Brexit, Globalisation, Protectionism and Competitiveness

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Brexit, Globalisation, Protectionism and Competitiveness

Post by Disastrous @ Wed Mar 15, 2017 1:21 pm

We were discussing >waves hand dismissively< all this the other day and it confuses me a bit. I never studied economics or anything, so maybe it's a stfu n00b,u fukin n00b! question but I think I broadly understand how market forces etc work.

What I'm trying to get my head around is how we (any country) remain competitive in an ever-more globalised world where laws vary between territories.

So take Brexit. Everyone gets all angry about the EU telling us what to do and so on, but if they don't and we have our own labour and employment laws to protect our workers, is there not a risk that businesses will simply outsource to our cheaper EU/Chinese/wherever neighbours?

So does that not make the problem actually worse?

Would we not be better off trying to globalise a set of standards for working hours, holiday entitlement etc and effectively neutralise international advantages by normalising the playing field? And if not, why not? Would a unified global market not make life so much easier for everybody whilst still protecting local businesses as people will naturally prefer to use local suppliers if there's no cost advantage to going further afield? Truckers can travel across borders and not lose jobs to Eastern Europeans who don't take breaks etc etc

It seems like Brexiting would make that worse and protectionism can't work. Is that right??

I get the Trump approach which seems to be isolationist and Americans will buy American made stuff and all will be well but I think it's a bit silly in the modern world as they'll still want BMWs and TVs and whatnot. So maybe short term fix but then massive fail in the long term.

Are we not ultimately moving towards a global super-state at some point anyway?

So many questions but the whole thing is a bit mad to me so any insight appreciated...
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Käsemeister @ Wed Mar 15, 2017 1:36 pm

Disastrous wrote:Would we not be better off trying to globalise a set of standards for working hours, holiday entitlement etc and effectively neutralise international advantages by normalising the playing field?


I mean, like, why don't we try some sort of union of nations, with one overarching set of rules. Perhaps all of those of us in this one continent could get together. Given we're all in this one patch called "Europe", perhaps we should call it the European Union. That's quite catchy. You. in the EU.

Yay.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Turntable @ Wed Mar 15, 2017 1:38 pm

Obviously I agree with you but will play the devils advocate here a little.

One big problem with globalising workers rights is that in practice it doesn't work because countries are so far apart in economic evolution that there is no way you can achieve it (i.e. the theory is lovely but the reality is different). Most countries like China/India/ Any Africa do not want equal rights as their main way of competing is on price.
Even within a single country universal rights have disadvantages let alone across a continent or world.
Take the UK - there are big swathes of poverty and mass unemployment in shit towns. One of the significant things preventing them getting better is workers rights. If there were no artificial economic barriers in place (minimum wage/benefits/sick pay/martenity pay/holiday pay etc) then industry would move to those areas where they would get cheaper labour and the local economies would grow, attract more companies, create more jobs etc. In other words, the only realistic way to restore industry again to these areas is to make them attractive. In the short term those people would arguably be exploited but in the long term the equilibrium would return as the local economy grew.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Strawman @ Wed Mar 15, 2017 1:42 pm

Disastrous wrote:Would we not be better off trying to globalise a set of standards for working hours, holiday entitlement etc and effectively neutralise international advantages by normalising the playing field? And if not, why not? Would a unified global market not make life so much easier for everybody whilst still protecting local businesses as people will naturally prefer to use local suppliers if there's no cost advantage to going further afield? .


Something H.G. Wells advocated, though he was more concerned about wars than trade, and lead to the setting up of the United Nations. The problems is that it means national governments have to 'surrender' some of their powers ( SOVEREIGNTY!!!!) in order for it to happen. Also if everyone in the world lived a more equal lifestyle there are not the resources to mean that lifestyle would be a middle income American one for example.
On a slightly related note, all the energy the world's population consumes is equivalent to the power solar panels can produce (using current technology) if they covered a land mass equivalent to Spain (sorry span but sacrifices are needed here).
Some things like climate change need a global solution, hence thick horrors like Trump want to pull back from global agreements that the US has already signed up to.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Disastrous @ Wed Mar 15, 2017 1:52 pm

Ok, I can follow that I think, and I understand why shit countries might not want to get involved with this.

But then what would the solution be?

It seems you can either

1. Drop your own standards so you can compete on price with China/Africa
2. Not allow your companies to do business with undeveloped nations

Neither is ideal.


I see things like the boss of Deliveroo being hauled in front of DWP for having 'employees' that work as effectively zero hours contractors rather than paying the living wage but to me, that's destructive and impedes entrepreneurialism/new business models. Also, I get the impression that people who do cycle courier work quite like the ephemerality of it on both sides...They can work or not, their call.

Equally, I don't think it's a bad thing for people who are happy to take a shit job sweeping a kebab shop floor floor for below minimum wage, to do so. Lots of people just won't do it, so if somebody is prepared to, why can't he?

Yet, I feel it's a bad thing for truckers to have to drive for a million hours straight, not to mention dangerous. Should foreign trucks not be allowed on UK roads unless the adhere to our standards? Probably, but how do you enforce it?

SO I'm torn between my natural bias for people generally being allowed to do what they like, and a general improvement of 'standards' for everyone. But having some standards in some countries and not in others just seems to mean that all the wealth will just flow from place to place, booming and busting, wherever the value is...
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Turntable @ Wed Mar 15, 2017 2:06 pm

There definitely isn't a solution and I am not sure there is one problem.
In fact, I think this inequality problem is quite the opposite in a selfish sense. We are huge beneficiaries of cheap labour from poor countries. We absolutely cannot get enough of cheap stuff and it would not exist if conditions were equalised.
Ironically, I believe Brexit is completely irrelevant to any of this. We are not suddenly going to compete with china at manufacturing, or Germany at engineering. I also don't think that all the too-ing and froing about tariffs is anywhere near as big a deal as talked about. Its going to make a few percent difference and help us elsewhere. My gut feeling is all-in-all it will have a relatively small impact subject to how much more hassle it is dealing with us outside the eu. Hassle more than actual cost.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Turntable @ Wed Mar 15, 2017 2:11 pm

Disastrous wrote:. But having some standards in some countries and not in others just seems to mean that all the wealth will just flow from place to place, booming and busting, wherever the value is...


On this front, in theory over a long time these things will gradually become more equal on their own. Where stuff is produced cheaply because of cheap labour- we consume relentlessly until we are using more and more of that labour to make/grow stuff for us. Over time this in-turn lowers unemployment and increases the wages/conditions.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Disastrous @ Wed Mar 15, 2017 2:12 pm

Turntable wrote:There definitely isn't a solution and I am not sure there is one problem.
In fact, I think this inequality problem is quite the opposite in a selfish sense. We are huge beneficiaries of cheap labour from poor countries. We absolutely cannot get enough of cheap stuff and it would not exist if conditions were equalised.
Ironically, I believe Brexit is completely irrelevant to any of this. We are not suddenly going to compete with china at manufacturing, or Germany at engineering. I also don't think that all the too-ing and froing about tariffs is anywhere near as big a deal as talked about. Its going to make a few percent difference and help us elsewhere. My gut feeling is all-in-all it will have a relatively small impact subject to how much more hassle it is dealing with us outside the eu. Hassle more than actual cost.



That I can believe...I suppose it was really Brexit that brought to the fore the bigger discussion.

The Swedish girl at work was banging on about UBI and whatnot, and whilst that seems like a great idea within Europe global redistribution of wealth seems an absolutely unfeasibly unmanageable task. And actually can't happen whilst conflict exists in the world. But I sort of get the point of striving towards some sort of global utopia...

>brain melts<
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by minimoog @ Wed Mar 15, 2017 2:29 pm

There seems to be some (Devil's) advocacy here for a return to sending children up chimneys and scrabbling under flailing looms because if they're desperate enough to want agree to do that, why not let them? The business owners will do well out of it and the country will prosper.

Just no.

I don't think Brexit is completely irrelevant in the sense that the EU is responsible for some of our employment law. Having said that I doubt we'll bin all that off when we leave. We have tended to be early and enthusiastic adopters of what might be termed liberal (small l) legislation, even while our EU oppos haven't bothered their arses.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Turntable @ Wed Mar 15, 2017 2:38 pm

minimoog wrote:There seems to be some (Devil's) advocacy here for a return to sending children up chimneys and scrabbling under flailing looms because if they're desperate enough to want agree to do that, why not let them? The business owners will do well out of it and the country will prosper.

Just no.
.


No you missed my point slightly. Yes, short term exploitation but as a local economy starts to thrive again, the workers get paid more and get more rights i.e. a short term hardship for long term benefits. This is the only way that some of these areas are ever going to regenerate and re-economise.
I don't necessarily advocate it by any means, I am merely saying that the reverse is the mass unemployment, zero prospects and a frankly miserable existence for a lot of people who are totally unemployable because they are too expensive for their lack of skills.
Neither is a good thing but I increasingly believe that the former is the ONLY solution to these long-forgotten redundant areas. Unless you think perpetual welfare in lieu of prospects and self-worth is preferable to low wages. I don't have a strong opinion on it at all, I am just saying it is one clear example of where healthy workers rights can be counter productive.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Strawman @ Wed Mar 15, 2017 2:53 pm

The other point is that the accession economies have been largely successful,

Poland used to be scary and poor, now it is a much nicer place to be

Image

Those Poles who now have more disposable income buy more (other) EU goods, and the cycle of virtue continues.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by desertweasel @ Wed Mar 15, 2017 5:21 pm

No you missed my point slightly. Yes, short term exploitation but as a local economy starts to thrive again, the workers get paid more and get more rights i.e. a short term hardship for long term benefits.


But why would this happen, pure unfettered capitalism would dictate that you keep the wages as low as possible for ever, the only driver to raise wages would be lack of people to exploit. So wages were very low and conditions awful in factories until WW1 when lack of working men forced conditions to improve.

There is also the fear of crime or even revolution as well, by removing all welfare the first place many will turn is crime not the mine, do we want to live in Joburg? or Lagos or Caracus or Cuidad Juarez all cities with little or no welfare, where the elite live in constant fear of the teeming masses
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by thekungfury @ Wed Mar 15, 2017 5:30 pm

Strawman wrote:The other point is that the accession economies have been largely successful,

Poland used to be scary and poor, now it is a much nicer place to be

Those Poles who now have more disposable income buy more (other) EU goods, and the cycle of virtue continues.

I'm in Poland RIGHT NOW and it's >wiggles horizontal spread fingers< OK.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by desertweasel @ Wed Mar 15, 2017 5:35 pm

https://medium.com/@thogge/the-3-tenets-of-capitalism-6fd2c73d7d7#.2c7q89xhs

This has been doing the rounds on FB today, interesting read on the basics behind globalisation and tradae
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by Barbarianna @ Wed Mar 15, 2017 6:17 pm

TT is both succinct and correct on this stuff IMO. Brexit will not make a massive money difference in the long term; we are still de facto in Europe andthe ties we have to it educationally, familially, economically etc will find a way to carry on.

The reason why anything happens, anywhere, is because of some kind of tension- a gradient of need, if you will. Action, wilful or otherwise, satisfies the tension, reducing it slightly or completely. Generally, it is better to have not too much of a gradient as this causes too violent a reaction, and not too little either as this may not cause much of anything useful to happen. Nudging this inequality to keep it in the Goldilocks zone is the aim of any positively intended rules and regs.

Equality is not a desirable state if it means that nobody wants or needs for anything. Psychologically, it is uncomfortable to the mind to have everything equal between people, paradoxical as it is. Parity causes folk to become more narrowly focussed on ever diminishing degrees of difference, perhaps because it is not a natural state of affairs for us as evolved beings to have parity.
Last edited by Barbarianna on Wed Mar 15, 2017 6:18 pm, edited 1 time in total.
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Re: Brexit, Globalisation, Protectionism and Competitiveness

Post by moleamol @ Wed Mar 15, 2017 8:12 pm

thekungfury wrote:
Strawman wrote:The other point is that the accession economies have been largely successful,

Poland used to be scary and poor, now it is a much nicer place to be

Those Poles who now have more disposable income buy more (other) EU goods, and the cycle of virtue continues.

I'm in Poland RIGHT NOW and it's >wiggles horizontal spread fingers< OK.

Which bit? I think Easyjet have ruined a fair bit of Poland.
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