Globalisation and its impacts

In a global economy experiencing rapid technical change there are plenty of opportunities to start new businesses, create large and growing companies, exploit skills and talents for a worldwide audience, and generate jobs. A few even manage in their teens and early twenties to become multimillionaires by being internet revolutionaries.The US has been especially good at riding this new wave.

UK sports, singing and film stars benefit from global media exposure, earning fabulous sums as they can now entertain the world, not just the UK. UK bankers, lawyers and business consultants can earn large salaries and bonuses by offering their services to a worldwide clientele. Famous brands offering everything from cosmetics to clothes, and cars to watches can command premium prices from the rich in many countries. Some of the world’s wealth rubs off on the UK economy.

This more globalised world is richer overall than the world of more entrenched nations with more enclosed economies it replaces. National governments have been losing power, as more and more countries join the global marketplace, their people seeking access to the opportunity, the products and the services that the market generates. The biggest change came with the ending of the USSR, followed by the gradual transition of China to a more capitalist model of economic development. When people demand the advantages of the global market, a government’s opportunity to control economic life and information flows is reduced.

This transformation has posed big political issues for many of the countries caught up in it. Given that the active and successful rich will get richer, as they benefit from a much larger market with many more better off people and companies to sell to, how do we take care of thsoe who cannot do that? It has also posed a big political issue about how government is conducted. Given the limitations on any individual nation, should a nation join a major continental grouping, or should it pursue its interests by Treaties entered into with the wider world community?

I wish over the next few days to explore the first of these quesitons. My answer to the second vis a vis the EU is well known and often rehearsed. I do not see why, just because we have to accept limits on the UK government’s freedom to choose placed by market influences, we should surrender even more power to a mezzanine regional government. The world market does limit what we can charge in taxes and what types of goods and services we produce, but that is no argument to give up our still considerable powers of self government.


  1. lifelogic
    April 5, 2013

    Globalisation provides huge opportunities, there is very good cause for optimism but alas we have Cameron’s lack of vision and tax, borrow and waste everywhere with Miliband to come shortly. You just have to dance round the obstacles and huge over taxation that Cameron and the EU mug and inconvenience you with. Better still move away from UK.

    You say “But that is no argument to give up our still considerable powers of self government.”

    “Considerable powers” we cannot even decide how we generate electricity, what pointless house energy certification we do, which people we let in or deport and which people we can offer benefits too. We are also forced into absurdly damaging, gender neutral insurance and pension rules, water and sewage rules and countless other expensive absurdities.

    Did not John Major go on and on about “subsidiarity” droning on about decisions being taken at the lowest possible level. Why is this lowest level nearly always Brussels then? The sensible level for energy certificates is the owner of the house and for insurance premiums the insurer, for employment the employer and employee – not Brussels.

    Reply: I am agreeing with you! I opposed the powers we gave up and want them back!

    1. uanime5
      April 5, 2013

      Given that the Government has little control over EU immigration but has a high degree of control over non-EU immigration you only need to compare the percentage of applicants that are allowed into the UK from these two groups to determine how little UK immigration control differs from EU immigration control.

    2. Disaffected
      April 5, 2013

      Spot on Lifelogic.

      Today we learn Baroness Ashton is allowed to claim £400,000 as a transitional allowance from her EU role when she leaves. £1.3 billion EU contribution increase last week for 2013 budget- what is Cameron doing about this? Of course, the Uk has no right to object only to pay up out of borrowed money . More of the same next year when QMV is fully on line through the Lisbon Treaty he [Cameron] failed us on. Did he speak out about the Cyprus bail-out ie Cyprus not being allowed to hold a vote in its own parliament and at the same time costing the UK a fortune through the IMF and other funding streams? What planet is Cameron on to fight with all his heart and soul to keep the UK in a stealth commie style dictatorship?

      JR is also on another planet if he thinks powers will come back, France and Germany made that point perfectly clear last week. It is entrenched in the EU, once powers are given they cannot be taken back.

      Reply Please stop insulting me. I am trying to sort this out for all of us. If no powers are offered back then we vote to come out.

      1. Roger Farmer
        April 5, 2013

        With the greatest respect John, you know that if there is no referendum and follow up action before the next election it will never happen. Clegg will be in bed with Labour and UKIP will have destroyed the Conservative vote, end of story. All talk of re-negotiation and a referendum in 2017 is smoke and mirrors because you will not be in power. I would submit that our Europhile prime minister knows this and has engineered it because it is exactly what he wants. I accept that at least 100 Conservative MPs believe as you do and want out so lets see you putting DC under serious pressure. If you do not you have failed the majority of UK citizens who wish to be out of the EU which means you have failed democracy.

        Reply: I do not accept your view of the next election as it is far too early to know how it might go, but of course I am continuing to press for the Mandate referendum now.

      2. Richard1
        April 5, 2013

        Disaffected conservatives blogging here should remember that there will only be an opportunity to vote on EU membership in a referendum if there is a majority Conservative government after the next election.

        1. zorro
          April 6, 2013

          Yes, but It is highly unlikely when Cameron starting from fresh with a clear problem requiring a clear solution failed to beat Brown decisively! How would the last three years convince the British public that it is worth trusting them, when they have a more likely choice to get a vote/withdrawal with UKIP?


          1. Richard1
            April 6, 2013

            Cameron seems to be committed clearly to an attempt to renegotiate the EU deal with an in-out referendum. There is no chance of this with a Labour govt or with any coalition including the LibDems. A vote for UKIP at the general election makes a Labour govt or a coalition more likely.

          2. zorro
            April 6, 2013

            I do not call him Cast Elastic for nothing….


          3. zorro
            April 6, 2013

            A coalition of Tories/UKIP would do……


        2. cosmic
          April 6, 2013

          There are reasons other than the EU why people are disillusioned with the Conservatives.

          People don’t trust them or think they stand for anything much, especially with Cameron at the helm.

          Cameron has done something very dangerous. He’s removed the fear of letting Labour in.

          A lot of people believe the Tories have no chance of gaining a majority at the next GE anyway, so better to for what you believe in than throw away your vote and worse, encourage a thoroughly muddled party.

    3. Denis Cooper
      April 5, 2013

      “Did not John Major go on and on about “subsidiarity” droning on about decisions being taken at the lowest possible level. Why is this lowest level nearly always Brussels then?”

      Because that is the level at which decisions can further the process of “ever closer union” required by the EU treaties.

      The latest farce on “subsidiarity” is Viviane Reding’s Directive to impose gender quotas on company boards.

      MP’s agreed with the government that there is no need for an EU law, but she’s going ahead anyway because only six parliaments voiced that objection.

      “Most national parliaments in EU countries say the European Commission should go ahead with a law on female quotas on corporate boards. But six disagree.

      Commission spokeswoman Mina Andreeva told press in Brussels on Wednesday (16 January) the consultation with MPs was not about the content of the proposal, but about “subsidiarity” – the question whether a given problem is best tackled at EU or local level.

      Parliaments are entitled under the Lisbon Treaty to provide opinions on whether proposals adopted by the commission subscribe to the subsidiarity principle. If one third contest, then the commission must review its draft.”

      “The green light by 21 out of 27 national assemblies is enough for the commission to go ahead, with MEPs and member states to thrash out details of the new law in talks in Brussels in the coming months.”

  2. Andy Baxter
    April 5, 2013

    “but that is no argument to give up our still considerable powers of self government. ”
    hahaha you really are having a laugh Mr. Redwood…..just what exactly do you mean by “considerable”?

    I refer you to the lists of EU competencies; in other words the list of areas of power and control the EU claims for itself. and please don’t edit the links that is censorship worthy of North Korean magnitude.

    So first up from the horses mouth so to speak..The EU itself

    another horses mouth, this one a rather impoverished self deluding one with the title HMG:

    and finally from Mr. Hague himself. and never a more revealing self serving piece of utter nonsense have I ever read, with terms of reference to achieve a conclusion of continued membership of a supranational government and I quote the following;

    “Foreword by Foreign Secretary William Hague
    We are committed to playing a leading role in the European Union in order to
    advance our national interest.”

    And this gem

    Membership of the EU is in the UK’s national interests. But the EU needs to reform
    to meet the challenges of competitiveness, a stable Eurozone and greater
    democratic legitimacy. The Government is committed to playing a leading role in the
    EU and protecting the UK’s sovereignty.”

    lets examine “membership…is in the UK’s national interest” really? how so when so many competencies, you know the areas where the EU claims the sole right to govern which include;


    trade which by the way includes the EU’s right under the treaty’s to negotiate global trade agreements on behalf of the EU of which the UK is part of, (we cannot therefore enter into separate trade body agreements) like Norway does via EFTA where it controls its own fishing quotas by its entering into a Joint Norwegian-Russian Fisheries Commission, established in 1975, Norways refusal to enter the EU in 1994 allowed it to do so, by its refusal its able to set its own fishing quotas which were 1million tons of cod from the Barents sea this year thereby preserving its fishing industry not decimating it under the EU fishery policy.

    now this “The Government is committed to playing a leading role in the
    EU and protecting the UK’s sovereignty”

    sadly we gave away our sovereignty the moment we entered the EU so the only way we can protect our sovereignty is by giving notice under article 50 of the Lisbon Treaty and leaving, there is no re-negotiation possible because the EU once it has claimed a competency will defend it and never give it back.

    again from the horses mouth in B&W for all to see and its called “the Acquis Communauitaire”

    Reply EWhich is exactly why I want a new relationship with the EU and a referendum! I do not support all this EU government – surely you have worked that out by now.

    1. Brian Tomkinson
      April 5, 2013

      Reply to reply,
      What we haven’t worked out is what you want that new realtionship to be. I don’t want a new relationship as a member within the EU but as an independent self-governing country outside but trading with the EU and the rest of the world. Many, I think, believe that your party and its present leadership will do anything to keep us in the EU. The bottom line is would you want to leave the EU? Cameron has given his answer – a resounding ‘NO’. What is yours?

      1. lifelogic
        April 5, 2013

        Cameron will campaign “Heart and Sole” not to leave and become a Greater Switzerland, yet will not even give us a single sensible reason why!

        That even before he knows the deal he can negotiate (some years after he has been evicted). He has caved in on press freedom and could not even get the constituencies sorted. PR spin, cast iron (and IHT) cons are his thing, not negotiation.

        1. zorro
          April 6, 2013

          Soul…….even though he might be a wet fish!


    2. Bob
      April 5, 2013

      ” I want a new relationship with the EU “

      Nice idea, but completely unrealistic. Better to pull out and negotiate as an independent nation, where we can agree to things that suit us, and not agree with things that don’t.

      Listening to a discussion on R4 this morning where a couple of politicians were pontificating about how many people were likely to come in to the UK from Romania and Bulgaria in January. It occurred to me that our government should not need to play guessing games on the issue, but rather they should decide how many people would be allowed to come here and on what terms. We cannot do this while immigration is under EU control.

    3. ian wragg
      April 5, 2013

      As you are well aware John, a looser arrangement with the EU is not possible. France and Germany have just refused to discuss alternative arrangements with the foreign office and dismissed them as ” a uk political excercise”.
      With the current bankrupting of the PIIGs and Cyprus, even you must admit that negotiations with Brussels are hot air.

      Reply No, I do not, but were that to be the case then we can all vote for Out in the referendum that follows your hopeless negotiations.

      1. lifelogic
        April 5, 2013

        This is in the referendum promised by someone whose cast iron promises are proven totally worthless and several years after he will clearly have left office anyway, I assume.

      2. Leslie Singleton
        April 6, 2013

        Blimey John–You talk about the referendum as if it were really going to happen, which is disingenuous at best because I doubt that you believe it will. What do the bookmakers say I wonder. In any event, why not four decades instead of mere years away?

        Reply Elect a Conservative government in 2015 and there will be both a renegotiation and a referendum. Elect a Lib/Lab majority and there will be neither. That is the simple choice.

        1. Leslie Singleton
          April 6, 2013

          Comment on Reply–Hardly a certainty and that’s even in the unlikely event Cameron wins, for even if he wins he will find a way to slide out of it–One cannot simply believe at will and so many of us will never be willing under any circumstances (logic or no logic) to vote for him. If UKIP go hell for leather on welfare they, UKIP, could do outstandingly well.

          Reply: All UKIP can do is help Lib dems and Labour keep a federalist majority in the Commons. If Cameron wins you can rest assured we Conservative MPs will keep him to his EU promise, and will have a majority to enforce it.

    4. stred
      April 5, 2013

      Don’t forget energy policy- and the DECC follies, banking regulation coming, transport- HS2, and equality- gay marriage etc.

    5. uanime5
      April 5, 2013

      Given that the EU is a larger marketplace than the UK and has more financial power it’s highly like that trade agreements negotiated by the EU will be more favourable to EU countries that agreements that the UK could get if we negotiated alone.

      1. Nash Point
        April 5, 2013

        That really is clutching at straws. Go to Richard North’s EU referendum blog and read how Norway has negotiated its cod fishing quotas with Russia in the Barents Sea. How pleased they must be not to have surrendered their fishing rights to the EU.

        1. uanime5
          April 6, 2013

          The Barents Sea is north of Norway and Russia. So given that Russia and Norway are the only countries that are going to fish in this part of the sea it’s no surprise that they negotiated a fishing quota.

          Also Richard North’s blog fails to explain whether this agreement was beneficial for Norway or whether Russia was able to force Norway to accept a poor deal.

          1. David Price
            April 7, 2013

            Not a given since France, Germany, Spain and the UK also fish there.

      2. Leslie Singleton
        April 6, 2013

        unanime–I do not agree with you but in any event if it were only trade agreements it wouldn’t be so bad (still very bad, mind) but of course it is not, not by a long chalk.

    6. Denis Cooper
      April 5, 2013


      “The single market is one of the greatest forces for prosperity the continent has ever known and that is why we will continue to push an ambitious programme of deepening the single market while seeking to reduce unnecessary burdens in EU legislation.”

      The single market has been one of the greatest forces for destroying our national democracy through the abolition of national vetoes and the extension of qualified majority voting, and its costs have exceeded its economic benefits; yet Hague still thinks the magical answer is to have more of it.

  3. Ben Kelly
    April 5, 2013

    “Given that the active and successful rich will get richer, as they benefit from a much larger market with many more better off people and companies to sell to, how do we take care of thsoe who cannot do that?”

    This line may be partially correct but I submit that it should contain the rider that some of the active and succesful are so due to sharrp practice cronyism and corruption. For the vast majority of the populace globalisation has merely introduced cheaper competition for their labour services and increased the amount of worship at the altar of mass consumerism.

    I would massively advocate self sufficiency and protectionism (we would of course need to tackle idleness in many quarters) and would gladly swap the potential small drop in my financial standard of living for the increase in my quality of life. Globalism supports business not individuals.

    1. oldtimer
      April 5, 2013

      The effect of globalisation is to reduce the cost and widen the availability of a vast range of goods and services. That is self evident to anyone who travels the world.

    2. Edward2
      April 5, 2013

      In your last paragrapgh you called for self sufficiency and protecionism.
      I’m not sure this is the way to go.
      I you look what this policy did to East Germany compared to West Germany and then look at the huge improvements in the standards of living of nations like China, India and other Far East nations recently, you can see that globalisation is unstoppable and may well be benficial to us anyway.
      With protecionism and self sufficiency we would need to return to a 1960 style state command economy, with restrictions on travel, currency exchange and import tariffs which would make imports more expensive.
      It is also assumed that nations we impose tariffs on would still welcome our goods into their markets without retaliation, which I feel is unlikely.
      Speaking as someone who has been made redundant twice due to global competition, I am tempted, but the proper answer is to try to compete and take advantage of the increased opportunities.
      And no Uni, I dont mean sweat shops and pittance wages for all in the UK in order to compete, before you start!

      1. Ben Kelly
        April 5, 2013


        I disagree with your points about India and China (and East Germany was a command economy not a sufficient one).

        China and India take advantage of globalisation to export more than they import and the extent to which they import is that which they can take advantage of. We on the other hand are mature and uncompetitive, lulled into false security by the low price of globalisation while our companies got rich on the margins, The low labour costs available in other parts of the world are a turkey that has come home to roost in a big way (tax credits and mass unemployment thank you very much). The globalisation opportunities for us are not the same as for third/new world economies.

        Old timer – if you had journeyed the world instead of travelling it you would be aware that the most satisfied communities are the ones that are self sufficient. Once they get the taste for stuff they become unhappier. I have seen the transformation in more than one distant place.

        1. oldtimer
          April 6, 2013

          First I made no comment about whether communities that experienced globalisation were happier or not – merely that the effect was to reduce cost and inprove availability of a wide range of goods and services. That is incontestable. I do observe that the latest country to experience industrialisation and participation in the global economy is China and that millions upon millions of Chinese want to participate. It certainly is a messy process, but at heart it is driven by the determination of those Chinese to improve their standards of living.

          Secondly you do not have a clue about my experience “travelling” the world – nor do you explain how “journeying” is different. It so happens I have both travelled and journeyed the world for nearly 65 years, covering all the main continents both for work and for pleasure. It has provided me with plenty of observational evidence of the colossal rate of change that has occurred throughout the world during that extended period. That evidence is that they want to continue to improve their standardsof living and access to more and better goods and services.

          1. Ben Kelly
            April 6, 2013

            Old timer

            Interesting that you take issue with my querying your travel experience yet in your original post “evident to anyone who has traveled the globe” query my own.

            My first post was about happiness being more important than standard of living. Your post was about increasing availability and prices.

            I do not argue that this happens, I just feel it is not worth the cost in quality of life.

            We differ.

      2. uanime5
        April 5, 2013

        While the USSR did engage in self-sufficiency and protectionism Western Europe and the USA also engaged in this so they wouldn’t need to trade with the USSR. I’d say that the improved standards of living capitalist countries was mainly due to increased competition, which gave companies more reasons to innovate in order to produce better products. Though the USA did spend large amounts of money in West Germany and especially West Berlin to improve it and annoy the Soviets.

        One point about globalisation is that there is evidence that the Romans were purchasing silk from China. So globalisation has to a degree always existed. Though better communication technology has made this process easier.

        1. Denis Cooper
          April 5, 2013

          Nonsense, there’s no way that the Romans could have been trading with China before the EEC was invented to negotiate the trade deal.

          Just as nobody from this country ever travelled to the continent before 1973, except for the occasional military purpose of sorting out their latest dictator(s), and nor was there any trade.

          Get your story straight!

        2. Richard1
          April 5, 2013

          Excellent post. Are you joining us on the Right?

      3. David Price
        April 5, 2013

        In my experience protectionism is precisely what is practised by other countries, developed and developing, while the cost of our openess is lost jobs, investment and being bled dry by foreign owned utilities.

        1. zorro
          April 6, 2013

          Exactly, the only reason China/India are booming is because we allow it to happen. We give them access to our markets and they limit our access to their markets. We allow anyone to come and buy property here and he don’t……Globalism is about promoting the power of international corporate interests at the expense of national ones.


    3. outsider
      April 5, 2013

      “Given that the active and successful rich will get richer … how do we take care of those who cannot do that?”
      The key point is that “the rich” will always be a small minority. So who is “we”? It must be the vast majority of the people , so the issue is really how do we look after ourselves not about how the majority (or the state) looks after that other minority “the poor”.

  4. APL
    April 5, 2013

    “In a global economy experiencing rapid technical change there are plenty of opportunities to start new businesses, create large and growing companies, exploit skills and talents for a worldwide audience, and generate jobs.”

    But only if you have the inside contacts among the political elite and share their obsession with tax farming. If your project is a windmill, you’re in.

    Advertised today ‘Cultural services manager‘ £49 – £51K.

  5. alan jutson
    April 5, 2013

    Power is moving away from Governments.

    Yes it is.

    Other than being able to start or join in Wars at will, their ability to tax as they like is now being undermined by the ease with which individuals and Companies can move their assets/accounts and tax liabilities to anywhere they choose.

    Many have found that small office in a tax friendly location can work wonders for the balance sheet.
    Others have found that the alternative economy has some benefits.
    With business now being able to be conducted from almost anywhere in the World, wealthy individuals can move about at will.

    Perhaps the solution is to recognise that people do actually spend their own money in a far more cost effective manner than any government, many of which are corrupt either morally of financially, or even both.
    Thus the more sensible governments will begin to recognise that less punative levels of tax, will in fact produce more income than excessive ones.

    When a government loses its power to suck money out of its people and its businesses, then they automatically lose some control.

    The days of the Socialist dream where all are equal, and all is provided by the State are numbered, because the people can no longer afford it, and the big contributors are kicking against it.

    1. uanime5
      April 5, 2013

      Perhaps the solution is to change the laws to prevent companies off-shoring their profits. That way if companies want to have branches in profitable locations they would have to pay the tax rates.

      1. alan jutson
        April 6, 2013


        Yes your solution would work if every country in the World agreed a set rate.
        Somehow I do not think that will happen.

        1. uanime5
          April 6, 2013

          Alternatively the UK create new tax laws that specifically apply industries that cannot easily leave, such as most of the services industry which has to remain in the UK to sell their products in the UK.

      2. outsider
        April 6, 2013

        Not really, uanime5. It is far more common, I would suggest, simply to have all your debt in countries with high rates of profit tax. That is, in my experience, the main way that foreign ownership of UK business has cut corporation tax receipts.
        The way round both problems is to have foreign ownership rules, as Australia has done, or administrative measures, as in China, to oblige global companies to have domestic partners. Not easy for the UK (or any other EU member) even if we wanted to. And there are counter arguments.

    2. Edward2
      April 5, 2013

      An excellent post Alan, which gets to the real challenges facing national Governments in this developing global age.

  6. Chris
    April 5, 2013

    If we weren’t part of the EU, we could have our own seat at the negotiation table in many of these global organisations, as Norway does, and influence policy at a much earlier stage (as Norway did with its fishing industry). As it is, the EU has one seat and this represents all the interests of the EU member states, and certainly does not reflect the UK’s individual interests. Excellent articles on this on the eureferendum blog, by Richard North.

    1. uanime5
      April 5, 2013

      It you don’t know what these global organisation are then how can you be sure that the UK doesn’t have a seat in them or that the EU’s vote doesn’t count for more than Norway’s vote?

  7. Mike Stallard
    April 5, 2013

    “How do we take care of those who cannot do that?”
    I think this kindly thought needs examining.
    Richard Dawkins and his many, many followers love talking about Darwin driving out the idea of God. So why not let us put it into practice?
    Let the strongest survive and the weakest go to the wall so that the human race can thrive properly! We ought, surely, to rejoice when old people die alone, and when poor children starve naked on the streets as they pick through the rubbish? This, after all, is what goes on in parts of Africa, India and Asia. We call it progress. And as these failures die off, we are, are we not, saving the planet by cutting back on wastage?
    Oddly enough, nobody seems to follow this train of thought through though…..
    What it is strange is that nobody is paying attention to the Christian Church. We have motivation, you see. We know why we ought to help the poor. We are the poor. On the tiniest of financial margins, we can do a hell of a lot and are doing just that, hoping nobody will notice.
    Meanwhile governments slosh money around, make huge statements to prove how they very sincerely care (Mr Balls on TV over the Welfare State yesterday was especially moving), and then get it almost (but not completely) right. They could very well be just the wrong people to look after the poor, actually.
    Myself, I was a teacher and have watched, in despair, as the State run Education Sector has fallen farther and farther behind the independent, largely Church run schools. I am told the same thing has happened with hospitals (BUPA of course is not overtly Christian). Christopher Booker in the Telegraph says that the Social Services are the next Big Scandal (Christians lost out here ages ago).
    “How do we take care of those who cannot do that?”
    I think this kindly thought needs examining. I really do. We are getting it badly wrong.

  8. Iain Moore
    April 5, 2013

    “The US has been especially good at riding this new wave.”

    I don’t believe so, the US middle class have seen their salaries stagnate, if they are lucky, over the last few decades.

    The US like the UK, two countries who have been slaves to the market and globalisation , have seen massive gulfs opened up between a small very privileged sections of their societies and the rest.

    The US dream is no longer a dream but a mirage for the majority.

    1. zorro
      April 6, 2013

      Indeed, the gameplan is the impoverishment of the majority to enrich the 1%…..


  9. oldtimer
    April 5, 2013

    I agree with your argument. It is unfortunate that this and the previous government are committed to policies which inhibit or preclude participation in the global economy – its energy policy being a prime example. I also note that the coalition spoke with disapproval, in its National Security Strategy Published October 2010), of the failure of the Copenhagen treaty. Does it still feel that way?

  10. Brian Tomkinson
    April 5, 2013

    “The biggest change came with the ending of the USSR, followed by the gradual transition of China to a more capitalist model of economic development.”
    How about the ending of the EU which seems intent on concentrating more power to its centre?

    Reply That does n ot yet seem to have happened!

    1. Roger Farmer
      April 5, 2013

      If the EU is not concentrating its power to the centre, then who was it that blackmailed the Cypriot Government to resort to theft. Socialism spends other peoples money until it runs out. Frau Merkel has taken it a step further by demanding it’s theft. The centralised EU will not stop until it has the whole of Mediterranean Europe up in arms. The EU is (very-ed) dangerous and it is about time all of you in the Westminster debating society woke up to this.

      1. uanime5
        April 6, 2013

        Given that Cyprus needed a bailout because the banks ran out of money it seems that capitalism is the first to run out of other people’s money.

  11. James Reade
    April 5, 2013

    “Given the limitations on any individual nation, should a nation join a major continental grouping, or should it pursue its interests by Treaties entered into with the wider world community?”

    Indeed, your readers ought all to be well aware of how you’ll go about answering this question, especially since you’ve already begun.

    The less politically slanted argument would be: Yes, if by doing so, that country can gain in the global marketplace.

    Yes if by doing so, their bargaining power is increased and hence ability to strike acceptable trade deals is increased.

    I don’t know about you, but if I were a country like China, Brazil or the US, I’d more likely listen to trade envoys representing 500m customers rather than 70m. I’ll be interested if you try to address that issue in your forthcoming posts on this – why would the UK have more bargaining power than the EU does? What would it need to do in order to get that (e.g. drop other strings attached that the EU adds)?

    1. Edward2
      April 5, 2013

      James, another way of looking at it is to consider if the UK is currently gaining much from being a member of the EU as I am sure Cyprus, Spain, Greece etc, must also be considering.
      Internal trade is reducing for member nations and I don’t hear of any recent world trade deals being signed by the EU with China Brazil USA which will greatly benefit the UK.

    2. Chris
      April 5, 2013

      With regard to your last paragraph, see the excellent article by Richard North on where he demonstrates how Norway has far more power in negotiations than the UK does as it has an individual seat at the negotiating table of various global organisations, whereas the UK does not. Instead, because it is part of the EU, it is “represented” by the EU viewpoint, which does not necessarily stand up for the UK’s specific interests/requirements e.g. with regard to fishing.

      1. uanime5
        April 5, 2013

        Firstly if the decisions have to be unanimous or are decided through majority voting then Norway cannot override the wishes of the EU.

        Secondly while Norway may influence the “Codex standards” which are the basis for EU law has no control the final outcome. So the EU parliament could quite easily make changes that don’t benefit Norway and Norway would have means to override these changes.

        So the “Norway option” will not give the UK more power over EU law.

        1. Mark
          April 6, 2013

          But since Norway isn’t formally part of the EU, they can walk out of EU laws any time they choose. That’s a powerful weapon, especially as they aren’t dependent on the EU for funding.

    3. cosmic
      April 5, 2013

      One reason is that agreements made for the whole EU may be useless for the UK, or worse, completely against our interests.

    4. David Price
      April 5, 2013

      In this era of 24 hour trading and global communications why should we join with the local continental grouping that we have very little in common with. Why not be part of a more distributed group of Anglo Saxon cousins or even the Commonwealth?

  12. John Eustace
    April 5, 2013

    And what measures can or should be taken to prevent countries like Ireland collecting their low percentage in corporation taxes on business that really should attract tax in the UK? To take a local example all of the business that Microsoft conducts in the UK through it’s Irish office.
    Where do UK government purchases of IT licences get booked by the likes of Microsoft and Oracle I wonder?
    Can corporation taxes be harmonised across countries, or should the tax be levied on sales, or should it be abolished completely?
    At present it seems only small businesses like my one man band pay the full tax – and even I should probably be booking a trip to the Bahamas or Bermuda to explore the possibilities!

  13. Robert K
    April 5, 2013

    To risk repeating an old trope, the world needs less government, not more. I already pay tax to my parish council; district council, county council, UK national government and the mezzanine (nice phrase, JR) EU government. The last thing I need is for some supra national governance on top of that.
    The private sector looks at globalisation as an entirely positive thing, whereas national governments remain stuck in notions of 20th-century regional rivalries. Companies based in high-wage locations in western Europe have relocated low-value-added manufacturing capacity to low-wage locations. This is bemoaned by western governments who see countries such as China as rivals for global power. Lefties condemn multinational companies for “exploiting” workers in low-cost location and demand global regulation.
    This ignores the fact that left to its own devices, the global free market – not the mercantalist model that we suffer today in this country – is the ultimate force for prosperity. As regions such as China and India are lifted out of poverty their newly prosperous peoples become consumers, as well as labour providers. This amplifies the cycle of prosperity. Imagine the potential prosperity of Africa, if its corrupt national governments were replaced by a true free market.
    The more global the free market becomes, the less powerful any one national government becomes. To me, this is an entirely good thing – it was nationalism that destroyed world peace in the 20th century. Ideally, governments today should recognise that the free movement of good, capital and intellecutal capital on a global scale should be welcomed, not feared. From a UK perspective, that means the state needs to retrench – we get out of the EU and we reduce the scale of national government leaving ultra-localism as the logical scale of governance.

    1. forthurst
      April 5, 2013

      “it was nationalism that destroyed world peace in the 20th century.”

      I agree: instead of resisting, nation states should have handed over the keys when Comintern came knocking, and then handed over their ‘bougoisie’ for special treatment, just like in dear old Bolshevik Russia. Why resist when the forces of internationism and globalism are so benign; they were, after all, originally bankrolled by Wall Street, surely one of the major forces for good in the world? Why, aren’t they now assistng us through their ‘think tanks’ by bankrolling research into ‘global warming’ and the promotion of cultural enrichment through multiculturalism and ‘gay marriage’?

    2. uanime5
      April 5, 2013

      The private sector values globalisation because it is profitable, not because it will benefit the people living in these countries. So these companies have no objections to outsourcing thousands of jobs to the cheapest locations, regardless of how much it reduces prosperity in the the countries that have huge job losses. As a result globalisation brings far more prosperity to private companies than ordinary people.

      Also the UK hasn’t used Mercantilism for several centuries. I guessing that you don’t know what Mercantilism entails, which is why you were unable to provide any evidence regarding why you think the UK is practising Mercantilism.

    3. Denis Cooper
      April 5, 2013

      “Ideally, governments today should recognise that the free movement of good, capital and intellecutal capital on a global scale should be welcomed, not feared.”

      You’ve forgotten the fourth fundamental freedom that the EU lumps in with the freedom of movement of goods, services and capital, which is the freedom of movement of persons.

      Because apparently human beings can be regarded as being much the same as goods, services and capital.

    4. Edward2
      April 5, 2013

      I agree Robert K
      I too noticed JR’s excellent phrase “mezzanine Government which I have never heard before.

  14. Gary
    April 5, 2013

    protectionism makes everyone poor.
    Instead of trying to compete making cheap widgets with people earning a dollar per day we have to find niches where we specialise with natural barriers of entry like developing niche, hard to acquire advanced skills. That is called division of labour, or specialization, and that is mutually beneficial to all. Protectionism is the opposite.

    And banking under the present fist,debt based inflating system is not sustainable. If we are trying to use this as our niche we are headed for the poor house. Unfortunately our govt seems to know nothing else, everything it does is to try and keep this system on life support. See the latest housing underwriting budget, this is another financial sector bailout in thin disguise.

    1. David Price
      April 5, 2013

      Niche areas requiring advanced skills? Do you mean areas such as pharmaceuticals, computer and telecommunications technologies, electronics and aerospace? Areas that involve extensive education and prolonged investment in R&D. Areas so strategic that we shouldn’t simply give the IPR away?

      Too late.

    2. uanime5
      April 5, 2013

      You seem to be somewhat confused regarding what different terms mean. Allow me to explain them.

      Protectionism: restricting trade between states, usually using tariffs or quotas. So if the UK was using protectionism we wouldn’t need to compete with people earning a dollar per day because they either wouldn’t be allowed to sell their products in the UK or UK tariffs would increase the price of their products to prices that would be similar to UK products.

      Barrier to entry: something that prevents people or a company entering a market, such as the capital cost of a factory. Strictly speaking the UK wants other countries to have high barriers to entry so that companies can’t leave the UK.

      Division of labour: having people specialise in specific tasks. This has nothing to do with advanced skills as people can also specialise in rudimentary skills. The important thing is that the worker focuses on repeatedly doing one task, rather than many.

      Competitive advantage: an advantage a person, company, or country has that others do not. So Germany has a competitive advantage because they have a large number of skilled engineers. I believe this is the phrase you were looking for.

  15. Gary
    April 5, 2013

    why would a company not prefer getting one export permit that gives it entry into a market of 400 million of the richest people in the world, rather than have to negotiate permits for 27 individual countries to gain access to the same people ?

    plus, there is nothing preventing any of those 400 million people exporting as they see fit to the rest of the world.

    I cannot see the eurosceptic argument.

    The only possibility is that they are water carriers for The City , to protect its banking monopoly from moving to Frankfurt. Well, judging by the present banking catastrophe, maybe we should present it on a plate to Frankfurt as a smelly “gift”

    1. A different Simon
      April 5, 2013

      Gary ,

      As you may have seen I’m no fan of finance capitalism or the City of London (with the exception of Lloyd’s of London) .

      One of the great delusions , even with the recent evidence from Cyprus , is that the EU is somehow different and not run by the very same global finance houses and transnational corporations which run the UK and US .

      The Eurosceptic argument as far as I am concerned is a social one more than an economic one .

      Some of us want to live in a country where we can be judged by a jury of our peers , where habeus corpus is observed and we have personal freedoms including freedom of speech .

      I accept that those things may not make sense from a financial perspective but they are priceless to me .

      1. Gary
        April 6, 2013

        But we don’t even have the advantage of habeas corpus here anymore, they can arrest you without reason and are proposing to have secret trials where you may not even know what you are charged with. Where are these vaunted democratic freedoms ? Add far as I can tell all political choices offer more state spending, more bank bailouts, more money printing and less freedom. We may as well be in the EU and get the crumbs of economic benefit,

    2. Denis Cooper
      April 5, 2013

      But then you’re not noted for seeing the democratic argument either.

    3. Edward2
      April 5, 2013

      ” I cannot see the Eurosceptic argument”
      I suppose the question is … will the EU provide us with a better or worse standard of living in the future?
      Its promising much and many say in this increasingly global world we need to negotiate from within the power of the bigger EU framework, but currently it is providing many of its member nations rising unemployment, reduced inter member trade and reduced standards of living.

    4. Ben Kelly
      April 5, 2013

      “Instead of trying to compete making cheap widgets with people earning a dollar per day we have to find niches where we specialise with natural barriers of entry like developing niche, hard to acquire advanced skills. That is called division of labour, or specialization, and that is mutually beneficial to all. Protectionism is the opposite.”

      Nice idea but others will always park their tanks on our lawn. If our companies can not compete with each othet nationally to drive down prices. I despair of them being able to compete globally. A little protectionism using duties to level the playing field may make manufacturing attractive in this country again and economies of scale will then kick in to drive competition and prices. At present we are funding the rise of others and deriving little benefit other than more possesions. By we I mean individuals not corporations.

  16. Kenneth
    April 5, 2013

    John, I do not accept the implication behind your comment “the rich get richer”.

    Surely, in a free market, the rich cannot get much richer as competition will always kick in.

    If the rich get their hands on the levers of power, then they can protect themselves from the market as landowners did 200 years ago or large corporations and quangos do today.

    What they both had in common was an ability to influence lawmakers, whether they were the monarch, Parliament or Brussels.

    If markets are perverted in this way, the result is the same, whether we have socialists in charge or capitalists: a few very rich and many very poor.

    As far as globalisation is concerned, am I being simplistic when I suggest that the best trade deal is “we will sell to you and you sell to us”? I think the back of a fag packet will do the job.

  17. cosmic
    April 5, 2013

    The effect of the EU is far more pernicious than you seem to believe. We have a system of governance which is completely in tune with it, and seeks to distinguish itself by taking the lead. There’s ample evidence of that, e.g. volunteering for impossible emissions targets and not taking advantage of quite legitimate opt outs.

    The EU has a cultural influence which reinforces a direction our establishment is more than ready to go in.

    It’s naive to believe that could be altered without cutting the umbilical link between Westminster and Brussels.

  18. Alte Fritz
    April 5, 2013

    The answer in this country is to use our power over our economy to promote the availability of work for those who will never join the rich, that is to say, most people. What one does in relation to other countries is more questionable on many grounds. Is it our responsibility to address the plight of Pakistanis who live on 30 pence a day? We provide aid to a country’s whose elite has opted out of tax and where there is a suggestion that aid money goes to buy votes for the PPP.

    The obvious danger to other countries of people being impoverished is that they migrate to find better conditions at any price.

  19. sm
    April 5, 2013

    Its capital versus labour in a global economy and capital has proved more adept at capturing the economic system.

    The world economy has been financialized and debt interest has been used to asset strip economies, the weaker ones first. Never do the lenders seem to take the losses they deserve. Why not? The losses are being socialized to a point of collapse.

    We don’t have capitalism and competition. We have barriers to entry, protected interests, distorted markets which all seem to favour the uber wealthy.

    Double Dutch, Irish Sandwich. Multinationals.Offshore, trust funds, legal secrecy and anonymity

    The inequalities are causing the instability. No jobs = No real demand except via social tax funded redistribution.

    Now which French MP had a previously undisclosed secret account? Could that be possible with the great and good in the UK?

    Why was the Liechtenstein disclosure facility set up? How many publicly responsible figures have taken advantage of this and remain in positions of power?

    Compare that to the treatment of (the little people) someone who does not purchase a TV license when required? or small businesses.

    We do need a flat tax with a robust GAAR and US style citizen/resident based tax.
    And stop discriminating against residents who are domiciled here versus non domiciled residents. We should be ensuring that tax is paid somewhere!

  20. David Price
    April 5, 2013

    One aspect of gloablism we were “sold” is that the low value jobs go East and the products we need supposedly get cheaper while we were supposed to grow the high value technology jobs and business in our economy.

    The problem is that hasn’t happened. On the one hand protectionism is rife all over the world, including China, India, Germany and the US. On the other hand the IPR developed in the West as part of the “high value” activities has leaked extensively to the East so now the developing countries are focusing their competitiveness on these high value areas while inhibiting trade in such things from the West (eg pharmaceutical patents in India). They are reaping the benefits of our R&D whilst never having invested in it.

    The cheap imports aren’t so cheap when you consider the cost in lost IPR, jobs and business investment. Meanwhile the only people doing well out of this situation are those who don’t create these technologies and IPR but simply trade in them. I stopped working in commercial technology partly because of this and I no longer invest in UK technology companies as no one takes protection of IPR and the UK’s STEM capability seriously, least of all the politicians and financiers.

    1. Mark
      April 6, 2013

      Indeed, they encourage its export by educating overseas students in STEM subjects while hobbling our own schoolchildren’s education to the point that they are no longer adequately prepared for those university courses.

  21. muddyman
    April 5, 2013

    You do not support EU Government JR, BUT by supporting this coalition Govt. you ARE. – switch to UKIP and take a few with you!

    Reply I vote against measures transferring power, money and responsibility to the EU, I do not support them. I was elected as a Eurosceptic Conservative and will keep my word to my electors, who rejected UKIP decisively in 2010 when they had the chance to vote UKIP.

  22. uanime5
    April 5, 2013

    UK sports, singing and film stars benefit from global media exposure, earning fabulous sums as they can now entertain the world, not just the UK.

    They may earn fabulous sums but they provide few jobs and can afford to avoid a lot of tax. So how exactly do they benefit the UK?

    UK bankers, lawyers and business consultants can earn large salaries and bonuses by offering their services to a worldwide clientele.

    Only if foreign companies are willing to give them a job, rather than give this jobs to someone in their own country with similar levels of experience.

    Also lawyers can’t offer their services worldwide because every legal system is different, so their knowledge of the law in one country is useless in another country with a different legal system.

    Famous brands offering everything from cosmetics to clothes, and cars to watches can command premium prices from the rich in many countries.

    These goods often command a premium price because they’re considered luxury items; and they’re considered luxury items because they’re so expensive that only a few people can buy them. As a result you can never mass produce luxury goods, so there will only ever be a small number of jobs available due to the production of these goods. Though there will be a higher than average number of marketing jobs available as the product’s image is more important.

    The world market does limit what we can charge in taxes

    While this is true it would be misleading to claim that companies will always locate where taxes are lowest. If a company needs access to certain markets, certain natural resources, or access to employees with certain skills then they often have to go to a country with high taxes. This is why Germany has a successful economy despite their high taxes.

    April 5, 2013

    Just reminding your readers of my prediction that a large Italian Bank will pull the plug on the Euro. My prediction is more specific. That a clerk around 3 o’clock will pass an alarm up the line that a bunch of swaps means the bank is essentially bankrupt.

  24. Lindsay McDougall
    April 6, 2013

    How far are we away from having completely free trade worldwide? The impediments are non-floating currencies, tariffs, quotas and other non-tariff barriers, state subsidised dumping. Any others? Is there a name and shame list?

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