The Industrial Clearances

Industrial Clearances.

There can be no mistaking the air of desperation pervading the political establishment now albeit that with the sense that despite the overweening emphasis being placed on the need to carry out ‘the will of the people’, ‘they have spoken’, ‘their views cannot be overridden’, the people have ‘won their sovereignty back’ and the house of lords – being unrepresentative of the people – they cannot delay or deny that decision; that there is a great mounting feeling of uncertainty. This uncertainty, carefully choreographed to asphyxiate realism in public arena and cohered within the executive system as a positive frontal stance for overall PR consumption, would seem to be attempting to disguise the panic that is hardly deniable from the blasé and disingenuous assertions expressed on the simplification of how easy and marvellous everything can be, once we (whoever that is) get our country back! The unfolding ambiguity on the whole range of topics that have to be sorted out is clearly unsettling for the range of industrial / commercial activities which will be affected. It is not just disquieting within the different divides of the accepted definitive decision but also in the direction and conclusion to be adjusted to once the partition offer is decided upon and taken though ‘The House’.

If one looks at the key players involved, one can detect that the bombastic pro leave attitudes is not having such a beneficial effect, etched as it is on the face of the team now tasked with the responsibility of negotiating the terms of the separation debacle and the reality of just how fraught the situation is. Unravelling the links of 43 years of economic complexity and practical / psychological cohesion is not just at the behest of this government but is to a greater extent reliant on the good will of all the EU nation states, goodwill which has, thus far, been sourly tested. As much as the leavers crow against the re-moaners ‘to get over it’, ‘suck it up’ and don’t even try for a second vote; the price of brexit is to be, long term, very expensive, potential unaffordable without adjustment to the nations revenue intake stream and is unlikely to provide, in any practical way, a good deal for the people. It is an unenviable odd bet that the people of the UK will be worse off over the next 50 years, to be paying for the decision of the 23.6.16.

One can become somewhat dispiriting lethargic in the viewing the attitudes and unfolding events of 2007/2017. It is staggering to simple look at the damaged done within a supposed wealthy prosperous buoyant country, to have to witness the impoverishment taking place across a range of public assets and services, the degradation one can see that is becoming endemic over the last decade, enhanced by political incompetence might be only a precursor to what is to follow and without having to look too hard, to understand the superficiality of the hype being expressed in getting “ a better deal” (better than what has gone before?) with the unravelling of the country’s relationship within Europe’s EU.

For the levers the supposed benefits to be gained, as offered by the duplicitous brexiteres, on self determination in regaining (imaginary) sovereignty, definite reduction and more control of immigration, retention of finances wasted on the EU, greater flexibility to choose who one trades with outside Europe and still retain access  to the EU market; are all looking decidedly problematical.   

What we are stepping into is reminiscent of the 60’s to early 90’s, a period when the UK was warped in the beginnings of the international movement of business and looking at a very bleak future with falling productivity, rising inflation, higher deficit between import vs exports, labour force that did not agree with butt end deconstruction and a prevalence of industrial asset strippers. The economy was in turmoil and heading for serious issues, saved some say with the fortuitous find of North Sea oil which was promptly wasted in covering the cracks of divisive government policies of the mid 70’s to late 90’s. Thatcher turn her face against any industrial development policies and made it clear that she preferred the new world of globalisation, monetary policy, commerce and financial activity; so much that she presided over, what might be called ‘The Industrial Clearances’ period, stripping out of the country any activity that held an organised labour content which meant the large scale mature productive and manufacture sectors, primarily of the midlands and northern counties, had to go. From this there was little choice but to follow where the business was going – Europe and to seek a negotiated beneficial relationship, hence the act of accession 1973.

The adjustment was, some might contend, a success but it came at a high personal sectoral expertise price. The lack of any coherent industrial statgey in favour of the idea of market forces, foreign inward investment, with allowed exploitive supremacy of the financial markets was endemic and favoured in the phrase often used over the time by both parties; that the UK was “open for business”, any business will do and aided with lovely generous grants which were available to smooth the way to the adjustment by ‘SFA’ at up to 45% of capital cost. There was during the clearances ultimately a loss of industrial sector skills, de-skilling across trades, and little investment in practical retraining as training provision and technical colleges were shut down, with the industrial sectors also reducing their own need to offer quality apprenticeship placements while they gained, over the years, the reduction in corporation tax.

Today with the decisions being made and the even greater uncertainty of having an expansive profitable future, that has in the past largely been on the basis of exporting goods and services, can no longer be based on the productive / manufacturing capacity; with much of the manufacturing sectors striped out and owned by foreign investments and now contributes less than 20% of GDP, has left open the clear vision that the UK has flung open the doors as in being “open for business” which can be instead interpreted as being “Up For Sale” for any willing buyers. To evidence this one has only to consider the high number of prominent UK businesses that have in the past twenty years been taken over and link this to the fact that the value of the pound being driven low in the past decade means that it is again a prime target for very opportunist buyers to force aggressive hostile acquisitions of other key commercial, technical, service or productive known brands.

Take over’s are not necessarily good for the long term UK economy nor the industrial sector overall, there is a short term benefit generally for the shareholders, always willing to sell or be forced out (BHS, microchip designer Arm Holdings, the loss of Cadbury, the recent T-O Unilever attempt by Kraft) but once they are gone from the UK productive scene, investments decisions are ultimately controlled externally and open to more generous productive competitor pressures. (1)

The fact is, the UK is the most open accessible market for such acquisitions and although established political forces and liberal economist emphasis the benefits, (arguable transient) no other European country has copied the UK model of being “open for business”, they all have some form of strategic sectoral protective proscription against the hollowing out of their important productive earning capacity. Governments (primarily Conservative) have been averse to installing safeguarding measures e.g. coal, steel, utilities, telecomm industries and banking crisis etc, held to ransom by their own privatisation dogma seen increasingly as a policy disaster – sold off cheap and losing influential control. Some economist, over the years, have taken issue against the false wisdom of the relaxation / abandonment of managed market forces yet despite the outstanding evidence that traditional economics has failed and continues to be dangerously divisive, no real attempt is on offer to stop the systemic degradation of the UK or drain the swamp of government policy ineptitude.

There is no clear strategic direction, (disregarding the political spin that there is one) rather the country is just drifting into a uncontrolled and more uncertain future than at any time in the past 70 years, over a period when there was exploitive opportunity of mercantile projection onto a world platform that offered little competition in all forms of commercial, trade and services activities. Now that situation is no longer so open. The ability for every modern country to reach out to the world to provide their own offerings is at a substantial competitive level and the UK is no longer in a position to be a dominate player.

In order to meet the trials of the next 20 years, the UK will, with the advent of the split from the EU, have to find measures that secures or retains or generates the foundation of a new economic model; it is a high risk gamble to carry on with the outmoded position of being relaxed with open for business and a fast exit door for any key businesses. Becoming a great manufacturing country again is unlikely (unless the sweat shop policy becomes more extensive) and commercial service provision can be done anywhere in the world. This exposes the much lauded financial sector which is in danger and not just from the potential ‘passport’ restriction. It is clear that the UK will soon become a net importer of goods and services, none of which will be mitigated by a pursued offer of a better deal (with Europe or the world) than what has gone before. New stronger tax streams will have to be found and perhaps the much hated but usefully justified trade barriers may have to be installed to gain restructuring time. For the moment the UK is on the precipice of creating a failed economy, it is in no foreseeable position to redress its debt or minimise deficit and it is without forceful action, possible to see not just a rerun of the clearances of what is left of the productive sectors but likely to be one of the financial / commercial clearance of this decade.           

© Renot

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 (1) Hostile Takeovers in the UK and Short-termism.

        The need for an anti-takeover law John Hann

        www.civitas.org.uk 

Arcanus Inimicus Introrsus

The accumulated shape of pre-industrialisation trade was undertaken on a significant basis, concentrated within the known territories of the world, generally that of Europe, Middle East and Asia. A great variety of commerce took place within this ‘world’ but it was carried out by a range of small independent participants generally acting on their own behalf for profit for themselves and a limited number of resource comfortable investors. The trade might be characteristically described as buccaneering endeavours broadly opportunistic and unconstrained. It was though sometimes supported with powers of state either with a form of authority as of ‘licence’, ‘legal’ or implied acknowledgement and overtly with the threat of military support to maintain open access for its calculated interest and if seen as important to the general wealth of involved personages under the appellation ‘of national concern’, a more direct intercession was not uncommon. Such wide spread trade carried great risk both physically in the dangers to be encountered and the uncertain financial risk that was often carried personally for all investing participants, made it a hazardous undertaking  something the vast majority were not in any situation to do.

In general structure, the basis of undertaking a trading action and its financing was by private individuals who invested in an ‘opportunity’ and them taking a funding commitment to the venture as perhaps the owner / proprietor with maybe others taking a stake in the venture for a noted return if successful or suffer the loss on failure. Although often there was the application of a monetary value to trading for goods, there was on a loose basis, the presumption that such trade contained a rough form of equitable exchange, akin to the notion of “a willing buyer and willing seller”; if not for the exchange of desired goods, then an exchange that had a re-tradeable value with or without the use of a nominal value currency be it precious metals or rare commodities that were in demand by a limited number of wealth holders capable of acquiring the commodities. 

The majority of most populations were not excessive consumers in the sense as is known today but in comparison to now, survived on little better than a subsistence level or by the grace of a barter / bought labour trade usage, if not locked into a form of slave servitude. Most everyday toil value exchange, one might loosely call it ‘trade’, was of a small personal ad-hoc nature, opportunistic, localised, on demand with very little general powerful organised trade activist until the formation of guild or professional type protectionist. Also there was no such thing as large scale organised international trade; there was a huge range of specialist independent traders active in discreet parts of the world and interconnecting with trade ‘routes’ over a period of time, some gaining more influence than others and achieving success and failure in the flux of history. Many of these independent traders were not incorporated in the sense of being a protected legal independent body until the formation of confined external trading powers and having conformity with such example as the Hanseatic League or Dutch East India Company etc. There were of course many trade links being identified with influential nation powers of a time and within them there were fluctuating numbers of groups active in specific and confined commodity trading for resources like say; minerals, spice, opium, silk, slaves, cotton etc; stuff that generally had a low degradation factor capable of being transported some distance compared to food stuff produce that was created locally and consumed within a time and distance constraint, so trade in perishables was not as practical nor profitable.

Although every country traded in one form or another, some with more force and vigour than others especially if encouraged with nation inducements, the ability to fend off competition relied on the strength of the nation’s military reach with the rewards enjoyed by those that could exercise influence in the trading activities and the exploitation of lesser powers. There was no sense of wealth ‘tricking down’ within a nations population and it had no regard for anyone unimportant to the process of trade. Wealth was amassed and jealously nurtured into the hands of the few, a situation that suited the powers of the land and it made sure that influence was applied, when required, to pass laws that insured their continued privilege positions of power and its authority was not challenged. The state of a nations expanding population was not of any concern, the more wo /man power there was the more disposable and cheaper it was to replace. This was a situation that was very fortuitous with the start of the industrialisation that needed the pliant flexible cheap labour to feed into the exploitation of a burgeoning colonialism demanding market, with the uk being the first in the global mercantile game. As is the nature with any good profitable idea, mercantile activity increased and was adopted by any country willing to mimic, copy, host, or have exploitable resources. While there was the notion of continued expansion against disintegrated nations, there was little to consider a long term strategy that focused on resources exhaustion, population expansion and increasing competition of external economic productive output.

There is no doubt that the ability to undertake organised international trade has offered a better standard of life style for the mercantile nations, a situation that had rapidly grown for the past 200 years, albeit it has only been achieved by the strength of military power, favoured governmental laxity, the creation of large multinational companies together with a doctrinaire of free market and laissez-fair management and curtailed organised labour engagement; all this with a unquestioning tacit belief that the revenue such trade produces offers sustainable state disposable taxation and continued employment wealth for a consumer nation, however there are some that would strongly argue against this rosy-tainted view of free trade munificence being endowed upon all peoples of a mercantile nation via its trading activities and point to the evidence that this beneficial effect has been slowly declining, unchallenged over the past 50 yrs. There is evidence, not accepted, that despite the often expressed comment that everyone is better off, in a number of ways; health, materially, educationally, leisure, infrastructures and resource usage than a century ago; that the accumulated society benefits are being eroded at a faster rate than they were created and productivity/mercantile trading is ceasing to be able to offer a beneficial future for the mass of a population. There is an undisputed rise in poverty, relative or not. A move to low wage low skill employment, stagnating productivity and spare wo/man power. There is a fast growing large disparity between the accumulations of greater wealth by the few and corresponding lack of wealth distribution to the many with a hardening of social mobility that locks out progressing diversity and now generates social disenfranchisement.                   

For some the above is seen as merely academic, not necessarily a problem and they may be comfortable with the state of existence offered by ‘market forces’, being cosseted themselves from the consequence and sights of disparity issues. One may consider that if there are issues, such as suggested there are, they will be the strategic responsibility of a government to resolve and it would be able to see and assess any incremental decline in the state of the nation. Governments have the authority and resources to construct such strategic policies taking into account the accumulating pressures shaping the whole of society, to be able to instigate a position that undertakes remedial action for the betterment of all and do so in a timely manner; it is, one might suggest now an erroneous position to hold.     

The nature of governments and those holding influential power is currently defined by endemic deficiencies, deficiencies that have become surreptitiously concealed in the obviousness of their existence, to be accepted as the only way to exercise executive control in a mercantile democratic system that no other system, it is postulated, can better. Aside from fostering a totemic democratic process with its useful manipulatory ability, governments have two prime constraints in the pursuit of strategic social inclusiveness, one, is to secure its own position to retain power and influence for its own party and whatever policies it thinks will gain the support of voting believers. From this they do not display any aptitude to generate long term plans that exist beyond the term of their own power if in attempting to do so they undermine their own power base or has an actual cost associated to it for the betterment of ‘undeserving’ causes. Hence they are all are afflicted with the blight of short-terminism, incapable of developing any coordinated long-term strategies, ones that all interested political parties agree to and accept the necessity of adopting with a rolling oversight for application and implementation beyond their own period of power and influence. Because of this difference, government are incapable of making decisions in rapid time fame and are strung out by purely urgent reactive processes.

The other difficulty is that over the years government have in devising any strategy that requires state input of any legalities for or of trading resource which generates taxable revenue, it has been required to consider the self interested privilege views of a whole host of industry lobbyists that the market operators present to government, views that have no bearing on the state of the nation’s social wealth or inclusiveness. The tacit assumption is, what good for them is inevitably good for the populace, a stance the government is to some extent captured by and required to take in preference to any social counter points, preferring instead to rely on the trickle down dogma, so trade and the market must be given what it ask for in preference to any other considerations and it has to continue the un-hindered freedom to do business, any subsidies, inducement, laxity, accepted; until complications arise. To example this point one has only to look to the sort of secret ‘memos of understanding’ being offered to sectors of industry, farming, “The City” and an anxious conservative local authority all still adjusting to the extensive damage of the CC and now severely compounded more so by the unfolding self-inflicted disaster of Brexit. 

With this problem of being captured by the dependency of market self interest, it is clear that those countries operating a democratic process are at a major disadvantage in responding to the shifts of technical development. Their democratic processes and administrative attitudes perhaps overlaid with acquired social distinctions and matured economies, are built for the times of the 18^th/20^th century and to use the phrase in vogue are “not fit for purpose”. There is incapacity of ability to moderate regressive action that stems from reliance on the dominance of mercantile activity to GDP. To formulate or redirect paradigm cultural shifts is not such a difficulty for plutocracy, dictators, oligarchy, communist, etc. as there is no opposing authority, no loyal oppositions and they can to a far greater extent than in democracies, control how effectively it acts with or against influence that impinge on its self-interest. Their populous are simple forced to accept that the needs of the state is paramount; not a concept democracies would overtly own up to as well.      

International trade has, for those with the capacity to trade effectively and with some influential authority, have seen an improvement in their countries wealth, this wealth as is on display is with the acknowledgement that generations today are in a better resource position than generations gone before although there is a notable rise in the increase in disfranchised labour throughout the world driven by labour saving investment. However the consistent message being absorbed is that international trade free from artificial barriers is unquestionable good and has to continue. This is a stance that all trading parties want to absolutely hold too. However there is a need to severely question this absorbed belief. It has become an unchallenged dogma propagated by those of the liberal conservative established minds generally entrenched in the fortuitous position of established wealth that have enjoyed for decades the fruits of corporate enterprises and they have not really been dissuaded from the relaxed attitude to unfettered trade that things need to change; even faced with the rise in disenfranchised labour.

Over the past forty years there has been a great shift in the ability of companies to trade worldwide, easier and faster to meet the need of buoyant consumer markets, driven; it has to be recognised by the ‘disposable’ wealth of the western consumer populations. Companies have not unreasonably operated on the basis that they are supplying, if not creating, a demand for produce at the same time seeing the opportunity to generate dividend profit for their share holders, profit for reinvestment and rewards for internal participants with an additional benefit of a potential lift in share value that feeds into the gambling game of share trading for institutional investors. The link between the actual ‘financial investor’ in the assets and the resources used by the company and the direct personal risk they take in the commerce / trade is no longer of a compelling jeopardy type of involvement. As companies are now seen as legal independent bodies – a ‘person in its own right’, there is a disinterested shift in the relationship between what the trading body does, how it make profit and the attachment of liability to individuals if things go wrong.  

At the same time a disintegration of direct responsibility has taken place, there has been a powerful development in where and the way companies operate, to some extent assisted by governments in the pursuit of such trade and commerce. In order to maximise the benefits of global trade, companies have become amalgamated to form supranational entities and as such they have become large, very influential and directive in the formation of a nations policies, this has allowed then to be more surreptitious in governmental ordinance via lobby intercession or when governments seek views on any investigative issues. Government generally seek the views from ‘noted’ organisation on potential trading policy changes guided by party politics but to balance, it does not have any real way of gaining social impact assessment. It is taken that any trade, of any type, from anywhere, will have an enriching element to the state of the nation and it may only be concerned with the rich tax revenue it can acquire.

For governments to maintain a healthy society and invest in infrastructure development it has to raise revenue. This is via its tax take. However due to the munificence of laxity laid on supranational entities it is slowly apparent that far too much flexibility has been given to all forms of mercantile trade that not only is the benefits of trade becoming narrowly focused but tax law is out of date, unresponsive to the speed at which supranational bodies can move profits from the sources of extraction to a country of very low taxation thus avoiding contributing to the states sustaining funding steam. They have been, at the same time, moving productive capacity out to cheaper less regulated producer countries and still importing back to the richer consumer nations, again extracting profit which are then evasively moved back out to ‘tax havens’.     

Despite the unstinting belief in unrestricted free trade, the loss of productive capacity with contentious tax avoidance schemes operated by supranational entities, there is a realism that rich consumer counties are increasing at a major disadvantage and that unfettered free trade is undermining the ability of social and investment structures. The rise in unused labour, allows labour cost to be suppressed, undermines disposable incomes, reduces an expectation and opportunity of a certainly of a standard of living, has widened the gap between rich and poor, destroys continuance of infrastructure investment, and is creating an air of uncertainty with a range of social disenfranchisements. There a moot point to inject in this and it is one that is passed off as the cause of problems being seen in western democracies and it is that over the past 50 years there has been with technological developments an inexorable rise in the ability to automate productive capacity and this has impacted a whole range of ‘traditional’ forms of employment. This is the proffered reason for the impacts of a post heavy industrial era, that trading countries have to adapt to, but it is also an excuse used to not actively manage such shocks that are inevitably created by entirely free mobile trade.   

From some individual observations there is a growing disquiet that problems are being imperiously ignored by those that have the resources to take action to stem decline. There are those within governments, banks and corporate governance that should see the perilous direction of travail. It is a form of collective murmuration of a plethora of individuals holding onto commercial and political dogmas that refuse to acknowledge the declining state of the nation and not challenge the gifted supremacy of the financial and trading markets which some contend no longer serves the direct inclusive needs of a consumer nation. With the main tripartite participants, government, finance sector and global commerce there are, one can see, conspiratorial actions to maintain the economic confidence deception that free trade, mostly unfettered between participating nations – particularly the western nations is good for the economic wealth of all.

It is encouraging to see at last, one worldwide known celebrity personage has begun to challenge the assumption that free trade must always be unrestricted and carries no economy disturbance penalty for undertaking productive relocations. It cannot be allowed to continue massive tax manipulations, effectively defrauding and leeching the wealth of a nation into the pockets of the few. The Donald has voiced on the behalf of those cast aside by the dubious successes of laissez-fair economics and unencumbered international trade, the damage and concealed subsidies, in tax dollars and pounds, required to support the edifices of indifferent financial and mercantile actions. With assumed conviction, he demonstrates that it is not incompetent to question all the ‘good’ they do for all citizens; when clearly with the advent of dogmatically expressed “market forces” and supranational entities with their malign affects, it is no longer the case. He of course has form in this mercantile charade, so one wonders whether he will have any more luck in reforming this hidden enemy inside the state, than chasing foreign ones.     

© Renot

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