What makes Britain Rich? on BBC2
Since we have become a service orientated country, I fail to understand how
the UK ticks over, with only limited manufacturing in only specialist areas
and with outsourcing increasing. Peoples debt increasing, governments always
looking at new ways to collect tax from all different angles, we can't
afford to kit out our soldiers in the battlefield. What does the future hold
for us?, Asia is rapidly growing.
Missed the programme!!!
Didn't anyone watch it? Is it going to be repeated?
What did you make of it? What was covered?
We buy stuff off each other using MEWed equity from our housing stock.
It's a financial perpetual motion machine. Brilliant!
Or maybe global liquidity and Russian financial exiles keeps giving it a
sneaky nudge when nobody's looking. That'll go on forever, obviously.
Although I personally think it's a shame that we don't make stuff here any
more, I don't see why the country actually needs manufacturing to survive.
We can still have a very healthy economy with a mainly service based
economy, provided that foreigners are using our services at least as much as
we are buying physical bits of kit from all the foreigners.
According to the programme, in the 50's manu accounted for 36% of the
country's wealth (GDP?). Nowadays it's down to 13%. However, the reduction
is only in proportion to the growth of the economy as a whole. In
absolute terms (i.e. amount of "stuff" made) I think the prog. said we
actually make slightly more now - it just takes a lot fewer people.
. never trust a man who, when left alone ...... Pete Lynch .
On Sat, 6 Jan 2007 12:38:13 -0000, tim..... wrote:
Agreed. The more stuff we use is what's caused the growth in the economy,
no arguing with that. One major difference between now and then is
globalisation. In the 50s, the cost of transport was so high that it
was too expensive to move low-value freight around the world.
The costs only started to come down when containerisation took off
during the 60s and 70s. Until then, the UK was not in competition with
the far-eastern economies.
It's the competition element that has led to the reduction in manu.
Since this is a finance group, look up "economic advantage" to see why.
. never trust a man who, when left alone ...... Pete Lynch .
But here I don't:
We still make stuff so what we make must still be competitive
or we wouldn't be making it.
Other European countries (Germany, Italy, Sweden) have a
manufacturing sector which hasn't shrunk as much as ours,
yet they still compete.
We could have a kept a bigger manufacturing sector than we
did, but we just decided that we weren't interested, partly
becuase the jobs aren't as nice as the ones in 'newer' sectors.
Unfortunately, these newer jobs are starting to move elsewhere
(for the same reasons as manufacturing) and the things that they
'make' are often non tangible and are much easier to 'transport'
We may live to regret exporting so many of our manufacturing
Hmm, maybe in the '50s, but would you consider coal to be low-value?
Derek Lundy in _The Way Of A Ship_ talks about the (fictional, but based
on true accounts) voyage of an iron-hulled saling ship round the Horn
from Liverpool to Valparaiso in 1885.
At that time it was economic to mine coal in Wales and ship it by
square-rigger to Chile, to be used by the coastal steamers & steam
Puts a different slant on UK coal-fired power stations using Polish
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It won't just stop at manufacturing, goods made in China come in
packaging made in China and printed in China, USW USW USW.
Where there is no "iron mountain" of machinery or buildings, or any
real infrastructure needed and no manual skills to be taught to the
workforce, competition from 3rd world Asia (just for instance) can
come in and take your customers very quickly.
I've had friends working in insurance, who laughed out loud at the
prospect that the Chinese might one day (say) move into the Marine
I wouldn't bet on it, least of all bet my livelihood on it.
It was a highly interesting and informative programme. I went on to
the BBC website expecting the stats to be available, but they weren't.
The answers to your questions were in the programme.
Most of the other areas have grown more than making up for the lack of
growth in manufacturing.
British companies outsource, make much larger profits which are then
distributed to British shareholders via life funds, pensions etc.
Financial services industry make a huge amount as the trillions of
pounds pass through some of the largest world markets, based in
For a bit.
It's comparatively easy to compete with a company that does that, as
opposed to a company that keeps all it's technology in house.
One Chinese sweat shop is as competitive as any other, the customers
realise this and will no longer pay premium rates for perceived
However ATM they will still pay premium prices for designer branding.
I wouldn't like to think the security of my children's livelyhood for
the next 40 years depended on punters continuing to pay 85 quid (on
their credit cards) for a pair of designer running shoes that had cost
USD 3.00 to make in Vietnam, hence "much larger profits".
Financial services includes insurance (I think). Our company used to
manufacture machines that sold to the end users for £23,000. The
profit on the manufacturing was probably about £7,000 per machine.
The cost of the marine insurance on one machine was £60.00. Lets say
the profit on the insurance was £35. So the City of London needs to
insure 200 machines to equal the profit on the manufacture of one.
It doesn't look like a Bonzana to me.
Having given away manufacturing, What do we do when the Chinese (inc.
Korea and Hong Kong) move into financial services and insurance. they
already have their own shipbuilding companies and shipping /container
....and the sooner that happens the better. It's inevitable that
developed countries will be undercut; the shorter the time period the
Unfortunately too many thick people may demand protectionism which,
apart from the dangers of conflict, will only act to prolong the
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