Britain makes the best cars in the world, the problem is they only make a few dozen a year. All that hard work, just for Lewis Hamilton to lead a parade.
Why doesn't Britain make things any more? (2011)
11–20 of 115 posts
Re: Why doesn't Britain make things any more? (2011)
#12Earlier quoted context omitted.
What's the unit on that Y axis?
I recall an article (or blog post) from a couple years ago- it made the case that US productivity had been grossly mis-indexed since the 80s, in part due to assumptions about CPU power relating to economic productivity where Moore's Law essentially inflated the numbers. Does anyone happen to remember this same article, and have a link? EDIT: here it is, from 2012. I saw it again in 2016 when it was brought up to expl…
Another source to this thesis:
http://www.upjohn.org/MEG/papers/Measuring%20Mfg_Houseman_Ba...
Re: Why doesn't Britain make things any more? (2011)
#13A loss of political support for manufacturing has caused a loss of manufacturing in the US too - we wanted nice clean information jobs, no dirty factory jobs spewing chemicals all over
I think US is manufacturing more themselves then ever, and over the next few years its gonna be even more due to current political climate.
Re: Why doesn't Britain make things any more? (2011)
#14Just to add to the complexity of the issue: Part of the problem for the UK lies in the strength of the pound. The financial sector is so strong that it drives up the value of the pound beyond the demand for anything made in Britain. This makes it hard to compete on price in pounds.
https://en.m.wikipedia.org/wiki/Dutch_disease
Re: Why doesn't Britain make things any more? (2011)
#15Just to add to the complexity of the issue: Part of the problem for the UK lies in the strength of the pound. The financial sector is so strong that it drives up the value of the pound beyond the demand for anything made in Britain. This makes it hard to compete on price in pounds. https://en.m.wikipedia.org/wiki/Dutch_disease
Once the pound became the global reserve currency, the trade deficits started increasing. I expect the same was true for the US.
Does this inevitably lead to less domestic manufacturing? I think that's the outcome, yes.
This is the case for a global reserve currency that isn't controlled by any single country.
Re: Why doesn't Britain make things any more? (2011)
#16Just to add to the complexity of the issue: Part of the problem for the UK lies in the strength of the pound. The financial sector is so strong that it drives up the value of the pound beyond the demand for anything made in Britain. This makes it hard to compete on price in pounds. https://en.m.wikipedia.org/wiki/Dutch_disease
Once the pound became the global reserve currency, the trade deficits started increasing. I expect the same was true for the US. Does this inevitably lead to less domestic manufacturing? I think that's the outcome, yes. This is the case for a global reserve currency that isn't controlled by any single country.
But doesn’t this also mean that as a country, Britain or the US can “tax” the economic growth in an arbitrary country which uses its currency as reserve?
As Botswanna’s economy expands, it needs to print more money to conduct all the transactions and take advantage of the increased resources provided by an increasingly-skilled workforce. As that country’s central bank prints more money, it tries to acquire more GBP or UK treasury bills to hold in reserve. In order to do that, Botswana spends its own currency in Britain. Britons can trade this Botswanan currency in exchange for the right to receive some amount of goods/services from the people of Botswana. So britons have gained some goods as a result of Botswana’s economic expansion.
... in exchange for the possibility of needing to give someone goods whenever GBP stops being a reserve currency.
Or have I completely misunderstood international monetary policy interactions?
Re: Why doesn't Britain make things any more? (2011)
#17All of the main parties in the UK keep skirting around the start of the solution to "rebalancing" the economy: massively increased taxes on the rich to pay for the required investment. This is not a new idea; low taxes for the wealthy are a relatively modern phenomenon yet the social mobility gap has been getting wider. There is surely enough support for it among a properly informed plebiscite, but they are never given the option or they are lied to or given the idea that this tax might affect them when they get super wealthy.
Re: Why doesn't Britain make things any more? (2011)
#18Just to add to the complexity of the issue: Part of the problem for the UK lies in the strength of the pound. The financial sector is so strong that it drives up the value of the pound beyond the demand for anything made in Britain. This makes it hard to compete on price in pounds. https://en.m.wikipedia.org/wiki/Dutch_disease
If only there was some sort of regional currency, less susceptible to a single country’s economic changes, that one could use...
Re: Why doesn't Britain make things any more? (2011)
#19A loss of political support for manufacturing has caused a loss of manufacturing in the US too - we wanted nice clean information jobs, no dirty factory jobs spewing chemicals all over
This isn't true at all. The US has more manufacturing capacity than it ever has. https://www.federalreserve.gov/releases/g17/ip100_f2.svg
Seems like manufactured plateaued in the late 2000s, at least compared to its historical growth rate.
Re: Why doesn't Britain make things any more? (2011)
#20Just to add to the complexity of the issue: Part of the problem for the UK lies in the strength of the pound. The financial sector is so strong that it drives up the value of the pound beyond the demand for anything made in Britain. This makes it hard to compete on price in pounds. https://en.m.wikipedia.org/wiki/Dutch_disease
If only there was some sort of regional currency, less susceptible to a single country’s economic changes, that one could use...
What do you suggest? German domination of the Euro has exactly the same effect on Southern Europe, the so-called PIGS.