OK what is Globalisation? I say it’s subsidy and a transfer of wealth from workers in the West to offshore tax havens. Whilst I cannot deny that workers in the 3rd world have benefited at least in terms of income and other measures they are as likely the beneficiaries of changes in policy in such places as China and India and a great deal of debt much borne by Western States and Western, Chinese and Japanese Banks but more significantly workers and corporates all over the world.
Apple’s products developed with and by the State. Yet they leave Bns offshore to avoid tax. Indeed even on shore countries like Uk and Ireland compete to flatter Corporates with absurdly low levels of Corporate taxation. You will also note how the IMF insists on privitisation a great method for offshoring companies if UK example is any guide. Debt onshored and profit offshored meaning only Govt guarantees prop up companies they sold to friends! You can argue whether tax avoidance is a subsidy but that is semantics and deliberate obfuscation of the point here.
Exports from every country are subject to subsidy whether it’s no tax on shipping and aviation fuel or Export Credit Guarantees. Zac Goldsmith pointed out how Apples in Europe were shipped to South Africa for waxing and back here to be eaten.
The scale of Non Performing Loans in China is another subsidy as the state there essentially buys up losses and keeps producing with consequent damage to the environment and Western businesses. Western Banks that lend the money to buy the constant flow of tat are subsidised and bailed out. In short the world is living beyond its means economically and environmentally. Guaranteed loans by Govt for the polluters like INEOS as the neo Liberals saved Grangemouth is more subsidy. The end result is that large corporates get free money and the state assumes the risk and quite how much capitalism goes on is a question.
Dan Hannan Tory MEP may be statistically challenged but he made a point the EU loves regulation as it is a barrier to entry and the burden falls disproportionately on smaller companies. The response to TBTF (Too Big To Fail) Banks has been to make them bigger and strap even more regulation on the smaller banks. Yet the only way economies can grow is to add even more debt £9 of debt for £1 of growth according to the unreliable Max Keiser – £6 to £1 of GDP (whatever that is) from more reliable sources about China.
In the UK this is especially dangerous as much of the private debt is secured against or borrowed on the back of property wealth. Essentially we have bid up the prices of existing housing stock and debt, and called it growth, GDP even. This has caused the extraction of rent from younger generations and what has this paid for? Further increases in debt.
I really don’t think a PhD in economics is needed to know this is not going to work for the majority of us. Indeed the only way to think it is might work is to have a PhD in neo-classical economics. Experts in a strait jacket of ideology are wrong and obviously so to even us.