand against the internal disenters that have simply had enough of Globalism.

Nation states have always progressed perfectly well on their own. It has only ever been when they try to take ground they have no rights to (Germany) or enslave others without permission (EU, USSR etc) that troubles arise but we're supposed to have a UN to stop that happening. Shame the US takes no notice...... and that the UN has been corrupted.

But the elephant in the room is and always remains the banks and their hold/control of economies either directly or via the politicians they purchase. The globe needs to be rid of these parasites and countries should implement their own GDP-linked and interest-free currencies under full public control.

Get rid of the momey-lenders (debt creators) and free us ALL from Globalism.

Time you did a post on banks Raed....

Anonymous said...

Enslaved? By the EU?

"We will never be dictated to", says grovelling, Leave-voting wage-slave, waiting for the 'phone to ring, and then dropping everything, to be called in for yet another eighteen-hour NMW shift by his swaggering boss.

Mark said...

Of course Greece's problems stem from the EU, specifically the Euro, as do the other so called PIIGS.

You know this perfectly well. Greece was corrupt, it always has been. In the words of Varoufakis dodging tax was "something between an Olympic sport and a sacred duty".

The state of Greece, presently and historically was well known but such was the Euro arrogance and hubris that they were allowed in with the absolutley predictable consequences we now see. And it's going to get worse.

Anonymous said...

Well, no one kicked West Yorkshire out of the UK, over the Poulson affair and the like, did they?

Anonymous said...

The confidential business briefing in today's FT has Project Fear written all over it. Dr. Fox has 40 trade deals ready to roll in the wee hours of Independence Day.

DeeDee99 said...

@Jim

It's the electorate's job to breathe down the necks of our Parliamentarians, not an appointed foreign oligarchy.

We've been doing a far better job of it in the past 4 years and I suspect that will continue, post-Brexit, now so many of those not generally very interested in politics have had a clear view of what arrogant, incompetent and treacherous creatures infest the place.

James Higham said...

Midway between city state and global politburo, a nicer place to be.

Anonymous said...

Could you cite some reliable evidence, anon, that Fox has these deals ready? Thanks.

Saito said...

Japan is banging on the door for a trade deal with the UK.

Helvetix said...

Fox has rolled over the deal with Switzerland. An unexpected win. Lots of new benefits like UK being able to export cuckoos for Swiss clocks.