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Another question for the amateur economists ...


Tony Jones

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When we all lived in caves, each person, family or small group had to work really hard to produce enough food, tools, clothing etc for everyone, but they managed it (usually). The economy balanced.

 

The same was broadly true throughout history, until ...

 

The Industrial Revolution meant that all the "goods" the population needed, could be produced with far less human effort. This should have meant that everyone had an easier time of it, but somehow that didn't happen. Ordinary people worked harder (and in less pleasant conditions) than ever before. So where did the economic benefits of the Industrial Revolution go?

 

The electronic revolution meant that not only the production of goods, but also communication, and the storage of information, could be done with far less human effort. This should have meant that not only "manual" workers but also "clerical" workers could do/write/say/produce what was needed by working far shorter hours than before, but somehow that didn't happen either. Again, ordinary people work harder than ever, and modern communications mean they don't stop when they go home either. So where did the economic benefits of the electronic revolution go?

 

By now, we probably have the capacity to produce everything the world needs (yes, the WHOLE world) without anyone working more than about 15 hours a week. So why can't we?

 

Except, of course, that would only happen if the benefits were fairly distributed, not hoarded by those who were able to grab them.

 

I'm not really keen on the idea of state-controlled socialism, but I sometimes wonder - if only we could have it run by the right people .... So what do you all think?

 

Who would you vote for as "Temporary Ruler of the World?"

I'm offering a 5 year term of office, not renewable, no-one is allowed to put THEMSELVES forward, and the successful candidate isn't allowed to refuse.

(Because anyone who WANTS that sort of power shouldn't be given it, and the people who we'd trust probably wouldn't want it.)

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The 'benefits' in all those cases went primarily to those who created the wealth, and those who run their businesses for them.

 

To think that the benefits should be " fairly distributed " is a very noble idea, in an ideal world.

 

But that ain't where we live.

 

:-(

 

 

As for temporary ruler - well - you can have a go if you like Tony.

And good luck with it !

 

;-)

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She would be to old and would not like to take on anymore work, I think. But if she decided differently, I think the only person who most people could & would trust, would be the Queen, or as second choice Sepp Blatter he seems to be able to pacify everyone 8-)

 

Dave

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Guest pelmetman

Temporary ruler......No contest...

 

Pelmetman :-D ..........or my alter ego.........Poufeman :D ...............There you go two muppets for the price of one :D ...............

 

My first decree is that all towns will have an Aire installed out side the best resturant/pub/chippy ;-) and wildcamping will be made obligatory B-)

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Could it be a joint thing there are a few I would like to give the job to but only certain aspects would suit some.

 

Stephen Fry

Richard Branson

Rory Mc grath

Simon Cowell

Boris Johnson

Piers Morgan

 

Would have liked to have a woman in there but cannot think of one right now

*-)

 

Mandy

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pelmetman - 2011-05-31 3:21 PM

 

Temporary ruler......No contest...

 

Pelmetman :-D ..........or my alter ego.........Poufeman :D ...............There you go two muppets for the price of one :D ...............

 

My first decree is that all towns will have an Aire installed out side the best resturant/pub/chippy ;-) and wildcamping will be made obligatory B-)

 

 

You've blown your chance because you have ignored rule 1 : You can't nominate yourself.

 

 

 

;-)

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The answers to the economics questions, I think, is that we all had the benefits, in terms of all the possessions that clutter our lives. The increased productive capacity had to have increased consumption to absorb it, so we all had to buy more stuff to keep the factories churning stuff out. To fund all that acquisition we had to increase our earnings and, to a great extent, to do that, we had to work longer, harder, faster. That is the price we all pay for our motorhomes, cars, centrally heated houses, washing machines, TVs, computers etc. The increasing production required increased investment in new factories and machines, and that required increased investment. As the speed of change and innovation rose, it was no longer feasible for companies to finance expansion from current income, and they were forced to borrow; more, and more often, whether from a bank or by issuing shares; and those who lent the money wanted a return. Thus financing the debt became a greater part of the cost structure of almost all companies, meaning their earnings had to increase to meet the cost of capital. So, another twist in the demands on the workforce.

 

For reasons I have never fully understood, it seems the UK generally has historically had an aversion to investment in high output machinery as a means of expanding production, preferring instead to stay relatively low tech, and take on more labour instead. My suspicion is that this stems from a desire to extract money from enterprises rather than to run them as successful businesses. I also suspect this has something to do with the relatively small role played in our businesses by banks, and the relatively much larger role played by our stock market, compared to much of the rest of the world, but especially Europe. This low capital, high labour, approach has advantages when the economy slows, because companies can sharply reduce costs through labour lay-offs, without being saddled with high capital investment costs at a time of falling incomes. However, longer term, the technique resulted widely in out-dated plant, with no chance of competing with more efficient factories elsewhere. It also resulted in fairly appalling labour relations, and fostered belligerent unionisation, leading ultimately to Thatcher's union bashing and the flight from production into services. Where the latter got us, we now all know. Beware false prophets! :-)

 

For all its failings we have, in principle, the least worst system of government mankind has yet evolved. Ours needs an overhaul and, for my money, it is now necessary to have a counter to the excessive power of the prime minister. That counter, in my view, should be an elected president. The great problem with people is that they all, by degrees, bear out that saying that all power corrupts, but absolute power corrupts absolutely. Look around the world and there is plentiful evidence. So whoever they may be, elect them, and limit their term of office to two years. Could a monarch perform that function? In my opinion no, for reasons already stated. Our monarchs are no more than titular heads, having no real power at all, except the power of patronage. That patronage is the reason they are surrounded by so many, largely useless, fawning, sycophants. Give that lot real power and you'd be back to the excesses of Charles 1, or Louis IX, in a few generations! :-D So, put them out to grass, and bring in a president with, above all else, an absolute power of veto over parliament in the deployment of UK forces abroad. I think a bit less power than the American or French president, but quite a bit more than, for example, an Irish or Italian president.

Will it happen? Doubt it! :-)

But one, benign, dictator? Oooooohhhhhhhhhhh NO! 1,000 times no. Blimey, Mugabe might move in!

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Can see your point Brian but Tony said a temporary ruler of the world. The Queen is already the head of the Commonwealth so she already goes a long way down that road and is well respected in most other parts of the world. She has also been seen to be a good figurehead for this country, its a pity she is not allowed to say what she feels and thinks about any political aspects. Wouldn't trust any of her sons though, maybe her daughter. Now there's a formidable person if ever there were one and would say what she thinks.

 

Oh, by the way. I'm not a royalist :-D

 

Dave

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Just back from holiday so have not read all of this thread as yet - but would like to make this point re Tony's initial post:-

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

 

“When we all lived in caves, each person, family or small group had to work really hard to produce enough food, tools, clothing etc for everyone, but they managed it (usually). The economy balanced.

 

The same was broadly true throughout history, until ...

 

The Industrial Revolution meant that all the "goods" the population needed, could be produced with far less human effort. This should have meant that everyone had an easier time of it, but somehow that didn't happen. Ordinary people worked harder (and in less pleasant conditions) than ever before. So where did the economic benefits of the Industrial Revolution go?”

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

 

 

In the face you see in the mirror every day Tony!

 

Life expectancy pre industrial revolution was about 35 years. That may have balanced the economy, by I would hardly say the family unit “managed” by any sort of standard to which we now subscribe.

 

Life expectancy is now 80 plus and rising, tho’ some population sectors desire for things like deep fried mars bars, alcohol and Big Macs is doing Stirling work to keep it as low as possible.

 

So to my mind the economic benefits of the industrial revolution are in the antibiotics that reduced infant mortality to the low levels it is today, those same antibiotics and other miracle drugs and treatment mean that we now live so long that our pension age is having to be increased! The fact that we can now have two days off a week, as well as weeks of paid holiday, we have a state pension and a National Health Service, we can easily earn more than is required to simply keep us and our families alive. We can save up for our MH or Cvan. We can enjoy leisure time. We can if we are prudent, enjoy a good standard of living when we are too old and frail to still work.

 

Some people seem to hanker after a simpler world where you are born, you live, you work, you die. Well you can have that if you want. Because whilst the Industrial revolution undoubtedly had some initial bad effects whereby children for example were exploited, it should be noted that these same children would be exploited if they worked on the land as well. Just because a factory opened nothing changed as regards how those at the upper end of “society” abused those below them. So initially people worked in far far worse conditions in the past than now. We all mock "elf and safety" but never knock the fantastic worker safety rules we have here in the UK (even if you cannot run in an egg and spoon race in case someone fall over! )

 

What did happen during the IR was that workers got organised and used their power.

 

When I see the balls up the politicos regularly make and the tax burden we all suffer as a consequence, I have a feeling that we are not that far away from another flexing of worker “muscle”. And , no, I do not mean silly industrial action by someone in the Public sector losing one of the benefits they see as a god given right that everyone else “simply must see that it would be so unfair for us to lose”, that is just the last spasm of unreality of a bloated system. The UK economy is retracting. Nothing wrong in that. Perfectly normal part of the economic cycle. You do have to be a realist in such circumstances tho'.

 

What will happen is those that make the wealth will vote with their feet and simply set up companies elsewhere where the tax burden is lower. We have already seen that on a significant scale, now that companies cannot make profit here in the UK as easily as they can elsewhere, we will see significantly more wealth generation turning its back on the UK and going elsewhere.

 

In 5 years time it is predicted several large firms (and I do not mean the banks – but these are big names) will move their operations centres to somewhere like Singapore.

 

This is because our economy is on the decline and places like Singapore are on the ascendancy. So given the choice, if you can make a widget for 5p in the UK and 5p in Singapore but the tax hit is such that to make the same profit you need to sell the UK version for 10p and the Singapore version for 7p – what one to you choose if the quality is the same and the real wage for your workers is the same. (I will not even bother to go into the differing work ethic between a Singapore worker and the average UK worker – suffice it to say that the difference is significant)

 

And just as companies and organisations are looking for “value” so too are we as individuals. The sort of changes we are seeing (and to my mind is analogous to the company or organisation seeking better value) is outrage at benefit cheats who expect the state to pay for everything because of obesity, drink problems or the fact that the benefit safety net is more attractive to some than contributing to society. For our Prime Minister to state that he was shocked by the figures and expected the rest of us to be so as well is a clear message that society as a whole is shaping up for a lurch back from the excesses of the last government.

 

The whole thing can be wrapped up in the old have and have nots. What is interesting from where I stand is the fact that those that are doing most of the bleating about being potential “Have Nots” are those that have been protected and are in reality very much the “Haves” compared to many others.

 

And I do not mean to be personal Tony, but I know you are a religious man – and so am I. But I fail to see how any sensible moral individual can moan about not getting the exchange rate he wants, then goes on to have a swipe at those “Fat cats” everyone loves to hate citing their greed as being the problem and that (paraphrase) “wouldn’t it be nice if we all went back to Pre Industrial revolution time because people seemed to ‘manage’ then”.

 

Well no, I don’t think it would. And I would urge a little research on what life was like in Pre Industrial revolution times and how short it was. Because the odds are that if we were magically transported back to such times then worrying about the loss of a few pence on the exchange markets such that we have a tad less buying power on our holiday abroad would only bother us if we were born into wealth or Royalty.

 

For your average Joe – the problem would not occur as the average person died well before their 40th birthday.

 

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