Friday, March 09, 2007

Creating more jobs?

From the Organisation for Economic Co-operation and Development:
"13/02/2007 - With a number of the world’s most advanced countries finally shaking off the sluggish economic growth of recent years, now is the time to step up, not slacken, the pace of reform, according to the latest edition of the OECD's annual Going for Growth report. In a preface to the report, the OECD's Chief Economist, Jean-Philippe Cotis, cautions that cyclical buoyancy in continental Europe and Asian OECD countries must not lead to complacency. “Governments should resist the temptation to ease up on reforms aimed at boosting productivity and creating more jobs”, says Mr.Cotis."

I understand that the UK is now a knowledge-based economy and that job creation is a key factor in the immediate plans for our country and that these are to be 'information-based' jobs. It's possible to see such new jobs coming into existence all the time, in the form of increased public spending, more officers to develop and police the various burgeoning new departments and aspects of social policy, but... what I don't understand is this:

Where exactly is the money coming from to pay for it all?

Our country no longer seems to make real things to sell at home or abroad. The new jobs being created don't seem to be exporting anything, either material or otherwise, nor producing anything for either domestic or foreign markets to buy. They seem to be mostly jobs to be paid for from public expenditure.

I can see why it's desirable for governments to have most of us working and paying taxes. I just don't get where the actual real money is coming from in the first place.

Maybe it really is all a house of cards? Governments spends taxpayers' money on job creation projects and salaries; new employees pay taxes which contribute to governments creating yet more new jobs, etc.. Maybe there isn't any real money underwriting it all. Or perhaps it's resting on the UK housing bubble?

It just doesn't seem to me as if we have enough real trading going on, nationally or internationally - our shops are full of imported products, our fuel is imported, our clothes, cars.. just about everything we buy.

I must be missing something somewhere.


Blogger Tim said...

When New Labour came into power in 1997 we had an economy which was operating a trade balance and was extremely healthy.

After an awful lot of economic pain in the late seventies, eighties and early nineties, I think there was a window of opportunity in the second half of the nineties, which could have been used to reinvigorate Britain's manufacturing industry. Instead, we have borrowed money to buy more and more goods from (mainly) China, and re-employed people in services, predominantly in the public sector.

The economy is still partially sustained by intellectual property rights, but these will expire and/or will be replaced by new IP, which will accrue progressively in the countries where industrial development is taking place, i.e. China and India.

At some point, China in particular will have to reward their populations for the effort they are putting in, and in order to do that, they will have to ask us (and the US) to, finally, pay for all the goods we have consumed.

When the evil day comes, the Americans will have to get up off their fat backsides and go out and exploit the natural wealth of their country for themselves, they won't be able to rely on wetbacks to do the work for them.

As to us, well, we have pretty much burnt out our natural resources...

11:10 pm, March 09, 2007  
Blogger Gill said...

Thanks Tim :-)

1:59 pm, March 10, 2007  

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