Owning a bit of currency

I’ve long been interested in the idea of alternative currencies. Many have long argued that the current status quo of a few “fiat” currencies regulated by central banks for the benefits of government (and the good ol’ boys network), isn’t in the public interest. I posted last year about a system in one US town where local traders have created their own local currency system. I’ve also made several observations about a future Scottish currency, some admittedly a little tongue in cheek. However some recent experiments online with “digital currencies” are worth discussing, as Simon Cox of the BBC reports.

Several groups, many of them libertarians, have within the last few years set up alternative currencies such as the BitCoin, Liberty Reserve, Flooz or beenz. Such currencies would, so the supporters say, be much less prone to interference by either government policy or the hanky panky antics of banks, indeed they would allow independence from both. i.e. People would no longer even need a bank account anymore. Your boss would pay you via a I-phone app and you could then spend it via a digital wallet, something of particular use in places such as Africa, where practically everyone has a phone but few people have bank accounts (and it’s not exactly safe to wander around with lots of cash) and many African countries have extremely unstable currencies.

However many of these online currencies have proven far from stable. Currently of the four listed above only “Bitcoin” is still in business (although a number of others have started up more recently). The dot-com bubble took out the Beenz and Flooz. Liberty Reserve collapsed as a result of some rather serious money laundering charges leading it to be taken down by the FBI. Indeed Liberty Reserve‘s problems have been symptomatic of the problems afflicting all of these alternative currencies.

Bitcoin too has been prone to large daily fluctuations in its value with bubble’s building and market panics (which sort of makes a mockery of its claim to allow independence from government induced fluctuations in exchange rates). There has been the electronic theft of Bitcoins from mobile phones, illegal “mining” of Bitcoins.
And perhaps more worryingly, bitcoin seems to have become a haven for criminals, notably drug dealers, who frequently use the currency to conduct transactions between each other online.

In many respects one could argue that the woe’s afflicting Bitcoin actually serve to counter many libertarian arguments on currencies rather than prove them. I would argue the problems with global currencies at present are a lack of regulation not too much of it. The reality is that the US, UK and Eurozone are in trouble because the relevant governments were asleep at the wheel in the lead up to the financial crisis. They allowed a massive speculative bubble to build, when they should have been intervening (by for example pushing up interest rates or forcing banks to hold more cash in reserve, cracking down on “casino landlords“, etc.) to head it off. But politicians were too afraid of the short term politics (as it would have meant them deliberately slowing down the economy) to do anything.

Similarly the “solutions” to the crisis have been the equivalent of using a band-aid to treat a severed limb. “Quantative Easing” in the UK and US has given some temporary relief but not solved the underlying problems. And QE has ultimately amounted to punishing savers for the crimes of reckless borrowers. Similarly the Eurozone crisis has seen a lack of proper action, and what action has been taken (such as in Cyprus) has arguably made the problems worse in the long term. Indeed some of these actions may have been responsible for building bubbles in “bitcoin” as scared savers sought a way of getting their money out of the firing line.

By way of comparison, many libertarians also favour the gold standard and argue that if economists knew a bit more about it they’d all be in favour of it too. However economists counter that actually they know full well what the gold standard entails, they remember the events leading up to its abolition and that’s why they’re against it! (and that libertarians are poor students of history).

I’m somewhat on the fence about this incidentally, but tend to come down on the side of the economists (even thought there not exactly my kind of people!). Although I did come across this site awhile ago that backed the idea for an energy backed currency (where say every dollar would be backed up by say 10 kWh’s worth of energy).

And similarly Bitcoin and its contemporaries suffers from the same problem, those behind it are letting their ideology run counter to economics. Or as Dr Adam Posen (of the Peterson Institute for International Economics) puts it:

“many of the same right-wing nut jobs who distrust the government viscerally are more likely to believe in bitcoin…it’s those who are angry about being defrauded who are likely to be the ones defrauded again”

Or in another quib:

“…gold is the investment for silly people. bitcoin is gold for people who don’t save…”

The truth is there is a reason why many see the dollar as a safe haven, even thought, thanks to QE, its been weakening in value versus nearly every other major currency since the financial crisis began. But investors are banking on the fact that they believe the US federal reserve will do whatever it takes to defend the stability of the dollar…even if it has to invade countries! (if you believe certain rumours regarding the Iraq war). It’s a case of a dollar in the hand is worth two in the euro bush….and a hundred in the bitcoin hedge!

Unfortunately it would seem that if there’s anything worse than a fiat currency backed up by nothing other than ones trust in “the government”, one has to question how sensible it is to advocate as an alternative a virtual currency that is backed up by nothing at all.

Trouble at the Mill

Channel 4 viewers may have caught the gritty drama “The Mill” in recent weeks. Apparently it is based on accounts and records held by the Quarry Mill (now owned by the National Trust) of its workers, although one assumes its inevitably been spiced up for TV somewhat. I mean look at the mess on BBC “the White Queen” which is less historical drama and more mediaeval fantasy (i.e. about as historically accurate as Braveheart).

But I digress, the one thing “The Mill” does get right, is its portrayal of the sorts of working conditions many toiled under in the 1830’s, a time when even children were expected to put in over 12 hours a day worth of back breaking and often highly dangerous labour. And even adult workers faced working long hours for starvation wages. Many workers lived (when not working) in slum like conditions, two families to a room sort of thing. The series also shows who workers began to unite and get organised and lobby to see things changed, and of course the resistance of the upper classes to such changes.

Indeed the arguments against the Factory Acts or the 10 hour rule (with management saying, oh what’s wrong with a child working for 12 hrs? why they’ll be so fit and healthy after just 10, they’ll go off and do another night job with someone else and then never get any school or rest! :crazy:) sounds remarkably similar to the sort of spin that comes out these days, such as when, for example, its suggested the Starbucks & Amazon’s of this world actually pay some tax. Or that the rich pay a bit more (even just a one off payment from the $21 trillion cash pile they’ve stashed away). We’re led to believe that they will abandon their plush multi-million pound houses and billion pound a year turn-over businesses and flee abroad…and if you believe that then you probably also believe in this big jolly guy dressed in in red.

But going back to the Mill. The 1800’s wasn’t just a period which gave us the Industrial revolution, railways, industry, the labour movement and the middle classes but also it was the era that communism began to evolve. And when I say communism, I’m not talking about what comes out of David Miliband’s mouth (if he was around in 1830 he won’t have even been allowed to join a labour union on grounds of being too posh and right wing! ;D) but the Karl Marx (who was living in England at the time) “workers of the world unite” variety. Never mind taxing the rich a little bit, no take away everything they’ve got and put them on a train to Siberia sort of stuff.

Such notions (a belief that capitalism is institutionally corrupt and that democracy will always work in favour of those who can afford to buy elections) can strike the modern person, even those who are left wing leaning, as being a tad extreme. But seen through the prism of an oppressed worker in a British cotton mill or a downtrodden peasant farmer of the 1800’s or 1900’s it made perfect sense. It is really no big surprise that Russia was the first country in the world to go communist. The term “serf” for the working class of Russia has entered the dictionary as a word to describe extremes of social oppression.

Leaving Cert and A-level history papers often ask the question “why did Russia become communist?”. I’m tempted to reply “like Dah!”. Perhaps the real question is “why didn’t Britain become communist?”

And I would reply that what prevented the communist root taking seed in the UK was the actions of progressive reformers and politicians who sought to find a middle ground. Thanks to people such as Robert Peel, John Russell, Keir Hardie, Lloyd George, Gladstone and Attlee, gradually laws were brought in that protected workers rights, recognised trade unions, improved workers pay and living conditions (which ultimately led to the creation of what we now call the middle class), while at the same time effectively saving the capitalists from they’re greedy selves.

The rich were also made to first pay some tax (traditionally since feudal times the upper classes have never been expected to pay much, that’s the job of the workers and peasants!) but gradually more and more tax, in order to help meet the costs of an expanding welfare state.

Now the problem of course is that since Thatcher there’s been a gradual erosion of these hard won laws and freedoms. I mean where not far off the situation in the 1800’s when strikes were practically illegal…and of course as a consequence back then in lieu of a strike disgruntled workers often sabotaged production or burnt down their factory / bosses house….often with him still in it! (how long before this carry on happens again?).

Also in the UK, US and other Western countries the proportion of taxes paid by the top 1% peaked in the 1970’s, even thought since then many have seen their incomes skyrocket. Indeed many more of the very top earners pay no tax at all, as compared to previous generations.

And of course the Tories under Cameron have accelerated these trends, by cutting away yet more regulations, slashing benefits, tax cuts that benefit the wealthy and increasingly the privatisation of public services like the Royal Mail, NHS, Prisons and policing.

And there are some, notably libertarians who say we should go even further, getting rid of most if not all laws and taxes.

My response to that is to suggest they (and the Tories) read a history book. Because nine times out of ten you’ll find there was a perfectly good reason for said regulation being put in place or that social benefit being offered and thus good reasons to maintain it. Its equivalent to arguing that a building which hasn’t burnt down for decades doesn’t need a fire escape anymore, even though the last time it did catch fire, decades ago, the records show that everyone inside was burnt to a crisp.

In short, we tried unregulated turbo capitalism (then known as Lassie-faire) back in the Georgian & Victorian era and it didn’t work out so well. As anyone whose ever even read a Charles Dickens novel will know, Lassie-faire certainly did allow a small number of very greedy people to acquire (and then ultimately squander) vast fortunes, but it also led to enormous hardship and poverty for the majority (back then it was not unusual to have to step over dead bodies on the streets of London), actual famines within the UK (in Ireland and Scotland), violent crime rates that would make Baghdad look safe (back then the better off needed armed body guards or have a pistol handy whenever they went out and about) and nearly led to a communist revolution. Thus trying again is not recommended.

As for “The Mill” I’m still waiting for someone in it to say that line “there’s trouble at ‘t Mill” so they can do the Monty Python sketch, although I presume in this case the guys in red who burst in will be a bunch of Trade Unionists ;b.

What’s in a kiss?

I’m just getting back into blogging again after a wee break, but one story I missed commenting on was the apparent “protest” against Russia’s anti-gay laws that occurred when two Russian relay winners kissed on the podium. Both quickly denied that this was a protest, or anything of the sort, they were just pleased to have won.

Even so, whether intentional or not, it shows the hypocrisy of such laws, as strictly speaking this arbitrary Russian law would appear to say that any such kissing is illegal only if the parties involved enjoyed a kiss too much. I mean two French guys who are old friends meet and you’ll see more mouth on mouth action than in a Swedish porno, does that count? :??:

Elsewhere a Swedish athlete who painted her fingernails rainbow colours (apparently this was an actual protest) got told off by the IAAF (these are the same types who cosied up to Hitler and the Soviets in the 80’s, good too see they ain’t changed much!). So now it would seem Putin is censoring the colour of women’s finger polish, I wonder if he’s ever seen 1984.

I’m somewhat sceptical of mainstream religions for many reasons but one of them is this apparent hypocrisy over issues such as gay rights. Granted the bible does idly mention its disdain for “that sort of thing”, twice…in passing. However I also recall the bible goes to great lengths to discuss the evils of greed, how one should help thy neighbour, the virtues of charity and good will towards others, how the rich who aren’t charitable are going to have a hard time getting into heaven, and the evils of usury. And were talking pages and pages of the bible here, not one or two little footnotes.

And while, like homosexuality the bible is a little non-specific as to what does and doesn’t count as usury, its not difficult to conclude that what many city traders get up to on a daily basis (short selling, commodity price speculation, etc.) has to count as usury. And we have good evidence of the enormous hardship such activity can create, from causing companies to fail, wiping out people’s pensions and savings, driving up food prices for the very poorest on the planet, etc.

And of course there’s the many wars nations start with one another, flying in the face of Christian doctrine. Yet religions worldwide seem to ignore these inconvenient little facts, doing or say nothing about the crimes of the financial markets and governments against the church, but instead go gay bashing to make up for it.

I mean do they honestly think on the day of judgement when they stand before god and he points out that, say our Republican voting bond trader has broken nearly all ten of the commandments, thou shalt not covent thy neighbours goods, thou shalt not steal, thou shalt not worship a false god (these guys clearly worship money above all else!) at the very least….indeed I’d throw in thou shalt not commit murder (G. W. Bush and Tony Blair’s war in Iraq), thou shalt not coven thy neighbours wife (on grounds that they’ve screwed most of us over enough for it to count as adultery :b) and bearing false witness (as much share speculation consists of essentially trying to drive the price a certain way, this has to count as “bearing false witness against thy neighbour”). I mean is the plan at this point to shrug one’s shoulders and say to god, we’ll at least I ain’t gay or nothin!

In short religion, particularly the Christian types seem to adopt a policy of “selective blindness” to a host of pretty serious crimes against their faith from the rich and powerful, but will quite happily pick on some hapless minority group to compensate for it, how very Christian of them!

We need to do something about Syria

A few weeks ago I predicted that Syria was going to become a rerun of the Yugoslavian civil war. How wrong I was, its much worse than that! Now with yet another huge chemical attack, which seems to have been targeted more at refugee’s (and thus whose only crime was being in the wrong place at the wrong time) than free-Syrian fighters, the conflict has escalated yet again.

As I’ve highlighted before there are many reasons why the West hasn’t intervened and indeed why Western intervention might not be a good idea. But really, were getting to the stage of least worse options. Anything the west could do no matter how silly (arming rebels, airstrikes, giving Putin a wedgie at next international conference, “retiring” Assad…with a smart bomb as a going away present!), even another screw up like in Iraq, has to be better than the current status quo in Syria.

And its not just Syria that’s at stake here. Allowing the Assad regime to get away with using chemical weapons against civilians is setting a very dangerous precedence. Next time some African dictator has a problem with a couple of protesters or an ethnic minority complaining about they’re “rights” or something, the world is essentially sending the signal to him that he can gas them without worry. This has the potential to roll back and see the defacto overturning of the all important Geneva conventions. That is the slipperiest of slippery slopes we’re tittering on the edge of and will almost certainly not lead to the sort of world any of us want to live in.

I mean if you’re the Tea Party type who owns a gun in case the government turns tyrannical (ya a little plastic musket‘s the perfect thing for stopping a M1 Abrams tank or a F-15 at 30,000 ft), I’d say sell the gun and buy a chemical warfare suit and an NBC system. Similarly we may as well sent Osborne around the Hague and issue all the judges and lawyers there pink slips as its clearly pointless having such a thing if the likes of Assad are going to be let get away with it.

More Argy Bargy

What is it about the British, Spanish speaking people and small isolated rocks in the middle of nowhere? Again the UK is in a war of words over some far flung outpost. Again the media (on both sides) seems determined to stoke things up, although one is perhaps forced to consider the possibility that two angry governments on other sides of the world, is likely to be related to the Tory government :b and them having all the sensitivity to diplomatic matters as the UKBA at the Notting Hill carnival.

In response to a “protest” by a small group of Spanish “fishermen” (most of their boats did appear to be pleasure craft), the British respond by dispatching the Royal Navy. I mean that’ll sort the Spanish out ya? You guys do realise that the Spanish have an Aircraft Carrier while the UK does not? Not that they’d need one given the dozen air bases within 10 minutes flying time from the Gibraltar…..just saying mind! |-|

My position? Like the Falklands what exactly either the Spanish or the British want with a small, monkey infested rock on the edge of nowhere is beyond me. While I’ve never been there, I am reliably informed by ex-pats that have, that I ain’t missing much, as its been described to me as the most seedy place on the whole Mediterranean coast. I won’t mind, if it weren’t for the nagging thought that my taxes are helping fund Gibraltar and I fail to see how that benefits anyone back in the UK.

And of course oddly enough there are more Brit’s living in towns like Marbella than in Gibraltar. The Spanish are forever going on about having to pick up the tab for healthcare costs of British retirees and thus one has to question whether they really want Gibraltar back and bring in a load more of them. Personally if I was the Spanish PM and the Brits offered Gibraltar back, I’d probably gamble it away in some stupid drunken bet with Obama, or sell it to some Saudi prince for a few cans of engine oil.

And as for those Spanish fishermen at the centre of this dispute. What the hell are they doing trawling fishing nets through a harbour? :crazy: You have many thousands of miles worth of ocean to fish, yet they choose to do it in the place you’re least likely to catch anything. And its a bit rich them kicking up stink about a little corner of some inlet, when Spanish trawlers are forever invading Irish fishing waters with large factory ship trawlers. The only “support” they need from the Spainsh government is a strait-jacket and transportation to the funny farm.

The Head Hunters of academia

This is a reposting of something on my Education blog.

We had a number of e-mails doing the rounds at work indicating that a number of senior staff in the university were leaving (I was tempted to e-mail the whole faculty back to enquire if anyone wanted to go out for drinks to celebrate 😀 but decided they mightn’t see the funny side!).

Always worrying when many senior management leave at once (the rats abandoning the sinking ship? :-/) but my attention was drawn to another wee statement in both e-mails. That being the manner of the recruitment of said senior staff’s (Dean level and up) replacement.

Apparently the university was hiring a group of head hunters to try and find replacements. One has to ask the question, what the hell for? We’ve plenty of others in the university in senior posts who, while not exactly my favourite people, are more than suitably qualified to take over these roles. They also have the advantage of knowing the university, have been here for decades and thus are clearly committed to the place. They also know (as it were) where the bodies are buried and thus won’t have to take and BS from the more whiny members of staff.

However instead it seems we’ll have some Jonty De Wolfeesqueseagull manager” parachuted in on us. Who, much like the last guy, will fly in, make a lot of noise, crap on everything before flying back out to sea and be forgotten.

Indeed it is also strange that somewhere else in the university several lackies of the Dean were promoted sometime ago. The funny thing is that if junior members of staff like me want a promotion (e.g. from lecturer to senior lecturer) we have to wait for a staff opening to appear and apply for that job, do an interview, etc. But it would seem in the lofty air of the upper floor such mere mortal concerns do not apply. You can simply be prompted salary doubled (a salary the taxpayer pays for I would note, lecturing staff salaries are usually met via student fees these days) with not so much as an ounce of due process.

More corporate that the corporations themselves

Of course this is all too reminiscent of the increasingly corporate style approach of UK universities. They seem to assume that as they are running universities like companies that they should behave more like a corporation, notably paying people like senior VP’s an expensive pay packet and increasingly using head hunters to recruit senior staff. Of course in truth they are behaving more like a cartoon version of how corporations generally behave.

While it is true corporations will head hunt a new senior manager and parachute him in on an unsuspecting division of the firm (in lieu of simply promoting someone else to the job), often companies will do this for very specific reasons. e.g. That unit is under performing (our department is on the up and up, students satisfaction is rising, academic standards are up, etc.) or head office wants to make some major changes such as starting a new product line and have brought someone in who is an expert at that (my impression, students haven’t changed much since I was the other side of the room).

In all other situations, a company will obey the normal rules of promoting the most senior staff member available and triggering a wave of promotions across the division which serves to remind staff of the benefits of remaining loyal to the firm. And again, often companies are more likely to show restrain as regards promoting people to senior positions without some justification, as they know that while shareholders will rarely object to the hiring of a couple of dozen engineers, they will ask questions as to why we suddenly need more senior VP’s to manage a company that’s in the process of downsizing? (surely they’ll ask we should be sacking a few managers?).

However of course, there-in lies the problem for UK universities. A company doesn’t have the department of education paying the salaries of senior staff, it doesn’t have the safety net of the public purse. Instead it has a lot of angry shareholders who’ll kick up a right old stink if they see such carry on.

In short there is a reason why universities are supposed to be in the public sector and a way the public sector bodies are supposed to behave. Not least because a lot of what corporations do tends to be financially risky (and sometimes unethical) and we don’t want universities risking bankruptcy.

Beware of pickpockets….particularly around Downing street!

It has emerged this week that some (clearly a bit dotty) pensioner left some £500,000 to “whoever is in government. Now when I first heard that line, I assumed it meant the money went to the treasury (as is normal when someone leaves money to the state). But then I learnt that the lib dems and tories had simply pocketed it and put it into party coffers. How out of touch can you get? I mean even the Daily Mail is furious (though no doubt they’ll blame the mistake on Nick Clegg!)

Inevitably they’ve since backtracked, realising it looks, as one labour member put it “dodgy as hell”. They’ve tried to blame the executors of the will itself (what’s the bet one of them turns out to be a Tory party supporter?) for “misleading them”. However the very fact that they divided the money on the basis of party membership hints that there was some level of actual discussion at senior party level as to what to do with this cash, which presumably must have involved some queries as to what the will actually said…and if it didn’t then its yet another example of bungling amateurish government at work.

Indeed I would point to my earlier statement, it should have been blindingly obvious what this lady meant. If she’d wanted it to go to the Tories/lib dems I’m sure she’d have said as much in the will. Clearly she was bequeathing it to the nation. But instead they stood by slack jawed as a lawyer forced the money into their hands. And then, under duress they had to sit down and decide how to divvy it up. And if you believe that I’ve got some magic beans to sell you!

I mean I know the Tories/lib dems are running scared and desperate for cash, given that opinion polls show there’s a good change of them being beaten by (of all people) Ed Miliband 88|. But picking the pockets of pensioners ain’t up there with a strategy for winning friends and influencing people.

Not least because it suggests the Tories (and increasingly the lib dems) see no difference between “public money” (that’s our money from our taxes) and their personal wealth.

The Crisis in Egypt

Of course it’s difficult to ignore the growing crisis in Egypt. Regardless of what people think of the coup and the removal of Morsi’s government (not saying I support him, actually he strikes me as a sort of Egyptian GW Bush…just with more Koran thumbing but not quite as dumb). But there’s a right way and a wrong way about going about dealing with protestors. Clearly the Egyptian military has chosen the wrong way.

Indeed images of them using the same tactics as the Israeli army (going after stone throwing youths with armoured bulldozers and tanks) is going to play right into the hands of any extremists. And it’s worth remembering that that there are plenty of hot heads in the Muslim Brotherhood who will use this as justification for all manner of things, including terrorist attacks. As President Kennedy once said, those who make peaceful protest and democratic change impossible, make violent revolution inevitable.

And one can practically hear the sniggers in the Kremlin from here. No doubt, the Russians will argue that there is now no real difference between their backing of the Syrian Regime and its fight against “islamists” and the US providing military support to the Egyptian “junta” as it cracks down on “islamists”.

And my response on both counts is the same, an immediate arms embargo on both Egypt and Syria until both sides in both conflicts go back to the negotiating table. And if that doesn’t get the message across, selective sanctions, in particular of oil imports and exports (no oil, no tanks, nor bulldozers on the streets). If the Egyptians (and the Syrians) are to learn how this much fangled “democracy” thing works, that means showing them that behaviour like this has consequences. Then maybe next time the military will think twice.

Kraftwerk and the rise & fall of industries

The BBC had a programme on the other week charting the rise of German car makers at the same time as the UK’s car industry declined into obscurity. While the UK still makes cars, some 1.3 million of them in fact and there is a substantial industry in the UK that specialises in making individual components for cars (both home and abroad), this has to be compared to where the UK was a few decades ago. By contrast Germany produces 5.9 million vehicles while the Japanese churn out 9.9 million vehicles. Indeed the top selling VW Golf sells 430,000 per year (equivalent to a third of the UK’s entire car production) while Toyota churns out about 120,000 Prius hybrid cars per year (far more cars than any UK manufacturer).

This begs the question, why did the losers in WW2 succeed where the UK failed? How is it that the UK went from being the workshop of the world, to industrial wastelands now inhabited by chav’s and ned’s?

Anyway, in this programme Dominic Sandbrook attempts to answer the question. In part he puts it down to a difference in labour relations. UK car companies tended to be owned by upper class types how tended to have a fractious us v’s them relationship with the working class workers. By contrast in Germany, were union membership rates are higher (indeed in some industrial jobs in Germany union membership is actually compulsory), there is much greater co-operation between unions and the bosses. Both are required by law to meet and consult regularly and work together for the common good of company and workers.

Naturally this meant the Germans lost a lot less time to strikes. However I think Dominic Sandbrook vastly oversimplifies the situation, as it went beyond a few strike days to give the Germans (or the Japanese) the edge.

Part of the secret to the Japanese and Germans success was their willingness to embrace new ideas and technologies. For example one of the key developments in post war Japan was a management technique called Total Quality Management and later a principle called JIT (Just in Time) manufacturing. Both these techniques led Japanese products, which had been a by-word for poor quality and reliability, to become the very opposite (we now associate Japanese products with ultra-reliability and the latest technology). However it required a significant shift in how companies functioned, right from the board room down to the factory floor.

The Germans, once they learnt there was a way to make their factories & products even more efficient and reliable, quickly adopted TQM & JIT. However, the British and ironically the Americans (Edward Deming who had developed TQM was actually and American!) were very slow adopters. In part this was due to management resistance, who didn’t like the idea of an empowered workforce (a key element in TQM & JIT) nor the costs associated with reorganising factories. While the unions heard management say “efficiency” and interpreted it as “half of you’s are sacked” and fought tooth and nail against it.

In terms of technology, when robotic welding was developed (leading to faster and more reliable production as well as more lightweight yet safer vehicles) the Japanese and Germans were again very quick adopters, but the British were very slow, in part due to employee resistance, in part because employers were reluctant to pay the very high capital costs to buy the hardware.

Similarly when modular ship building was developed (rather than building a ship from the keel up, you instead build it modular pieces in a factory which is then assembled into a ship), the Japanese and German yards were quick to implement it while the UK yards were very slow adopters.

Furthermore there was a much greater willingness of German, or Japanese manufacturers to take risks and try out new ideas. For example, legend has it that the Sony Walkman was supposedly dreamt up by an executive at the company wondering if he could listen to music while he was playing golf. This led to a whole new class of portable consumer electronics.

When VW brought out the Golf they were taking a bit of gamble. As they were gambling that people would pay a bit more than the cost of a conventional economy car for something with a decent spec engine and a hatchback boot. As we now know, this gamble paid off and created an entire new market we call the hot hatch, of which the Golf is still one of the best selling examples.

Probably one of the biggest gambles in recent automotive history was the Toyota Prius. While people had talked about hybrid cars for decades and the US government had spent considerable sums on the concept, no manufacturer had taken the plunge. Toyota did and in a big way, spending many billions on the R&D to get the technology right.

Indeed when they first launched the Prius the crucial battery technology was arguably not quite at market level maturity, largely because nobody had ever tried to manufacture and deploy tens of thousands of these types of batteries before. Word around the camp fire is that Toyota lost money (to the tune of several thousand dollars) on every single Prius they sold for the first few years.

However, they capitalised on the knowledge gained and by the time the 2nd generation Prius rolled around they were selling at a substantial profit like hot cakes. And they now have almost every major manufacturer trying to copy them or go beyond the Prius towards fully electric cars.

Meanwhile the US automakers, who stuck with gas guzzlers and (according to some sources) tried to kill more fuel efficient vehicles, have gone bankrupt. Indeed Toyota is now not only the largest car maker in the world, but also the largest car maker within the US (in that they design, build and sell more cars in America for Americans that any other company). And the Germans and their subsidiaries aren’t far behind them.

Of course for every Prius and Walkman we have a Ford Pinto, Minidisc or Betamax. But the point is that German and Japanese companies were prepared to take calculated risks, while UK and American firms became increasingly risk averse, often because they feared the short term consequences of a product bombing and the effect that might have on share prices.

And speaking of share prices, one also has to point to financing as another key reason. German companies tended to develop very close long term relationships with banks and financial institutions. Often the shares in German manufacturing companies are owned by long term investors (such as pension funds) who are looking for steady long term growth. The Japanese tended to form these strange symbiotic relationships with banks and investors creating massive conglomerates, which naturally made sourcing finance for major projects very easy to accomplish. By contrast in the UK, Thatcher’s “Big Bang” led to banks and investors chasing get-rich-quick Ponzi schemes rather than investing in long term growth.

And of course the Euro and Yen currencies played their role. While if you read the Daily Mail, you’d be forgiven for thinking that the Euro was a disaster, the reality is it’s been generally a success (the current difficulties in the Eurozone are I would argue a lack of political leadership rather than a fundamental flaw with the single currency). Part of the reason why Germany is able to churn out so many cars is the relative strength of sterling v’s the euro. Indeed even Ireland, despite our difficulties, now has a higher rate of manufacturing (30% of GDP at present, although it was closer to 40% at the peak of the Celtic Tiger) compared to the UK (about 20% but as low as 15% before the 2007 crash).

And finally that brings us to government policy. The German and Japanese governments have never been ashamed to admit to their support for home industries. However its often a case of “tough love” were the state will provide bridging loans, or underwrite financial guarantees as well as academic research support (from research institutes or universities) but rarely will they provide outright subsidies and generally any support is at arm’s length (the German government has little interest in interfering in the day to day running of BMW). By contrast UK government support for the car industry has varied between treating them as a virtual welfare-to-work scheme under labour to outright contempt and economic sabotage under the Tories.

So there are very good reasons why German industry has thrived while UK industry went into decline. As Dominic Sandbrook mentioned (and Top Gear also brought up a couple of weeks back) we still do make a lot of stuff in the UK, it’s just the companies doing it are owned by foreign multinationals (Tata, BMW, GM, NISSAN, etc.). It is of course important to identify these reasons if further declines are to be avoided, something which many policies put forward by the Tories or UKIP could easily lead too.

We’re not racists but….

Now if over the last few weeks BNP leader Nick Griffin went around spray painting on the walls of London streets slogans telling foreigners to “go home” (wha you mean back to Brixton? :)) ) or Nigel Farrage went wandering around railways stations randomly telling blacks and Asians to “go back to Bonga, Bonga land”. I suspect we’d consider it typical of the bigotry we’ve long come to expect from them….and both would be currently helping the police with their enquiries.

However, it would seem the UKBA can basically do the same thing, by driving around with vans telling immigrants to “go home” and harassing black or Asians in train stations (racial profiling). One has to ask the question, are the UKBA becoming more racist? Or were they always a bunch of bigots to begin with?….

…Or perhaps it’s the enormous pressure the Home Office is being put under by the Tories to bring down net migration figures.

The Daily mail brigade think the UK is awash with immigrant. Actually as I reported before its closer to only about 11% being “foreign born” and actual immigrants represent more like 8% of the UK population. Only a tiny fraction of immigrants (or foreign born) ever claim any form of benefits and there is no link between them and crime. Oh…and contrary to what this member of the Australian racist One Nation Party thinks, Islam isn’t one country! :crazy:

And its not as if British don’t immigrate to other countries. Some Spanish towns such as Marbella have more British living there than in Gibraltar. Go to America, Australia or NZ and you’re tripping over brits. What if everyone else adopted the same policies towards Britain as UKIP or the Tories advocate?

Of course there are a small minority of immigrants who do enter the UK for “less than honest reasons”, however its not as if we’re short of criminals and fraudster Brit’s (just look at the banks ;D). But I worry that in the interest of chasing Tory targets the UKBA is going after easy pickings, generally that being the law abiding visitors to the country and largely ignoring the ones who they should be stopping. After all, its a lot easier to stop someone coming in who enters legally and applies for a visa in advance, than someone who arrives on the back of a lorry or train from Calais.

Indeed the UKBA has been accused of not properly processing those who they or the French catch trying to enter via France (making it harder to trace them if they try again and succeed). Similarly, they failed to perform proper checks at airports back in 2011 in order to meet Tory spending cuts. There’s also the small matter of the so called “Lille loophole” which they are doing nothing about. They have also been accused of failing to check up on 120,000 police tip off’s of possible illegal immigrants and are making no effort to trace an estimated 100 war criminals within the UK (oddly Tony Blair isn’t on this list ;D ).

By contrast consider the pressure the UKBA is putting on Universities. Now the thing is I’d question if we should count students as “immigrants” as this would imply they plan to stay in the UK long term. Most tell me they’ve already got jobs lined up back home. Others tell me that while they won’t mind staying in the UK a little longer after graduation to improve their English and get some work experience, few ultimately want to stay, as in many cases they simply don’t like the UK with its damp climate, boozy street culture and bland food (in which case, stay away from Ireland, we’re wetter, boozier and you can’t get more bland than Irish stew :)) ).

Similarly, UK companies often need to hire professionals from overseas. As I’ve highlighted before in the globalised world business has become increasingly internationalised and companies can’t afford to adopt the same views as the bigot brigade from UKIP. If you need an expert in superconducting current limiters ( a request in a job advert I read the other day) its not as if you’re going to find someone down the local job centre who can do that. No, you’re likely going to have to cast your net a little wider. Of course those same professionals tend not to be tied to one country (much like the many roving British professionals worldwide) so few will ultimately stay in the UK. And it’s not as if well paid and tax paying employees are a burden on the UK’s finances.

Of course the economic implications of harassing professionals or students just so the Tories can make immigration numbers look good, is lost on them. They don’t seem to respect the importance of universities to the UK economy (and how difficult it will be for us to function if we can’t recruit students and staff from overseas). Many UK universities already have overseas campuses, so the danger is they’ll move courses and research overseas. Similarly if companies can’t recruit here, the danger is they’ll move production overseas also.

Meanwhile the sorts who the UKBA should be going after are scarcely being affected. The FSA is now investigating the “bigot vans” in part because it could be considered a tad racist, but also because of the inaccurate claims they made about the number of arrests. They claimed 106 arrests in “your area” when in fact it was total arrests in several districts (so your area seems to cover the whole of the Midlands!) and not all of those were ultimately prosecuted. So in short the chances of an illegal immigrant being caught under present Tory policy is somewhere between slim and zero. Not unless they are willing to spend a considerable amount of money to fund proper border controls (which of course they won’t do as they’d then have to put up taxes).

Meanwhile Liberty took a dig at the Home office by driving around Parliament with a van and advert of their own.

In short all the tory policy is achieving is creating the illusion that the UK’s immigrant issues are being dealt with, keeping Daily Mail readers happy, when in fact they are doing nothing of the sort. They’re merely harassing a lot of law abiding people…many of them British!