If only the implications of this were understood

Brexit, at its heart, is a recognition that Britain has become steadily weaker since it spent much of its empire wealth fighting two world wars – too feeble in the years before the 2016 referendum to sustain an exchange rate of $1.60 and €1.40, just as it was too poor to cope with $4 to the pound in the 1950s and $2 to the pound in 1992.

Manufacturers were unable to make things cheaply, reliably or efficiently enough against the headwind of a high-value currency, forcing many to give up. An economy that boasted 20% of its income coming from manufacturing in the 1980s found it was the source of barely 10% at the beginning of this decade.

Surges in GDP growth in the 70 years since the war can be attributed (and this short list makes the point crudely) to periods when there were cheap raw materials and energy costs; or a growing population; or foreign ownership and management of key industries; or the offloading of vast amounts of state and mutually owned assets; or cheap borrowing. Without these in operation to improve the UK’s performance, a lower exchange rate became inevitable.

So, the 70 years since 1945 were years of bad economic management then? Doesn’t that mean that those years of bad economic management should not be repeated? You know, that puts the kibosh on the entire Corbyn/McDonnell set of plans?

18 comments on “If only the implications of this were understood

  1. A basic pack of lying leftist bullshite. The Empire was not that big a moneymaker compared to common or garden trade and commerce.

    It says in effect that the UK is useless and any economic progress in 70 years was basically due to luck. Lying socialist scum.

    I still believe in free speech. But the more deliberate lying leftist shite is pumped out the more angry I get.

  2. Brexit is also said to be the answer to Britain getting a pay rise. With fewer immigrants, the argument goes, the labour market will tighten and before too long workers will find themselves in the happy position of bidding up their wages.

    Not so fast. When so much growth over the past six years of recovery has been in the low-paid services sector, it is more likely that those businesses, confronted by angry staff, will close rather than pay up.

    Guardianlogic: when taxes or regulatory burdens or the minimum wage go up, employers will just pay up.

    When we try to get some sanity back to immigration policy, employers will just shut down.

  3. The war? Korea turned itself from a peasant economy smashed by war to a global industrial power in a few decades, yet WW1 and WW2 were too much for Britain. Balls.

  4. ‘Brexit, at its heart, is a recognition that Britain has become steadily weaker’

    As any true Scotsman can see.

  5. ‘Tis true we did spend an awful lot of money on fighting the wars (especially WW2). We also spent a lot on rebuilding afterwards – not just in the UK.

    The article nicely omits the terrible labour relations in the 70s which fatally weakened the UK manufacturing sector just at the point where the Far East was ramping up theirs. The fact that we moved to a more services (and thus higher up the value chain) based economy is/was a good thing and has probably saved our bacon.

    That’s why the EU hate the City and our financial institutions – they would like to see our economy weakened so that we are forced further into their ‘vision’ of a United States of Europe.

  6. “…too feeble in the years before the 2016 referendum to sustain an exchange rate of $1.60 and €1.40, just as it was too poor to cope with $4 to the pound in the 1950s and $2 to the pound in 1992.”

    Good thing we didn’t adopt the Euro, then.

  7. Can we consider: (1) The potential effects on the UK of NOT contesting the World Wars? (2) The comparative devastation of the nations that lost those wars?

    Even without taking cause-and-effect from the pages of the Guardian, is it even true that “Britain has become steadily weaker”?

  8. First the Empire stopped being useful by the end of the Napoleon wars. Its main functions were to give us a monopoly in our colonies and to prevent our European rivals from colonising them and in the process shutting us out. We were pretty well bankrupt at the end of those wars but some forty years later were the richest country on earth. Which was done by a combination of laissez-faire, industrialization and Trade principally with Argentina, Brazil, USA and Canada none of which were governed from London.
    As to the second world war Germany, France, Italy, Japan, Korea, Singapore, Hong Kong, Korea, Taiwan and China were all poorer than us at the end of it, and all dug themselves out of the hole without joining the Common Market never mind the EU ( yes I know three of those went on to be founding members of the common market)

  9. “spent much of its empire wealth …”: much of the Empire was (as far as anybody can tell) a burden rather than a source of wealth. We could afford it when we’d made ourselves rich: we couldn’t when we got poorer.

    “the Empire stopped being useful by the end of the Napoleon wars”: there wasn’t a lot Empire then, was there? Bits of India of course – including wealthy Bengal – and of the Caribbean. Oz and Canada. We kept the Cape Colony after the failure of handing it back to the Dutch the first time. We had taken the Ionian Islands from the French, which we eventually disposed of by gifting them to the Greek Republic some time after its foundation. We’d also bagged Malta from the French, which we kept. We didn’t have Cyprus or Aden or Egypt, of course. We had other bits and pieces too, but not the huge swathes of pink on the maps of, say, 1945. And in 1945 much of the pinkness anyway consisted of independent countries or countries to which independence had been promised. On t’other hand, we had re-acquired Newfoundland, due to the Dominion going bust in the Great Depression. We eventually got shot of that to the Canadians, bless them.

    I’m always amused by Americans boasting of their War of Independence being against the mighty British Empire. They obviously think in terms of the pink bits of 1945, ignoring the fact that the 13 colonies were rather a large part of the much smaller Empire at the time, at least in terms of acreage. Even Bengal didn’t become effectively the property of the East India Company until after American independence.

  10. “Manufacturers were unable to make things cheaply” which today is a matter of energy, employment regulation and waste policies not market forces.

  11. @ Pat
    The Empire wasn’t useful during the Napoleonic Wars – much of it was acquired *during* the Napoleonic Wars to stop Napoleon having it but imperial trade only became a significant benefit when merchant ships were free to plough the oceans with only the weather being a threat. The larger part of the Empire was acquired in the reign of Victoria a generation or two or three after Napoleon was defeated by the British, Germans and Dutch, with no noticeable help from the Colonies.
    Your knowledge of history seems a bit shaky if you think the Napoleonic Wars ended after Canada was granted self-governing status in 1855.

  12. Just in passing, anyone see Macron admit that the French would vote against the Single Market if given the choice?

    This is the problem with young people. They just don’t know when to keep their Jupiter-like mouths shut.

  13. ““Manufacturers were unable to make things cheaply”
    that’s because wages are high in the UK, and that’s a good thing, so long as you actually do have a job.

  14. Macron also said in passing that Brits in the referendum were protesting at too much globalisation and, by inference, neoliberalism. (The inference Marr took). Might explain why polls now show 80% Brit vote for nationalisation of utilities.

  15. @ DBC Reed
    A poll showed that of a small number of people interviewed 80% answered a loaded question to say “yes” after the media had lied about the prices that wold be charged after nationalisation.
    FTFY

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